Exhibit 10.13

 

 

September 25, 2012

 

 

To:

GT Advanced Technologies Inc.

 

20 Trafalgar Square

 

Nashua, NH 03063

 

Attn: Hoil Kim, General Counsel

 

Telephone: (603) 883-5200

 

 

From:

UBS AG, London Branch

 

c/o UBS AG, Stamford Branch

 

677 Washington Blvd

 

Stamford, CT 06901

 

Attn:

Tracy Johnson / Tim Clary

 

Facsimile:

203-719-0538

 

 

Re:

Additional Issuer Warrant Transaction

 

(Transaction Reference Number:                                    )

 

Ladies and Gentlemen:

 

The purpose of this communication (this “Confirmation”) is to set forth the
terms and conditions of the above-referenced transaction entered into on the
Trade Date specified below (the “Transaction”) between UBS AG, London Branch
(“Dealer”), represented by UBS AG, Stamford Branch (“Agent”) as its agent, and
GT Advanced Technologies Inc. (“Issuer”).  This communication constitutes a
“Confirmation” as referred to in the ISDA Master Agreement specified below.

 

1.     This Confirmation is subject to, and incorporates, the definitions and
provisions of the 2006 ISDA Definitions (the “2006 Definitions”) and the
definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”, and together with the 2006 Definitions, the
“Definitions”), in each case as published by the International Swaps and
Derivatives Association, Inc. (“ISDA”).  In the event of any inconsistency
between the 2006 Definitions and the Equity Definitions, the Equity Definitions
will govern.  For purposes of the Equity Definitions, each reference herein to a
Warrant shall be deemed to be a reference to a Call Option or an Option, as
context requires.

 

This Confirmation evidences a complete and binding agreement between Dealer and
Issuer as to the terms of the Transaction to which this Confirmation relates. 
This Confirmation shall be subject to an agreement (the “Agreement”) in the form
of the ISDA 2002 Master Agreement as if Dealer and Issuer had executed an
agreement in such form (without any Schedule but with the elections set forth in
this Confirmation). For the avoidance of doubt, the Transaction shall be the
only transaction under the Agreement.

 

All provisions contained in, or incorporated by reference to, the Agreement will
govern this Confirmation except as expressly modified herein.  In the event of
any inconsistency between this Confirmation and either the Definitions or the
Agreement, this Confirmation shall govern.

 

2.     The Transaction is a Warrant Transaction, which shall be considered a
Share Option Transaction for purposes of the Equity Definitions.  The terms of
the particular Transaction to which this Confirmation relates are as follows:

 

General Terms:

 

 

 

 

 

Trade Date:

September 25, 2012

 

 

 

 

Effective Date:

September 28, 2012, or such other date as agreed between the parties, subject to
Section 8(o) below.

 

 

 

 

Components:

The Transaction will be divided into individual Components, each with the terms
set forth in this Confirmation, and, in particular,

 

--------------------------------------------------------------------------------

 

 

 

with the Number of Warrants and Expiration Date set forth in this Confirmation.
The payments and deliveries to be made upon settlement of the Transaction will
be determined separately for each Component as if each Component were a separate
Transaction under the Agreement.

 

 

 

 

Warrant Style:

European

 

 

 

 

Warrant Type:

Call

 

 

 

 

Seller:

Issuer

 

 

 

 

Buyer:

Dealer

 

 

 

 

Shares:

The common stock of Issuer, par value USD0.01 per share (Ticker Symbol: “GTAT”).

 

 

 

 

Number of Warrants:

For each Component, as provided in Annex A to this Confirmation.

 

 

 

 

Warrant Entitlement:

One Share per Warrant

 

 

 

 

Strike Price:

As provided in Annex A to this Confirmation.

 

 

 

 

 

Notwithstanding anything to the contrary in the Agreement, this Confirmation or
the Equity Definitions, in no event shall the Strike Price be subject to
adjustment to the extent that, after giving effect to such adjustment, the
Strike Price would be less than USD5.92, except for any adjustment pursuant to
the terms of this Confirmation and the Equity Definitions in connection with
stock splits or similar changes to Issuer’s capitalization.

 

 

 

 

Premium:

As provided in Annex A to this Confirmation.

 

 

 

 

Premium Payment Date:

The Effective Date

 

 

 

 

Exchange:

The NASDAQ Global Select Market

 

 

 

 

Related Exchange:

All Exchanges

 

 

 

Procedures for Exercise:

 

 

 

In respect of any Component:

 

 

 

 

 

Expiration Time:

Valuation Time

 

 

 

 

Expiration Date:

As provided in Annex A to this Confirmation (or, if such date is not a Scheduled
Trading Day, the next following Scheduled Trading Day that is not already an
Expiration Date for another Component); provided that if that date is a
Disrupted Day, the Expiration Date for such Component shall be the first
succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is
not deemed to be an Expiration Date in respect of any other Component of the
Transaction hereunder; and provided further that if the Expiration Date has not
occurred pursuant to the preceding proviso as of the Final Disruption Date,
Dealer may elect in its discretion that the Final Disruption Date shall be the
Expiration Date (irrespective of whether such date is an Expiration Date in
respect of any other Component for the Transaction) and, notwithstanding
anything to the contrary in this Confirmation or the Definitions, the Relevant
Price for such Expiration Date shall be the prevailing market value per Share
determined by the Calculation Agent in a commercially reasonable manner. “Final
Disruption Date” means May 8, 2018. Notwithstanding the

 

2

--------------------------------------------------------------------------------

 

 

 

foregoing and anything to the contrary in the Equity Definitions, if a Market
Disruption Event occurs on any Expiration Date, the Calculation Agent may
determine that such Expiration Date is a Disrupted Day only in part, in which
case (i) the Calculation Agent shall make adjustments to the Number of Warrants
for the relevant Component for which such day shall be the Expiration Date and
shall designate the Scheduled Trading Day determined in the manner described in
the immediately preceding sentence as the Expiration Date for the remaining
Warrants for such Component, and (ii) the VWAP Price for such Disrupted Day
shall be determined by the Calculation Agent based on transactions in the Shares
on such Disrupted Day taking into account the nature and duration of such Market
Disruption Event on such day. Any Scheduled Trading Day on which, as of the date
hereof, the Exchange is scheduled to close prior to its normal close of trading
shall be deemed not to be a Scheduled Trading Day; if a closure of the Exchange
prior to its normal close of trading on any Scheduled Trading Day is scheduled
following the date hereof, then such Scheduled Trading Day shall be deemed to be
a Disrupted Day in full. Section 6.6 of the Equity Definitions shall not apply
to any Valuation Date occurring on an Expiration Date.

 

 

 

 

Market Disruption Event:

Section 6.3(a) of the Equity Definitions is hereby amended (A) by deleting the
words “during the one hour period that ends at the relevant Valuation Time,
Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as
the case may be,” in clause (ii) thereof and (B) by replacing the words “or
(iii) an Early Closure.” therein with “(iii) an Early Closure, or (iv) a
Regulatory Disruption.”

 

 

 

 

 

Section 6.3(d) of the Equity Definitions is hereby amended by deleting the
remainder of the provision following the term “Scheduled Closing Time” in the
fourth line thereof.

 

 

 

 

Regulatory Disruption:

Any event that Dealer, in its discretion, determines makes it appropriate with
regard to any legal, regulatory or self-regulatory requirements or related
policies and procedures, for Dealer to refrain from or decrease any market
activity in connection with the Transaction. Dealer shall notify Issuer as soon
as reasonably practicable that a Regulatory Disruption has occurred and the
Expiration Dates affected by it.

 

 

 

 

Automatic Exercise:

Applicable; and means that the Number of Warrants for each Component will be
deemed to be automatically exercised at the Expiration Time on the Expiration
Date for such Component unless Dealer notifies Seller (by telephone or in
writing) prior to the Expiration Time on the Expiration Date that it does not
wish Automatic Exercise to occur, in which case Automatic Exercise will not
apply.

 

 

 

 

Issuer’s Telephone Number and Telex and/or Facsimile Number and Contact Details
for purpose of Giving Notice:

To be provided by Issuer.

 

 

 

Settlement Terms:

 

 

 

In respect of any Component:

 

3

--------------------------------------------------------------------------------

 

 

Settlement Currency:

USD

 

 

 

 

Net Share Settlement:

On each Settlement Date, Issuer shall deliver to Dealer a number of Shares equal
to the Number of Shares to be Delivered for such Settlement Date to the account
specified by Dealer and pay cash to Dealer in lieu of any fractional shares
valued at the Relevant Price on the Valuation Date corresponding to such
Settlement Date.

 

 

 

 

Number of Shares to be Delivered:

In respect of any Exercise Date, subject to the last sentence of Section 9.5 of
the Equity Definitions, the product of (i) the number of Warrants exercised or
deemed exercised on such Exercise Date, (ii) the Warrant Entitlement and
(iii)(A) the excess, if any, of the VWAP Price on the Valuation Date occurring
on such Exercise Date over the Strike Price, divided by (B) such VWAP Price.

 

 

 

 

 

The Number of Shares to be Delivered shall be delivered by Issuer to Dealer no
later than 4:00 P.M. (local time in New York City) on the relevant Settlement
Date.

 

 

 

 

VWAP Price:

For any Valuation Date, the Rule 10b-18 dollar volume weighted average price per
Share for such Valuation Date based on transactions executed during such
Valuation Date, as reported on Bloomberg Page “GTAT <Equity> AQR SEC” (or any
successor thereto) or, in the event such price is not so reported on such
Valuation Date for any reason or is manifestly incorrect, as reasonably
determined by the Calculation Agent using a volume weighted method.

 

 

 

 

Other Applicable Provisions:

The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except that the
Representation and Agreement contained in Section 9.11 of the Equity Definitions
shall be modified by excluding any representations therein relating to
restrictions, obligations, limitations or requirements under applicable
securities laws arising as a result of the fact that Seller is the Issuer of the
Shares) and 9.12 of the Equity Definitions will be applicable as if “Physical
Settlement” applied to the Transaction.

 

 

 

Adjustments:

 

 

 

In respect of any Component:

 

 

 

 

Method of Adjustment:

Calculation Agent Adjustment

 

 

 

 

Extraordinary Dividend:

Any Dividend that has an ex-dividend date occurring on or after the Trade Date
and on or prior to the date on which Issuer satisfies all of its delivery
obligations hereunder.

 

 

 

 

Dividend:

Any dividend or distribution on the Shares (other than any dividend or
distribution of the type described in Sections 11.2(e)(i), 11.2(e)(ii)(A) or
11.2(e)(ii)(B) of the Equity Definitions).

 

 

 

Extraordinary Events:

 

 

 

 

Consequences of Merger Events:

 

 

 

 

 

(a)

Share-for-Share:

Modified Calculation Agent Adjustment

 

 

 

 

 

(b)

Share-for-Other:

Cancellation and Payment (Calculation Agent Determination)

 

 

 

 

 

(c)

Share-for-Combined:

Cancellation and Payment (Calculation Agent Determination)

 

 

 

 

Tender Offer:

Applicable

 

4

--------------------------------------------------------------------------------

 

 

Consequences of Tender Offers:

 

 

 

 

 

(a)

Share-for-Share:

Modified Calculation Agent Adjustment

 

 

 

 

 

(b)

Share-for-Other:

Cancellation and Payment (Calculation Agent Determination) on that portion of
the Other Consideration that consists of cash; Modified Calculation Agent
Adjustment on the remainder of the Other Consideration.

 

 

 

 

 

(c)

Share-for-Combined:

Modified Calculation Agent Adjustment

 

 

 

 

Modified Calculation Agent Adjustment:

If, in respect of any Merger Event to which Modified Calculation Agent
Adjustment applies, the adjustments to be made in accordance with
Section 12.2(e)(i) of the Equity Definitions would result in Issuer being
different from the issuer of the Shares, then with respect to such Merger Event,
as a condition precedent to the adjustments contemplated in
Section 12.2(e)(i) of the Equity Definitions, Dealer, the Issuer of the Affected
Shares and the entity that will be the Issuer of the New Shares shall, prior to
the Merger Date, have entered into such documentation containing
representations, warranties and agreements relating to securities law and other
issues as requested by Dealer that Dealer has determined, in its reasonable
discretion, to be reasonably necessary or appropriate to allow Dealer to
continue as a party to the Transaction, as adjusted under Section 12.2(e)(i) of
the Equity Definitions, and to preserve its hedging or hedge unwind activities
in connection with the Transaction in a manner compliant with applicable legal,
regulatory or self-regulatory requirements, or with related policies and
procedures applicable to Dealer, and if such conditions are not met or if the
Calculation Agent determines that no adjustment that it could make under
Section 12.2(e)(i) of the Equity Definitions will produce a commercially
reasonable result, then the consequences set forth in Section 12.2(e)(ii) of the
Equity Definitions shall apply.

 

 

 

 

Consequences of Announcement Events:

Modified Calculation Agent Adjustment as set forth in Section 12.3(d) of the
Equity Definitions; provided that references to “Tender Offer” shall be replaced
by references to “Announcement Event” and references to “Tender Offer Date”
shall be replaced by references to “date of such Announcement Event”. An
Announcement Event shall be an “Extraordinary Event” for purposes of the Equity
Definitions, to which Article 12 of the Equity Definitions is applicable.

 

 

 

 

Announcement Event:

(i) The public announcement of any Merger Event or Tender Offer or the intention
to enter into a Merger Event or Tender Offer, (ii) the public announcement by
Issuer of an intention to solicit or enter into, or to explore strategic
alternatives or other similar undertaking that may include, a Merger Event or
Tender Offer or (iii) any subsequent public announcement of a change to a
transaction or intention that is the subject of an announcement of the type
described in clause (i) or (ii) of this sentence (in each case, whether such
announcement is made by Issuer or a third party).

 

 

 

 

Announcement Date:

The definition of “Announcement Date” in Section 12.1 of the Equity Definitions
is hereby amended by (i) replacing the words “a

 

5

--------------------------------------------------------------------------------

 

 

 

firm” with the word “any” in the second and fourth lines thereof, (ii) replacing
the word “leads to the” with the words “, if completed, would lead to a” in the
third and the fifth lines thereof, (iii) replacing the words “voting shares”
with the word “Shares” in the fifth line thereof, and (iv) inserting the words
“by any entity” after the word “announcement” in the second and the fourth lines
thereof.

 

 

 

 

New Shares:

In the definition of New Shares in Section 12.1(i) of the Equity Definitions,
(a) the text in clause (i) thereof shall be deleted in its entirety (including
the word “and” following such clause (i)) and replaced with “publicly quoted,
traded or listed on any of the New York Stock Exchange, The NASDAQ Global Select
Market or The NASDAQ Global Market (or their respective successors),” and
(b) the phrase “and (iii) issued by a corporation organized under the laws of
the United States, any State thereof or the District of Columbia” shall be
inserted immediately prior to the period.

 

 

 

 

Nationalization, Insolvency or Delisting:

Cancellation and Payment (Calculation Agent Determination); provided that in
addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it
shall also constitute a Delisting if the Exchange is located in the United
States and the Shares are not immediately re-listed, re-traded or re-quoted on
any of the New York Stock Exchange, The NASDAQ Global Select Market or The
NASDAQ Global Market (or their respective successors); if the Shares are
immediately re-listed, re-traded or re-quoted on any such exchange or quotation
system, such exchange or quotation system shall thereafter be deemed to be the
Exchange.

 

 

 

 

Additional Disruption Events:

 

 

 

 

 

(a)

Change in Law:

Applicable; provided that Section 12.9(a)(ii) is hereby amended by (x) adding
the words “(including, for the avoidance of doubt and without limitation,
adoption or promulgation of new regulations authorized or mandated by existing
statute)” after the word “regulation” in the second line thereof, (y) adding the
words “or any Hedge Positions” after the word “Shares” in the clause (X) thereof
and (z) adding the words “, or holding, acquiring or disposing of Shares or any
Hedge Positions relating,” after the word “obligations” in clause (Y) thereof.

 

 

 

 

 

(b)

Failure to Deliver:

Applicable

 

 

 

 

 

(c)

Insolvency Filing:

Applicable

 

 

 

 

 

(d)

Hedging Disruption:

Applicable; provided that:

 

 

 

 

 

(i) Section 12.9(a)(v) of the Equity Definitions is hereby modified by inserting
the following two phrases at the end of such Section:

 

 

 

 

 

“For the avoidance of doubt, the term “equity price risk” shall be deemed to
include, but shall not be limited to, stock price and volatility risk. And, for
the further avoidance of doubt, any such transactions or assets referred to in
phrases (A) or (B) above must be available on commercially reasonable pricing
terms.”; and

 

 

 

 

 

(ii) Section 12.9(b)(iii) of the Equity Definitions is hereby amended by
inserting in the third line thereof, after the words “to

 

6

--------------------------------------------------------------------------------

 

 

 

terminate the Transaction”, the words “or a portion of the Transaction affected
by such Hedging Disruption”.

 

 

 

 

(e)

Increased Cost of Hedging:

Applicable

 

 

 

 

 

(f)

Loss of Stock Borrow:

Applicable

 

 

 

 

 

 

Maximum Stock Loan Rate:

As provided in Annex A to this Confirmation.

 

 

 

 

 

(g)

Increased Cost of Stock Borrow:

Applicable

 

 

 

 

 

 

Initial Stock Loan Rate:

As provided in Annex A to this Confirmation.

 

 

 

 

Hedging Party:

Dealer for all applicable Potential Adjustment Events and Extraordinary Events

 

 

 

 

Determining Party:

Dealer for all applicable Extraordinary Events

 

 

 

 

Non-Reliance:

Applicable

 

 

 

 

Agreements and Acknowledgments Regarding Hedging Activities:

Applicable

 

 

 

 

Additional Acknowledgments:

Applicable

 

 

 

 

3.

Calculation Agent:

Dealer

 

 

 

 

 

4.

Account Details:

 

 

 

 

 

 

 

Dealer Payment Instructions:

UBS AG Stamford

 

 

ABA# 026-007-993

 

 

F/O UBS AG London Branch

 

 

A/C# 101-WA-140007-000

 

 

 

 

 

Issuer Payment Instructions:

To be provided by Issuer.

 

 

 

 

 

5.

Offices:

 

 

 

 

 

 

 

The Office of Dealer for the Transaction is: New York

 

 

 

 

 

The Office of Issuer for the Transaction is: Not applicable

 

 

 

6.

Notices:

 

 

 

 

(a)

Address for notices or communications to Issuer for purposes of this
Confirmation:

 

 

 

 

 

 

To:

GT Advanced Technologies Inc.

 

 

 

20 Trafalgar Square

 

 

 

Nashua, NH 03063

 

 

Attn:

Hoil Kim, General Counsel

 

 

Telephone:

(603) 883-5200

 

 

 

 

 

(b)

Address for notices or communications to Dealer for purposes of this
Confirmation:

 

 

 

 

 

 

To:

UBS AG, London Branch

 

 

 

c/o UBS AG, Stamford Branch

 

 

 

677 Washington Boulevard

 

 

 

Stamford, CT 06901

 

 

Attn:

Tracy Johnson / Tim Clary

 

 

Facsimile:

203-719-0538

 

 

 

 

 

 

with copies to:

Equities Legal Department

 

 

 

677 Washington Boulevard

 

 

 

Stamford, CT 06901

 

 

Attn:

Gordon Kiesling and Hina Mehta

 

 

Telephone:

(203) 719-0268

 

7

--------------------------------------------------------------------------------

 

 

 

Facsimile:

(203) 719-5627

 

7.     Representations, Warranties and Agreements:

 

(a)           In addition to the representations and warranties in the Agreement
and those contained elsewhere herein, Issuer represents and warrants to and for
the benefit of, and agrees with, Dealer as of the date hereof (unless otherwise
specified) that:

 

(i)            On the Trade Date, and as of any date on which Issuer gives
Dealer a Notice of Cash Payment Termination under (and as defined in)
Section 8(a) below, (A) none of Issuer and its officers and directors is aware
of any material nonpublic information regarding Issuer or the Shares and (B) all
reports and other documents filed by Issuer with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), when considered as a whole (with the more recent such reports
and documents deemed to amend inconsistent statements contained in any earlier
such reports and documents), do not contain any untrue statement of a material
fact or any omission of a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances in
which they were made, not misleading.

 

(ii)           Without limiting the generality of Section 13.1 of the Equity
Definitions, Issuer acknowledges that Dealer is not making any representations
or warranties or taking any position or expressing any view with respect to the
treatment of the Transaction under any accounting standards including ASC Topic
260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic
480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and
Hedging — Contracts in Entity’s Own Equity (or any successor issue statements)
or under FASB’s Liabilities & Equity Project.

 

(iii)          Prior to the Trade Date, Issuer shall deliver to Dealer a
resolution of Issuer’s board of directors authorizing the Transaction and such
other certificate or certificates as Dealer shall reasonably request.

 

(iv)          Issuer is not entering into this Confirmation to create actual or
apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress or otherwise manipulate the
price of the Shares (or any security convertible into or exchangeable for
Shares) or otherwise in violation of the Exchange Act.

 

(v)           Issuer is not, and after giving effect to the transactions
contemplated hereby will not be, required to register as an “investment company”
as such term is defined in the Investment Company Act of 1940, as amended.

 

(vi)          On the Trade Date, (A) the assets of Issuer at their fair
valuation exceed the liabilities of Issuer, including contingent liabilities,
(B) the capital of Issuer is adequate to conduct the business of Issuer and
(C) Issuer has the ability to pay its debts and obligations as such debts mature
and does not intend to, or does not believe that it will, incur debt beyond its
ability to pay as such debts mature.

 

(vii)         Issuer shall not take any action to decrease the number of
Available Shares below the Capped Number (each as defined below).

 

(viii)        The representations and warranties of Issuer set forth in
Section 3 of the Agreement and Section 3 of the Underwriting Agreement (the
“Underwriting Agreement”) dated September 24, 2012 among Issuer, UBS Securities
LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives
of the Underwriters party thereto, are true and correct and are hereby deemed to
be repeated to Dealer as if set forth herein.

 

(ix)           Issuer understands no obligations of Dealer to it hereunder will
be entitled to the benefit of deposit insurance and that such obligations will
not be guaranteed by any Affiliate of Dealer or any governmental agency.

 

(x)            During the period starting on the first Expiration Date and
ending on the last Expiration Date (the “Settlement Period”), the Shares or
securities that are convertible into, or exchangeable or exercisable for, Shares
will not be subject to a “restricted period,” as such term is defined in
Regulation M under the Exchange Act (“Regulation M”).

 

8

--------------------------------------------------------------------------------

 

(xi)           On each day during the Settlement Period, neither Issuer nor any
“affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18 under the
Exchange Act (“Rule 10b-18”)) shall directly or indirectly (including, without
limitation, by means of any cash-settled or other derivative instrument)
purchase, offer to purchase, place any bid or limit order that would effect a
purchase of, or commence any tender offer relating to, any Shares (or an
equivalent interest, including a unit of beneficial interest in a trust or
limited partnership or a depository share) or any security convertible into or
exchangeable or exercisable for Shares, except through Dealer.

 

(xii)          On the Trade Date and at all times until termination or earlier
expiration of the Transaction, (A) a number of Shares equal to the Capped Number
have been reserved for issuance by all required corporate action of Issuer,
(B) the Shares issuable upon exercise of the Warrants (the “Warrant Shares”)
have been duly authorized and, when delivered against payment therefor (which
may include Net Share Settlement in lieu of cash) and otherwise as contemplated
by the terms of the Warrant following the exercise of the Warrant in accordance
with the terms and conditions of the Warrant, will be validly issued, fully-paid
and non-assessable and (C) the issuance of the Warrant Shares will not be
subject to any preemptive or similar rights.

 

(xiii)         No state law, rule, regulation or regulatory order applicable to
the Shares would give rise to any reporting, consent, registration or other
requirement (including without limitation a requirement to obtain prior approval
from any person or entity) as a result of Dealer or its affiliates owning or
holding (however defined) Shares, other than any reporting requirement imposed
by Section 13 or 16 of the Exchange Act.

 

(xiv)        Issuer (A) is capable of evaluating investment risks independently,
both in general and with regard to all transactions and investment strategies
involving a security or securities; (B) will exercise independent judgment in
evaluating the recommendations of any broker-dealer or its associated persons,
unless it has otherwise notified the broker-dealer in writing; and (C) has total
assets of at least $50 million as of the date hereof.

 

(b)           Each of Dealer and Issuer agrees and represents that it is an
“eligible contract participant” as defined in the U.S. Commodity Exchange Act,
as amended.

 

(c)           Each of Dealer and Issuer acknowledges that the offer and sale of
the Transaction to it is intended to be exempt from registration under the
Securities Act of 1933, as amended (the “Securities Act”), by virtue of
Section 4(2) thereof.  Accordingly, Dealer represents and warrants to Issuer
that (i) it has the financial ability to bear the economic risk of its
investment in the Transaction and is able to bear a total loss of its
investment, (ii) it is an “accredited investor” as that term is defined in
Regulation D as promulgated under the Securities Act, (iii) it is entering into
the Transaction for its own account without a view to the distribution or resale
thereof and (iv) the assignment, transfer or other disposition of the
Transaction has not been and will not be registered under the Securities Act and
is restricted under this Confirmation, the Securities Act and state securities
laws.

 

(d)           Issuer agrees and acknowledges that Dealer is a “financial
institution,” “swap participant” and “financial participant” within the meaning
of Sections 101(22), 101(53C) and 101(22A) of Title 11 of the United States Code
(the “Bankruptcy Code”).  The parties hereto further agree and acknowledge that
it is the intent of the parties that (A) this Confirmation is (i) a “securities
contract,” as such term is defined in Section 741(7) of the Bankruptcy Code,
with respect to which each payment and delivery hereunder or in connection
herewith is a “termination value,” “payment amount” or “other transfer
obligation” within the meaning of Section 362 of the Bankruptcy Code and a
“settlement payment,” within the meaning of Section 546 of the Bankruptcy Code
and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the
Bankruptcy Code, with respect to which each payment and delivery hereunder or in
connection herewith is a “termination value,” “payment amount” or “other
transfer obligation” within the meaning of Section 362 of the Bankruptcy Code
and a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy
Code and a “payment or other transfer of property” within the meaning of
Sections 362 and 546 of the Bankruptcy Code, and (B) Dealer is entitled to the
protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17),
362(o), 546(e), 546(g), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code.

 

(e)           Issuer shall deliver to Dealer an opinion of counsel, dated as of
the Effective Date and reasonably acceptable to Dealer in form and substance,
with respect to the matters set forth in Section 3(a) of the Agreement and
Section 7(a)(xii) of this Confirmation (replacing, solely for these purposes,
the words “On the Trade Date and at all times until termination or earlier
expiration of the Transaction” with the words “On the Effective Date”).

 

(f)            Issuer and Dealer agree and acknowledge that Shares delivered by
the Issuer to Dealer pursuant to the terms of the Transaction may not have been
registered under the Securities Act.

 

9

--------------------------------------------------------------------------------

 

8.  Other Provisions:

 

(a)           Alternative Calculations and Payment on Early Termination and on
Certain Extraordinary Events.  If Issuer shall owe Dealer any amount pursuant to
Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or pursuant to
Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Issuer shall satisfy
any such Payment Obligation by the Share Termination Alternative (as defined
below), unless (a) Issuer gives irrevocable telephonic notice to Dealer,
confirmed in writing within one Scheduled Trading Day, no later than 9:30 A.M.
New York City time on the Scheduled Trading Day immediately following the Merger
Date, Tender Offer Date, Announcement Date, Early Termination Date or date of
cancellation or termination in respect of an Extraordinary Event, as applicable,
of its election that the Share Termination Alternative shall not apply (“Notice
of Cash Payment Termination”) and (b) Dealer agrees, in its sole discretion, to
such election, in which case the provisions of Sections 12.2, 12.3, 12.6, 12.7
or 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as the
case may be, shall apply.  If the Share Termination Alternative applies, the
following provisions shall apply on the Scheduled Trading Day immediately
following the Merger Date, the Tender Offer Date, Announcement Date, Early
Termination Date or date of cancellation or termination in respect of an
Extraordinary Event, as applicable:

 

Share Termination Alternative:

Applicable and means that Issuer shall deliver to Dealer the Share Termination
Delivery Property on the date on which the Payment Obligation would otherwise be
due pursuant to Section 12.7 or 12.9 of the Equity Definitions or
Section 6(d)(ii) of the Agreement, as applicable (the “Share Termination Payment
Date”), in satisfaction of the Payment Obligation.

 

 

Share Termination Delivery Property:

A number of Share Termination Delivery Units, as calculated by the Calculation
Agent, equal to the Payment Obligation divided by the Share Termination Unit
Price. The Calculation Agent shall adjust the Share Termination Delivery
Property by replacing any fractional portion of the aggregate amount of a
security therein with an amount of cash equal to the value of such fractional
security based on the values used to calculate the Share Termination Unit Price.

 

 

Share Termination Unit Price:

The value of property contained in one Share Termination Delivery Unit on the
date such Share Termination Delivery Units are to be delivered as Share
Termination Delivery Property, as determined by the Calculation Agent in its
discretion by commercially reasonable means and notified by the Calculation
Agent to Issuer at the time of notification of the Payment Obligation.

 

 

Share Termination Delivery Unit:

In the case of a Termination Event, Event of Default, Delisting or Additional
Disruption Event, one Share or, in the case of an Insolvency, Nationalization,
Merger Event or Tender Offer, one Share or a unit consisting of the number or
amount of each type of property received by a holder of one Share (without
consideration of any requirement to pay cash or other consideration in lieu of
fractional amounts of any securities) in such Insolvency, Nationalization,
Merger Event or Tender Offer, as applicable. If such Insolvency,
Nationalization, Merger Event or Tender Offer involves a choice of consideration
to be received by holders, such holder shall be deemed to have elected to
receive the maximum possible amount of cash.

 

 

Failure to Deliver:

Applicable

 

 

Other applicable provisions:

If Share Termination Alternative is applicable, the provisions of Sections 9.8,
9.9, 9.10, 9.11 (except that the Representation and Agreement contained in
Section 9.11 of the Equity Definitions shall be modified by excluding any
representations therein relating to restrictions, obligations, limitations or
requirements under applicable securities laws arising as a result of the fact
that Seller is the issuer of the Shares or any portion of the Share Termination
Delivery Units) and 9.12 of the Equity Definitions will be applicable as if
“Physical Settlement” applied to the Transaction, except that all references to
“Shares” shall be read as references to “Share Termination Delivery Units”.

 

(b)           Private Placement Procedures.  (i)  If, in the reasonable judgment
of Dealer, for any reason, any Shares or any securities of Issuer or its
affiliates comprising any Share Termination Delivery Units deliverable to Dealer

 

10

--------------------------------------------------------------------------------

 

hereunder (any such Shares or securities, “Delivered Securities”) would not be
immediately freely transferable by Dealer under Rule 144 under the Securities
Act, then the provisions set forth in this Section 8(b) shall apply.  In such
event, Issuer shall deliver additional Delivered Securities so that the value of
such Delivered Securities, as determined by the Calculation Agent to reflect an
appropriate liquidity discount, equals the value of the number of Delivered
Securities that would otherwise be deliverable if such Delivered Securities were
freely tradeable (without prospectus delivery) upon receipt by Dealer (such
value, the “Freely Tradeable Value”).  (For the avoidance of doubt, as used in
this paragraph (b) only, the term “Issuer” shall mean the issuer of the relevant
securities, as the context shall require.)

 

(ii) (A)    Dealer (or an Affiliate of Dealer designated by Dealer) and any
potential institutional purchaser of any such Delivered Securities from Dealer
or such Affiliate identified by Dealer shall be afforded a commercially
reasonable opportunity to conduct a due diligence investigation in compliance
with applicable law with respect to Issuer customary in scope for private
placements of equity securities (including, without limitation, the right to
have made available to them for inspection all financial and other records,
pertinent corporate documents and other information reasonably requested by
them);

 

(B)           Dealer (or an Affiliate of Dealer designated by Dealer) and Issuer
shall enter into an agreement (a “Private Placement Agreement”) on commercially
reasonable terms in connection with the private placement of such Delivered
Securities by Issuer to Dealer or such Affiliate and the private resale of such
shares by Dealer or such Affiliate, substantially similar to private placement
purchase agreements customary for private placements of equity securities, in
form and substance commercially reasonably satisfactory to Dealer and Issuer,
which Private Placement Agreement shall include, without limitation, provisions
substantially similar to those contained in such private placement purchase
agreements relating to the indemnification of, and contribution in connection
with the liability of, Dealer and its Affiliates and Issuer, shall provide for
the payment by Issuer of all expenses in connection with such resale, including
all fees and expenses of counsel for Dealer, shall contain representations,
warranties and agreements of Issuer reasonably necessary or advisable to
establish and maintain the availability of an exemption from the registration
requirements of the Securities Act for such resales, and shall use best efforts
to provide for the delivery of accountants’ “comfort letters” to Dealer or such
Affiliate with respect to the financial statements and certain financial
information contained in or incorporated by reference into the offering
memorandum prepared for the resale of such Shares; and

 

(C)           Issuer agrees that any Delivered Securities so delivered to
Dealer, (i) may be transferred by and among Dealer and its Affiliates, and
Issuer shall effect such transfer without any further action by Dealer and
(ii) after the minimum “holding period” within the meaning of Rule 144(d) under
the Securities Act has elapsed with respect to such Delivered Securities, Issuer
shall promptly remove, or cause the transfer agent for such Shares or securities
to remove, any legends referring to any such restrictions or requirements from
such Delivered Securities upon delivery by Dealer (or such Affiliate of Dealer)
to Issuer or such transfer agent of seller’s and broker’s representation letters
customarily delivered by Dealer in connection with resales of restricted
securities pursuant to Rule 144 under the Securities Act, without any further
requirement for the delivery of any certificate, consent, agreement, opinion of
counsel, notice or any other document, any transfer tax stamps or payment of any
other amount or any other action by Dealer (or such affiliate of Dealer).

 

(D)          Issuer shall not take, or cause to be taken, any action that would
make unavailable either the exemption pursuant to Section 4(2) of the Securities
Act for the sale by Issuer to Dealer (or any affiliate designated by Dealer) of
the Shares or Share Termination Delivery Units, as the case may be, or the
exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for
resales of the Shares or Share Termination Delivery Units, as the case may be,
by Dealer (or any such affiliate of Dealer).

 

(c)           Make-whole. Dealer or its affiliate may sell such Shares or Share
Termination Delivery Units delivered in satisfaction of a Payment Obligation, as
the case may be, during a period (the “Resale Period”) commencing on the
Exchange Business Day following delivery of such Shares or Share Termination
Delivery Units, as the case may be, and ending on the Exchange Business Day on
which Dealer completes the sale of all such Shares or Share Termination Delivery
Units, as the case may be, or a sufficient number of Shares or Share Termination
Delivery Units, as the case may be, so that the realized net proceeds of such
sales exceed the Freely Tradeable Value (such amount of the Freely Tradeable
Value, the “Required Proceeds”).  If any of such delivered Shares or Share
Termination Delivery Units remain after such realized net proceeds exceed the
Required Proceeds, Dealer shall return such remaining Shares or Share
Termination Delivery Units to Issuer.  If the Required Proceeds exceed the
realized net proceeds from such resale, Issuer shall transfer to Dealer by the
open of the regular trading session on the Exchange on the Exchange Trading Day

 

11

--------------------------------------------------------------------------------

 

immediately following the last day of the Resale Period the amount of such
excess (the “Additional Amount”) in cash or in a number of additional Shares or
Share Termination Delivery Units, as the case may be, (“Make-whole Shares”) in
an amount that, based on the Relevant Price on the last day of the Resale Period
(as if such day was the “Valuation Date” for purposes of computing such Relevant
Price), has a dollar value equal to the Additional Amount.  The Resale Period
shall continue to enable the sale of the Make-whole Shares in the manner
contemplated by this Section 8(c).  This provision shall be applied successively
until the Additional Amount is equal to zero, subject to Section 8(e).  For the
avoidance of doubt, the Dealer will use commercially reasonable efforts to sell
such Shares or Share Termination Delivery Units, as the case may be, for a price
equal to their fair market value.

 

(d)                                 Beneficial Ownership. Notwithstanding
anything to the contrary in the Agreement or this Confirmation, in no event
shall Dealer be entitled to receive, or shall be deemed to receive, any Shares
in connection with the Transaction if, immediately upon giving effect to such
receipt of such Shares, (i) Dealer’s Beneficial Ownership would be equal to or
greater than 7.5% of the outstanding Shares, (ii) Dealer, or any “affiliate” or
“associate” of Dealer, would be an “interested stockholder” of Issuer, as all
such terms are defined in Section 203 of the Delaware General Corporation Law or
(iii) Dealer, Dealer Group (as defined below) or any person whose ownership
position would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer
Group or any such person, a “Dealer Person”) under any federal, state or local
laws, regulations, regulatory orders or organizational documents or contracts of
Issuer that are, in each case, applicable to ownership of Shares (“Applicable
Laws”), owns, beneficially owns, constructively owns, controls, holds the power
to vote or otherwise meets a relevant definition of ownership in excess of a
number of Shares equal to (x) the number of Shares that would give rise to
reporting or registration obligations or other requirements (including obtaining
prior approval by a state or federal regulator) of a Dealer Person, or could
result in an adverse effect on a Dealer Person, under Applicable Laws, as
determined by Dealer in its reasonable discretion, and with respect to which
such requirements have not been met or the relevant approval has not been
received or that would give rise to any consequences under the constitutive
documents of Issuer or any contract or agreement to which Issuer is a party, in
each case minus (y) 1% of the number of Shares outstanding on the date of
determination (each of clause (i), (ii) and (iii) above, an “Ownership
Limitation”). If any delivery owed to Dealer hereunder is not made, in whole or
in part, as a result of an Ownership Limitation, Dealer’s right to receive such
delivery shall not be extinguished and Issuer shall make such delivery as
promptly as practicable after, but in no event later than one Exchange Business
Day after, Dealer gives notice to Issuer that such delivery would not result in
any of such Ownership Limitations being breached.  “Dealer’s Beneficial
Ownership” means the “beneficial ownership” (within the meaning of Section 13 of
the Exchange Act and the rules promulgated thereunder (collectively,
“Section 13”)) of Shares, without duplication, by Dealer, together with any of
its affiliates or other person subject to aggregation with Dealer under
Section 13 for purposes of “beneficial ownership”, or by any “group” (within the
meaning of Section 13) of which Dealer is or may be deemed to be a part (Dealer
and any such affiliates, persons and groups, collectively, “Dealer Group”) (or,
to the extent that, as a result of a change in law, regulation or interpretation
after the date hereof, the equivalent calculation under Section 16 of the
Exchange Act and the rules and regulations thereunder results in a higher
number, such number).  Notwithstanding anything in the Agreement or this
Confirmation to the contrary, Dealer (or the affiliate designated by Dealer
pursuant to Section 8(l) below) shall not become the record or beneficial owner,
or otherwise have any rights as a holder, of any Shares that Dealer (or such
affiliate) is not entitled to receive at any time pursuant to this Section 8(d),
until such time as such Shares are delivered pursuant to this Section 8(d).

 

(e)                                  Limitations on Settlement by Issuer. 
Notwithstanding anything herein or in the Agreement to the contrary, in no event
shall Issuer be required to deliver Shares in connection with the Transaction in
excess of the Capped Number of Shares (as provided in Annex A to this
Confirmation), subject to adjustment from time to time in accordance with the
provisions of this Confirmation or the Definitions resulting from actions of
Issuer or events within Issuer’s control (the “Capped Number”).  Issuer
represents and warrants to Dealer (which representation and warranty shall be
deemed to be repeated on each day that the Transaction is outstanding) that the
Capped Number is equal to or less than the number of authorized but unissued
Shares of the Issuer that are not reserved for future issuance in connection
with transactions in the Shares (other than the Transaction) on the date of the
determination of the Capped Number (such Shares, the “Available Shares”).  In
the event Issuer shall not have delivered the full number of Shares otherwise
deliverable as a result of this Section 8(e) (the resulting deficit, the
“Deficit Shares”), Issuer shall be continually obligated to deliver, from time
to time until the full number of Deficit Shares have been delivered pursuant to
this paragraph, Shares when, and to the extent, that (i) Shares are repurchased,
acquired or otherwise received by Issuer or any of its subsidiaries after the
Trade Date (whether or not in exchange for cash, fair value or any other
consideration), (ii) authorized and unissued Shares reserved for issuance in
respect of other transactions prior to such date which prior to the relevant
date become no longer so reserved or (iii) Issuer additionally authorizes any
unissued Shares that are not reserved for other transactions.  Issuer shall
immediately notify Dealer of the occurrence of any of the foregoing events

 

12

--------------------------------------------------------------------------------

 

(including the number of Shares subject to clause (i), (ii) or (iii) and the
corresponding number of Shares to be delivered) and promptly deliver such Shares
thereafter.

 

(f)                                    Right to Extend.  Dealer may postpone any
Exercise Date or Settlement Date or any other date of valuation or delivery with
respect to some or all of the relevant Warrants (in which event the Calculation
Agent shall make appropriate adjustments to the Number of Shares to be Delivered
with respect to one or more Components), if Dealer determines, in its reasonable
discretion, that such extension is reasonably necessary or appropriate to
(i) preserve Dealer’s hedging or hedge unwind activity hereunder in light of
existing liquidity conditions in the cash market, the stock loan market or any
other relevant market or (ii) to enable Dealer to effect purchases of Shares in
connection with its hedging, hedge unwind or settlement activity hereunder in a
manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer,
be in compliance with applicable legal, regulatory or self-regulatory
requirements, or with related policies and procedures applicable to Dealer.

 

(g)                                 Equity Rights.  Dealer acknowledges and
agrees that this Confirmation is not intended to convey to it rights with
respect to the Transaction that are senior to the claims of common stockholders
in the event of Issuer’s bankruptcy.  For the avoidance of doubt, the parties
agree that the preceding sentence shall not apply at any time other than during
Issuer’s bankruptcy to any claim arising as a result of a breach by Issuer of
any of its obligations under this Confirmation or the Agreement.  For the
avoidance of doubt, the parties acknowledge that this Confirmation is not
secured by any collateral that would otherwise secure the obligations of Issuer
herein under or pursuant to any other agreement.

 

(h)                                 Amendments to Equity Definitions.  The
following amendments shall be made to the Equity Definitions:

 

(i)                                     Section 11.2(a) of the Equity
Definitions is hereby amended by deleting the words “a diluting or
concentrative” and replacing them with the words “an”; and adding the phrase “or
Warrants” at the end of the sentence.

 

(ii)                                  The first sentence of Section 11.2(c) of
the Equity Definitions, prior to clause (A) thereof, is hereby amended to read
as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of
Adjustment in the related Confirmation of a Share Option Transaction, then
following the announcement or occurrence of any Potential Adjustment Event, the
Calculation Agent will determine whether such Potential Adjustment Event has an
effect on the theoretical value of the relevant Shares or options on the Shares
and, if so, will (i) make appropriate adjustment(s), if any, to any one or more
of:’ and, the portion of such sentence immediately preceding clause (ii) thereof
is hereby amended by deleting the words “diluting or concentrative” and the
words “(provided that no adjustments will be made to account solely for changes
in volatility, expected dividends, stock loan rate or liquidity relative to the
relevant Shares)” and replacing such latter phrase with the words “(and, for the
avoidance of doubt, adjustments may be made to account solely for changes in
volatility, expected dividends, stock loan rate or liquidity relative to the
relevant Shares)”;

 

(iii)                               Section 11.2(e)(vii) of the Equity
Definitions is hereby amended by deleting the words “diluting or concentrative”
and replacing them with “a material” and adding the phrase “or Warrants” at the
end of the sentence;

 

(iv)                              Section 12.6(a)(ii) of the Equity Definitions
is hereby amended by (1) deleting from the fourth line thereof the word “or”
after the word “official” and inserting a comma therefor, and (2) deleting the
semi-colon at the end of subsection (B) thereof and inserting the following
words therefor “or (C) at Dealer’s option, the occurrence of any of the events
specified in Section 5(a)(vii)(1) through (9) of  the ISDA Master Agreement with
respect to that Issuer.”;

 

(v)                                 Section 12.9(b)(iv) of the Equity
Definitions is hereby amended by (A) deleting (1) subsection (A) in its
entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase
“in each case” in subsection (B); and (B) deleting the phrase “neither the
Non-Hedging Party nor the Lending Party lends Shares in the amount of the
Hedging Shares or” in the penultimate sentence; and

 

(vi)                              Section 12.9(b)(v) of the Equity Definitions
is hereby amended by (A) adding the word “or” immediately before subsection
“(B)” and deleting the comma at the end of subsection (A); and (B)(1) deleting
subsection (C) in its entirety, (2) deleting the word “or” immediately preceding
subsection (C) and (3) replacing in the penultimate sentence the words “either
party” with “the Hedging Party” and (4) deleting clause (X) in the final
sentence.

 

13

--------------------------------------------------------------------------------

 

(i)                                     Transfer and Assignment.  Dealer may
transfer or assign its rights and obligations hereunder and under the Agreement,
in whole or in part, at any time to any person or entity whatsoever without the
consent of Issuer; provided, however, that the transferee or assignee shall not
be entitled to receive any greater payment of additional amounts under
Section 2(d)(i)(4) of the Agreement than Dealer would have been entitled to
receive, except to the extent such entitlement to receive a greater payment
results from a Change in Tax Law that occurs after the date of the transfer or
assignment.  At any time at which any Ownership Limitation or a Hedging
Disruption exists, if Dealer, in its discretion, is unable to effect a transfer
or assignment to a third party after using its commercially reasonable efforts
on pricing terms and within a time period reasonably acceptable to Dealer such
that an Ownership Limitation or a Hedging Disruption, as the case may be, no
longer exists, Dealer may designate any Scheduled Trading Day as an Early
Termination Date with respect to a portion (the “Terminated Portion”) of the
Transaction, such that such Ownership Limitation or Hedging Disruption, as the
case may be, no longer exists.  In the event that Dealer so designates an Early
Termination Date with respect to a portion of the Transaction, a payment or
delivery shall be made pursuant to Section 6 of the Agreement and
Section 8(b) of this Confirmation as if (i) an Early Termination Date had been
designated in respect of a Transaction having terms identical to the Terminated
Portion of the Transaction, (ii) Issuer shall be the sole Affected Party with
respect to such partial termination and (iii) such portion of the Transaction
shall be the only Terminated Transaction.

 

(j)                                     Adjustments.  For the avoidance of
doubt, whenever the Calculation Agent is called upon to make an adjustment
pursuant to the terms of this Confirmation or the Definitions to take into
account the effect of an event, the Calculation Agent shall make such adjustment
by reference to the effect of such event on the Hedging Party, assuming that the
Hedging Party maintains a commercially reasonable hedge position.

 

(k)                                  Disclosure.  Effective from the date of
commencement of discussions concerning the Transaction, Issuer and each of its
employees, representatives, or other agents may disclose to any and all persons,
without limitation of any kind, the tax treatment and tax structure of the
Transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to Issuer relating to such tax treatment and tax
structure.

 

(l)                                     Designation by Dealer.  Dealer has the
right to assign any or all of its rights and obligations under the Transaction
to purchase, sell, receive or deliver any Shares to any of its affiliates;
provided that such assignment shall only occur when it has become obligatory
that the Transaction be settled by the transfer of Shares; and provided further
that Issuer shall have recourse to Dealer in the event of failure by the
assignee to perform any of such obligations hereunder.  Notwithstanding the
foregoing, the recourse to Dealer shall be limited to recoupment of Issuer’s
monetary damages and Issuer hereby waives any right to seek specific performance
by Dealer of its obligations hereunder.  Such failure after any applicable grace
period shall be deemed to be an Additional Termination Event, such Transaction
shall be the only Affected Transaction and Dealer shall be the only Affected
Party.

 

(m)                               Additional Termination Events.  The occurrence
of any of the following shall constitute an Additional Termination Event with
respect to which the Transaction shall be the sole Affected Transaction and
Issuer shall be the sole Affected Party; provided that with respect to any
Additional Termination Event, Dealer may choose to treat part of the Transaction
as the sole Affected Transaction, and, upon the termination of the Affected
Transaction, a Transaction with terms identical to those set forth herein except
with a Number of Warrants equal to the unaffected number of Warrants shall be
treated for all purposes as the Transaction, which shall remain in full force
and effect:

 

(i)                                      Dealer reasonably determines that it is
advisable to terminate a portion of the Transaction so that Dealer’s related
hedging activities will comply with applicable securities laws, rules or
regulations or related policies and procedures of Dealer (whether or not such
requirements, policies or procedures are imposed by law or have been voluntarily
adopted by Dealer, so long as such requirements, policies and procedures are
generally applicable to transactions similar to the Transaction);

 

(ii)                                   a “person” or “group” within the meaning
of Section 13(d) of the Exchange Act, other than Issuer, its subsidiaries and
the employee benefit plans of Issuer or its subsidiaries, files a Schedule TO or
any schedule, form or report under the Exchange Act disclosing that such person
or group has become the direct or indirect “beneficial owner,” as defined in
Rule 13d-3 under the Exchange Act, of the common equity of Issuer representing
more than 50% of the voting power the common equity of Issuer;

 

(iii)                                the consummation of (A) any
recapitalization, reclassification or change of the Shares (other than changes
resulting from a subdivision or combination) as a result of which the Shares
would be converted

 

14

--------------------------------------------------------------------------------

 

into, or exchanged for, stock, other securities, other property or assets;
(B) any share exchange, consolidation or merger of Issuer pursuant to which the
Shares will be converted into cash, securities or other property; or (C) any
sale, lease or other transfer in one transaction or a series of transactions of
all or substantially all of the consolidated assets of Issuer and its
subsidiaries, taken as a whole, to any person other than one of Issuer’s
subsidiaries;

 

(iv)                               the stockholders of Issuer approve any plan
or proposal for the liquidation or dissolution of Issuer; or

 

(v)                                  the Shares cease to be listed or quoted on
any of The NASDAQ Global Select Market, The NASDAQ Global Market or the New York
Stock Exchange (or any of their respective successors).

 

Notwithstanding the foregoing, any transaction set forth in clauses (ii),
(iii) or (v) above will not constitute an Additional Termination Event if at
least 90% of the consideration received or to be received by the holders of the
Shares, excluding cash payments for fractional shares and cash payments made
pursuant to dissenters’ appraisal rights, in connection with such transaction or
transactions consists of shares of common stock that are listed or quoted on any
of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ
Global Market (or any of their respective successors) or will be so listed or
quoted when issued or exchanged in connection with such transaction or
transactions and as a result of such transaction or transactions the Shares will
consist of such consideration, excluding cash payments for fractional Shares.

 

(n)                                 No Netting and Set-off.  Each party waives
any and all rights it may have to set off obligations arising under the
Agreement and the Transaction against other obligations between the parties,
whether arising under any other agreement, applicable law or otherwise.

 

(o)                                 Effectiveness.  If, prior to the Effective
Date, Dealer reasonably determines, based on the advice of counsel, that it is
advisable to cancel the Transaction because of concerns that Dealer’s related
hedging activities could be viewed as not complying with applicable securities
laws, rules or regulations, the Transaction shall be cancelled and shall not
become effective, and neither party shall have any obligation to the other party
in respect of the Transaction.

 

(p)                                 Wall Street Transparency and Accountability
Act of 2010.  The parties hereby agree that none of (v) Section 739 of the Wall
Street Transparency and Accountability Act of 2010 (“WSTAA”), (w) any similar
legal certainty provision in any legislation enacted, or rule or regulation
promulgated, on or after the Trade Date, (x) the enactment of WSTAA or any
regulation under the WSTAA, (y) any requirement under WSTAA nor (z) an amendment
made by WSTAA, shall limit or otherwise impair either party’s rights to
terminate, renegotiate, modify, amend or supplement this Confirmation or the
Agreement, as applicable, arising from a termination event, force majeure,
illegality, increased costs, regulatory change or similar event under this
Confirmation, the Equity Definitions incorporated herein, or the Agreement
(including, but not limited to, rights arising from Change in Law, Hedging
Disruption, Increased Cost of Hedging, Loss of Stock Borrow, Increased Cost of
Stock Borrow, an Excess Ownership Position or Illegality (as defined in the
Agreement)).

 

(q)                                 Waiver of Trial by Jury.  EACH OF ISSUER AND
DEALER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS OF
DEALER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

(r)                                    Governing Law; Jurisdiction.  THIS
CONFIRMATION AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO
THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.  THE
PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION
TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO,
THESE COURTS.

 

15

--------------------------------------------------------------------------------

 

(s)                                  Role of Agent.  Each party agrees and
acknowledges that Agent is acting as agent for both parties but does not
guarantee the performance of either party and neither Dealer nor Issuer shall
contact the other with respect to any matter relating to the Transaction without
the direct involvement of Agent; (ii) Agent is not a member of the Securities
Investor Protection Corporation; (iii) Agent, Dealer and Issuer each hereby
acknowledges that any transactions by Dealer or Agent in the Shares will be
undertaken by Dealer or Agent, as the case may, as principal for its own
account; and (iv) all of the actions to be taken by Dealer and Agent in
connection with the Transaction, including but not limited to any exercise of
any rights with respect to the Transactions, shall be taken by Dealer or Agent
independently and without any advance or subsequent consultation with Issuer;
and (iv) Agent is hereby authorized to act as agent for Issuer only to the
extent required to satisfy the requirements of Rule 15a-6 under the Exchange Act
in respect of the Transactions described hereunder.  For the avoidance of doubt,
any performance by Issuer of its obligations (including notice obligations)
through or by means of Agent shall constitute good performance of Issuer’s
obligations hereunder to Dealer when Issuer has taken the action necessary to
allow Agent to perform or satisfy such obligation on its behalf, notwithstanding
whether Dealer actually receives the benefit of such performance; however, for
the avoidance of doubt, performance by Dealer of its obligations hereunder
(including notice obligations) to Issuer through or by means of Agent shall only
constitute good performance of Dealer’s obligations hereunder to the extent
Agent actually performs such obligations.

 

(t)                                    Agreements and Acknowledgements Regarding
Hedging.  Issuer understands, acknowledges and agrees that: (A) at any time on
and prior to the final Expiration Date, Dealer and its affiliates may buy or
sell Shares or other securities or buy or sell options or futures contracts or
enter into swaps or other derivative securities in order to adjust its hedge
position with respect to the Transaction; (B) Dealer and its affiliates also may
be active in the market for Shares other than in connection with hedging
activities in relation to the Transaction; (C) Dealer shall make its own
determination as to whether, when or in what manner any hedging or market
activities in securities of Issuer shall be conducted and shall do so in a
manner that it deems appropriate to hedge its price and market risk with respect
to the VWAP Price; and (D) any market activities of Dealer and its affiliates
with respect to Shares may affect the market price and volatility of Shares, as
well as the VWAP Price, each in a manner that may be adverse to Issuer.

 

16

--------------------------------------------------------------------------------

 

Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to us.

 

 

Yours faithfully,

 

 

 

UBS AG, LONDON BRANCH

 

 

 

 

 

By:

/s/ Tracy Johnson

 

 

Name: Tracy Johnson

 

 

Title: Managing Director

 

 

 

By:

/s/ Lisa Woo

 

 

Name: Lisa Woo

 

 

Title: Associate Director

 

 

 

UBS AG, STAMFORD BRANCH, as agent

 

 

 

 

 

By:

/s/ Tracy Johnson

 

 

Name: Tracy Johnson

 

 

Title: Managing Director

 

 

 

By:

/s/ Lisa Woo

 

 

Name: Lisa Woo

 

 

Title: Associate Director

 

Agreed and Accepted By:

 

 

 

GT ADVANCED TECHNOLOGIES INC.

 

 

 

 

 

By:

/s/ Hoil Kim

 

 

Name: Hoil Kim

 

 

Title: Vice President, General Counsel and Secretary

 

 

Signature Page to Additional Issuer Warrant Transaction

 

--------------------------------------------------------------------------------

 

 

Annex A

 

For each Component of the Transaction, the Number of Warrants and Expiration
Date is set forth below.

 

Component Number

 

Number of Warrants

 

Expiration Date

1

 

8,512

 

January 2, 2018

2

 

8,512

 

January 3, 2018

3

 

8,512

 

January 4, 2018

4

 

8,512

 

January 5, 2018

5

 

8,512

 

January 8, 2018

6

 

8,512

 

January 9, 2018

7

 

8,512

 

January 10, 2018

8

 

8,512

 

January 11, 2018

9

 

8,512

 

January 12, 2018

10

 

8,512

 

January 16, 2018

11

 

8,512

 

January 17, 2018

12

 

8,512

 

January 18, 2018

13

 

8,512

 

January 19, 2018

14

 

8,512

 

January 22, 2018

15

 

8,512

 

January 23, 2018

16

 

8,512

 

January 24, 2018

17

 

8,512

 

January 25, 2018

18

 

8,512

 

January 26, 2018

19

 

8,512

 

January 29, 2018

20

 

8,512

 

January 30, 2018

21

 

8,512

 

January 31, 2018

22

 

8,512

 

February 1, 2018

23

 

8,512

 

February 2, 2018

24

 

8,512

 

February 5, 2018

25

 

8,512

 

February 6, 2018

26

 

8,512

 

February 7, 2018

27

 

8,512

 

February 8, 2018

28

 

8,512

 

February 9, 2018

29

 

8,512

 

February 12, 2018

30

 

8,512

 

February 13, 2018

31

 

8,512

 

February 14, 2018

32

 

8,512

 

February 15, 2018

33

 

8,512

 

February 16, 2018

34

 

8,512

 

February 20, 2018

35

 

8,512

 

February 21, 2018

36

 

8,512

 

February 22, 2018

37

 

8,512

 

February 23, 2018

38

 

8,512

 

February 26, 2018

39

 

8,512

 

February 27, 2018

40

 

8,512

 

February 28, 2018

41

 

8,512

 

March 1, 2018

42

 

8,512

 

March 2, 2018

43

 

8,512

 

March 5, 2018

44

 

8,512

 

March 6, 2018

45

 

8,512

 

March 7, 2018

46

 

8,512

 

March 8, 2018

47

 

8,512

 

March 9, 2018

48

 

8,512

 

March 12, 2018

49

 

8,512

 

March 13, 2018

50

 

8,512

 

March 14, 2018

51

 

8,512

 

March 15, 2018

 

Annex A-1

--------------------------------------------------------------------------------

 

52

 

8,512

 

March 16, 2018

53

 

8,512

 

March 19, 2018

54

 

8,512

 

March 20, 2018

55

 

8,512

 

March 21, 2018

56

 

8,512

 

March 22, 2018

57

 

8,512

 

March 23, 2018

58

 

8,512

 

March 26, 2018

59

 

8,512

 

March 27, 2018

60

 

8,512

 

March 28, 2018

61

 

8,512

 

March 29, 2018

62

 

8,512

 

April 2, 2018

63

 

8,512

 

April 3, 2018

64

 

8,512

 

April 4, 2018

65

 

8,512

 

April 5, 2018

66

 

8,512

 

April 6, 2018

67

 

8,512

 

April 9, 2018

68

 

8,512

 

April 10, 2018

69

 

8,512

 

April 11, 2018

70

 

8,512

 

April 12, 2018

71

 

8,512

 

April 13, 2018

72

 

8,512

 

April 16, 2018

73

 

8,512

 

April 17, 2018

74

 

8,512

 

April 18, 2018

75

 

8,512

 

April 19, 2018

76

 

8,512

 

April 20, 2018

77

 

8,512

 

April 23, 2018

78

 

8,512

 

April 24, 2018

79

 

8,512

 

April 25, 2018

80

 

8,574

 

April 26, 2018

 

Strike Price:

USD9.9328

 

 

Premium:

USD993,267

 

 

Maximum Stock Loan Rate:

200 basis points

 

 

Initial Stock Loan Rate:

25 basis points

 

 

Capped Number of Shares:

1,362,044

 

2

--------------------------------------------------------------------------------