Exhibit 10.2

[Dealer

Dealer Address]

November 19, 2020

 

To:      Microchip Technology Incorporated    2355 W. Chandler Blvd.   
Chandler, AZ 85224-6199    Attention:    Chief Financial Officer   
Telephone No.:    480-792-7804    Facsimile No.:    480-792-4133    Email:   
eric.bjornholt@microchip.com

Re: Call Option Transaction

The purpose of this letter agreement (this “Confirmation”) is to confirm the
terms and conditions of the call option transaction entered into between
[Dealer] (“Dealer”) and Microchip Technology Incorporated, a Delaware
corporation (“Counterparty”) as of the Trade Date specified below (the
“Transaction”). This letter agreement constitutes a “Confirmation” as referred
to in the ISDA Master Agreement specified below. Each party further agrees that
this Confirmation and the related Hedging Notice together with the Agreement
evidence a complete binding agreement between Counterparty and Dealer as to the
subject matter and terms of the Transaction to which this Confirmation relates,
and shall supersede all prior or contemporaneous written or oral communications
with respect thereto.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (the “Equity Definitions”), as published by the International Swaps
and Derivatives Association, Inc. (“ISDA”) are incorporated into this
Confirmation. In the event of any inconsistency between the Equity Definitions
and this Confirmation, this Confirmation shall govern. Certain defined terms
used herein are based on terms that are defined in the Description of Notes (the
“Description of Notes”), dated as of November 16, 2020 and referred to in each
of the Exchange Agreements (the “Exchange Agreements”), each dated November 19,
2020 between Counterparty and an investor in the Convertible Notes and relating
to the 0.125% Convertible Senior Subordinated Notes due 2024 (as originally
issued by Counterparty, the “Convertible Notes” and each USD 1,000 principal
amount of Convertible Notes, a “Convertible Note”) issued by Counterparty in an
aggregate initial principal amount of USD 609,000,000 pursuant to an Indenture
to be dated on or around December 1, 2020 between Counterparty and Wells Fargo
Bank, National Association, as trustee (the “Indenture”). In the event of any
inconsistency between the terms defined in the Description of Notes, the
Indenture and this Confirmation, this Confirmation shall govern. The parties
acknowledge that this Confirmation is entered into on the date hereof with the
understanding that (i) definitions set forth in the Indenture which are also
defined herein by reference to the Indenture and (ii) sections of the Indenture
that are referred to herein will conform to the descriptions thereof in the
Description of Notes. If any such definitions in the Indenture or any such
sections of the Indenture differ from the descriptions thereof in the
Description of Notes, the descriptions thereof in the Description of Notes will
govern for purposes of this Confirmation. The parties further acknowledge that
the Indenture section numbers used herein are based on the draft of the
Indenture last reviewed by Dealer as of the date of this Confirmation, and if
any such section numbers are changed in the Indenture as executed, the parties
will amend this Confirmation in good faith to preserve the intent of the
parties. Subject to the foregoing, references to the Indenture herein are
references to the Indenture as in effect on the date of its execution, and if
the Indenture is amended or supplemented following such date (other than any
amendment or supplement (x) pursuant to Section 10.01(n) of the Indenture that,
as determined by the Calculation Agent, conforms the Indenture to the
description of Convertible Notes in the Description of Notes or (y) pursuant to
Section 14.07 of the Indenture, subject, in the case of this clause (y), to the
second paragraph under “Method of Adjustment” in Section 3), any such amendment
or supplement will be disregarded for purposes of this Confirmation unless the
parties agree otherwise in writing. For the purposes of the Equity Definitions,
the Transaction shall be deemed to be a Share Option Transaction.

Each party is hereby advised, and each such party acknowledges, that the other
party has engaged in, or refrained from engaging in, substantial financial
transactions and has taken other material actions in reliance upon the parties’
entry into the Transaction to which this Confirmation relates on the terms and
conditions set forth below.

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1. This Confirmation and the related Hedging Notice evidence a complete and
binding agreement between Dealer and Counterparty as to the terms of the
Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the
2002 ISDA Master Agreement (the “Agreement”) as if Dealer and Counterparty had
executed an agreement in such form but without any Schedule except for (a) the
election of the laws of the State of New York as the governing law (without
reference to choice of law doctrine) and the election of USD as the Termination
Currency; [and] (b) (i) the election that the “Cross Default” provisions of
Section 5(a)(vi) of the Agreement shall apply to Dealer with a “Threshold
Amount” of three percent of Dealer’s shareholders’ equity; provided that
“Specified Indebtedness” shall not include obligations in respect of deposits
received in the ordinary course of Dealer’s banking business, (ii) the phrase
“or becoming capable at such time of being declared” shall be deleted from
clause (1) of such Section 5(a)(vi) and (iii) the following language shall be
added to the end thereof “Notwithstanding the foregoing, a default under
subsection (2) hereof shall not constitute an Event of Default if (x) the
default was caused solely by error or omission of an administrative or
operational nature; (y) funds were available to enable the party to make the
payment when due; and (z) the payment is made within two Local Business Days of
such party’s receipt of written notice of its failure to pay;” [and (c) (1) the
election of an executed guarantee of [__________] (“Guarantor”) dated as of the
Trade Date in substantially the form attached hereto as Annex A as a Credit
Support Document and (2) the designation of Guarantor as Credit Support Provider
in relation to Dealer].

In the event of any inconsistency between provisions of the Agreement, this
Confirmation and the Hedging Notice, the following will prevail for purposes of
the Transaction to which this Confirmation relates in the order of precedence
indicated: (i) such Hedging Notice; (ii) this Confirmation; and (iii) the
Agreement. The parties hereby agree that no transaction other than the
Transaction to which this Confirmation relates shall be governed by the
Agreement. If there exists any ISDA Master Agreement between Dealer and
Counterparty or any confirmation or other agreement between Dealer and
Counterparty pursuant to which an ISDA Master Agreement is deemed to exist
between Dealer and Counterparty, then notwithstanding anything to the contrary
in such ISDA Master Agreement, such confirmation or agreement or any other
agreement to which Dealer and Counterparty are parties, the Transaction shall
not be considered a Transaction under, or otherwise governed by, such existing
or deemed ISDA Master Agreement.

2. The terms of the particular Transaction to which this Confirmation relates
are as follows:

General Terms.

 

Trade Date:

   November 19, 2020

Option Style:

   “Modified American”, as described under “Procedures for Exercise” below

Option Type:

   Call

Buyer:

   Counterparty

Seller:

   Dealer

Shares:

   The common stock of Counterparty, par value USD 0.001 per share (Exchange
symbol “MCHP”).

Number of Options:

   609,000. For the avoidance of doubt, the Number of Options shall be reduced
by any Options exercised by Counterparty. In no event will the Number of Options
be less than zero.

Applicable Percentage:

   [__]%

Option Entitlement:

   A number equal to the product of the Applicable Percentage and the Conversion
Rate.

 

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Strike Percentage:

   140%

Conversion Rate:

   The quotient, rounded to the nearest one ten-thousandth of a Share, of
(a) USD 1,000 divided by (b) the Strike Percentage multiplied by the Hedge Price

Strike Price:

   The quotient, rounded to the nearest one one-hundredth of a cent, of USD
1,000 divided by the Conversion Rate

Cap Percentage:

   175%

Cap Price:

   The product of the Cap Percentage multiplied by the Hedge Price

Hedge Price:

   The 10b-18 VWAP on the Hedge Date, subject to the proviso in the definition
of Hedge Date

Hedge Date:

   The Exchange Business Day immediately succeeding the Trade Date (or, if such
day is a full Disrupted Day, the immediately succeeding Exchange Business Day
that is not a full Disrupted Day); provided that if the Calculation Agent
determines that the Hedge Date is a partial Disrupted Day, the Calculation Agent
shall in good faith and in a commercially reasonable manner (x) determine the
Hedge Price using an appropriately weighted average of the 10b-18 VWAPs for the
Hedge Date and the immediately succeeding Exchange Business Day(s) that are not
full Disrupted Days and (y) determine the 10b-18 VWAPs for such Disrupted Day(s)
based on transactions in the Shares taking into account the nature and duration
of such Market Disruption Event; provided further that the Hedge Date may not be
extended by more than five Scheduled Trading Days.    If the Hedge Date has been
extended by five Scheduled Trading Days and Dealer is unable to establish its
initial commercially reasonable Hedge Position on the full number of Shares on
which Dealer expected to establish its initial commercially reasonable Hedge
Position on the date hereof (the “Expected Number of Shares”), the Calculation
Agent shall make such commercially reasonable adjustments to the terms of the
Transaction to account for Dealer’s inability to establish an initial
commercially reasonable Hedge Position equal to the Expected Number of Shares.
   Solely for purposes of determining the Hedge Date, the definition of “Market
Disruption Event” in Section 6.3(a) of the Equity Definitions is hereby amended
by (A) 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; in each case, that the Calculation Agent
determines is material.”

 

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   Solely for purposes of determining the Hedge Date, Section 6.3(d) of the
Equity Definitions is hereby amended by deleting the remainder of the provision
following the words “Scheduled Closing Time” in the fourth line thereof.   
Solely for purposes of determining the Hedge Date, a Regulatory Disruption is
any event that Designated Dealer, in its reasonable discretion, based on the
advice of counsel, determines makes it appropriate, with regard to any legal,
regulatory or self-regulatory requirements or related policies and procedures,
for Designated Dealer to refrain from or decrease any market activity in
connection with the Transaction in order to maintain or establish a commercially
reasonable hedge position.    [Dealer shall, and shall cause its affiliates and
agents (if any) to, use commercially reasonable efforts on the Hedge Date to
make all purchases of Shares in connection with the Transaction or any Other
Call Option Agreements and the equity swaps between Dealer and any other dealers
that are parties to Other Call Option Agreements entered into between the Trade
Date and the Premium Payment Date (collectively, the “Initial Hedge Purchases”)
in a manner that would comply with the limitations set forth in clauses (b)(2),
(b)(3) and (b)(4) and (c) of Rule 10b-18 under the Exchange Act (“Rule 10b-18”),
as if such rule were applicable to such purchases and neither Counterparty nor
any “affiliated purchaser” had made any “Rule 10b-18 Purchases” under Rule
10b-18 (except through the Designated Dealer) during such period and taking into
account any applicable Securities and Exchange Commission no-action letters, as
appropriate, and subject to any delays between the execution and reporting of a
trade of the Shares on the Exchange and other circumstances reasonably beyond
Dealer’s (or such affiliate’s or agent’s (if any)) control; provided that the
foregoing agreement shall not apply to purchases made to dynamically hedge for
Dealer’s own account or the account of its affiliate(s) the optionality arising
under the Transaction or any other option transaction to which it is a party.
Dealer shall, and shall cause its affiliates and agents (if any) to, use only
one broker or dealer in making the Initial Hedge Purchases. “Other Call Option
Agreements” means any other call option transactions entered to by Counterparty
in connection with the Convertible Notes on the Trade Date.]1[On the Hedge Date,
Dealer shall not, and shall cause its affiliates and agents (if any) not to,
make any purchases of Shares in connection with the Transaction or any other
option

 

1 

Include for Designated Dealer.

 

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   transaction to which it is a party, other than purchases made to dynamically
hedge for Dealer’s own account or the account of its affiliate(s) the
optionality arising under the Transaction or such other option transaction.]2

10b-18 VWAP:

   For any Exchange Business Day, the 10b-18 Volume Weighted Average Price per
Share for the regular trading session (including any extensions thereof) of the
Exchange on such Exchange Business Day (without regard to pre-open or after
hours trading outside of such regular trading session for such Exchange Business
Day), as published by Bloomberg at 4:15 p.m. New York time (or 15 minutes
following the end of any extension of the regular trading session) on such
Exchange Business Day, on Bloomberg page “MCHP <Equity> AQR SEC” (or any
successor thereto), or if unavailable or manifestly incorrect, the market value
of one Share, using, if practicable, a 10b-18-based volume weighted method, as
determined by the Designated Dealer.

Designated Dealer:

   JPMorgan Chase Bank, National Association

Premium:

   USD [_____]

Premium Payment Date:

   The closing date of the issuance of the Convertible Notes

Hedging Notice:

   Dealer shall notify Counterparty of the Hedge Price, Conversion Rate, Strike
Price and Cap Price by 10:00 P.M. (New York City time) on the Hedge Date (as it
may be postponed) by delivering a notice as set forth in the Form of Hedging
Notice attached hereto as Schedule I.

Exchange:

   The Nasdaq Global Select Market

Related Exchange(s):

   All Exchanges; provided that Section 1.26 of the Equity Definitions shall be
amended to add the words “United States” before the word “exchange” in the tenth
line of such section.

Excluded Provisions:

   Section 14.04(h) and Section 14.03 of the Indenture. Procedures for Exercise.
  

Conversion Date:

   With respect to any conversion of a Convertible Note (other than (1) any
conversion of Convertible Notes with a Conversion Date occurring prior to the
Free Convertibility Date, (2) any conversion of Convertible Notes occurring on
or after the Free Convertibility Date in connection with a “Make-Whole
Fundamental Change” (as defined in the Indenture) and (3) any conversion of
Convertible Notes called (or deemed called) for redemption with a Conversion
Date occurring on or after the Free Convertibility Date and during the related
“Redemption Period” (as defined in the Indenture) (any

 

2 

Include for Dealers that are not the Designated Dealer.

 

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   such conversion described in (1), (2) or (3) above, an “Early Conversion”),
to which the provisions of Section 9(i)(i) of this Confirmation shall apply),
the date on which the Holder (as such term is defined in the Indenture) of such
Convertible Note satisfies all of the requirements for conversion thereof as set
forth in Section 14.02(b) of the Indenture; provided that if Counterparty has
not delivered to Dealer a related Notice of Exercise, then in no event shall a
Conversion Date be deemed to occur hereunder (and no Option shall be exercised
or deemed to be exercised hereunder) with respect to any surrender of a
Convertible Note for conversion in respect of which Counterparty has elected to
designate a financial institution for exchange in lieu of conversion of such
Convertible Note pursuant to Section 14.12 of the Indenture.

Free Convertibility Date:

   August 15, 2024

Expiration Time:

   The Valuation Time

Expiration Date:

   November 15, 2024, subject to earlier exercise.

Multiple Exercise:

   Applicable, as described under “Automatic Exercise” below.

Automatic Exercise:

   Notwithstanding Section 3.4 of the Equity Definitions, on each Conversion
Date occurring on or after the Free Convertibility Date, in respect of which a
Notice of Conversion that is effective as to Counterparty has been delivered by
the relevant converting Holder, a number of Options equal to the number of
Convertible Notes in denominations of USD 1,000 as to which such Conversion Date
has occurred shall be deemed to be automatically exercised; provided that such
Options shall be exercised or deemed exercised only if Counterparty has provided
a Notice of Exercise to Dealer in accordance with “Notice of Exercise” below.   
Notwithstanding the foregoing, in no event shall the number of Options that are
exercised or deemed exercised hereunder exceed the Number of Options.

Notice of Exercise:

   Notwithstanding anything to the contrary in the Equity Definitions or under
“Automatic Exercise” above, in order to exercise any Options relating to
Convertible Notes with a Conversion Date occurring on or after the Free
Convertibility Date, Counterparty must notify Dealer in writing (which, for the
avoidance of doubt, may be by email) before 5:00 p.m. (New York City time) on
the Scheduled Valid Day immediately preceding the Expiration Date specifying the
number of such Options; provided that, notwithstanding the foregoing, such
notice (and the related exercise of Options hereunder) shall be effective if
given after the applicable notice deadline specified above but prior to 5:00
P.M., New York City

 

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   time, on the fifth Exchange Business Day following such notice deadline, in
which event the Calculation Agent shall have the right to adjust Dealer’s
delivery obligation hereunder and the Settlement Date in a commercially
reasonable manner, with respect to the exercise of such Options, as appropriate
to reflect the additional commercially reasonable costs (limited to losses as a
result of hedging mismatches and market losses) and expenses incurred by Dealer
in connection with its hedging activities, with such adjustments made assuming
that Dealer maintains commercially reasonable hedge positions (including the
unwinding of any hedge position), solely resulting from Dealer not having
received such notice prior to such notice deadline (it being understood that the
adjusted delivery obligation described in the preceding proviso can never be
less than zero and can never require any payment by Counterparty); provided
further that if the Relevant Settlement Method for such Options is (x) Net Share
Settlement and the Specified Cash Amount (as defined below) is not USD 1,000,
(y) Cash Settlement or (z) Combination Settlement, Dealer shall have received a
separate notice (the “Notice of Final Settlement Method”) (which, for the
avoidance of doubt, may be by email) in respect of all such Convertible Notes
before 5:00 p.m. (New York City time) on the Free Convertibility Date specifying
(1) the Relevant Settlement Method for such Options, and (2) if the settlement
method for the related Convertible Notes is not Settlement in Shares or
Settlement in Cash (each as defined below), the fixed amount of cash per
Convertible Note that Counterparty has elected to deliver to Holders (as such
term is defined in the Indenture) of the related Convertible Notes (the
“Specified Cash Amount”). If Counterparty fails to timely provide such Notice of
Final Settlement Method, it shall be deemed to have provided a Notice of Final
Settlement Method indicating that the Relevant Settlement Method is Net Share
Settlement and that the settlement method for the related Convertible Notes is
the Default Settlement Method (as defined below). Counterparty acknowledges its
responsibilities under applicable securities laws, and in particular Section 9
and Section 10(b) of the Exchange Act (as defined below) and the rules and
regulations thereunder, in respect of any election of a settlement method with
respect to the Convertible Notes that is not the Default Settlement Method.

Valuation Time:

   At the close of trading of the regular trading session on the Exchange;
provided that if the principal trading session is extended, the Calculation
Agent shall determine the Valuation Time in its commercially reasonable
discretion.

 

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Market Disruption Event:

   Subject to the provisions opposite “Hedge Date” above, Section 6.3(a) of the
Equity Definitions is hereby replaced in its entirety by the following:   
“‘Market Disruption Event’ means, in respect of a Share, (i) a failure by the
primary United States national or regional securities exchange or market on
which the Shares are listed or admitted for trading to open for trading during
its regular trading session or (ii) the occurrence or existence prior to 1:00
p.m. (New York City time) on any Scheduled Valid Day for the Shares for more
than one half-hour period in the aggregate during regular trading hours of any
suspension or limitation imposed on trading (by reason of movements in price
exceeding limits permitted by the relevant stock exchange or otherwise) in the
Shares or in any options contracts or futures contracts on any Related Exchange
relating to the Shares.” Settlement Terms.   

Settlement Method:

   For any Option, Net Share Settlement; provided that if the Relevant
Settlement Method set forth below for such Option is not Net Share Settlement,
then the Settlement Method for such Option shall be such Relevant Settlement
Method, but only if Counterparty shall have notified Dealer of the Relevant
Settlement Method in the Notice of Final Settlement Method for such Option.

Relevant Settlement Method:

   In respect of any Option:    (i) if Counterparty has elected (or, in the case
of the Default Settlement Method, is deemed to have elected) to settle its
conversion obligations in respect of the related Convertible Note (A) entirely
in Shares pursuant to Section 14.02(a)(iv)(A) of the Indenture (together with
cash in lieu of fractional Shares) (such settlement method, “Settlement in
Shares”), (B) in a combination of cash and Shares pursuant to
Section 14.02(a)(iv)(C) of the Indenture with a Specified Cash Amount less than
USD 1,000 (such settlement method, “Low Cash Combination Settlement”) or (C) in
a combination of cash and Shares pursuant to Section 14.02(a)(iv)(C) of the
Indenture with a Specified Cash Amount equal to USD 1,000 (such settlement
method, the “Default Settlement Method”), then, for each of the cases in clause
(A) (Settlement in Shares), clause (B) (Low Cash Combination Settlement) and
clause (C) (Default Settlement Method), the Relevant Settlement Method for such
Option shall be Net Share Settlement;    (ii) if Counterparty has elected to
settle its conversion obligations in respect of the related Convertible Note in
a combination of cash and Shares pursuant to Section 14.02(a)(iv)(C) of the
Indenture with a Specified Cash Amount greater than USD 1,000, then the Relevant
Settlement Method for such Option shall be Combination Settlement; and

 

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  (iii) if Counterparty has elected to settle its conversion obligations in
respect of the related Convertible Note entirely in cash pursuant to
Section 14.02(a)(iv)(B) of the Indenture (such settlement method, “Settlement in
Cash”), then the Relevant Settlement Method for such Option shall be Cash
Settlement.

Net Share Settlement:

  If Net Share Settlement is applicable to any Option exercised or deemed
exercised hereunder, Dealer will deliver to Counterparty, on the relevant
Settlement Date for each such Option, a number of Shares (the “Net Share
Settlement Amount”) equal to the sum, for each Valid Day during the Settlement
Averaging Period for each such Option, of (i) (a) the Daily Option Value for
such Valid Day, divided by (b) the Relevant Price on such Valid Day, divided by
(ii) the number of Valid Days in the Settlement Averaging Period; provided that
in no event shall the Net Share Settlement Amount for any Option exceed a number
of Shares equal to the Applicable Limit for such Option divided by the
Applicable Limit Price on the Settlement Date for such Option.   Dealer will pay
cash in lieu of delivering any fractional Shares to be delivered with respect to
any Net Share Settlement Amount valued at the Relevant Price for the last Valid
Day of the Settlement Averaging Period.

Combination Settlement:

  If Combination Settlement is applicable to any Option exercised or deemed
exercised hereunder, Dealer will pay or deliver, as the case may be, to
Counterparty, on the relevant Settlement Date for each such Option:  

(i) cash (the “Combination Settlement Cash Amount”) equal to the sum, for each
Valid Day during the Settlement Averaging Period for such Option, of (A) an
amount (the “Daily Combination Settlement Cash Amount”) equal to the lesser of
(1) the product of (x) the Applicable Percentage and (y) the Specified Cash
Amount minus USD 1,000 and (2) the Daily Option Value, divided by (B) the number
of Valid Days in the Settlement Averaging Period; provided that if the
calculation in clause (A) above results in zero or a negative number for any
Valid Day, the Daily Combination Settlement Cash Amount for such Valid Day shall
be deemed to be zero; and

 

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(ii)  Shares (the “Combination Settlement Share Amount”) equal to the sum, for
each Valid Day during the Settlement Averaging Period for such Option, of a
number of Shares for such Valid Day (the “Daily Combination Settlement Share
Amount”) equal to (A) (1) the Daily Option Value on such Valid Day minus the
Daily Combination Settlement Cash Amount for such Valid Day, divided by (2) the
Relevant Price on such Valid Day, divided by (B) the number of Valid Days in the
Settlement Averaging Period; provided that if the calculation in sub-clause
(A)(1) above results in zero or a negative number for any Valid Day, the Daily
Combination Settlement Share Amount for such Valid Day shall be deemed to be
zero;

   provided that in no event shall the sum of (x) the Combination Settlement
Cash Amount for any Option and (y) the Combination Settlement Share Amount for
such Option multiplied by the Applicable Limit Price on the Settlement Date for
such Option, exceed the Applicable Limit for such Option.    Dealer will pay
cash in lieu of delivering any fractional Shares to be delivered with respect to
any Combination Settlement Share Amount valued at the Relevant Price for the
last Valid Day of the Settlement Averaging Period.

Cash Settlement:

   If Cash Settlement is applicable to any Option exercised or deemed exercised
hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to
Counterparty, on the relevant Settlement Date for each such Option, an amount of
cash (the “Cash Settlement Amount”) equal to the sum, for each Valid Day during
the Settlement Averaging Period for such Option, of (i) the Daily Option Value
for such Valid Day, divided by (ii) the number of Valid Days in the Settlement
Averaging Period; provided that in no event shall the Cash Settlement Amount for
any Option exceed the Applicable Limit for such Option.

Daily Option Value:

   For any Valid Day, an amount equal to (i) the Option Entitlement on such
Valid Day, multiplied by (ii) (A) the lesser of the Relevant Price on such Valid
Day and the Cap Price, less (B) the Strike Price on such Valid Day; provided
that if the calculation contained in clause (ii) above results in a negative
number, the Daily Option Value for such Valid Day shall be deemed to be zero. In
no event will the Daily Option Value be less than zero.

Applicable Limit:

   For any Option, an amount of cash equal to the Applicable Percentage
multiplied by the excess of (i) the aggregate of (A) the amount of cash, if any,
paid to the Holder of the related Convertible Note upon conversion of such
Convertible Note and (B) the number of Shares, if any, delivered to the Holder
of the related Convertible Note upon conversion of such Convertible Note
multiplied by the Applicable Limit Price on the Settlement Date for such Option,
over (ii) USD 1,000. Counterparty shall notify Dealer (which notice may, for the
avoidance of doubt, be by email) of such amount of cash, if any, and number of
Shares, if any, prior to the Settlement Date.

 

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Applicable Limit Price:

   On any day, the opening price as displayed under the heading “Op” on
Bloomberg page MCHP <equity> (or any successor thereto).

Valid Day:

   A day on which (i) there is no Market Disruption Event and (ii) trading in
the Shares generally occurs on the Exchange or, if the Shares are not then
listed on the Exchange, on the principal other United States national or
regional securities exchange on which the Shares are then listed or, if the
Shares are not then listed on a United States national or regional securities
exchange, on the principal other market on which the Shares are then listed or
admitted for trading. If the Shares are not so listed or admitted for trading,
“Valid Day” means a Business Day.

Scheduled Valid Day:

   A day that is scheduled to be a Valid Day on the principal United States
national or regional securities exchange or market on which the Shares are
listed or admitted for trading. If the Shares are not so listed or admitted for
trading, “Scheduled Valid Day” means a Business Day.

Business Day:

   Any day other than a Saturday, a Sunday or a day on which the Federal Reserve
Bank of New York is authorized or required by law or executive order to close or
be closed.

Relevant Price:

   On any Valid Day, the per Share volume-weighted average price as displayed
under the heading “Bloomberg VWAP” on Bloomberg page MCHP <equity> AQR (or its
equivalent successor if such page is not available) in respect of the period
from the scheduled opening time of the Exchange to the Scheduled Closing Time of
the Exchange on such Valid Day (or if such volume-weighted average price is
unavailable at such time, the market value of one Share on such Valid Day, as
determined by the Calculation Agent in a commercially reasonable manner using,
if practicable, a volume-weighted average method). The Relevant Price will be
determined without regard to after-hours trading or any other trading outside of
the regular trading session trading hours.

Settlement Averaging Period:

   For any Option and regardless of the Settlement Method applicable to such
Option, the 25 consecutive Valid Days commencing on, and including, the 26th
Scheduled Valid Day immediately prior to the Expiration Date.

Settlement Date:

   For any Option, the second Business Day immediately following the final Valid
Day of the Settlement Averaging Period for such Option.

Settlement Currency:

   USD

 

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Other Applicable Provisions:

   The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 of the Equity
Definitions will be applicable, except that all references in such provisions to
“Physically-settled” shall be read as references to “Share Settled”. “Share
Settled” in relation to any Option means that Net Share Settlement or
Combination Settlement is applicable to that Option.

Representation and Agreement:

   Notwithstanding anything to the contrary in the Equity Definitions
(including, but not limited to, Section 9.11 thereof), the parties acknowledge
that (i) any Shares delivered to Counterparty shall be, upon delivery, subject
to restrictions and limitations arising from Counterparty’s status as issuer of
the Shares under applicable securities laws, (ii) Dealer may deliver any Shares
required to be delivered hereunder in certificated form in lieu of delivery
through the Clearance System and (iii) any Shares delivered to Counterparty may
be “restricted securities” (as defined in Rule 144 under the Securities Act of
1933, as amended (the “Securities Act”)).

 

3.

Additional Terms applicable to the Transaction.

 

Adjustments applicable to the Transaction:

Potential Adjustment Events:

   Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential
Adjustment Event” means an occurrence of any event or condition, as set forth in
any Dilution Adjustment Provision, that would result in an adjustment under the
Indenture to the “Conversion Rate” or the composition of a “unit of Reference
Property” or to any “Last Reported Sale Price,” “Daily VWAP,” “Daily Conversion
Value” or “Daily Settlement Amount” (each as defined in the Indenture). For the
avoidance of doubt, Dealer shall not have any delivery or payment obligation
hereunder, and no adjustment shall be made to the terms of the Transaction, on
account of (x) any distribution of cash, property or securities by Counterparty
to holders of the Convertible Notes (upon conversion or otherwise) or (y) any
other transaction in which holders of the Convertible Notes are entitled to
participate, in each case, in lieu of an adjustment under the Indenture of the
type referred to in the immediately preceding sentence (including, without
limitation, pursuant to the fourth sentence of Section 14.04(c) of the Indenture
or the fifth sentence of Section 14.04(d) of the Indenture).

Method of Adjustment:

   Calculation Agent Adjustment, which means that, notwithstanding
Section 11.2(c) of the Equity Definitions (and, for the avoidance of doubt,
subject to Section 9(x) of this Confirmation, in lieu of any adjustments
pursuant to Section 11.2(c) of the Equity Definitions), upon any Potential
Adjustment Event, the Calculation Agent shall make a corresponding adjustment in
respect of any adjustment to the Convertible Notes under the Indenture to any
one or more of the Strike Price, Number of Options and Option Entitlement.

 

12

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  Notwithstanding the foregoing and “Consequences of Merger Events / Tender
Offers” below:  

(i) if the Calculation Agent in good faith and in a commercially reasonable
manner disagrees with any adjustment to the Convertible Notes that involves an
exercise of discretion by Counterparty or its board of directors (including,
without limitation, pursuant to Section 14.05 of the Indenture, Section 14.07 of
the Indenture or any supplemental indenture entered into thereunder or in
connection with any proportional adjustment or the determination of the fair
value of any securities, property, rights or other assets), then in each such
case, the Calculation Agent will determine in good faith and in a commercially
reasonable manner the adjustment to be made to any one or more of the Strike
Price, Number of Options and Option Entitlement; provided that, notwithstanding
the foregoing, if any Potential Adjustment Event occurs during the Settlement
Averaging Period but no adjustment was made to any Convertible Note under the
Indenture because the relevant Holder (as such term is defined in the Indenture)
was deemed to be a record owner of the underlying Shares on the related
Conversion Date, then the Calculation Agent shall in good faith and in a
commercially reasonable manner make an adjustment, consistent with the
methodology set forth in the Indenture, to the terms hereof in order to account
for such Potential Adjustment Event;

 

(ii)  in connection with any Potential Adjustment Event as a result of an event
or condition set forth in Section 14.04(b) of the Indenture or Section 14.04(c)
of the Indenture where, in either case, the period for determining “Y” (as such
term is used in Section 14.04(b) of the Indenture) or “SP0” (as such term is
used in Section 14.04(c) of the Indenture), as the case may be, begins before
Counterparty has publicly announced the event or condition giving rise to such
Potential Adjustment Event, then the Calculation Agent shall, in good faith and
in a commercially reasonable manner, have the right to adjust any one or more of
the Strike Price, Number of Options and Option Entitlement as appropriate to
reflect reasonable costs documented in reasonable detail (including, but not
limited to, hedging mismatches and market

 

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  losses customary for transactions of this type) and expenses that would be
incurred by Dealer assuming Dealer is maintaining a commercially reasonable
hedge position (subject to the requirements set forth under Hedging Adjustments
below) as a result of such event or condition not having been publicly announced
prior to the beginning of such period; and   (iii) if any Potential Adjustment
Event is declared and (a) the event or condition giving rise to such Potential
Adjustment Event is subsequently amended, modified, cancelled or abandoned,
(b) the “Conversion Rate” (as defined in the Indenture) is otherwise not
adjusted at the time or in the manner contemplated by the relevant Dilution
Adjustment Provision based on such declaration or (c) the “Conversion Rate” (as
defined in the Indenture) is adjusted as a result of such Potential Adjustment
Event and subsequently re-adjusted (each of clauses (a), (b) and (c), a
“Potential Adjustment Event Change”) then, in each case, the Calculation Agent
shall, in good faith and in a commercially reasonable manner, have the right to
adjust any one or more of the Strike Price, Number of Options and Option
Entitlement as appropriate to reflect the reasonable costs documented in
reasonable detail (including, but not limited to, hedging mismatches and market
losses customary for transactions of this type) and expenses that would be
incurred by Dealer assuming dealer is maintaining a commercially reasonable
hedge position (subject to the requirements set forth under Hedging Adjustments
below) as a result of such Potential Adjustment Event Change.

Dilution Adjustment Provisions:

  Sections 14.04(a), (b), (c), (d) and (e) and Section 14.05 of the Indenture.
Extraordinary Events applicable to the Transaction:

Merger Events:

  Applicable; provided that notwithstanding Section 12.1(b) of the Equity
Definitions, a “Merger Event” means the occurrence of any event or condition set
forth in the definition of “Share Exchange Event” in Section 14.07(a) of the
Indenture.

Tender Offers:

  Applicable; provided that notwithstanding Section 12.1(d) of the Equity
Definitions, a “Tender Offer” means the occurrence of any event or condition set
forth in Section 14.04(e) of the Indenture.

 

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Consequences of Merger Events/ Tender Offers:

  Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon
the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall
make in a commercially reasonable manner a corresponding adjustment in respect
of any adjustment under the Indenture to any one or more of the nature of the
Shares (in the case of a Merger Event), Strike Price, Number of Options and
Option Entitlement to the extent that an analogous adjustment is required to be
made pursuant to the Indenture in respect of such Merger Event or Tender Offer,
subject to the second paragraph under “Method of Adjustment”; provided, however,
that such adjustment shall be made without regard to any adjustment to the
“Conversion Rate” (as defined in the Indenture) pursuant to any Excluded
Provision; provided further that if, with respect to a Merger Event or a Tender
Offer, (i) the consideration for the Shares includes (or, at the option of a
holder of Shares, may include) shares of an entity or person that is not a
corporation or is not organized under the laws of the United States, any State
thereof or the District of Columbia or (ii) the Counterparty to the Transaction
following such Merger Event or Tender Offer will not be a corporation organized
under the laws of the United States, any State thereof or the District of
Columbia, then, in either case, subject to Section 9(l), Cancellation and
Payment (Calculation Agent Determination) may apply at Dealer’s reasonable
election; provided further that, for the avoidance of doubt, adjustments shall
be made pursuant to the provisions set forth above regardless of whether any
Merger Event or Tender Offer gives rise to an Early Conversion.

Consequences of Announcement Events:

  Modified Calculation Agent Adjustment as set forth in Section 12.3(d) of the
Equity Definitions; provided that, in respect of an Announcement Event, the
definition of “Modified Calculation Agent Adjustment” set forth in Section 12.3
of the Equity Definitions shall be modified in the following manner:
(x) 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”, (y) the phrase “exercise,
settlement, payment or any other terms of the Transaction (including, without
limitation, the spread)” shall be replaced with the phrase “Cap Price (provided
that in no event shall the Cap Price be less than the Strike Price)”, and the
words “whether within a commercially reasonable (as determined by the
Calculation Agent) period of time prior to or after the Announcement Event,”
shall be inserted prior to the word “which” in the seventh line, and (z) for the
avoidance of doubt, the Calculation Agent shall in a commercially reasonable
manner determine whether the relevant Announcement Event has had a material
economic effect on the Transaction (and, if so, shall adjust the Cap Price

 

15

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  accordingly) on one or more occasions on or after the date of the Announcement
Event up to, and including, the Expiration Date, any Early Termination Date
and/or any other date of cancellation, it being understood that any adjustment
in respect of an Announcement Event shall take into account any earlier
adjustment relating to the same 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 by (x) Issuer or any subsidiary or agent thereof
or any Valid Third-Party Entity of any transaction or event that the Calculation
Agent determines is reasonably likely to be completed and that, if completed,
would constitute a Merger Event or Tender Offer (it being understood and agreed
that in determining whether such transaction or event is reasonably likely to be
completed, the Calculation Agent shall take into consideration the effect of the
relevant announcement on the Shares and/or options relating to the Shares and,
if such effect is material, shall deem such transaction or event to be
reasonably likely to be completed), (y) Issuer or any subsidiary or agent
thereof of any potential acquisition or disposition by Issuer and/or its
subsidiaries where the aggregate consideration exceeds 35% of the market
capitalization of Issuer as of the date of such announcement (an “Acquisition
Transaction”) or (z) Issuer, any subsidiary or agent of Issuer or any Valid
Third-Party Entity of the intention to enter into a Merger Event or Tender Offer
or an Acquisition Transaction (in the case of a Valid Third-Party Entity, that
the Calculation Agent determines is capable, financially and otherwise, of
consummating the relevant Merger Event, Tender Offer or Acquisition Transaction,
it being understood and agreed that in making such determination, the
Calculation Agent shall take into consideration the effect of the relevant
announcement on the Shares and/or options relating to the Shares and, if such
effect is material, shall deem such entity to be capable of consummating the
relevant Merger Event, Tender Offer or Acquisition Transaction), (ii) the public
announcement by Issuer or any subsidiary or agent thereof of an intention to
explore strategic alternatives that may include a Merger Event or Tender Offer
or an Acquisition Transaction or (iii) any subsequent public announcement by any
Valid Third-Party Entity, Issuer or any subsidiary or agent of Issuer 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 (including, without
limitation, a new announcement, whether or not by the same party, relating to
such a transaction or intention or the announcement of a withdrawal from, or the
abandonment or discontinuation of, such a transaction or intention), as
determined by the Calculation Agent in a commercially reasonable manner.

 

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  For the avoidance of doubt, the occurrence of an Announcement Event with
respect to any transaction or intention shall not preclude the occurrence of a
later Announcement Event with respect to such transaction or intention. For
purposes of this definition of “Announcement Event,” (A) “Merger Event” shall
mean such term as defined under Section 12.1(b) of the Equity Definitions (but,
for the avoidance of doubt, the remainder of the definition of “Merger Event” in
Section 12.1(b) of the Equity Definitions following the definition of “Reverse
Merger” therein shall be disregarded) and (B) “Tender Offer” shall mean such
term as defined under Section 12.1(d) of the Equity Definitions; provided that
Section 12.1(d) of the Equity Definitions is hereby amended by replacing “10%”
with “20%” in the third line thereof.

Valid Third-Party Entity:

  In respect of any transaction, any third party that the Calculation Agent in
good faith and in a commercially reasonable manner determines has a bona fide
intent to enter into or consummate such transaction (it being understood and
agreed that in determining whether such third party has such a bona fide intent,
the Calculation Agent shall take into consideration the effect of the relevant
announcement by such third party on the Shares and/or options relating to the
Shares and, if such effect is material, may deem such third party to have a bona
fide intent).

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
will 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 of the New York Stock Exchange, The
Nasdaq Global Select Market or The Nasdaq Global Market (or their respective
successors), such exchange or quotation system shall thereafter be deemed to be
the Exchange.

Additional Disruption Events:

Change in Law:

  Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is
hereby amended by (i) replacing the phrase “the interpretation” in the third
line thereof with the phrase “, or public announcement of, the formal or
informal interpretation”, (ii) replacing the word “Shares” where it appears in
clause (X) thereof with the words “Hedge Position”, (iii) replacing the
parenthetical beginning after the word “regulation” in the second line thereof
the words “(including, for the avoidance of doubt

 

17

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  and without limitation, (x) any tax law or (y) adoption, effectiveness or
promulgation of new regulations authorized or mandated by existing statute)”,
and (iv) adding the words “provided that in the case of clause (Y) hereof and
any law, regulation or interpretation, the consequence of such law, regulation
or interpretation is applied consistently by Dealer to all of its similarly
situated counterparties and/or similar transactions;” after the semi-colon in
the last line thereof.

Failure to Deliver:

  Applicable

Hedging Disruption:

  Applicable; provided that:  

(i) Section 12.9(a)(v) of the Equity Definitions is hereby amended by
(a) inserting the following words at the end of clause (A) thereof: “in the
manner contemplated by the Hedging Party on the Trade Date” and (b) 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 terminate the
Transaction”, the words “or a portion of the Transaction affected by such
Hedging Disruption”.

Increased Cost of Hedging:

  Not applicable

Hedging Party:

  For all applicable Additional Disruption Events, Dealer.

Determining Party:

  For all applicable Extraordinary Events, Dealer; provided that when making any
determination or calculation as “Determining Party,” Dealer shall be bound by
the same obligations relating to required acts of the Calculation Agent as set
forth in Section 1.40 of the Equity Definitions and this Confirmation as if
Determining Party were the Calculation Agent.   Following any determination or
calculation by Determining Party hereunder, upon a written request by
Counterparty (which may be by email), Determining Party will promptly (but in
any event within five Scheduled Trading Days) provide to Counterparty by email
to the email address provided by Counterparty in such written request a report
(in a commonly used file format for the storage and manipulation of financial
data) displaying in reasonable detail the basis for such

 

18

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  determination or calculation (including any assumptions used in making such
determination or calculation), it being understood that in no event will
Determining Party be obligated to share with Counterparty any proprietary or
confidential data or information or any proprietary or confidential models used
by it in making such determination or calculation or any information that is
subject to an obligation not to disclose such information.   All calculations
and determinations made by Determining Party shall be made in good faith and in
a commercially reasonable manner.

Non-Reliance:

  Applicable

Agreements and Acknowledgments Regarding Hedging Activities:

  Applicable

Hedging Adjustment:

  For the avoidance of doubt, whenever the Determining Party or Calculation
Agent is permitted to make an adjustment pursuant to the terms of this
Confirmation or the Equity Definitions to take into account the effect of an
event (other than, for the avoidance of doubt, any adjustment that is required
to be made by reference to the Indenture), the Determining Party or Calculation
Agent, as the case may be, shall make such adjustment by reference to the effect
of such event on Dealer assuming that Dealer maintains a commercially reasonable
hedge position.

Additional Acknowledgments:

  Applicable

 

4.  Calculation Agent.

   Dealer, except in the case of the Hedge Date, in which case the Calculation
Agent shall be the Designated Dealer for purposes of determining whether a
Disrupted Day has occurred; provided that, following the occurrence and during
the continuance of an Event of Default of the type described in
Section 5(a)(vii) of the Agreement with respect to which Dealer is the sole
Defaulting Party, Counterparty shall have the right to designate a nationally
recognized independent equity derivatives dealer to replace Dealer as the
Calculation Agent, and the parties shall work in good faith to execute any
appropriate documentation required by such replacement Calculation Agent.   
Following any adjustment, determination or calculation by the Calculation Agent
hereunder, upon a written request by Counterparty (which may be by email), the
Calculation Agent will promptly (but in any event within five Scheduled Trading
Days) provide to Counterparty by email to the email address provided by
Counterparty in such written request a report (in a commonly used file format
for the storage and manipulation of financial data) displaying in reasonable
detail the basis for such adjustment, determination or calculation (including
any

 

19

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   assumptions used in making such adjustment, determination or calculation), it
being understood that in no event will the Calculation Agent be obligated to
share with Counterparty any proprietary or confidential data or information or
any proprietary or confidential models used by it in making such adjustment,
determination or calculation or any information that is subject to an obligation
not to disclose such information.    All calculations and determinations by the
Calculation Agent shall be made in good faith and in a commercially reasonable
manner.

 

5.

Account Details.

 

  (a)

Account for payments to Counterparty:

Bank: [____________]

ABA#: [____________]

Acct No.: [____________]

Beneficiary:    [____________]

Ref: [____________]

Account for delivery of Shares to Counterparty:

[____________]

 

  (b)

Account for payments to Dealer:

[________]

Account for delivery of Shares from Dealer:

To be provided.

 

6.

Offices.

 

  (a)

The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is
not a Multibranch Party.

 

  (b)

The Office of Dealer for the Transaction is: [________]

 

7.

Notices.

 

  (a)

Address for notices or communications to Counterparty:

Microchip Technology Incorporated

2355 W. Chandler Blvd.

Chandler, AZ 85224-6199

Attention:           Chief Financial Officer

Telephone No.:  480-792-7804

Facsimile No.:   480-792-4133

Email:                eric.bjornholt@microchip.com

 

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  (b)

Address for notices or communications to Dealer:

[____________________]

Attention: [____________]

Telephone: [____________]

Facsimile: [____________]

Email: [____________]

With a copy to:

[____________________]

Attention: [____________]

Telephone: [____________]

Facsimile: [____________]

Email: [____________]

 

8.

Representations and Warranties.

 

  (a)

Representations and Warranties of Counterparty. Each of the representations and
warranties of Counterparty set forth in Article 3 of each of the Exchange
Agreements is true and correct and is hereby deemed to be repeated to Dealer as
if set forth herein. Counterparty hereby further represents and warrants to
Dealer on the date hereof and on and as of the Premium Payment Date, in lieu of
the representations set forth in Section 3(a) of the Agreement, that:

 

  (i)

Counterparty has all necessary corporate power and authority to execute, deliver
and perform its obligations in respect of the Transaction; such execution,
delivery and performance have been duly authorized by all necessary corporate
action on Counterparty’s part; and this Confirmation has been duly and validly
executed and delivered by Counterparty and constitutes its valid and binding
obligation, enforceable against Counterparty in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity) and except that rights to indemnification and contribution hereunder
may be limited by federal or state securities laws or public policy relating
thereto.

 

  (ii)

Neither the execution and delivery of this Confirmation nor the incurrence or
performance of obligations of Counterparty hereunder will conflict with or
result in a breach of the certificate of incorporation or by-laws (or any
equivalent documents) of Counterparty, or any applicable law or regulation, or
any order, writ, injunction or decree of any court or governmental authority or
agency, or any agreement or instrument to which Counterparty or any of its
subsidiaries is a party or by which Counterparty or any of its subsidiaries is
bound or to which Counterparty or any of its subsidiaries is subject, or
constitute a default under, or result in the creation of any lien under, any
such agreement or instrument.

 

  (iii)

No consent, approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required in connection with the
execution, delivery or performance by Counterparty of this Confirmation, except
such as have been obtained or made and such as may be required under the
Securities Act or state securities laws.

 

  (iv)

Counterparty is not and, after consummation of 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.

 

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  (v)

Counterparty is an “eligible contract participant” (as such term is defined in
Section 1a(18) of the Commodity Exchange Act, as amended, other than a person
that is an eligible contract participant under Section 1a(18)(C) of the
Commodity Exchange Act).

 

  (vi)

Counterparty is not, on the date hereof, aware of any material non-public
information with respect to Counterparty or the Shares.

 

  (vii)

To the knowledge of the Counterparty, no state or local (including any non-U.S.
jurisdiction’s) 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 (except for filings of any Form 13F, Schedule
13D or Schedule 13G under the Exchange Act); provided that Counterparty makes no
representation or warranty regarding any such requirement that is applicable
generally to the ownership of equity securities by Dealer or any of its
affiliates solely as a result of it or any of such affiliates being a financial
institution or broker-dealer.

 

  (viii)

Counterparty (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 USD 50 million.

 

  (ix)

The assets of Counterparty do not constitute “plan assets” under the Employee
Retirement Income Security Act of 1974, as amended, the Department of Labor
Regulations promulgated thereunder or similar law.

 

  (x)

On each of the Trade Date, the Premium Payment Date and immediately after giving
effect to the Transaction on the Premium Payment Date, (A) the present fair
market value (or present fair saleable value) of the total assets of
Counterparty is not less than the total amount required to pay the probable
total liabilities (including contingent liabilities) of Counterparty as they
mature and become absolute, (B) the capital of Counterparty is adequate to
conduct its business in the manner contemplated in its public filings under the
Exchange Act and to enter into the Transaction, (C) Counterparty has the ability
to pay its debts and obligations as such debts mature, (D) Counterparty is not
“insolvent” (as such term is defined under Section 101(32) of the U.S.
Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”))
and (E) Counterparty would be able to purchase the Number of Shares with respect
to the Transaction in compliance with the laws of the jurisdiction of
Counterparty’s incorporation (including the adequate surplus and capital
requirements of Sections 154 and 160 of the General Corporation Law of the State
of Delaware).

 

  (xi)

Counterparty acknowledges that the Transaction may constitute a purchase of its
equity securities or a capital distribution. Counterparty further acknowledges
that, pursuant to the provisions of the Coronavirus Aid, Relief and Economic
Security Act (the “Cares Act”), the Counterparty will be required to agree to
certain time-bound restrictions on its ability to purchase its equity securities
or make capital distributions if it receives loans, loan guarantees or direct
loans (as that term is defined in the Cares Act) under section 4003(b) of the
Cares Act. Counterparty further acknowledges that it may be required to agree to
certain time-bound restrictions on its ability to purchase its equity securities
or make capital distributions if it receives loans, loan guarantees or direct
loans (as that term is defined in the Cares Act) under programs or facilities
established by the Board of Governors of the Federal Reserve System or the U.S.
Department of Treasury for the purpose of providing liquidity to the financial
system, and may be required to agree to

 

22

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  similar restrictions under programs or facilities established in the future.
Accordingly, Counterparty represents and warrants that it has not applied, and
throughout the term of this Transaction shall not apply, for a loan, loan
guarantee, direct loan (as that term is defined in the Cares Act) or other
investment, or to receive any financial assistance or relief (howsoever defined)
under any program or facility that (a) is established under applicable law
(whether in existence as of the Trade Date or subsequently enacted, adopted or
amended), including without limitation the Cares Act and the Federal Reserve
Act, as amended, and (b) requires under applicable law (or any regulation,
guidance, interpretation or other pronouncement thereunder), as a condition of
such loan, loan guarantee, direct loan (as that term is defined in the Cares
Act), investment, financial assistance or relief, that the Counterparty agree,
attest, certify or warrant that it has not, as of the date specified in such
condition, repurchased, or will not repurchase, any equity security of
Counterparty, and that it has not, as of the date specified in such condition,
made a capital distribution or will not make a capital distribution.
Counterparty further represents and warrants that the Premium is not being paid,
in whole or in part, directly or indirectly, with funds received under or
pursuant to any program or facility, including the U.S. Small Business
Administration’s “Paycheck Protection Program”, that (a) is established under
applicable law (whether in existence as of the Trade Date or subsequently
enacted, adopted or amended), including without limitation the Cares Act and the
Federal Reserve Act, as amended, and (b) requires under such applicable law (or
any regulation, guidance, interpretation or other pronouncement of a
governmental authority with jurisdiction for such program or facility) that such
funds be used for specified or enumerated purposes that do not include the
purchase of this Transaction (either by specific reference to this Transaction
or by general reference to transactions with the attributes of this Transaction
in all relevant respects).

 

  (b)

Representations and Warranties of Dealer. Dealer hereby represents and warrants
to Counterparty on the date hereof and on and as of the Premium Payment Date, in
lieu of the representations set forth in Section 3(a) of the Agreement, that:

 

  (i)

Dealer has all necessary corporate power and authority to execute, deliver and
perform its obligations in respect of the Transaction; such execution, delivery
and performance have been duly authorized by all necessary corporate action on
Dealer’s part; and this Confirmation has been duly and validly executed and
delivered by Dealer and constitutes its valid and binding obligation,
enforceable against Dealer in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors’ rights and remedies generally, and subject, as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except that
rights to indemnification and contribution hereunder may be limited by federal
or state securities laws or public policy relating thereto.

 

  (ii)

Neither the execution and delivery of this Confirmation nor the incurrence or
performance of obligations of Dealer hereunder will conflict with or result in a
breach of (1) the certificate of incorporation or by-laws (or any equivalent
documents) of Dealer, or (2) any applicable law or regulation, or any order,
writ, injunction or decree of any court or governmental authority or agency, or
(3) any agreement or instrument to which Dealer or any of its subsidiaries is a
party or by which Dealer or any of its subsidiaries is bound or to which Dealer
or any of its subsidiaries is subject, or (4) constitute a default under, or
result in the creation of any lien under, any such agreement or instrument.

 

  (iii)

No consent, approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required in connection with the
execution, delivery or performance by Dealer of this Confirmation, except such
as have been obtained or made and such as may be required under the Securities
Act or state securities laws.

 

23

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  (iv)

Dealer is an “eligible contract participant” (as such term is defined in
Section 1a(18) of the Commodity Exchange Act, as amended, other than a person
that is an eligible contract participant under Section 1a(18)(C) of the
Commodity Exchange Act).

 

  (v)

On each of the Trade Date and the Premium Payment Date, Dealer is not
“insolvent” (as such term is defined under Section 101(32) of the Bankruptcy
Code.

 

9.

Other Provisions.

 

  (a)

Opinions. Counterparty shall deliver to Dealer an opinion of counsel, dated as
of the Premium Payment Date, with respect to the due incorporation, existence
and good standing of the Counterparty in Delaware, the due authorization,
execution and delivery of this Confirmation, and, in respect of the execution,
delivery and performance of this Confirmation, the absence of any conflict with
or breach of any material agreement required to be filed as an exhibit to the
Counterparty’s Annual Report on Form 10-K. Delivery of such opinion to Dealer
shall be a condition precedent for the purpose of Section 2(a)(iii) of the
Agreement with respect to each obligation of Dealer under Section 2(a)(i) of the
Agreement.

 

  (b)

Repurchase Notices. Counterparty shall, on any day on which Counterparty effects
any repurchase of Shares, promptly give Dealer a written notice of such
repurchase (a “Repurchase Notice”) on such day if following such repurchase, the
number of outstanding Shares as determined on such day is (i) less than
133.3 million (in the case of the first such notice) or (ii) thereafter more
than 43.7 million less than the number of Shares included in the immediately
preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless
Dealer and its affiliates and their respective officers, directors, employees,
affiliates, advisors, agents and controlling persons (each, an “Indemnified
Person”) from and against any and all commercially reasonable losses (including
losses relating to Dealer’s commercially reasonable hedging activities as a
consequence of becoming, or of the risk of becoming, a Section 16 “insider”,
including without limitation, any forbearance from hedging activities or
cessation of hedging activities and any losses in connection therewith with
respect to the Transaction), claims, damages, judgments, liabilities and
expenses (including reasonable attorney’s fees of one outside counsel in each
relevant jurisdiction), joint or several, which an Indemnified Person may become
subject to, as a result of Counterparty’s failure to provide Dealer with a
Repurchase Notice on the day and in the manner specified in this paragraph, and
to reimburse, within 30 days, upon written request, each of such Indemnified
Persons for any commercially reasonable out-of-pocket legal or other expenses
incurred (and supported by invoices or other documentation setting forth in
reasonable detail such expenses) in connection with investigating, preparing
for, providing testimony or other evidence in connection with or defending any
of the foregoing. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
the Indemnified Person as a result of Counterparty’s failure to provide Dealer
with a Repurchase Notice in accordance with this paragraph, such Indemnified
Person shall promptly notify Counterparty in writing, and Counterparty, upon
request of the Indemnified Person, shall retain counsel reasonably satisfactory
to the Indemnified Person to represent the Indemnified Person and any others
Counterparty may designate in such proceeding and shall pay the commercially
reasonable fees and expenses of such counsel related to such proceeding.
Counterparty shall not be liable to the extent that the Indemnified Person fails
to notify Counterparty within a commercially reasonable period of time after any
action is commenced against it in respect of which indemnity may be sought
hereunder. In addition, Counterparty shall not be liable for any settlement of
any proceeding contemplated by this paragraph that is effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified
Person from and against any commercially reasonable loss or liability by reason
of such settlement or judgment. Counterparty

 

24

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  shall not, without the prior written consent of the Indemnified Person, effect
any settlement of any pending or threatened proceeding contemplated by this
paragraph that is in respect of which any Indemnified Person is or could have
been a party and indemnity could have been sought hereunder by such Indemnified
Person, unless such settlement includes an unconditional release of such
Indemnified Person from all liability on claims that are the subject matter of
such proceeding on terms reasonably satisfactory to such Indemnified Person.
Counterparty shall not be liable for any losses, claims, damages or liabilities
(or expenses relating thereto) of any Indemnified Person that result from the
bad faith, gross negligence, willful misconduct or fraud of such Indemnified
Person. If the indemnification provided for in this paragraph is unavailable to
an Indemnified Person or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then Counterparty hereunder, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities. The remedies provided for in this paragraph (b) are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any Indemnified Person at law or in equity. The indemnity and
contribution agreements contained in this paragraph shall remain operative and
in full force and effect regardless of the termination of the Transaction.

 

  (c)

Regulation M. Counterparty is not on the Trade Date engaged in a distribution,
as such term is used in Regulation M under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), of any securities of Counterparty, other than a
distribution meeting the requirements of the exception set forth in Rules
101(b)(10) and 102(b)(7) of Regulation M. Counterparty shall not, until the
second Scheduled Trading Day immediately following the Hedge Date, engage in any
such distribution.

 

  (d)

No Manipulation. Counterparty is not entering into the Transaction to create
actual or apparent trading activity in the Shares (or any security convertible
into or exchangeable for the Shares) or to manipulate the price of the Shares
(or any security convertible into or exchangeable for the Shares) or otherwise
in violation of the Exchange Act.

 

  (e)

Transfer or Assignment.

 

  (i)

Counterparty shall have the right to transfer or assign its rights and
obligations hereunder with respect to all, but not less than all, of the Options
hereunder (such Options, the “Transfer Options”); provided that such transfer or
assignment shall be subject to reasonable conditions that Dealer may impose,
including but not limited, to the following conditions:

 

  (A)

With respect to any Transfer Options, Counterparty shall not be released from
its notice and indemnification obligations pursuant to Section 9(b) or any
obligations under Section 9(n) or 9(s) of this Confirmation;

 

  (B)

Any Transfer Options shall only be transferred or assigned to a third party that
is a United States person (as defined in the Internal Revenue Code of 1986, as
amended) (the “Revenue Code”);

 

  (C)

Such transfer or assignment shall be effected on terms, including any reasonable
undertakings by such third party (including, but not limited to, an undertaking
with respect to compliance with applicable securities laws in a manner that, in
the reasonable judgment of Dealer, will not expose Dealer to material risks
under applicable securities laws) and execution of any documentation and
delivery of legal opinions with respect to securities laws and other matters by
such third party and Counterparty, as are reasonably requested and reasonably
satisfactory to Dealer;

 

25

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  (D)

Dealer will not, as a result of such transfer and assignment, be required to pay
the transferee on any payment date an amount under Section 2(d)(i)(4) of the
Agreement greater than an amount that Dealer would have been required to pay to
Counterparty in the absence of such transfer and assignment;

 

  (E)

An Event of Default, Potential Event of Default or Termination Event will not
occur as a result of such transfer and assignment;

 

  (F)

Without limiting the generality of clause (B), Counterparty shall cause the
transferee to make such Payee Tax Representations and to provide such tax
documentation as may be reasonably requested by Dealer to permit Dealer to
determine that results described in clauses (D) and (E) will not occur upon or
after such transfer and assignment; and

 

  (G)

Counterparty shall be responsible for all reasonable costs and expenses,
including reasonable counsel fees, incurred by Dealer in connection with such
transfer or assignment.

 

  (ii)

Dealer may transfer or assign (a “Transfer”) all or any part of its rights or
obligations under the Transaction (A) without Counterparty’s consent, to any
affiliate of Dealer (1) that has a long-term issuer rating that is equal to or
better than Dealer’s credit rating at the time of such transfer or assignment,
or (2) whose obligations hereunder will be guaranteed, pursuant to the terms of
a customary guarantee in a form used by Dealer or its ultimate parent generally
for similar transactions, by Dealer or its ultimate parent (provided that in
connection with any Transfer pursuant to clause (A)(2) hereof, the guarantee of
any guarantor of the relevant transferee’s obligations under the Transaction
shall constitute a Credit Support Document under the Agreement) or (B) with
Counterparty’s consent (such consent not to be unreasonably withheld or
delayed), to any third party financial institution that is a recognized dealer
in the market for U.S. corporate equity derivatives and that has a long-term
issuer rating equal to or better than the lesser of (1) the credit rating of
Dealer at the time of the transfer and (2) A- by Standard and Poor’s Rating
Group, Inc. or its successor (“S&P”), or A3 by Moody’s Investor Service, Inc.
(“Moody’s”) or, if either S&P or Moody’s ceases to rate such debt, at least an
equivalent rating or better by a substitute rating agency mutually agreed by
Counterparty and Dealer; provided that, in the case of any Transfer (I) such a
Transfer shall not occur unless an Event of Default, Potential Event of Default
or Termination Event will not occur as a result of such Transfer; (II) at the
time of such Transfer either (i) each of Dealer and the transferee in any such
Transfer is a “dealer in securities” within the meaning of Section 475(c)(1) of
the Revenue Code or (ii) the Transfer does not result in a deemed exchange by
Counterparty within the meaning of Section 1001 of the Revenue Code; and
(III) after any such Transfer (a) Counterparty will not, as a result of any
withholding or deduction made by the transferee or assignee as a result of any
Tax, receive from the transferee or assignee on any payment date or delivery
date (after accounting for amounts paid by the transferee or assignee under
Section 2(d)(i)(4) of the Agreement as well as such withholding or deduction) an
amount or a number of Shares, as applicable, lower than the amount or the number
of Shares, as applicable, that Dealer would have been required to pay or deliver
to Counterparty in the absence of such Transfer (except to the extent such lower
amount or number results from a change in law after the date of such Transfer),
and (b) Dealer shall cause the transferee or assignee to make such Payee Tax
Representations and to provide such tax documentation as may be reasonably
requested by Counterparty to permit Counterparty to make any necessary
determinations pursuant to clause (III)(a) of this proviso; provided further
that Dealer shall promptly provide written notice to Counterparty following such
Transfer. If at any time at which (A) the Section 16 Percentage exceeds 7.5%,
(B) the Option Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds
the Applicable Share Limit

 

26

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  (if any applies) (any such condition described in clauses (A), (B) or (C), an
“Excess Ownership Position”), Dealer is unable after using its commercially
reasonable efforts to effect a transfer or assignment of Options to a third
party on pricing terms reasonably acceptable to Dealer and within a time period
reasonably acceptable to Dealer such that no Excess Ownership Position exists,
then Dealer may designate any Exchange Business Day as an Early Termination Date
with respect to a portion of the Transaction (the “Terminated Portion”), such
that following such partial termination no Excess Ownership Position exists. In
the event that Dealer so designates an Early Termination Date with respect to a
portion of the Transaction, a payment shall be made pursuant to Section 6 of the
Agreement as if (1) an Early Termination Date had been designated in respect of
a Transaction having terms identical to the Transaction and a Number of Options
equal to the number of Options underlying the Terminated Portion,
(2) Counterparty were the sole Affected Party with respect to such partial
termination and (3) the Terminated Portion were the sole Affected Transaction
(and, for the avoidance of doubt, the provisions of Section 9(l) shall apply to
any amount that is payable by Dealer to Counterparty pursuant to this sentence
as if Counterparty was not the Affected Party). The “Section 16 Percentage” as
of any day is the fraction, expressed as a percentage, (A) the numerator of
which is the number of Shares that Dealer and any of its affiliates or any other
person subject to aggregation with Dealer for purposes of the “beneficial
ownership” test under Section 13 of the Exchange Act, or any “group” (within the
meaning of Section 13 of the Exchange Act) of which Dealer is or may be deemed
to be a part beneficially owns (within the meaning of Section 13 of the Exchange
Act), without duplication, on such day (or, to the extent that for any reason
the equivalent calculation under Section 16 of the Exchange Act and the rules
and regulations thereunder results in a higher number, such higher number) and
(B) the denominator of which is the number of Shares outstanding on such day.
The “Option Equity Percentage” as of any day is the fraction, expressed as a
percentage, (A) the numerator of which is the sum of (1) the product of the
Number of Options and the Option Entitlement and (2) the aggregate number of
Shares underlying any other call option transaction sold by Dealer to
Counterparty, and (B) the denominator of which is the number of Shares
outstanding. The “Share Amount” as of any day is the number of Shares that
Dealer and any person whose ownership position would be aggregated with that of
Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule,
regulation, regulatory order or organizational documents or contracts of
Counterparty that are, in each case, applicable to ownership of Shares
(“Applicable Restrictions”), owns, beneficially owns, constructively owns,
controls, holds the power to vote or otherwise meets a relevant definition of
ownership under any Applicable Restriction, as determined by Dealer in its
reasonable discretion. The “Applicable Share Limit” means a number of Shares
equal to (A) the minimum number of Shares that could give rise to reporting or
registration obligations or other requirements (including obtaining prior
approval from any person or entity) of a Dealer Person, or could result in an
adverse effect on a Dealer Person, under any Applicable Restriction, as
determined by Dealer in its reasonable discretion, minus (B) 1% of the number of
Shares outstanding.

 

  (iii)

Notwithstanding any other provision in this Confirmation to the contrary
requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or
other securities, or make or receive any payment in cash, to or from
Counterparty, Dealer may designate any of its affiliates to purchase, sell,
receive or deliver such Shares or other securities, or to make or receive such
payment in cash, and otherwise to perform Dealer’s obligations in respect of the
Transaction and any such designee may assume such obligations. Dealer shall be
discharged of its obligations to Counterparty to the extent of any such
performance.

 

27

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  (f)

Staggered Settlement. If upon advice of counsel with respect to applicable legal
and regulatory requirements, including any requirements relating to Dealer’s
commercially reasonable hedging activities hereunder, Dealer reasonably
determines that it would not be practicable or advisable to deliver, or to
acquire Shares to deliver, any or all of the Shares to be delivered by Dealer on
any Settlement Date for the Transaction, Dealer may, by written notice to
Counterparty (which, for the avoidance of doubt, may be by email) on or prior to
any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares
on two or more dates (each, a “Staggered Settlement Date”) as follows; provided
that in no event shall any Staggered Settlement Date be later than the
Expiration Date:

 

  (i)

in such notice, Dealer will specify to Counterparty the related Staggered
Settlement Dates (the first of which will be on or prior to such Nominal
Settlement Date and the last of which will be no later than the twentieth (20th)
Exchange Business Day following such Nominal Settlement Date) and the number of
Shares that it will deliver on each Staggered Settlement Date;

 

  (ii)

the aggregate number of Shares that Dealer will deliver to Counterparty
hereunder on all such Staggered Settlement Dates will equal the number of Shares
that Dealer would otherwise be required to deliver on such Nominal Settlement
Date; and

 

  (iii)

if the Net Share Settlement terms or the Combination Settlement terms set forth
above were to apply on the Nominal Settlement Date, then the Net Share
Settlement terms or the Combination Settlement terms, as the case may be, will
apply on each Staggered Settlement Date, except that the Shares otherwise
deliverable on such Nominal Settlement Date will be allocated among such
Staggered Settlement Dates as specified by Dealer in the notice referred to in
clause (i) above.

 

  (g)

[Insert Dealer agency boilerplate, if applicable.] [Reserved.]

 

  (h)

Dividends. If at any time during the period from and including the Scheduled
Trading Day immediately succeeding the Trade Date, to but excluding the
Expiration Date, (i) an ex-dividend date for a regular quarterly cash dividend
occurs with respect to the Shares (an “Ex-Dividend Date”), and that dividend is
less than the Regular Dividend on a per Share basis or (ii) if no Ex-Dividend
Date for a regular quarterly cash dividend occurs with respect to the Shares in
any quarterly dividend period of Counterparty, then the Calculation Agent will
adjust the Cap Price to preserve the fair value of the Options after taking into
account such dividend or lack thereof. “Regular Dividend” shall mean USD 0.3685
per Share per quarter. Upon any adjustment to the Dividend Threshold (as defined
in the Indenture) for the Convertible Notes pursuant to the Indenture, the
Calculation Agent will make a corresponding adjustment to the Regular Dividend
for the Transaction.

 

  (i)

Additional Termination Events.

 

  (i)

Notwithstanding anything to the contrary in this Confirmation, upon any Early
Conversion in respect of which a Notice of Conversion that is effective as to
Counterparty has been delivered by the relevant converting Holder:

 

  (A)

Counterparty shall, within three Scheduled Trading Days of the Conversion Date
for such Early Conversion, provide written notice (an “Early Conversion Notice”)
to Dealer specifying the number of Convertible Notes surrendered for conversion
on such Conversion Date (such Convertible Notes, the “Affected Convertible
Notes”), and the giving of such Early Conversion Notice shall constitute an
Additional Termination Event as provided in this clause (i); provided that the
provisions of this Section 9(i)(i) shall not apply to any Affected Convertible
Note (i) with respect to which Counterparty has made an “Exchange Election”
pursuant to Section 14.12 of the Indenture and (ii) that has been accepted by
the designated financial institution pursuant to Section 14.12 of the Indenture,
except to the extent that Counterparty notifies Dealer, within

 

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  five Scheduled Trading Days of the then applicable conversion settlement date
determined pursuant to Section 14.02(c) of the Indenture, that (x) such
financial institution has failed to pay or deliver, as the case may be, the
consideration due upon conversion of such Affected Convertible Note, or (y) such
Affected Convertible Note is subsequently resubmitted to Counterparty for
conversion in accordance with the terms of the Indenture;

 

  (B)

upon receipt of any such Early Conversion Notice, Dealer shall designate an
Exchange Business Day as an Early Termination Date (which Exchange Business Day
shall be no earlier than the later of (x) one Scheduled Trading Day following
the Conversion Date for such Early Conversion and (y) the date on which
Counterparty provides the written notice described in Section 9(i)(i)(A) above)
with respect to the portion of the Transaction corresponding to a number of
Options (the “Affected Number of Options”) equal to the lesser of (x) the number
of Affected Convertible Notes and (y) the Number of Options as of the Conversion
Date for such Early Conversion;

 

  (C)

any payment hereunder with respect to such termination shall be calculated
pursuant to Section 6 of the Agreement as if (x) an Early Termination Date had
been designated in respect of a Transaction having terms identical to the
Transaction and a Number of Options equal to the Affected Number of Options,
(y) Counterparty were the sole Affected Party with respect to such Additional
Termination Event and (z) the terminated portion of the Transaction were the
sole Affected Transaction; provided that the amount payable with respect to such
termination shall not be greater than (1) the Applicable Percentage, multiplied
by (2) the Affected Number of Options, multiplied by (3) (x) the sum of (i) the
amount of cash paid (if any) to the Holder (as such term is defined in the
Indenture) of an Affected Convertible Note upon conversion of such Affected
Convertible Note and (ii) the number of Shares delivered (if any) to the Holder
(as such term is defined in the Indenture) of an Affected Convertible Note upon
conversion of such Affected Convertible Note (including for such purposes taking
into account any applicable adjustments to the “Conversion Rate” (as defined in
the Indenture) pursuant to Section 14.03 of the Indenture), multiplied by the
Applicable Limit Price, minus (y) USD 1,000;

 

  (D)

Counterparty shall notify Dealer (which notice may, for the avoidance of doubt,
be by email) of the amount of cash, if any, paid to the Holder and the number of
Shares, if any, delivered to the Holder, in each case as described in clause
(3) of the foregoing Section 9(i)(i)(C), prior to relevant Early Termination
Date;

 

  (E)

for the avoidance of doubt, in determining the amount payable in respect of such
Affected Transaction pursuant to Section 6 of the Agreement, the Calculation
Agent shall assume that (x) the relevant Early Conversion and any conversions,
adjustments, agreements, payments, deliveries or acquisitions by or on behalf of
Counterparty leading thereto had not occurred, (y) no adjustments to the
“Conversion Rate” (as defined in the Indenture) have occurred pursuant to any
Excluded Provision and (z) the corresponding Convertible Notes remain
outstanding; and

 

  (F)

the Transaction shall remain in full force and effect, except that, as of the
Conversion Date for such Early Conversion, the Number of Options shall be
reduced by the Affected Number of Options.

 

29

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  (ii)

Notwithstanding anything to the contrary in this Confirmation if an event of
default with respect to Counterparty occurs under the terms of the Convertible
Notes as set forth in Section 6.01 of the Indenture and such event of default
results in the Convertible Notes being accelerated and declared due and payable,
then such event of default shall constitute an Additional Termination Event
applicable to the Transaction and, with respect to such Additional Termination
Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the
Transaction shall be the sole Affected Transaction and (C) Dealer shall be the
party entitled to designate an Early Termination Date pursuant to Section 6(b)
of the Agreement (which Early Termination Date shall be on or as promptly as
reasonably practicable after Dealer becomes aware of the occurrence of such
acceleration).

 

  (iii)

Within seven Scheduled Trading Days following any Repayment Event (as defined
below), Counterparty may, at its option, notify Dealer of such Repayment Event
and the aggregate principal amount of Convertible Notes subject to such
Repayment Event (any such notice, a “Repayment Notice”); provided that
Counterparty shall timely provide a Repayment Notice in connection with any
repurchase or redemption of the Convertible Notes pursuant to Article 15 or
Article 16 of the Indenture, as the case may be. Any Repayment Notice shall
contain an acknowledgement by Counterparty of its responsibilities under
applicable securities laws, and in particular Section 9 and Section 10(b) of the
Exchange Act and the rules and regulations thereunder, in respect of the
delivery of such Repayment Notice and the representations by Counterparty set
forth in Section 8(a)(vi) as of the date of such Repayment Notice. The receipt
by Dealer from Counterparty of any Repayment Notice shall constitute an
Additional Termination Event as provided in this Section 9(i)(iii). Upon receipt
of any such Repayment Notice, Dealer shall designate an Exchange Business Day
following receipt of such Repayment Notice (which Exchange Business Day shall be
on or as promptly as reasonably practicable after the later of (x) the related
repurchase settlement date for the relevant Repayment Event and (y) the date on
which Counterparty provides the Repayment Notice described in this
Section 9(i)(iii)) as an Early Termination Date with respect to the portion of
the Transaction corresponding to a number of Options (the “Repayment Options”)
equal to the lesser of (A) the aggregate principal amount of such Convertible
Notes specified in such Repayment Notice, divided by USD 1,000, and (B) the
Number of Options as of the date Dealer designates such Early Termination Date
and, as of such date, the Number of Options shall be reduced by the number of
Repayment Options. Any payment hereunder with respect to such termination (the
“Repayment Unwind Payment”) shall be calculated pursuant to Section 6 of the
Agreement as if (1) an Early Termination Date had been designated in respect of
a Transaction having terms identical to the Transaction and a Number of Options
equal to the number of Repayment Options, (2) Counterparty were the sole
Affected Party with respect to such Additional Termination Event, (3) no
adjustments to the “Conversion Rate” (as defined in the Indenture) have occurred
pursuant to an Excluded Provision, (4) the corresponding Convertible Notes
remain outstanding, (5) the relevant Repayment Event and any conversions,
adjustments, agreements, payments, deliveries or acquisitions by or on behalf of
Counterparty leading thereto had not occurred and (6) the terminated portion of
the Transaction were the sole Affected Transaction. “Repayment Event” means that
(i) any Convertible Notes are repurchased or redeemed (whether in connection
with or as a result of a fundamental change, howsoever defined, or in connection
with a redemption of the Convertible Notes pursuant to the Indenture or for any
other reason) by Counterparty or any of its subsidiaries, (ii) any Convertible
Notes are delivered to Counterparty in exchange for delivery of any property or
assets of Counterparty or any of its subsidiaries (howsoever described), (iii)
any principal of any of the Convertible Notes is repaid prior to the final
maturity date of the Convertible Notes (other than as a result of an
acceleration of the Convertible Notes that results in an Additional Termination
Event pursuant to Section 9(i)(ii)) or (iv) any Convertible Notes are exchanged
by or for the benefit of the “Holders” (as defined in the Indenture) thereof for
any other securities of Counterparty or any of its subsidiaries (or any other
property, or any combination thereof) pursuant to any exchange offer or similar
transaction.

 

30

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  (iv)

Notwithstanding anything to the contrary in the Equity Definitions, if, as a
result of an Extraordinary Event, the Transaction would be cancelled or
terminated (whether in whole or in part) pursuant to Article 12 of the Equity
Definitions, an Additional Termination Event (with the Transaction (or portion
thereof) being the Affected Transaction, Counterparty being the sole Affected
Party and Dealer being the party entitled to designate an Early Termination Date
pursuant to Section 6(h) of the Agreement) shall be deemed to occur, and, in
lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the
Agreement shall apply to such Affected Transactions.

 

  (j)

Amendments to Equity Definitions.

 

  (i)

Solely in respect of adjustments to the Cap Price pursuant to Section 9(x),
Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the
words “that may have a diluting or concentrative effect on the theoretical value
of the relevant Shares” and replacing them with the words “that is the result of
a corporate event involving the Issuer or its securities that has a material
economic effect on the Shares or options on the Shares; provided that such event
is not based on (a) an observable market, other than the market for the Issuer’s
own stock or (b) an observable index, other than an index calculated and
measured solely by reference to Issuer’s own operations.”

 

  (ii)

Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) inserting
“(1)” immediately following the word “means” in the first line thereof and
(2) inserting immediately prior to the semi-colon at the end of subsection
(B) thereof the following words: “or (2) 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”.

 

  (iii)

Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing
“either party may elect” with “Dealer may elect” and (2) replacing “notice to
the other party” with “notice to Counterparty” in the first sentence of such
section.

 

  (iv)

Section 12.9(b)(vi) of the Equity Definitions is hereby amended by (1) adding
the word “or” immediately before subsection “(B)”, (2) deleting the comma at the
end of subsection (A), (3) deleting subsection (C) in its entirety, (4) deleting
the word “or” immediately preceding subsection (C) and (5) replacing the words
“either party” in the last sentence of such Section with “Dealer”.

 

  (k)

No Setoff. Neither party shall have the right to set off any obligation that it
may have to the other party under the Transaction against any obligation such
other party may have to it, whether arising under the Agreement, this
Confirmation or any other agreement between the parties hereto, by operation of
law or otherwise.

 

  (l)

Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events. If (a) an Early Termination Date (whether as a result of
an Event of Default or a Termination Event) occurs or is designated with respect
to the Transaction or (b) the Transaction is cancelled or terminated upon the
occurrence of an Extraordinary Event (except as a result of (i) a
Nationalization, Insolvency or Merger Event in which the consideration to be
paid to all holders of Shares consists solely of cash, (ii) an Announcement
Event, Merger Event or Tender Offer that is within Counterparty’s control, or
(iii) an Event of Default in which Counterparty is the Defaulting Party or a
Termination Event in which Counterparty is the Affected Party other than an
Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or
(viii) of the Agreement or a Termination Event of the type described in
Section 5(b) of the Agreement, in each case that resulted from an event or
events outside Counterparty’s control), and if Dealer would owe any amount to
Counterparty pursuant to Section 6(d)(ii) of the Agreement or any Cancellation
Amount

 

31

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  pursuant to Article 12 of the Equity Definitions (any such amount, a “Payment
Obligation”), then Dealer shall satisfy the Payment Obligation by the Share
Termination Alternative (as defined below), unless (a) Counterparty gives
irrevocable telephonic notice to Dealer, confirmed in writing within one
Scheduled Trading Day, no later than 12:00 p.m. (New York City time) on the date
of the Announcement Event, Merger Date, Tender Offer Date, Announcement Date (in
the case of a Nationalization, Insolvency or Delisting), Early Termination Date
or date of cancellation, as applicable, of its election that the Share
Termination Alternative shall not apply, (b) Counterparty remakes the
representation set forth in Section 8(a)(vi) as of the date of such election and
(c) Dealer agrees, in its sole discretion, to such election, in which case the
provisions of Section 12.7 or Section 12.9 of the Equity Definitions, or the
provisions of Section 6(d)(ii) of the Agreement, as the case may be, shall
apply.

 

Share Termination Alternative:    If applicable, Dealer shall deliver to
Counterparty the Share Termination Delivery Property on, or within a
commercially reasonable period of time after, the date when the relevant Payment
Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity
Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable, in
satisfaction of such Payment Obligation in the manner reasonably requested by
Counterparty free of payment. 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 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, as
determined by the Calculation Agent in its discretion by commercially reasonable
means and notified by the Calculation Agent to Dealer at the time of
notification of the Payment Obligation. Share Termination Delivery Unit:    One
Share or, if the Shares have changed into cash or any other property or the
right to receive cash or any other property as the result of a Nationalization,
Insolvency or Merger Event (any such cash or other property, the “Exchange
Property”), a unit consisting of the type and amount of such Exchange 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 Nationalization, Insolvency or Merger Event, as determined by the
Calculation Agent. Failure to Deliver:    Applicable

 

32

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Other applicable provisions:    If Share Termination Alternative is applicable,
the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity
Definitions and the provisions set forth opposite the caption “Representation
and Agreement” in Section 2 will be applicable, except that all references in
such provisions to “Physically-settled” shall be read as references to “Share
Termination Settled” and all references to “Shares” shall be read as references
to “Share Termination Delivery Units”. “Share Termination Settled” in relation
to the Transaction means that Share Termination Alternative is applicable to the
Transaction.

 

  (m)

Waiver of Jury Trial. Each party waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect of any suit,
action or proceeding relating to the Transaction. Each party (i) certifies that
no representative, agent or attorney of either party has represented, expressly
or otherwise, that such other party would not, in the event of such a suit,
action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges
that it and the other party have been induced to enter into the Transaction, as
applicable, by, among other things, the mutual waivers and certifications
provided herein.

 

  (n)

Registration. Counterparty hereby agrees that if, in the good faith reasonable
judgment of Dealer, based on advice of counsel, the Shares (the “Hedge Shares”)
acquired by Dealer for the purpose of effecting a commercially reasonable hedge
of its obligations pursuant to the Transaction cannot be sold in the U.S. public
market by Dealer without registration under the Securities Act, Counterparty
shall, at its election, either (i) in order to allow Dealer to sell the Hedge
Shares in a registered offering, make available to Dealer an effective
registration statement under the Securities Act to cover the resale of such
Hedge Shares and enter into a customary agreement, in form and substance
commercially reasonably satisfactory to Dealer, substantially in the form of an
underwriting agreement for a registered secondary offering for companies of a
similar size in a similar industry; provided, however, that if Dealer, in its
reasonable discretion, is not satisfied with access to due diligence materials,
the results of its due diligence investigation, or the procedures and
documentation for the registered offering referred to above, then clause (ii) or
clause (iii) of this paragraph shall apply at the election of Counterparty,
(ii) in order to allow Dealer to sell the Hedge Shares in a private placement,
enter into a private placement agreement substantially similar to private
placement purchase agreements customary for private placements of equity
securities for companies of a similar size in a similar industry, in form and
substance commercially reasonably satisfactory to Dealer (in which case, the
Calculation Agent shall make any commercially reasonable adjustments to the
terms of the Transaction that are necessary, in its reasonable judgment, to
compensate Dealer for any discount from the public market price of the Shares
incurred on the sale of Hedge Shares in a private placement for companies of a
similar size in a similar industry); provided that no “comfort letter” or
accountants’ consent shall be required to be delivered in connection with any
private placements, or (iii) purchase the Hedge Shares from Dealer at the
then-prevailing market price at one or more times on such Exchange Business
Days, and in the amounts, requested by Dealer.

 

  (o)

Tax Disclosure. Effective from the date of commencement of discussions
concerning the Transaction, Counterparty 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 Counterparty relating to such tax treatment and tax structure.

 

33

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  (p)

Right to Extend. Dealer may postpone or add, in a commercially reasonable
manner, in whole or in part, any Valid Day or Valid Days during the Settlement
Averaging Period or any other date of valuation, payment or delivery by Dealer,
with respect to some or all of the Options hereunder, if Dealer reasonably
determines, in the case of clause (i), in its commercially reasonable judgment
or, in the case of clause (ii), based on advice of counsel, that such action is
reasonably necessary or appropriate (i) to preserve Dealer’s commercially
reasonable hedging or hedge unwind activity hereunder in light of existing
liquidity conditions in the cash market or stock loan market (but only if there
is a material decrease in liquidity relative to Dealer’s expectations on the
Trade Date) or (ii) to enable Dealer to effect purchases of Shares in connection
with its commercially reasonable hedging, hedge unwind or settlement activity
hereunder in a manner that would, if Dealer were Counterparty or an affiliated
purchaser of Counterparty, be in compliance with applicable legal, regulatory or
self-regulatory requirements of organizations with jurisdiction over Dealer or
its affiliates, or with related policies and procedures would generally be
applicable to counterparties similar to Counterparty and/or transactions similar
to the Transaction; provided that no such Valid Day or other date of valuation,
payment or delivery may be postponed or added more than 25 Valid Days after the
original Valid Day or other date of valuation, payment or delivery, as the case
may be; provided further that any such postponement or addition may only be in
whole, and not in part, in the case of any event described in clause
(ii) relating solely to a self-regulatory requirement applicable to Dealer.

 

  (q)

Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this
Confirmation is not intended to convey to Dealer rights against Counterparty
with respect to the Transaction that are senior to the claims of common
stockholders of Counterparty in any United States bankruptcy proceedings of
Counterparty; provided that nothing herein shall limit or shall be deemed to
limit Dealer’s right to pursue remedies in the event of a breach by Counterparty
of its obligations and agreements with respect to the Transaction; provided
further that nothing herein shall limit or shall be deemed to limit Dealer’s
rights in respect of any transactions other than the Transaction.

 

  (r)

Securities Contract; Swap Agreement. The parties hereto intend for (i) the
Transaction to be a “securities contract” and a “swap agreement” as defined in
the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy
Code”), and the parties hereto to be entitled to the protections afforded by,
among other Sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and
560 of the Bankruptcy Code, (ii) a party’s right to liquidate the Transaction
and to exercise any other remedies upon the occurrence of any Event of Default
under the Agreement with respect to the other party to constitute a “contractual
right” as described in the Bankruptcy Code, and (iii) each payment and delivery
of cash, securities or other property hereunder to constitute a “margin payment”
or “settlement payment” and a “transfer” as defined in the Bankruptcy Code.

 

  (s)

Notice of Certain Other Events. Counterparty covenants and agrees that:

 

  (i)

Counterparty shall give Dealer written notice of the weighted average of the
types and amounts of consideration actually received by holders of Shares upon
consummation of such Merger Event (the date of such notification, the
“Consideration Notification Date”); provided that in no event shall the
Consideration Notification Date be later than the date on which such Merger
Event is consummated; and

 

  (ii)

(A) Counterparty shall give Dealer commercially reasonable advance (but in no
event less than one Exchange Business Day) written notice of the section or
sections of the Indenture and, if applicable, the formula therein, pursuant to
which any adjustment will be made to the Convertible Notes in connection with
any Potential Adjustment Event, Merger Event or Tender Offer and (B) promptly
following any such adjustment, Counterparty shall give Dealer written notice of
the details of such adjustment.

 

  (t)

Wall Street Transparency and Accountability Act. In connection with Section 739
of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the
parties hereby agree that neither the enactment of WSTAA or any regulation under
the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall
limit or otherwise impair either party’s

 

34

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  otherwise applicable 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, an Excess
Ownership Position, or Illegality (as defined in the Agreement)).

 

  (u)

Agreements and Acknowledgements Regarding Hedging. Counterparty understands,
acknowledges and agrees that: (A) at any time on and prior to the 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 Relevant Prices; 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 Relevant Prices, each in a
manner that may be adverse to Counterparty.

 

  (v)

Early Unwind. (A) In the event Counterparty fails to deliver to Dealer opinions
of counsel as required pursuant to Section 9(a), or (B) to the extent the
transactions contemplated in the Exchange Agreements are not consummated for any
reason, in each case by 5:00 p.m. (New York City time) on the seventh Business
Day immediately following the Trade Date, or such later date as agreed upon by
the parties (such Business Day or such later date, the “Early Unwind Date”), the
Transaction, or, in the case of clause (B) above, a corresponding portion of the
Transaction, shall automatically terminate (the “Early Unwind”) on the Early
Unwind Date and (i) the Transaction, or portion thereof in the case of clause
(B) above, and all of the respective rights and obligations of Dealer and
Counterparty under the Transaction, or portion thereof, shall be cancelled and
terminated, and Counterparty shall pay to Dealer an amount in cash equal to the
aggregate amount of commercially reasonable costs and expenses relating to the
unwinding of Dealer’s commercially reasonable hedging activities in respect of
the Transaction, or portion thereof, so terminated (including commercially
reasonable market losses incurred in reselling any Shares purchased by or on
behalf of Dealer or its affiliates in connection with such commercially
reasonable hedging activities, unless Counterparty agrees to purchase any such
Shares at the cost at which Dealer purchased such Shares) or, at the election of
Counterparty, deliver to Dealer Shares with a value equal to such amount, as
determined by the Calculation Agent, in which event the parties shall enter into
customary and commercially reasonable documentation relating to the registered
or exempt resale of such Shares (provided that the aggregate amount of Shares
deliverable pursuant to this Section 9(v) shall not exceed the Number of
Shares), and (ii) each party shall be released and discharged by the other party
from and agrees not to make any claim against the other party with respect to
any obligations or liabilities of the other party arising out of and to be
performed in connection with the Transaction, or portion thereof, so terminated
either prior to or after the Early Unwind Date. Each of Dealer and Counterparty
represents and acknowledges to the other that upon an Early Unwind, all
obligations with respect to the Transaction, or portion thereof, so terminated
(other than the payment obligation set forth in this Section 9(v)) shall be
deemed fully and finally discharged. For the avoidance of doubt, it is intended
that payments pursuant to this Section 9(v) shall be made solely in respect of
the terminated portion of the Transaction.

 

  (w)

Payment by Counterparty. In the event that, following payment of the Premium,
(i) an Early Termination Date occurs or is designated with respect to the
Transaction as a result of a Termination Event or an Event of Default (other
than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the
Agreement) and, as a result, Counterparty owes to Dealer an amount calculated
under Section 6(e) of the Agreement, or (ii) Counterparty owes to Dealer,
pursuant to Section 12.7 or Section 12.9 of the Equity Definitions, an amount
calculated under Section 12.8 of the Equity Definitions, such amount shall be
deemed to be zero.

 

35

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  (x)

Other Adjustments Pursuant to the Equity Definitions. Notwithstanding anything
to the contrary in this Confirmation, solely for the purpose of adjusting the
Cap Price, (x) the terms “Potential Adjustment Event,” “Merger Event,” and
“Tender Offer” shall each have the meanings assigned to such term in the Equity
Definitions (subject to Section 9(j)(i)), and (y) “Extraordinary Dividend” means
any cash dividend on the Shares other than a regular, quarterly cash dividend in
an amount equal to or less than the Regular Dividend, and upon the occurrence of
a Merger Date, the occurrence of a Tender Offer Date, or declaration by
Counterparty of the terms of any Potential Adjustment Event, respectively, as
such terms are defined in the Equity Definitions (subject to Section 9(j)(i)),
the Calculation Agent shall determine in a commercially reasonable manner
whether such occurrence or declaration, as applicable, has had a material
economic effect on the Transactions and, if so shall adjust the Cap Price to
preserve the fair value of the Options; provided that in no event shall the Cap
Price be less than the Strike Price; provided further that any adjustment to the
Cap Price made pursuant to this Section 9(x) shall be made without duplication
of any other adjustment hereunder (including, for the avoidance of doubt,
adjustment made pursuant to the provisions opposite the captions “Method of
Adjustment,” “Consequences of Merger Events / Tender Offers” and “Consequences
of Announcement Events” in Section 3 above).

 

  (y)

[Reserved.] [__________]3

 

  (z)

[Conduct Rules. Each party acknowledges and agrees to be bound by the Conduct
Rules of the Financial Industry Regulatory Authority, Inc. applicable to
transactions in options, and further agrees not to violate the position and
exercise limits set forth therein.

 

  (aa)

Risk Disclosure Statement. Counterparty represents and warrants that it has
received, read and understands the OTC Options Risk Disclosure Statement
provided by Dealer and a copy of the most recent disclosure pamphlet prepared by
The Options Clearing Corporation entitled “Characteristics and Risks of
Standardized Options”.]

 

  (bb)

Tax Matters.

 

  (i)

Payee Representations:

For the purpose of Section 3(f) of the Agreement, Counterparty makes the
following representation to Dealer:

Counterparty is a corporation and a U.S. person (as that term is defined in
Section 7701(a)(30) of the Revenue Code and used in Section 1.1441-4(a)(3)(ii)
of the United States Treasury Regulations) for U.S. federal income tax purposes.

For the purpose of Section 3(f) of the Agreement, Dealer makes the following
representations to Counterparty:

[Dealer is a U.S. person (as that term is used in Section 1.1441-4(a)(3)(ii) of
the United States Treasury Regulations) for U.S. federal income tax purposes.]4

 

  (ii)

Tax Documentation. For the purpose of Sections 4(a)(i) and (ii) of the
Agreement, Counterparty agrees to deliver to Dealer one duly executed and
completed U.S. Internal Revenue Service Form W-9 (or successor thereto) and
Dealer agrees to deliver to Counterparty, as applicable, a U.S. Internal Revenue
Service Form W-8 or Form W-9 (or

 

 

 

3 

Dealer boilerplate, as applicable.

4 

To be updated for each Dealer, if applicable.

 

36

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

  successor thereto). Such forms or documents shall be delivered (i) on or
before the date of execution of this Confirmation, (ii) upon Counterparty or
Dealer, as applicable, learning that any such tax form previously provided by it
has become obsolete or incorrect and (iii) upon reasonable request of the other
party.

 

  (iii)

Withholding Tax imposed on payments to non-US counterparties under the United
States Foreign Account Tax Compliance Act. “Indemnifiable Tax”, as defined in
Section 14 of the Agreement, shall not include any U.S. federal withholding tax
imposed or collected pursuant to Sections 1471 through 1474 of the Revenue Code,
any current or future regulations or official interpretations thereof, any
agreement entered into pursuant to Section 1471(b) of the Revenue Code, or any
fiscal or regulatory legislation, rules or practices adopted pursuant to any
intergovernmental agreement entered into in connection with the implementation
of such Sections of the Code (a “FATCA Withholding Tax”). For the avoidance of
doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is
required by applicable law for the purposes of Section 2(d) of the Agreement.

 

  (cc)

HIRE Act. “Indemnifiable Tax”, as defined in Section 14 of the Agreement, shall
not include any tax imposed on payments treated as dividends from sources within
the United States under Section 871(m) of the Revenue Code or any regulations
issued thereunder. For the avoidance of doubt, any such tax imposed under
Section 871(m) of the Revenue Code is a Tax the deduction or withholding of
which is required by applicable law for the purposes of Section 2(d) of the
Agreement.

 

  (dd)

Counterparty Purchases. Except pursuant to (i) the Exchange Agreements and
(ii) any confirmation substantially similar to this Confirmation entered into on
the date hereof, Counterparty (or any “affiliated purchaser” (as defined in Rule
10b-18) of Counterparty) shall not directly or indirectly purchase any Shares
(including by means of a derivative instrument), listed contracts on Shares or
securities that are convertible into, or exchangeable or exercisable for, Shares
(including, without limitation, any Rule 10b-18 purchases of blocks (as defined
in Rule 10b-18)) until the second Scheduled Trading Day immediately following
the Hedge Date.

 

  (ee)

10b5-1 Plan. Dealer and Counterparty each acknowledges that it is the intent of
the parties that the Transaction entered into under this Confirmation comply
with the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 under
the Exchange Act (“Rule 10b5-1”) and the Transaction entered into under this
Confirmation shall be interpreted to comply with the requirements of Rule
10b5-1(c). During the Hedge Date, Counterparty will not seek to control or
influence Dealer’s or the Designated Dealer’s decision to make any “purchases or
sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) in connection with the
Transaction entered into under this Confirmation.

 

  (ff)

Counterparts. This Confirmation may be executed in several counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument. Delivery of an executed signature page by facsimile or
electronic transmission (e.g. “pdf” or “tif”), or any electronic signature
complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic
Transactions Act or other applicable law, e.g., www.docusign.com, shall be
effective as delivery of a manually executed counterpart hereof.

 

  (gg)

[U.S. Resolution Stay Protocol. The parties acknowledge and agree that (i) to
the extent that prior to the date hereof both parties have adhered to the 2018
ISDA U.S. Resolution Stay Protocol (the “Protocol”), the terms of the Protocol
are incorporated into and form a part of the Agreement, and for such purposes
the Agreement shall be deemed a Protocol Covered Agreement, the J.P. Morgan
entity that is a party to the Agreement (“J.P. Morgan”) shall be deemed a
Regulated Entity and the other entity that is a party to the Agreement
(“Counterparty”) shall be deemed an Adhering Party; (ii) to the extent that
prior to the date hereof the parties have executed a separate agreement the

 

37

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

  effect of which is to amend the qualified financial contracts between them to
conform with the requirements of the QFC Stay Rules (the “Bilateral Agreement”),
the terms of the Bilateral Agreement are incorporated into and form a part of
the Agreement, and for such purposes the Agreement shall be deemed a Covered
Agreement, J.P. Morgan shall be deemed a Covered Entity and Counterparty shall
be deemed a Counterparty Entity; or (iii) if clause (i) and clause (ii) do not
apply, the terms of Section 1 and Section 2 and the related defined terms
(together, the “Bilateral Terms”) of the form of bilateral template entitled
“Full-Length Omnibus (for use between U.S. G-SIBs and Corporate Groups)”
published by ISDA on November 2, 2018 (currently available on the 2018 ISDA U.S.
Resolution Stay Protocol page at www.isda.org and, a copy of which is available
upon request), the effect of which is to amend the qualified financial contracts
between the parties thereto to conform with the requirements of the QFC Stay
Rules, are hereby incorporated into and form a part of the Agreement, and for
such purposes the Agreement shall be deemed a “Covered Agreement,” J.P. Morgan
shall be deemed a “Covered Entity” and Counterparty shall be deemed a
“Counterparty Entity.” In the event that, after the date of the Agreement, both
parties hereto become adhering parties to the Protocol, the terms of the
Protocol will replace the terms of this paragraph. In the event of any
inconsistencies between the Agreement and the terms of the Protocol, the
Bilateral Agreement or the Bilateral Terms (each, the “QFC Stay Terms”), as
applicable, the QFC Stay Terms will govern. Terms used in this paragraph without
definition shall have the meanings assigned to them under the QFC Stay Rules.
For purposes of this paragraph, references to “the Agreement” include any
related credit enhancements entered into between the parties or provided by one
to the other. In addition, the parties agree that the terms of this paragraph
shall be incorporated into any related covered affiliate credit enhancements,
with all references to J.P. Morgan replaced by references to the covered
affiliate support provider. “QFC Stay Rules” means the regulations codified at
12 C.F.R. 252.2, 252.81–8, 12 C.F.R. 382.1-7 and 12 C.F.R. 47.1-8, which,
subject to limited exceptions, require an express recognition of the
stay-and-transfer powers of the FDIC under the Federal Deposit Insurance Act and
the Orderly Liquidation Authority under Title II of the Dodd Frank Wall Street
Reform and Consumer Protection Act and the override of default rights related
directly or indirectly to the entry of an affiliate into certain insolvency
proceedings and any restrictions on the transfer of any covered affiliate credit
enhancements.]5

 

5 

To be updated for each Dealer, if applicable.

 

38

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

Very truly yours,

 

[Dealer] By:  

 

Authorized Signatory Name:

Accepted and confirmed

as of the Trade Date:

 

Microchip Technology Incorporated By:  

 

Authorized Signatory Name:

[Signature Page to Capped Call Confirmation]

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

[Annex A

Form of Guarantee]6

 

 

6 

To be included if applicable.

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

Schedule I

[FORM OF HEDGING NOTICE]

[________], 2020

 

To:

Microchip Technology Incorporated

2355 W. Chandler Blvd.

Chandler, AZ 85224-6199

Attention: Chief Financial Officer

Telephone No.:    480-792-7804

Facsimile No.:     480-792-4133

 

From:

[____________________]

Subject: Hedging Notice

Reference is made to the letter agreement, dated as of November 19, 2020 (the
“Confirmation”), confirming the terms and conditions of that certain Call Option
Transaction (the “Transaction”) entered into between [________] (“Dealer”) and
Microchip Technology Incorporated (“Counterparty”). Pursuant to the provisions
set forth opposite “Hedging Notice” in Section 2 of the Confirmation, Dealer
hereby notifies Counterparty of the following terms of the Transaction:

Hedge Price:    USD [____]

Conversion Rate: [____]

Strike Price: USD [____]

Cap Price: USD [____]

 

 

Very truly yours, [_______________] By:  

 

Authorized Signatory Name: