Morgan Stanley         
MORGAN STANLEY & CO. LLC
1585 BROADWAY
NEW YORK, NY 10036-8293
(212) 761-4000

November 12, 2014

Fixed Dollar Accelerated Share Repurchase Transaction

Rackspace Hosting, Inc.
1 Fanatical Place
City of Windcrest
San Antonio, Texas 78218
___________________________________________________________________________________

Dear Sir/Madam:

The purpose of this letter agreement (this “Confirmation”) is to confirm the
terms and conditions of the Transaction entered into between Morgan Stanley &
Co. LLC (“Dealer”) and Rackspace Hosting, Inc. (“Issuer”) on the Trade Date
specified below (the “Transaction”). This confirmation constitutes a
“Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”)) (the “Equity Definitions”) are incorporated into
this Confirmation. The Transaction is a Share Forward Transaction for purposes
of the Equity Definitions. Any reference to a currency shall have the meaning
contained in Section 1.7 of the 2006 ISDA Definitions, as published by ISDA.

1. This Confirmation evidences a complete and binding agreement between Dealer
and Issuer as to the terms of the Transaction to which this Confirmation relates
and shall supersede all prior or contemporaneous written or oral communications
with respect thereto. This Confirmation shall be subject to an agreement (the
“Agreement”) in the form of the 2002 ISDA Master Agreement as if Dealer and
Issuer had executed an agreement in such form without any Schedule but with the
elections set forth in this Confirmation (and (1) the election of USD as the
Termination Currency, (2) the election that subparagraph (ii) of Section 2(c)
will not apply to the Transactions, and (3) the election that the “Cross
Default” provisions of Section 5(a)(vi) shall apply to Dealer, with a “Threshold
Amount” of 3% of Dealer shareholders’ equity for Dealer (provided that (a) the
phrase “or becoming capable at such time of being declared” shall be deleted
from clause (1) of such Section 5(a)(vi) of the Agreement and (b) the following
sentence shall be added to the end thereof: “Notwithstanding the foregoing, a
default hereunder shall not constitute an Event of Default if (i) the default
was caused solely by error or omission of an administrative or operational
nature; (ii) funds were available to enable the party to make the payment when
due; and (iii) the payment is made within two Local Business Days of such
party’s receipt of written notice of its failure to pay)”.).

The Transaction shall be the only transaction under the Agreement. If there
exists any ISDA Master Agreement between Dealer and Issuer or any confirmation
or other agreement between Dealer and Issuer pursuant to which an ISDA Master
Agreement is deemed to exist between Dealer and Issuer, then, notwithstanding
anything to the contrary in such ISDA Master Agreement, such confirmation or
agreement or any other agreement to which Dealer and Issuer are parties, the
Transaction shall not be considered a transaction under, or otherwise governed
by, such existing or deemed to be existing ISDA Master Agreement.

If there is any inconsistency between the Agreement, this Confirmation and the
Equity Definitions, the following will prevail for purposes of the Transaction
in the order of precedence indicated: (i) this Confirmation; (ii) the Equity
Definitions; and (iii) the Agreement.

-1-

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

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

GENERAL TERMS:

Trade Date:
As specified in Schedule I

Buyer:
Issuer

Seller:
Dealer

Shares:
Common Stock, par value USD $0.001 per share, of Issuer (Ticker: RAX)

Forward Price:
A price per Share (as determined by the Calculation Agent) equal to (i) the
arithmetic mean (not a weighted average) of the 10b-18 VWAP on each Trading Day
during the Calculation Period minus (ii) the Discount.
 
 
Discount:
As specified in Schedule I
 
 
10b-18 VWAP:
For each Trading Day, a price per Share equal to the volume-weighted average
price of the Shares for the entirety of such Trading Day as determined by the
Calculation Agent by reference to the screen entitled “RAX <Equity> AQR SEC” or
any successor page as reported by Bloomberg L.P. or any successor (excluding (i)
trades that do not settle regular way, (ii) opening (regular way) reported
trades in the consolidated system on such Scheduled Trading Day, (iii) trades
that occur in the last ten minutes before the scheduled close of trading on the
Exchange on such Scheduled Trading Day and ten minutes before the scheduled
close of the primary trading in the market where the trade is effected, and (iv)
trades on such Scheduled Trading Day that do not satisfy the requirements of
Rule 10b-18(b)(5) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) on such Trading Day (such trades, hereinafter, “Rule 10b-18
eligible trades”) or, if the price (i) is not reported on such Bloomberg page or
successor page or (ii) is determined by the Calculation Agent to have been
reported incorrectly, the price determined by the Calculation Agent in good
faith and in a commercially reasonable manner to substitute for the unreported
or erroneous price on such day.

Calculation Period:
The period from, and including, the first Trading Day that occurs on or after
the Prepayment Date to, but excluding, the relevant Valuation Date; provided,
however, that if the Valuation Date is the Scheduled Valuation Date, then the
Valuation Date shall be included in the Calculation Period; provided further
that in no event shall any Scheduled Valuation Date be postponed to a date later
than the Final Termination Date.

-2-

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

Final Termination Date:
As specified in Schedule 1; provided that if a Market Disruption Event has
occurred pursuant to Section 8 of this Confirmation, such Final Termination Date
shall be postponed by one Trading Date for every Trading Date that is a
Disrupted Day as a result of such Merger Transaction during the Calculation
Period.
 
 
Trading Day:
Any Exchange Business Day that is not a Disrupted Day in whole

Initial Shares:
As specified in Schedule I
 
 
Initial Share Delivery Date:
One Exchange Business Day following the Trade Date. On the Initial Share
Delivery Date, Seller shall deliver to Buyer a number of Shares equal to the
Initial Shares in accordance with Section 9.4 of the Equity Definitions, with
the Initial Share Delivery Date being deemed to be a “Settlement Date” for
purposes of such Section 9.4.

Prepayment:
Applicable

Prepayment Amount:
As specified in Schedule I

Prepayment Date:
One Exchange Business Day following the Trade Date. On the Prepayment Date,
Buyer shall pay to Seller the Prepayment Amount.

Exchange:
The New York Stock Exchange

Related Exchange:
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.

-3-

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

Market Disruption Event:
The definition of “Market Disruption Event” in Section 6.3(a) of the Equity
Definitions is hereby amended by deleting the words “at any time 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,”
starting in the third line thereof and inserting the words “at any time on any
Scheduled Trading Day during the Calculation Period or Settlement Valuation
Period” after the word “material” in the third line thereof.

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

Notwithstanding anything to the contrary in the Equity Definitions, if any
Observation Date in the Calculation Period is a Disrupted Day, the Calculation
Agent shall have the option in its commercially reasonable discretion to take
one or more of the following actions in a good faith and commercially reasonable
manner: (i) determine that such Exchange Business Day is a Disrupted Day in
part, in which case the Calculation Agent shall (x) determine the 10b-18 VWAP on
such Exchange Business Day based on Rule 10b-18 eligible trades in the Shares on
such day taking into account the nature and duration of the relevant Market
Disruption Event and (y) determine the Forward Price using an appropriately
weighted average of 10b-18 VWAPs instead of an arithmetic mean, and/or (ii)
elect to postpone the Scheduled Valuation Date by up to one Observation Date for
every Observation Date that is a Disrupted Day during the Calculation Period;
provided that in no event shall any Scheduled Valuation Date be postponed to a
date later than the Final Termination Date. For the avoidance of doubt, if
Calculation Agent elects the option described in clause (i) above, then such
Disrupted Day shall be deemed to be a Trading Day for purposes of calculating
the Forward Price.

If a Disrupted Day occurs during the Calculation Period and each of the nine
immediately following Scheduled Trading Days is a Disrupted Day, then the
Calculation Agent may, in its good faith and commercially reasonable discretion,
deem such ninth Scheduled Trading Day to be an Exchange Business Day that is not
a Disrupted Day and determine the VWAP Price for such ninth Scheduled Trading
Day using its good faith and commercially reasonable estimate of the value of
the Shares on such ninth Scheduled Trading Day based on the volume, historical
trading patterns and price of the Shares.

-4-

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

VALUATION:

Valuation Date:
The earlier of (i) the Scheduled Valuation Date and (ii) any earlier accelerated
Valuation Date resulting from Dealer’s election in accordance with the
immediately succeeding paragraph.

Dealer shall have the right, in its absolute discretion but subject to the
limitation set forth in the immediately succeeding paragraph, to accelerate the
Valuation Date, in whole or in part, to any Exchange Business Day that is on or
after the Lock-Out Date and prior to the Scheduled Valuation Date by notice
(each such notice, an “Acceleration Notice”) to Issuer by 9:00 p.m., New York
City time, on the accelerated Valuation Date (the “Acceleration Date”).

Dealer shall specify in each Acceleration Notice the portion of the Prepayment
Amount that is subject to acceleration (which may be less than the full
Prepayment Amount, but only so long as such portion is not less than
USD25,000,000). If the portion of the Prepayment Amount that is subject to
acceleration is less than the full Prepayment Amount, then the Calculation Agent
shall adjust the terms of the Transaction as appropriate in order to take into
account the occurrence of such accelerated Valuation Date (including cumulative
adjustments to take into account all prior accelerated Valuation Dates).

On each Valuation Date, the Calculation Agent shall calculate the applicable
Settlement Amount.
 
 
Scheduled Valuation Date:
As specified in Schedule I, subject to postponement in accordance with “Market
Disruption Event” above
 
 
Lock-Out Date:
As specified in Schedule I

SETTLEMENT TERMS:

Physical Settlement:
Applicable.

On the Settlement Date, Seller shall deliver to Buyer a number of Shares equal
to (a) (i) the Prepayment Amount divided by (ii) the Forward Price, minus (b)
the Initial Shares (such number of Shares, the “Settlement Amount”), rounded to
the nearest whole number of Shares; provided, however, that if the Dealer elects
to accelerate the Valuation Date in part, the Calculation Agent shall determine
on a pro-rata basis the Prepayment Amount and Initial Shares subject to the
accelerated Valuation Date for the purposes of this paragraph; and provided
further that if the Settlement Amount is less than zero, the terms of the Buyer
Settlement Provisions in Annex A shall apply.

-5-

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

Settlement Currency:
USD
 
 
Settlement Date:
The date that falls one Settlement Cycle after any Scheduled Valuation Date;
provided that with respect to any accelerated Valuation Date, the date shall be
5 Exchange Business Days after the Valuation Date.
 
 
Other Applicable Provisions:
The last sentence of Section 9.2, Sections 9.8, 9.9, 9.10 and 9.11 (except that
the Representation and Agreement contained in Section 9.11 of the Equity
Definitions shall be modified by excluding any representations therein relating
to restrictions, obligations, limitations or requirements under applicable
securities laws arising as a result of the fact that Buyer is the issuer of the
Shares) and Section 9.12 of the Equity Definitions will be applicable to the
Transaction.

SHARE ADJUSTMENTS:

Potential Adjustment Event:
Notwithstanding anything to the contrary in Section 11.2(e) of the Equity
Definitions, an Extraordinary Dividend shall not constitute a Potential
Adjustment Event.

It shall constitute a Potential Adjustment Event if a Disrupted Day occurs or,
pursuant to Section 11 below, is deemed to occur (in whole or in part) on any
Trading Day on or prior to the Valuation Date.
 
 
Extraordinary Dividend:
Any dividend or distribution on the Shares with an ex-dividend date occurring
during the period from, and including, the Trade Date to, and including, the
last day of the Calculation Period (other than any dividend or distribution of
the type described in Section 11.2(e)(i), Section 11.2(e)(ii)(A) or Section
11.2(e)(ii)(B) of the Equity Definitions).

Method of Adjustment:
Calculation Agent Adjustment
 
 
Agreement Regarding Dividends:
Notwithstanding any other provision of this Confirmation, the Definitions or the
Agreement to the contrary, in calculating any adjustment pursuant to Article 11
of the Equity Definitions or any amount payable in respect of any termination or
cancellation of the Transaction pursuant to Article 12 of the Equity Definitions
or Section 6 of the Agreement, the Calculation Agent shall not take into account
changes to any dividends since the Trade Date. For the avoidance of doubt, if an
Early Termination Date occurs in respect of the Transaction, the amount payable
pursuant to Section 6 of the Agreement in respect of such Early Termination Date
shall be determined without regard to the difference between actual dividends
declared (including Extraordinary Dividends) and expected dividends as of the
Trade Date.

Extraordinary Events:

Consequences of Merger Events:

Share-for-Share:
Modified Calculation Agent Adjustment

-6-

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

Share-for-Other:
Cancellation and Payment on that portion of the Other Consideration that
consists of cash; Modified Calculation Agent Adjustment on the remainder of the
Other Consideration

Share-for-Combined:
Component Adjustment
 
 
Tender Offer:
Applicable; provided that the definition of “Tender Offer” in Section 12.1 of
the Equity Definitions will be amended by replacing the phrase “greater than 10%
and less than 100% of the outstanding voting shares of the Issuer” in the third
and fourth line thereof with “(a) greater than 15% and less than 100% of the
outstanding Shares of the Issuer in the event that such Tender Offer is being
made by any entity or person other than the Issuer or any subsidiary thereof or
(b) greater than 20% and less than 100% of the outstanding Shares of the Issuer
in the event that such Tender Offer is being made by the Issuer or any
subsidiary thereof.

Consequences of Tender Offers:

Share-for-Share:
Modified Calculation Agent Adjustment

Share-for-Other:
Modified Calculation Agent Adjustment

Share-for-Combined:
Modified Calculation Agent Adjustment
 
 
New Shares:
In the definition of New Shares in Section 12.1(i) of the Equity Definitions,
the text in clause (i) thereof shall be deleted in its entirety (including the
word “and” following such clause (i)) and replaced with “publicly quoted, traded
or listed on any of the New York Stock Exchange, The NASDAQ Global Select Market
or The NASDAQ Global Market (or their respective successors)”.

For purposes of the Transaction,

(i)
the definition of Merger Date in Section 12.1(c) of the Equity Definitions shall
be amended to read, “Merger Date shall mean the Announcement Date.”;

(ii)
the definition of Tender Offer Date in Section 12.1(e) of the Equity Definitions
shall be amended to read, “Tender Offer Date shall mean the Announcement Date.”;

(iii)
the definition of “Announcement Date” in Section 12.1(l) of the Equity
Definitions is hereby amended by (a) replacing the words “a firm” with the words
“any bona fide” in the second and fourth lines thereof, (b) replacing the word
“leads to the” with the words “, if completed, would lead to a” in the third and
the fifth lines thereof, (c) replacing the words “voting shares” with the word
“Shares” in the fifth line thereof, (d) inserting the words “by any bona fide
entity” after the word “announcement” in the second and the fourth lines
thereof, (e) inserting the words “or to explore the possibility of engaging in”
after the words “engage in” in the second line thereof and (f) inserting the
words “or to explore the possibility of purchasing or otherwise obtaining” after
the word “obtain” in the fourth line thereof; and

(iv)
Section 12.2 of the Equity Definitions is hereby amended by inserting the words
“Announcement Date in respect of any Merger Event or any potential” before the
words “Merger Event” in the final line thereof.

Composition of Combined Consideration:        Not Applicable

-7-

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

Nationalization, Insolvency or Delisting:
Cancellation and Payment; provided that in addition to the provisions of Section
12.6(a)(iii) of the Equity Definitions, it shall constitute a Delisting if the
Exchange is located in the United States and the Shares are immediately
re-listed, re-traded or re-quoted on none of the New York Stock Exchange, The
NASDAQ Global Market or The NASDAQ Global Select Market (or their respective
successors); if the Shares are immediately re-listed, re-traded or re-quoted on
any such exchange or quotation system, such exchange or quotation system shall
thereafter be deemed to be the Exchange.

Additional Disruption Events:

Change in Law:
Applicable; provided that (i) any determination as to whether (A) the adoption
of or any change in any applicable law or regulation (including, for the
avoidance of doubt and without limitation, (x) any tax law or (y) adoption or
promulgation of new regulations authorized or mandated by existing statute) or
(B) the promulgation of or any change in the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any applicable
law or regulation (including any action taken by a taxing authority), in each
case, constitutes a “Change in Law” shall be made without regard to Section 739
of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any
similar legal certainty provision in any legislation enacted, or rule or
regulation promulgated, on or after the Trade Date, and (ii) Section 12.9(a)(ii)
of the Equity Definitions is hereby amended by replacing the parenthetical
beginning after the word “regulation” in the second line thereof the words
“(including, for the avoidance of doubt and without limitation, (x) any tax law
or (y) adoption or promulgation of new regulations authorized or mandated by
existing statute)” )” and (iii) by, immediately following the word “Transaction”
in clause (x) thereof, adding the phrase “in the manner contemplated by the
Hedging Party on the Trade Date”.

Failure to Deliver:
Applicable

Insolvency Filing:
Applicable

Hedging Disruption:
Not Applicable

Increased Cost of Hedging:
Not Applicable
 
 
Loss of Stock Borrow:
Applicable
 
 
Maximum Stock Loan Rate:
200 bps

Increased Cost of Stock Borrow:
Applicable
 
 
Initial Stock Loan Rate:
50 bps

-8-

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

Determining Party:
For all applicable events, Dealer; provided that following any determination
hereunder and upon written request by Issuer, the Determining Party shall
provide Issuer with a reasonably detailed explanation in writing of its
determination including, where applicable, a description of the methodology and
the basis for such determination.

Hedging Party:
For all applicable events, Dealer

Non-Reliance:
Applicable

Agreements and Acknowledgements Regarding Hedging Activities:
Applicable

Additional Acknowledgments:
Applicable
 
 
Hedging Adjustments:
For the avoidance of doubt, whenever the Calculation Agent is called upon to
make an adjustment pursuant to the terms of this Confirmation or the Equity
Definitions to take into account the effect of an event, the Calculation Agent
shall make such adjustment by reference to the effect of such event on Dealer,
assuming that Dealer maintains a commercially reasonable Hedge Position.

3. Calculation Agent:
Dealer; provided that following the occurrence 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, if the Calculation Agent fails to timely
make any calculation, adjustment or determination required to be made by the
Calculation Agent hereunder or to perform any obligation of the Calculation
Agent hereunder and such failure continues for five (5) Exchange Business Days
following notice to the Calculation Agent by Issuer of such failure the Issuer
shall have the right to designate a nationally recognized third-party dealer in
over-the-counter corporate equity derivatives to act, during the period
commencing on the date such Event of Default occurred and ending on the Early
Termination Date with respect to such Event of Default, as the Calculation
Agent.

Following any calculation by the Calculation Agent hereunder, upon written
request by Counterparty, the Calculation Agent will 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 calculation;
provided, however, that in no event will Dealer be obligated to share with
Counterparty any proprietary or confidential data or information or any
proprietary or confidential models used by it.

Whenever the Calculation Agent is required to act or exercise judgment in any
way with respect to the Transaction, it will do so in good faith and in a
commercially reasonable manner and it will not make any arbitrary decisions or
adjustments.

4. Account Details and Notices:                

(a)    Account for delivery of Shares to Issuer:

-9-

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

Deliver Shares to American Stock Transfer & Trust Company (American Stock
Transfer & Trust Company will immediately cancel and retire Shares upon receipt)

(b)     Account for payments to Issuer:

(c)     Account for payments to Dealer:

(d)    For purposes of this Confirmation:

(i)    Address for notices or communications to Issuer:

    
Rackspace US, Inc.
One Fanatical Place
City of Windcrest
Attention: Office of the General Counsel
San Antonio, Texas 78218
MAIL STOP: US109-2301
Telephone: (210) 312-4000
Facsimile: (210) 312-4848

(ii)    Address for notices or communications to Dealer:

Morgan Stanley & Co. LLC
1585 Broadway
New York, NY 10036-8293
Attention: David Oakes
Telephone: (212) 761-5319
Facsimile: (212) 404-9480

With a copy to:
Morgan Stanley & Co. LLC
1585 Broadway
New York, NY 10036-8293
Attention: Joshua Birbach
Telephone: 212-761-1719
Facsimile: 212-507-8717
Email: Joshua.birbach@morganstanley.com

5. Amendments to the Equity Definitions and Agreement.

(a)     Section 9.2(a)(iii) of the Equity Definitions is hereby amended by
deleting the words “the Excess Dividend Amount, if any, and”.

(b)    Section 11.2(a) of the Equity Definitions is hereby amended by deleting
the words “in the determination of the Calculation Agent, a diluting or
concentrative effect on the theoretical value of the relevant Shares” and
replacing them with the words “, in the commercially reasonable judgment of the
Calculation Agent, a material economic effect on the relevant Transaction;
provided that such event is not based on (a) an observable market, other than
the market for Issuer’s own stock or (b) an observable index, other than an
index calculated and measured solely by reference to Issuer’s own operations”.

-10-

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

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

(d)    Section 11.2(e)(vii) of the Equity Definitions is hereby amended by
deleting the words “a diluting or concentrative effect on the theoretical value
of the relevant Shares” and replacing them with the words “, in the commercially
reasonable judgment of the Calculation Agent, a material economic effect on the
relevant Transaction; provided that such event is not based on (a) an observable
market, other than the market for Issuer’s own stock or (b) an observable index,
other than an index calculated and measured solely by reference to Issuer’s own
operations”.

(e)    Section 12.6(c)(ii) of the Equity Definitions is hereby amended by
replacing the words “the Transaction will be cancelled,” in the first line with
the words “Dealer will have the right to cancel the Transaction,”.

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

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

(h)     Section 2(a)(iii) of the Agreement is hereby amended by deleting the
words “or Potential Event of Default” in clause (1) of such Section and deleting
the word “and” immediately before subsection (3) and deleting clause “(3)” in
its entirety.

-11-

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

6. Certain Payments and Deliveries by Dealer.
Notwithstanding anything to the contrary herein, or in the Equity Definitions,
if at any time (i) an Early Termination Date occurs and Dealer would be required
to make a payment pursuant to Section 6 of the Agreement or (ii) an
Extraordinary Event occurs and Dealer would be required to make a payment
pursuant to Article 12 of the Equity Definitions (the amount of any such payment
obligation described in Section 6(i) or (ii) above, an “Dealer Payment Amount”),
then Issuer shall have the option to require Dealer to settle such payment
obligation in Shares in lieu of cash. If Issuer elects for Dealer to settle an
Dealer Payment Amount in Shares, then on such date such Dealer Payment Amount is
due, Dealer will deliver a number of Shares with a market value, as commercially
reasonably determined by the Calculation Agent, equal to all or a portion (which
portion may be zero) of the Dealer Payment Amount. If the market value of such
Shares equals a portion, but not all, of the Dealer Payment Amount, then, on the
date such Dealer Payment Amount is due, a notional balance (the “Settlement
Balance”) shall be established equal to the remaining portion of the Dealer
Payment Amount, and Dealer shall commence purchasing Shares for delivery to
Issuer. At the end of each Trading Day on which Dealer purchases Shares pursuant
to this Section 6, Dealer shall reduce the Settlement Balance by the amount paid
by Dealer to purchase the Shares purchased on such Trading Day; provided,
however, that if the amount paid by Dealer to purchase Shares exceeds the 10b-18
VWAP for that Trading Day, Dealer shall reduce the Settlement Balance by the
amount equal to the product of (i) the number of Shares purchased on that
Trading Day, and (ii) the 10b-18 VWAP. Dealer shall deliver any Shares purchased
on a Trading Day pursuant to this Section 6 to Issuer on the third Exchange
Business Day following such Trading Day. Dealer shall continue purchasing and
delivering Shares until the Settlement Balance has been reduced to zero. In
making any purchases of Shares contemplated by this Section 6, Dealer shall use
commercially reasonable efforts to purchase such Shares in a manner that would
qualify for the safe harbor provided by Rule 10b-18 if such purchases were made
by or on behalf of Issuer. The period until the Settlement Balance is reduced to
zero shall be considered to be part of the Calculation Period for purposes of
the representations, warranties and covenants and other provisions herein as the
context requires.

7. Certain Payments and Deliveries by Issuer.

Notwithstanding anything to the contrary herein, or in the Equity Definitions,
if at any time (i) an Early Termination Date occurs and Issuer would be required
to make a payment pursuant to Section 6 of the Agreement or (ii) an
Extraordinary Event occurs and Issuer would be required to make a payment
pursuant to Article 12 of the Equity Definitions (any such payment described in
Section 7(i) or (ii) above, an “Early Settlement Payment”), then Issuer shall
have the option in lieu of making such cash payment, to settle such payment
obligation in Shares (such Shares, “Early Settlement Shares”). In order to elect
to deliver Early Settlement Shares, (i) Issuer must notify Dealer of its
election by no later than 4:00 p.m., New York City time, on the date that is
three Exchange Business Days before the date that the Early Settlement Payment
is due, (ii) Issuer must specify whether such Early Settlement Shares are to be
sold by means of a registered offering or by means of a private placement and
(iii) Issuer must comply with Annex A below.

8. Special Provisions for Merger Transactions.

Notwithstanding anything to the contrary herein or in the Equity Definitions:

(a)    Issuer agrees that:

(i)    It will use best efforts such that Issuer will not during the term of the
Transaction make, or, to the extent within its control, permit to be made, any
public announcement (as defined in Rule 165(f) under the Securities Act) of any
Merger Transaction or potential Merger Transaction unless such public
announcement is made prior to the open or after the close of the regular trading
session on the Exchange for the Shares.

-12-

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

(ii)    To the extent that an announcement of a potential Merger Transaction
occurs during the term of the Transaction and Dealer has not provided notice to
Issuer following such announcement that Dealer will cause the Transaction to be
cancelled or terminated in whole pursuant to “Extraordinary Events” in Section 2
above, then as soon as practicable following such announcement (but in any event
prior to the next opening of the regular trading session on the Exchange),
Issuer shall provide Dealer with written notice of such announcement and shall
promptly (but in any event prior to the next opening of the regular trading
session on the Exchange) provide Dealer with written notice specifying (x)
Issuer’s average daily “Rule 10b-18 purchases” (as defined in Rule 10b-18)
during the three full calendar months immediately preceding the Announcement
Date that were not effected through Dealer or its Affiliates and (y) the number
of Shares purchased pursuant to the block purchase proviso in Rule 10b-18(b)(4)
under the Exchange Act for the three full calendar months preceding the
Announcement Date. Such written notice shall be deemed to be a certification by
Issuer to Dealer that such information is true and correct. Issuer understands
that Dealer will use this information in calculating the trading volume for
purposes of Rule 10b-18. In addition, Issuer shall promptly notify Dealer of the
earlier to occur of the completion of such transaction and the completion of the
vote by target shareholders. Issuer acknowledges that any such public
announcement may trigger the provision set forth in Section 10 below.
Accordingly, Issuer acknowledges that its actions in relation to any such
announcement or transaction must comply with the standards set forth in Section
12(b) below.

“Merger Transaction” means any merger, acquisition or similar transaction
involving a recapitalization of Issuer as contemplated by Rule 10b-18(a)(13)(iv)
under the Exchange Act.

9. Special Provisions for Acquisition Transaction Announcements.

(a)     If an Acquisition Transaction Announcement occurs on or prior to the
final Valuation Date, then the Calculation Agent shall make such adjustments to
the exercise, settlement, payment or any other terms of such Transaction
(including, without limitation, the Forward Price) as the Calculation Agent
determines appropriate, at such time or at multiple times as the Calculation
Agent determines appropriate, to account for the economic effect on such
Transaction of such Acquisition Transaction Announcement (provided that
adjustments will be made to account solely for changes in volatility, stock loan
rate or liquidity relevant to the Shares or to the Transaction). If an
Acquisition Transaction Announcement occurs after the Trade Date but prior to
the Lock-Out Date, the Lock-Out Date shall be deemed to be the date of such
Acquisition Transaction Announcement.

(b)     “Acquisition Transaction Announcement” means (i) the announcement of an
Acquisition Transaction, (ii) an announcement that Issuer or any of its
subsidiaries has entered into an agreement, a letter of intent or an
understanding designed to result in an Acquisition Transaction, (iii) the
announcement of the intention to solicit or enter into, or to explore strategic
alternatives or other similar undertaking that may include, an Acquisition
Transaction, or (iv) any other bona fide announcement that in the commercially
reasonable judgment of the Calculation Agent is reasonably expected to result in
an Acquisition Transaction or (v) any announcement subsequent to an Acquisition
Transaction Announcement relating to a material amendment, material extension,
withdrawal or other material change to the subject matter of the previous
Acquisition Transaction Announcement. For the avoidance of doubt, the term
“announcement” as used in the definition of Acquisition Transaction Announcement
refers to any public announcement whether made by Issuer or by a third party,
provided that such third party’s announcement is bona fide.

(c)    “Acquisition Transaction” means (i) any Merger Event (for purposes of
this definition, the definition of Merger Event shall be read with the
references therein to “100%” being replaced by “25%” and to “50%” by “75%” and
without reference to the clause beginning immediately following the definition
of Reverse Merger therein to the end of such definition), Tender Offer or Merger
Transaction or any other transaction involving the merger of Issuer with or into
any third party, (ii) the sale or transfer of all or substantially all of the
assets or liabilities of Issuer, (iii) a recapitalization, reclassification,
binding share exchange or other similar transaction, or (iv) any acquisition,
lease, exchange, transfer, disposition (including by way of spin-off or
distribution) of assets or liabilities (including any capital stock or other
ownership interests in subsidiaries) or other similar event by Issuer or any of
its subsidiaries where the consideration transferable or receivable by or to
Issuer or its subsidiaries in respect of each transaction exceeds 50% of the
market capitalization of Issuer.

(d)     Notwithstanding anything in this Confirmation, the Agreement or the
Definitions to the contrary, this Section 9 shall not apply to any Extraordinary
Event.

-13-

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

10. Dealer Adjustments.

In the event that Dealer reasonably determines in good faith and commercially
reasonable manner that, based upon the advice of counsel, that it is appropriate
with regard to any legal, regulatory or self-regulatory requirements or related
policies and procedures (whether or not such requirements, policies or
procedures are imposed by law or have been voluntarily adopted by Dealer, and
including, without limitation, Rule 10b-18, Rule 10b-5, Regulations 13D-G and
Regulations 14 D-E under the Exchange Act, but provided that such requirements,
policies or procedures relate to legal and regulatory issues and are generally
applicable in similar situations and applied to the relevant Transaction in a
non-discriminatory manner), for Dealer to refrain from purchasing Shares or
engaging in other market activity or to purchase fewer than the number of Shares
or to engage in fewer or smaller other market transactions than Dealer would
otherwise purchase or engage in on any Trading Day on or prior to the last day
of the Calculation Period, then Dealer may, in its discretion, elect that a
Market Disruption Event shall be deemed to have occurred on such Trading Day.
Dealer shall notify Issuer upon the exercise of Dealer’s rights pursuant to this
Section 10 and Trading Days affect by it and shall subsequently notify Issuer on
the day Dealer believes that the circumstances giving rise to such exercise have
changed.

11. Covenants.

Issuer covenants and agrees that:

(a)     Until the end of the Potential Purchase Period (as defined below),
neither it nor any of its affiliated purchasers (as defined in Rule 10b-18 under
the Exchange Act) shall directly or indirectly (which shall be deemed to include
the writing or purchase of any cash-settled or other derivative or structured
Share repurchase transaction with a hedging period, calculation period or
settlement valuation period or similar period that overlaps with the
Transaction) purchase, offer to purchase, place any bid or limit order relating
to a purchase of or commence any tender offer relating to Shares (or any
security convertible into or exchangeable for Shares) without the prior written
approval of Dealer or take any other action that would cause the purchase by
Dealer of any Shares in connection with this Agreement not to qualify for the
safe harbor provided in Rule 10b-18 under the Exchange Act (assuming for the
purposes of this paragraph that such safe harbor were otherwise available for
such purchases) ); provided that this Section 12(a)(i) shall not (i) limit the
Issuer’s ability, pursuant to its employee incentive plan or dividend
reinvestment program to re-acquire Shares in connection with the related equity
transactions, (ii) limit the Issuer’s ability to withhold shares to cover tax
liabilities associated with such equity transactions or (iii) limit the Issuer’s
ability to grant stock and options to “affiliated partners” (as defined in Rule
10b-18) or the ability of such affiliated purchasers to acquire such stock or
options, provided that in connection with any such purchase Issuer will be
deemed to represent to Dealer that such purchase does not constitute a “Rule
10b-18 Purchase” (as defined in Rule 10b-18) (any such incentive or compensatory
plan, program or policy of Counterparty, a “Compensatory Plan”).

“Potential Purchase Period” means the period from, and including, the Trade Date
to, and including, the latest of (i) the last day of the Calculation Period,
(ii) the earlier of (A) the last day of the Calculation Period and (B) the
Scheduled Valuation Date and (iii) if an Early Termination Date occurs or the
Transaction is cancelled pursuant to Article 12 of the Equity Definitions, a
date determined by Dealer in its commercially reasonable discretion and
communicated to Issuer no later than the Exchange Business Day immediately
following such date.

(b)     Reserved

(c)     Without limiting the generality of Section 13.1 of the Equity
Definitions, it is not relying, and has not relied, upon Dealer or any of its
representatives or advisors with respect to the legal, accounting, tax or other
implications of this Agreement and that it has conducted its own analyses of the
legal, accounting, tax and other implications of this Agreement, and that Dealer
and its Affiliates may from time to time effect transactions for their own
account or the account of customers and hold positions in securities or options
on securities of Issuer and that Dealer and its Affiliates may continue to
conduct such transactions during the term of this Agreement. Without limiting
the generality of the foregoing, Issuer acknowledges that Dealer is not making
any representations or warranties or taking any position or expressing any view
with respect to the treatment of the Transaction under any accounting standards
including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and
Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC
815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity (or any
successor issue statements) or under FASB’s Liabilities & Equity Project.

-14-

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

(d)    Neither it nor any Affiliates shall take any action that would cause a
restricted period (as defined in Regulation M under the Exchange Act
(“Regulation M”)) to be applicable to any purchases of Shares, or of any
security for which Shares is a reference security (as defined in Regulation M),
by Issuer or any affiliated purchasers (as defined in Regulation M) of Issuer
during the Potential Purchase Period.

(e)    It will not make any election or take any other action in connection with
the Transaction while aware of any material nonpublic information regarding
Issuer or the Shares.

(f)    It shall not declare or pay any Extraordinary Dividend until the later of
(i) the Scheduled Valuation Date or (ii) end of the Settlement Valuation Period,
except for ordinary cash dividends of amounts equal to the Ordinary Dividend
Amount (as specified in Schedule I) per Share with record dates on the relevant
Ordinary Dividend Record Dates (as specified in Schedule I).

Dealer covenants and agrees that Dealer has adopted policies and procedures
reasonably designed to ensure that purchases of Shares by Dealer in connection
with this Transaction are consistent with the anti-manipulation provisions of
the Exchange Act by taking into account, among other things, the historical
trading patterns of the Shares, the Scheduled Valuation Date, the Lock-Out Date
and other relevant factors.

12. Representations, Warranties and Acknowledgments.

(a)     Issuer hereby represents and warrants to Dealer on the date hereof and
on and as of the Initial Share Delivery Date that:

(i)    (A) None of Issuer and its officers and directors is aware of any
material nonpublic information regarding Issuer or the Shares, and is entering
into the Transaction in good faith and not as part of a plan or scheme to evade
the prohibitions of federal securities laws, including, without limitation, Rule
10b-5 under the Exchange Act and (B) Issuer agrees not to alter or deviate from
the terms of the Agreement or enter into or alter a corresponding or hedging
transaction or position with respect to the Shares (including, without
limitation, with respect to any securities convertible or exchangeable into the
Shares) during the term of the Agreement. Without limiting the generality of the
foregoing, all reports and other documents filed by Issuer with the Securities
and Exchange Commission pursuant to the Exchange Act when considered as a whole
(with the more recent such reports and documents deemed to amend inconsistent
statements contained in any earlier such reports and documents) do not contain
any untrue statement of a material fact or any omission of a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances in which they were made, not misleading.

(ii)    The transactions contemplated by this Confirmation have been authorized
under Issuer’s publicly announced program to repurchase Shares.

(iii)     Issuer is not entering into this Agreement to facilitate a
distribution of the Shares (or any security convertible into or exchangeable for
Shares) or in connection with a future issuance of securities.

(iv)     Issuer is not entering into this Agreement to create actual or apparent
trading activity in the Shares (or any security convertible into or exchangeable
for Shares) or to manipulate the price of the Shares (or any security
convertible into or exchangeable for Shares) in violation of the federal
securities laws.

(v)     There have been no purchases of Shares in Rule 10b-18 purchases of
blocks pursuant to the once-a-week block exception contained in Rule
10b-18(b)(4) by or for Issuer or any of its affiliated purchasers during each of
the four calendar weeks preceding the Trade Date and during the calendar week in
which the Trade Date occurs (“Rule 10b-18 purchase”, “blocks” and “affiliated
purchaser” each being used as defined in Rule 10b-18).

-15-

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

(vi)    Issuer is as of the date hereof, and after giving effect to the payment
of the Prepayment Amount will be, Solvent. As used in this paragraph, the term
“Solvent” means, with respect to a particular date, that on such date (A) the
present fair market value (or present fair saleable value) of the assets of
Issuer is not less than the total amount required to pay the liabilities of
Issuer on its total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured, (B) Issuer is able to realize
upon its assets and pay its debts and other liabilities, contingent obligations
and commitments as they mature and become due in the normal course of business,
(C) assuming consummation of the transactions as contemplated by this Agreement,
Issuer is not incurring debts or liabilities beyond its ability to pay as such
debts and liabilities mature, (D) Issuer is not engaged in any business or
transaction, and does not propose to engage in any business or transaction, for
which its property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which Issuer is
engaged, (E) Issuer is not a defendant in any civil action that could reasonably
be expected to result in a judgment that Issuer is or would become unable to
satisfy, (F) Issuer 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 (G) Issuer would be able to purchase Shares with an
aggregate purchase price equal to the Prepayment Amount in compliance with the
corporate laws of the jurisdiction of its incorporation.

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

(viii)     No state or local (including non-U.S. jurisdictions) law, rule,
regulation or regulatory order applicable to the Shares would give rise to any
reporting, consent, registration or other requirement (including without
limitation a requirement to obtain prior approval from any person or entity) as
a result of Dealer or its Affiliates owning or holding (however defined) Shares,
other than any such law, rule, regulation or regulatory order that applies (A)
to the beneficial ownership of Shares under the Exchange Act or (B) solely as a
result of the business, identity, place of business or jurisdiction of
organization of Dealer or any such affiliate..

(b)    Issuer acknowledges and agrees that the Initial Shares may be sold short
to Issuer. Issuer further acknowledges and agrees that Dealer may purchase
Shares in connection with the Transaction, which Shares may be used to cover all
or a portion of such short sale or may be delivered to Issuer. Such purchases
and any other market activity by Dealer will be conducted independently of
Issuer by Dealer as principal for its own account. All of the actions to be
taken by Dealer in connection with the Transaction shall be taken by Dealer
independently and without any advance or subsequent consultation with Issuer. It
is the intent of the parties that the Transaction comply with the requirements
of Rule 10b5-1(c)(1)(i)(B) of the Exchange Act, and the parties agree that this
Confirmation shall be interpreted to comply with the requirements of such Rule,
and Issuer shall not take any action that results in the Transaction not so
complying with such requirements. Without limiting the generality of the
preceding sentence, Issuer acknowledges and agrees that (A) Issuer does not
have, and shall not attempt to exercise, any influence over how, when or whether
Dealer effects any market transactions in connection with the Transaction and
(B) neither Issuer nor its officers or employees shall, directly or indirectly,
communicate any information regarding Issuer or the Shares to any employee of
Dealer or its Affiliates, other than employees identified by Dealer to Issuer in
writing as employees not responsible for executing market transactions in
connection with the Transaction. Issuer also acknowledges and agrees that any
amendment, modification, waiver or termination of this Confirmation must be
effected in accordance with the requirements for the amendment or termination of
a “plan” as defined in Rule 10b5-1(c) under the Exchange Act. Without limiting
the generality of the foregoing, any such amendment, modification, waiver or
termination shall be made in good faith and not as part of a plan or scheme to
evade the prohibitions of Rule 10b-5 under the Exchange Act, and no such
amendment, modification or waiver shall be made at any time at which Issuer or
any officer or director of Issuer is aware of any material nonpublic information
regarding Issuer or the Shares.

(c)    Each of Issuer and Dealer represents and warrants to the other that it is
an “eligible contract participant” as defined in Section 1a(12) of the U.S.
Commodity Exchange Act, as amended.

-16-

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

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

13. Acknowledgements of Issuer Regarding Hedging and Market Activity.

Issuer agrees, understands and acknowledges that:

(a)    during the period from (and including) the Trade Date to (and including)
the Settlement 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 transactions 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 the Shares
or options, futures contracts, swaps or other derivative transactions relating
to the Shares other than in connection with hedging activities in relation to
the Transaction;

(c)    Dealer shall make its own determination as to whether, when and in what
manner any hedging or market activities in Issuer’s securities or other
securities or transactions 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
Transaction; and

(d)    any such market activities of Dealer and its Affiliates may affect the
market price and volatility of the Shares, including the 10b-18 VWAP and the
Forward Price, each in a manner that may be adverse to Issuer.

14. Other Provisions.

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

(b)    Dealer and Issuer hereby agree and acknowledge that Dealer has authorized
Issuer to disclose the Transaction to any and all persons, and there are no
express or implied agreements, arrangements or understandings to the contrary,
and authorizes Issuer to use any information that Issuer receives or has
received with respect to the Transaction in any manner.

-17-

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

(c)    In the event Issuer becomes the subject of proceedings (“Bankruptcy
Proceedings”) under the Bankruptcy Code or any other applicable bankruptcy or
insolvency statute, any rights or claims of Dealer hereunder in respect of the
Transaction shall rank for all purposes no higher than, but on a parity with,
the rights or claims of holders of Shares, and Dealer hereby agrees that its
rights and claims hereunder shall be subordinated to those of all parties with
claims or rights against Issuer (other than common stockholders) to the extent
necessary to assure such ranking. Without limiting the generality of the
foregoing, after the commencement of Bankruptcy Proceedings, the claims of
Dealer hereunder shall for all purposes have rights equivalent to the rights of
a holder of a percentage of the Shares equal to the aggregate amount of such
claims (the “Claim Amount”) taken as a percentage of the sum of (i) the Claim
Amount and (ii) the aggregate fair market value of all outstanding Shares on the
record date for distributions made to the holders of such Shares in the related
Bankruptcy Proceedings. Notwithstanding any right it might otherwise have to
assert a higher priority claim in any such Bankruptcy Proceedings, Dealer shall
be entitled to receive a distribution solely to the extent and only in the form
that a holder of such percentage of the Shares would be entitled to receive in
such Bankruptcy Proceedings, and, from and after the commencement of such
Bankruptcy Proceedings, Dealer expressly waives (i) any other rights or
distributions to which it might otherwise be entitled in such Bankruptcy
Proceedings in respect of its rights and claims hereunder and (ii) any rights of
setoff it might otherwise be entitled to assert in respect of such rights and
claims.

(d)    Notwithstanding any provision of this Confirmation or any other agreement
between the parties to the contrary, neither the obligations of Issuer nor the
obligations of Dealer hereunder are secured by any collateral, security
interest, pledge or lien.

(e)    Each party waives any and all rights it may have to set off obligations
arising under the Agreement and the Transaction against other obligations
between the parties, whether arising under any other agreement, applicable law
or otherwise.

(f)    Notwithstanding anything to the contrary herein, Dealer may, by prior
notice to Issuer, satisfy its obligation to deliver any Shares or other
securities on any date due (an “Original Delivery Date”) by making separate
deliveries of Shares or such securities, as the case may be, at more than one
time on or prior to such Original Delivery Date, so long as the aggregate number
of Shares and other securities so delivered on or prior to such Original
Delivery Date is equal to the number required to be delivered on such Original
Delivery Date.

(g)    It shall constitute an Additional Termination Event with respect to which
the Transaction is the sole Affected Transaction and Issuer is the sole Affected
Party and Dealer shall be the party entitled to designate an Early Termination
Date pursuant to Section 6(b) of the Agreement if, at any time on or prior to
the Valuation Date, the price per Share on the Exchange, as commercially
reasonably determined by the Calculation Agent, is at or below the Threshold
Price (as specified in Schedule I).

15. Share Cap.

Notwithstanding any other provision of this Confirmation or the Agreement to the
contrary, in no event shall Issuer be required to deliver to Dealer in the
aggregate a number of Shares that exceeds the Issuer Share Cap as of the date of
delivery (as specified in Schedule I) or (ii) Dealer be required to deliver to
Issuer in the aggregate a number of Shares that exceeds the Dealer Share Cap as
of the date of delivery (as specified in Schedule I).

-18-

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

16. Delivery of Cash.

For the avoidance of doubt, nothing in this Confirmation shall be interpreted as
requiring Issuer to deliver cash in respect of the settlement of the
Transactions contemplated by this Confirmation following payment by Counterparty
of the relevant Prepayment Amount, except in circumstances where the required
cash settlement thereof is permitted for classification of the contract as
equity by ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own
Equity, as in effect on the relevant Trade Date (including, without limitation,
where Issuer so elects to deliver cash or fails timely to elect to deliver
Shares in respect of the settlement of such Transactions)

17. Transfer and Assignment.

Dealer may transfer or assign its rights and obligations hereunder and under the
Agreement, in whole or in part, to any of its Affiliates that have a credit
rating that is not lower than the credit rating of Dealer (and Guarantor)
immediately prior to the proposed time of such Transfer (or whose obligations
are guaranteed by Guarantor) without the consent of Issuer. Dealer will provide
prompt written notice of any such transfer to Issuer.

18. Governing Law; Jurisdiction; Waiver.

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

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

Remainder of Page Intentionally Blank

-19-

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

_________________________________________________________________________________

Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to us by facsimile to
the number provided on the attached facsimile cover page.

Confirmed as of the date first written above:

Rackspace Hosting Inc.
MORGAN STANLEY & CO. LLC
By:  /s/ Karl Pichler                                                   
Name: Karl Pichler
Title: Chief Financial Officer and Treasurer
By:  /s/ Scott Pecullan                                                  
Name: Scott Pecullan
Title: Managing Director

-20-

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

ANNEX A
BUYER SETTLEMENT PROVISIONS
1.    The following Buyer Settlement Provisions shall apply to the extent
indicated under the Confirmation:
Settlement Currency:
USD

Settlement Method Election:
Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby
amended by deleting the word “Physical” in the sixth line thereof and replacing
it with the words “Net Share” and (ii) the Electing Party may make a settlement
method election only if the Electing Party represents and warrants to Seller in
writing on the date it notifies Seller of its election that, as of such date,
the Electing Party is electing the settlement method in good faith and not as
part of a plan or scheme to evade compliance with the federal securities laws.

Electing Party:
Buyer

Settlement Method
Election Date:
The earlier of (i) the Scheduled Valuation Date and (ii) the second Scheduled
Trading Day immediately following the Valuation Date (if different than the
Scheduled Valuation Date), in which case the election under Section 7.1 of the
Equity Definitions shall be made no later than 10 minutes prior to the open of
trading on the Exchange on such second Scheduled Trading Day), as the case may
be.

Default Settlement Method:
Cash Settlement

Forward Cash Settlement
Amount:
The Settlement Amount multiplied by the Settlement Price.

Settlement Price:
The arithmetic mean of the 10b-18 VWAP for the Scheduled Trading Days in the
Settlement Valuation Period, subject to a Market Disruption Event as specified
in the Confirmation.

Settlement Valuation Period:
A number of Scheduled Trading Days selected by the Seller in its commercially
reasonable discretion, beginning on the Scheduled Trading Day immediately
following the Settlement Method Election Date.

Cash Settlement:
If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute
value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.

Cash Settlement
Payment Date:
The date one Settlement Cycle following the last day of the Settlement Valuation
Period.

Net Share Settlement
Procedures:
If Net Share Settlement is applicable, Net Share Settlement shall be made in
accordance with paragraphs 2 through 7 below.

2.    Net Share Settlement shall be made by delivery on the Cash Settlement
Payment Date of a number of Shares satisfying the conditions set forth in
paragraph 3 below (the “Registered Settlement Shares”), or a number of Shares
not satisfying such conditions (the “Unregistered Settlement Shares”), in either
case with a value equal to the absolute value of the Forward Cash Settlement
Amount, with such Shares’ value based on the value thereof to Seller (which
value shall, in the case of Unregistered Settlement Shares, take into account a
commercially reasonable illiquidity discount not to exceed 1%), in each case as
determined by the Seller in its commercially reasonable judgment acting in good
faith.
3.    Buyer may only deliver Registered Settlement Shares pursuant to paragraph
2 above if:

-21-

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

(a)    a registration statement covering public resale of the Registered
Settlement Shares by Seller (the “Registration Statement”) shall have been filed
with the Securities and Exchange Commission under the Securities Act and been
declared or otherwise become effective on or prior to the date of delivery, and
no stop order shall be in effect with respect to the Registration Statement; a
printed prospectus relating to the Registered Settlement Shares (including any
prospectus supplement thereto, the “Prospectus”) shall have been delivered to
Seller, in such quantities as Seller shall reasonably have requested, on or
prior to the date of delivery;
(b)    the form and content of the Registration Statement and the Prospectus
(including, without limitation, any sections describing the plan of
distribution) shall be satisfactory to Seller;
as of or prior to the date of delivery, Seller and its Sellers shall have been
afforded a commercially reasonable opportunity to conduct a due diligence
investigation with respect to Buyer customary in scope for underwritten
offerings of equity securities of similar size by similar issuers and the
results of such investigation are satisfactory to Seller, in its commercially
reasonable discretion; and
(d)    as of the date of delivery, an agreement (the “Underwriting Agreement”)
shall have been entered into with Seller in connection with the public resale of
the Registered Settlement Shares by Seller substantially similar to underwriting
agreements customary for follow-on underwritten offerings of equity securities
of similar size by similar issuers, in form and substance commercially
reasonably satisfactory to Seller and Buyer, which Underwriting Agreement shall
include, without limitation, provisions substantially similar to those contained
in such underwriting agreements of a publicly traded company relating, without
limitation, to the customary indemnification of, and contribution in connection
with the liability of, Seller and its Affiliates and the provision of customary
opinions, accountants’ comfort letters and lawyers’ negative assurance letters.
4.    If Buyer delivers Unregistered Settlement Shares pursuant to paragraph 2
above:
(a)    all Unregistered Settlement Shares shall be delivered to Seller (or any
Affiliate of Seller designated by Seller) pursuant to the exemption from the
registration requirements of the Securities Act provided by Section 4(a)(2)
thereof;
(b)    as of or prior to the date of delivery, Seller and any potential
purchaser of any such Shares from Seller (or any Affiliate of Seller designated
by Seller) identified by Seller shall be afforded a commercially reasonable
opportunity to conduct a due diligence investigation with respect to Buyer
customary in scope for private placements of equity securities of similar size
by similar issuers (including, without limitation, the right to have made
available to them for inspection all financial and other records, pertinent
corporate documents and other information reasonably requested by them);
(c)    as of the date of delivery, Buyer shall use best efforts to enter into an
agreement (a “Private Placement Agreement”) with Seller (or any Affiliate of
Seller designated by Seller) in connection with the private placement of such
shares by Buyer to Seller (or any such Affiliate) and the private resale of such
shares by Seller (or any such Affiliate), substantially similar to private
placement purchase agreements customary for private placements of equity
securities of similar size by similar issuers, in form and substance
commercially reasonably satisfactory to Seller and Buyer, which Private
Placement Agreement shall (i) include, without limitation, provisions
substantially similar to those contained in such private placement purchase
agreements relating to the customary indemnification of, and contribution in
connection with the liability of, Seller and its Affiliates, (ii) provide for
Buyer using best efforts to deliver documentation appropriate for a private
placement of equity securities by similar size by similar issuers, and the
payment by Buyer of all commercially reasonable fees and expenses in connection
with such resale, including all commercially reasonable fees and expenses of
counsel for Seller, and (iii) contain representations, warranties, covenants and
agreements of Buyer reasonably necessary or advisable to establish and maintain
the availability of an exemption from the registration requirements of the
Securities Act for such resales; and
(d)    in connection with the private placement of such shares by Buyer to
Seller (or any such Affiliate) and the private resale of such shares by Seller
(or any such Affiliate), Buyer shall, if so requested by Seller, prepare, in
cooperation with Seller, a private placement memorandum in form and substance
commercially reasonably satisfactory to Seller and Buyer.

-22-

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

5.    Seller, itself or through an Affiliate (the “Selling Seller”) or any
underwriter(s), will sell all, or such lesser portion as may be required
hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares
and any Make-whole Shares (as defined below) (together, the “Settlement Shares”)
delivered by Buyer to Seller pursuant to paragraph 6 below commencing on the
Cash Settlement Payment Date and continuing until the date on which the
aggregate Net Proceeds (as such term is defined below) of such sales, as
determined by Seller, is equal to the absolute value of the Forward Cash
Settlement Amount (such date, the “Final Resale Date”). If the proceeds of any
sale(s) made by Seller, the Selling Seller or any underwriter(s), net of any
commercially reasonable fees and commissions (including, without limitation,
underwriting or placement fees) customary for similar transactions under the
circumstances at the time of the offering, together with carrying charges and
expenses incurred in connection with the offer and sale of the Shares
(including, but without limitation to, the covering of any over-allotment or
short position (syndicate or otherwise)) (the “Net Proceeds”) exceed the
absolute value of the Forward Cash Settlement Amount, Seller will refund, in USD
or Shares at Buyer’s election, such excess to Buyer on the date that is three
(3) Currency Business Days following the Final Resale Date, and, if any portion
of the Settlement Shares remains unsold, Seller shall return to Buyer on that
date such unsold Shares.
6.    If the Seller determines that the Net Proceeds received from the sale of
the Registered Settlement Shares or Unregistered Settlement Shares or any
Make-whole Shares, if any, pursuant to this paragraph 6 are less than the
absolute value of the Forward Cash Settlement Amount (the amount in USD by which
the Net Proceeds are less than the absolute value of the Forward Cash Settlement
Amount being the “Shortfall”), Buyer shall, on the Exchange Business Day next
succeeding the day on which such Shortfall is established (the “Make-whole
Notice Date”), deliver to Seller a notice of Buyer’s election that Buyer shall
either (i) pay an amount in cash equal to the Shortfall on the day that is one
(1) Currency Business Day after the Make-whole Notice Date, or (ii) deliver
additional Shares. If Buyer elects to deliver to Seller additional Shares, then
Buyer shall deliver additional Shares in compliance with the terms and
conditions of paragraph 3 or paragraph 4 above, as the case may be (the
“Make-whole Shares”), on the first Clearance System Business Day which is also
an Exchange Business Day following the Make-whole Notice Date in such number as
the Seller reasonably believes would have a market value on that Exchange
Business Day equal to the Shortfall. Such Make-whole Shares shall be sold by
Seller in accordance with the provisions above; provided that if the sum of the
Net Proceeds from the sale of the originally delivered Shares and the Net
Proceeds from the sale of any Make-whole Shares is less than the absolute value
of the Forward Cash Settlement Amount then Buyer shall, at its election, either
make such cash payment or deliver to Seller further Make-whole Shares until such
Shortfall has been reduced to zero.
7.    Notwithstanding the foregoing, in no event shall the aggregate number of
Settlement Shares and Make-whole Shares be greater than the Reserved Shares
minus the amount of any Shares actually delivered by Buyer under any other
Transaction(s) under this Confirmation (the result of such calculation, the
“Capped Number”). Buyer represents and warrants (which shall be deemed to be
repeated on each day that a Transaction is outstanding) that the Capped Number
is equal to or less than the number of Shares determined according to the
following formula:
A - B
Where
A = the number of authorized but unissued shares of the Buyer that are not
reserved for future issuance on the date of the determination of the Capped
Number; and

B = the maximum number of Shares required to be delivered to third parties if
Buyer elected Net Share Settlement of all transactions in the Shares (other than
Transactions in the Shares under this Confirmation) with all third parties that
are then currently outstanding and unexercised.
“Reserved Shares” means 9,389,672 Shares.

-23-

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

Schedule I

For the purposes of the Transaction, the following terms shall have the
following values or meanings:

The Trade Date shall be November 12, 2014.

The Scheduled Valuation Date shall be May 15, 2015.

The Final Termination Date shall be June 15, 2015.

The Discount equals $1.1161

The Initial Shares equal 3,286,385 Shares.

The Prepayment Amount equals USD $200,000,000.

The Lock-Out Date shall be February 13, 2015.

Ordinary Dividend Amount: USD $0.00

Threshold Price: USD $21.30

Issuer Share Cap, as of any date, shall equal the lesser of (i) 9,389,672 Shares
and (ii) 20% of the total number of Shares that Issuer has outstanding as of
such date.

Dealer Share Cap equals 9,389,672 Shares.

-24-