EXHIBIT 10.1

EXECUTION COPY

Morgan Stanley & Co. LLC

1585 Broadway

New York, NY 10036-8293

Attn: Joshua Birbach

Telephone: 212-761-1719

Facsimile: 212-507-8717

February 25, 2016

Capped Accelerated Share Repurchase Transaction

Express Scripts Holding Company

One Express Way

St. Louis, MO 63121

Attention:        Timothy Smith

Telephone:      314-684-5759

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 Express Scripts Holding Company (“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. In the event of any inconsistency between the Equity
Definitions and this Confirmation, this Confirmation will govern.

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. 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 (i) the election that
the “Cross Default” provisions of Section 5(a)(vi) shall apply to Dealer as if
(x) the “Threshold Amount” with respect to Dealer were equal to 3% of Dealer’s
shareholders’ equity as of the Trade Date and (y) “Specified Indebtedness” had
the meaning specified in Section 14 of the Agreement, except that such term
shall not include obligations in respect of deposits received in the ordinary
course of Dealer’s banking business, and (ii) the other elections set forth in
this Confirmation. For the avoidance of doubt, the Transaction shall be the only
Transaction under the Agreement.

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

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GENERAL TERMS:

 

Trade Date:

   As specified in Schedule I

Buyer:

   Issuer

Seller:

   Dealer

Shares:

   Common Stock of Issuer (Ticker: ESRX)

Number of Shares:

   The number of Shares delivered in accordance with Physical Settlement below.

Forward Price:

   As specified in Schedule I

Discount:

   As specified in Schedule I

10b-18 VWAP:

   For each Trading Day during the Calculation Period, a price per share (as
determined by the Calculation Agent) equal to the volume-weighted average price
of the Rule 10b-18 eligible trades in the Shares for the entirety of such
Trading Day as determined by reference to the screen entitled “ESRX <Equity> AQR
SEC” or any successor page as reported by Bloomberg L.P. (without regard to
pre-open or after-hours trading outside of any regular trading session for such
Trading Day or block trades (as defined in Rule 10b-18(b)(5) under the
Securities Exchange Act of 1934 as amended (the “Exchange Act”) and such Rule
10b-18, “Rule 10b-18”) on such Trading Day) or, in the event such price is not
so reported on such day for any reason or is manifestly incorrect, as reasonably
determined by the Calculation Agent using a volume weighted method.

Calculation Period:

   The period from, and including, the Calculation Period Start Date to, and
including, the Valuation Date.

Calculation Period Start Date:

   As specified in Schedule I

Trading Day:

   Any Exchange Business Day that is not a Disrupted Day

Initial Shares:

   As specified in Schedule I

Initial Share Delivery Date:

   The Trade Date.    On the Initial Share Delivery Date, Seller shall deliver
to Buyer a number of Shares equal to the

 

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   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:

   The Trade Date.    On the Prepayment Date, Buyer shall pay to Seller the
Prepayment Amount.

Exchange:

   NASDAQ Global Select Market

Related Exchange:

   The primary exchange on which options or futures on the Shares are traded.

Market Disruption Event:

   The definition of “Market Disruption Event” in Section 6.3(a) of the Equity
Definitions is hereby amended by replacing the words “at any time during the
one-hour period that ends at the relevant Valuation Time, Latest Exercise Time,
Knock-in Time, Valuation Time or Knock-out Valuation Time, as the case may be”
with the words “at any time on any Exchange Business Day during Calculation
Period” after the word “material”.    Notwithstanding anything to the contrary
in the Equity Definitions, if any Exchange Business Day in the Calculation
Period is a Disrupted Day, other than a Disrupted Day that is deemed not to be a
Disrupted Day pursuant to the immediately following paragraph, the Calculation
Agent shall (i) determine the 10b-18 VWAP for such 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 determine the weighting of
the 10b-18 VWAP for such Disrupted Day using its commercially reasonable
judgment for purposes of calculating the Forward Price, or (ii) extend the
Scheduled Valuation Date by a number of Exchange Business Days equal to the
number of Disrupted Days during the Calculation Period. In each such case, the
Calculation Agent shall promptly notify Issuer in writing of (A) circumstances
giving rise to such Disrupted Day, and (B) any such weighting,

 

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extension or suspension as soon as reasonably practicable after the occurrence
of such Disrupted Day. For the avoidance of doubt, if the 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 (a “Disruption
Event”), then the Calculation Agent shall, in its good faith and commercially
reasonable discretion, deem such ninth Scheduled Trading Day to be a Trading Day
and determine the 10b-18 VWAP 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 and such other factors as it deems appropriate.

VALUATION:

  

Valuation Time:

   The Scheduled Closing Time on the relevant Exchange

Valuation Date:

   The earlier of (i) the Scheduled Valuation Date and (ii) any earlier
accelerated Valuation Date as a result of Dealer’s election in accordance with
the immediately succeeding paragraph, in either case, subject to extension in
accordance with “Market Disruption Event” above or Section 9 or Section 10
below.   

Dealer shall have the right, in its absolute discretion but subject to the
limitations set forth in the immediately succeeding paragraph, to accelerate the
Valuation Date, in whole or in part, to any Exchange Business Day that is 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.

 

Dealer shall specify in each Acceleration Notice

 

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   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 35% of the Prepayment Amount (or, if less, the remainder of the
Prepayment Amount for which an Acceleration Notice has yet to be delivered)),
and the Calculation Agent shall adjust all terms of the Transaction as it deems
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, Calculation Agent shall
calculate the Settlement Amount.

Scheduled Valuation Date:

   As specified in Schedule I

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 as determined on the relevant Valuation Date, 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 Settlement Amount is less than
zero, then Buyer shall deliver to Seller a number of Shares equal to 101% of the
absolute value of the Settlement Amount (such number of Shares, the “Payment
Shares”).    Notwithstanding the proviso in the immediately preceding paragraph,
if the Settlement Amount is less than zero, Buyer may cash settle its obligation
to deliver the Payment Shares by delivering to Seller by no later than the
relevant Valuation Date (i) a notice electing to cash settle its obligation to
deliver the Payment Shares and (ii) a written representation that, at the time
of such notice, Buyer is not in possession of any material non-public
information with respect to Buyer or any of

 

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   its securities. Any such cash settlement shall be effected in accordance with
“Cash Settlement of Payment Shares” below.    For the avoidance of doubt, upon
the date that (i) Buyer satisfies its obligation to deliver the Payment Shares
to Seller in accordance with the terms of this paragraph or (ii) the Settlement
Balance (as defined below) is reduced to zero in connection with cash settlement
of Buyer’s obligation to deliver Payment Shares (as described under “Cash
Settlement of Payment Shares” below), Buyer shall have no further delivery or
payment obligations under the terms of the Transaction and the Transaction shall
be deemed to have been settled as of such date.

Settlement Currency:

   USD

Settlement Date:

   Three Exchange Business Days after the Valuation Date, or if such date is not
a Clearance System Business Day or if there is a Settlement Disruption Event on
such day, the immediately succeeding Clearance System Business Day on which
there is no Settlement Disruption Event.

Other Applicable Provisions:

   To the extent that either party is obligated to deliver Shares hereunder, the
provisions of the last sentence of Section 9.2 and Sections 9.8, 9.9, 9.10, 9.11
(except that the Representation and Agreement contained in Section 9.11 of the
Equity Definitions shall be modified by excluding any representations therein
relating to restrictions, obligations, limitations or requirements under
applicable securities laws arising as a result of the fact that Buyer is the
issuer of the Shares) and Section 9.12 of the Equity Definitions will be
applicable as if “Physical Settlement” applied to the Transaction.

Cash Settlement of Payment Shares:

   If Buyer elects to cash settle its obligation to deliver Payment Shares, then
on the Valuation Date a balance (the “Settlement Balance”) shall be created with
an initial balance equal to the absolute value of the Settlement Amount. On the
Settlement Date, Buyer shall deliver to Seller a U.S. dollar amount equal to the
absolute value of the Settlement Amount multiplied by a price per

 

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   Share as reasonably determined by the Calculation Agent (such cash amount,
the “Initial Cash Settlement Amount”). On the Exchange Business Day immediately
following the delivery of the Initial Cash Settlement Amount, Seller shall begin
purchasing Shares in a commercially reasonable manner (all such Shares
purchased, “Cash Settlement Shares”). At the end of each Exchange Business Day
on which Seller purchases Cash Settlement Shares, Seller shall reduce (i) the
Settlement Balance by the number of Cash Settlement Shares purchased on such
Exchange Business Day and (ii) the Initial Cash Settlement Amount by an amount
equal to the product of (x) the number of Cash Settlement Shares purchased on
such Exchange Business Day and (y) the 10b-18 VWAP on such Exchange Business
Day. If, on any Exchange Business Day, the Initial Cash Settlement Amount is
reduced to or below zero but the Settlement Balance is above zero, the Buyer
shall deliver to Seller or as directed by Seller on the next Exchange Business
Day after such Exchange Business Day an additional U.S. dollar amount (an
“Additional Cash Settlement Amount”) equal to the Settlement Balance as of such
Exchange Business Day multiplied by a price per Share as reasonably determined
by the Calculation Agent. This provision shall be applied successively until the
Settlement Balance is reduced to zero. On the Exchange Business Day that the
Settlement Balance is reduced to zero, Seller shall return to Buyer any unused
portion of the Initial Cash Settlement Amount or any Additional Cash Settlement
Amount, as the case may be. In making any purchases of Cash Settlement Shares
contemplated by this paragraph Seller shall use commercially reasonable efforts
to purchase such shares in a manner that would comply with Rule 10b-18 under the
Exchange Act (“Rule 10b-18”) if such purchases were subject to Rule 10b-18.

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.

 

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Extraordinary Dividend:

   Any dividend or distribution on the Shares with an ex-dividend date occurring
during the term of the Transaction (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

EXTRAORDINARY EVENTS:

  

Consequences of Merger Events:

  

Share-for-Share:

   Modified Calculation Agent Adjustment

Share-for-Other:

   Cancellation and Payment

Share-for-Combined:

   Component Adjustment

Consequences of Tender Offers:

  

Tender Offer:

   Applicable; provided that the definition of “Tender Offer” in Section 12.1(d)
of the Equity Definitions will be amended by replacing “10%” with “15%” in the
third and fourth line thereof.

Share-for-Share:

   Modified Calculation Agent Adjustment

Share-for-Other:

   Modified Calculation Agent Adjustment

Share-for-Combined:

   Modified Calculation Agent Adjustment

Modified Calculation Agent Adjustment:

   For greater certainty, the definition of “Modified Calculation Agent
Adjustment” in Sections 12.2 and 12.3 of the Equity Definitions shall be amended
by (i) adding the following italicized language after the stipulated
parenthetical provision: “(including adjustments to account for changes in
volatility, expected dividends, stock loan rate or liquidity relevant to the
Shares or to the Transaction) from the Exchange Business Day immediately
preceding the Announcement Date or the Determination Date, as applicable, to the
first Exchange Business Day immediately following the Merger Date (Section 12.2)
or Tender Offer Date (Section 12.3).”

 

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Composition of Combined Consideration:

   Not Applicable

Announcement Event:

   If, during the term of the Transaction, an Announcement Date occurs in
respect of a Merger Event (for the avoidance of doubt, determined without regard
to the language in the definition of “Merger Event” following the definition of
“Reverse Merger” therein) or Tender Offer (such occurrence, an “Announcement
Event”), then on the earliest of the Valuation Date, any Early Termination Date
or other date of cancellation (the “Announcement Event Adjustment Date”), the
Calculation Agent will determine the economic effect on the Transaction of the
Announcement Event and any related, prior announcements by any entity
(regardless of whether the Announcement Event actually results in a Merger Event
or Tender Offer, and taking into account such factors as the Calculation Agent
may determine, including, without limitation, changes in volatility, expected
dividends, stock loan rate or liquidity relevant to the Shares or the
Transaction whether prior to or after the Announcement Event or for any period
of time, including, without limitation, the period from the Announcement Event
to the relevant Announcement Event Adjustment Date). If the Calculation Agent
determines that such economic effect on the Transaction is material, then on the
Announcement Event Adjustment Date, the Calculation Agent shall make such
adjustment to one or more terms of the Transaction, including, without
limitation, adjustments to the Settlement Amount, Forward Cap Price and/or
Forward Price, as the Calculation Agent determines appropriate to account for
such economic effect, which adjustment shall be effective immediately prior to
the valuation, termination or cancellation of the Transaction, as the case may
be.

Announcement Date:

   The definition of “Announcement Date” in Section 12.1(l) of the Equity
Definitions is hereby amended by (i) replacing the words “a firm” with the word
“any” in the second and fourth lines thereof, (ii) replacing the word “leads to
the” with the words “, if completed, would lead to a” in the third and the fifth
lines thereof, (iii) inserting the

 

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   following words at the end of each of clauses (i) and (ii) therein: “and that
the Calculation Agent determines is reasonably likely to be completed (which
determination may, for the avoidance of doubt, take into account the effect of
such announcement on the market price of the Shares or options relating
thereto)”, (iv) replacing the words “voting shares” with the words “Shares” in
the fifth line thereof and (v) inserting the words “by any party thereto or the
Issuer or any affiliate or representative of the foregoing” after the word
“announcement” in the second and the fourth lines thereof.

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 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 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.

Cancellation Amount:

   Section 12.8(d) of the Equity Definitions shall be amended by deleting the
second sentence thereof and Section 12.8(e) of the Equity Definitions shall be
amended by replacing the words “(or any gain resulting from any of them)” at the
end thereof with the words “and shall, in calculating any Cancellation Amount,
consider any gain resulting from its terminating, liquidating or re-establishing
any hedge related to such Transaction”.

Additional Disruption Events:

  

Change in Law:

   Applicable; provided 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 with 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)”.

 

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Failure to Deliver:

   Applicable; provided that, notwithstanding Section 12.9(b)(ii)(B) of the
Equity Definitions, Dealer will use commercially reasonable efforts to deliver
any Shares not initially delivered on the Initial Share Delivery Date or the
Settlement Date as soon as commercially practicable following the Initial Share
Delivery Date or the Settlement Date, as applicable.

Insolvency Filing:

   Applicable

Hedging Disruption:

   Not Applicable

Increased Cost of Hedging:

   Not Applicable

Loss of Stock Borrow:

   Applicable

Maximum Stock Loan Rate:

   500 basis points

Increased Cost of Stock Borrow:

   Applicable

Initial Stock Loan Rate:

   35 basis points

Determining Party:

   For all Extraordinary Events, Dealer

Hedging Party:

   For all Additional Disruption Events, Dealer

Non-Reliance:

   Applicable

AGREEMENTS AND

ACKNOWLEDGMENTS:

  

Regarding Hedging Activities:

   Applicable

Additional Acknowledgments:

   Applicable

3. Calculation Agent: Dealer, provided that, notwithstanding anything to the
contrary, all determinations, adjustments and calculations performed by Dealer
in its capacity as Calculation Agent, as well as any determinations, adjustments
or calculations by Dealer in any other capacity, pursuant to this Confirmation,
the Agreement and the Equity Definitions shall be made in good faith and in a
commercially reasonable manner, including, without limitation, with respect to
calculations, adjustments and determinations that are made in its sole
discretion or otherwise. In the event the Calculation Agent or Dealer makes any
calculation, adjustment or determination pursuant to this Confirmation, the
Agreement or the Equity Definitions, the Calculation Agent or Dealer shall
promptly provide an explanation in reasonable detail of the basis for any such
determination, adjustment or calculation if requested by Issuer (including any
quotations, market data or information from external sources used in making such
calculation, adjustment or determination, as the case may be, but without
disclosing Calculation Agent’s or

 

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Dealer’s proprietary models or other information that is subject to contractual,
legal or regulatory obligations to not disclose such information); provided that
following the occurrence of an Event of Default pursuant to Section 5(a)(vii) of
the Agreement with respect to which Dealer is the Defaulting Party, 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.

4. Account Details: To be provided.

5. Miscellaneous.

(a) Additional Termination Event. The declaration of an Extraordinary Dividend
by Issuer during the term of the Transaction shall constitute an Additional
Termination Event with respect to which the Transaction is the sole Affected
Transaction, 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.

(b) Share Forward Transaction. For the avoidance of doubt, the Transaction shall
be deemed to be a “Share Forward Transaction” for purposes of the Equity
Definitions; provided, however, that in Section 9.2(a)(iii) of the Equity
Definitions the words “the Excess Dividend Amount, if any, and” shall be
deleted.

(c) The words “that diluting or concentrative effect” in the fifth and sixth
rows from the end of Section 11.2(c) of the Equity Definitions shall be replaced
with the words “the economic effect on the Transaction”.

(d) The proviso appearing in parentheses beginning on the fifth row from the end
of Section 11.2(c) of the Equity Definitions shall be replaced with the
following: “(and, for the avoidance of doubt, adjustments may be made to account
solely for changes in volatility, expected dividends, stock loan rate or
liquidity relative to the relevant Shares).”

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 Sections 6(d) and 6(e) of the Agreement, (ii) a
Tender Offer occurs and Dealer would be required to make a payment pursuant to
Sections 12.3 and 12.7 of the Equity Definitions, (iii) a Merger Event occurs
and Dealer would be required to make a payment pursuant to Sections 12.2 and
12.7 of the Equity Definitions, (iv) an Additional Disruption Event occurs and
Dealer would be required to make a payment pursuant to Sections 12.8 and 12.9 of
the Equity Definitions or (v) a Nationalization, Insolvency or Delisting occurs
and Dealer would be required to make a payment pursuant to Sections 12.6 and
12.7 of the Equity Definitions (any such payment described in Sections 6(i),
(ii), (iii), (iv) or (v) above, a “Dealer Payment Amount”), then, in lieu of any
payment of such Dealer Payment Amount in cash, unless Issuer makes an election
to the contrary no later than 4 p.m., New York City time, on the Early
Termination Date or the date on which the Transaction is terminated or
cancelled, a balance (the “Settlement Balance”) shall be established equal to
the Dealer Payment Amount on the date such Dealer Payment Amount is

 

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due. On such date, 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. Dealer shall
deliver any Shares purchased on a Trading Day to Issuer on the third Exchange
Business Day following the relevant Trading Day. Dealer shall continue
purchasing Shares until the Settlement Balance has been reduced to zero.

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 Sections 6(d) and 6(e) of the Agreement, (ii) a
Tender Offer occurs and Issuer would be required to make a payment pursuant to
Sections 12.3 and 12.7 of the Equity Definitions, (iii) a Merger Event occurs
and Issuer would be required to make a payment pursuant to Sections 12.2 and
12.7 of the Equity Definitions, (iv) an Additional Disruption Event occurs and
Issuer would be required to make a payment pursuant to Sections 12.8 and 12.9 of
the Equity Definitions or (v) a Nationalization, Insolvency or Delisting occurs
and Issuer would be required to make a payment pursuant to Sections 12.6 and
12.7 of the Equity Definitions (any such payment described in Sections 7(i),
(ii), (iii), (iv) or (v) above, an “Early Settlement Payment”), then, in lieu of
any payment of such Early Settlement Payment in cash, unless Issuer makes an
election to the contrary no later than 4 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, Issuer shall settle its payment obligations under Sections 7(i),
(ii), (iii), (iv) or (v) above in Shares (such Shares, the “Early Settlement
Shares”); provided that if (i) Issuer does not specify whether such Early
Settlement Shares are to be sold by means of a registered offering or by means
of a private placement or (ii) the conditions described in Section 8 below are
not satisfied on each day Early Settlement Shares are to be sold by Seller in
connection with Buyer’s election to deliver Early Settlement Shares in
connection with the settlement of an Early Settlement Payment, then Issuer shall
make the Early Settlement Payment in cash.

8. Conditions to Delivery of Early Settlement Shares.

Issuer may only deliver Early Settlement Shares and Make-Whole Shares (as
defined below) by means of a registered offering pursuant to clause (a) below or
by means of a private placement pursuant to clause (b) below:

(a) If Issuer timely elects to deliver Early Settlement Shares and Make-Whole
Shares by means of a registered offering, the following provisions shall apply:

(i) On the later of (A) the Trading Day following Issuer’s election to deliver
Early Settlement Shares and any Make-Whole Shares by means of a registered
offering (the “Registration Notice Date”), and (B) the date on which the
Registration Statement is declared effective by the SEC or becomes effective
(the “Registered Share Delivery Date”), Issuer shall deliver to Dealer a number
of Early Settlement Shares equal to the quotient of (I) the relevant Early
Settlement Payment divided by (II) a price per Share as reasonably determined by
the Calculation Agent.

 

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(ii) Promptly following the Registration Notice Date, Issuer shall file with the
SEC a registration statement (“Registration Statement”) covering the public sale
by Dealer of the Early Settlement Shares and any Make-Whole Shares
(collectively, the “Registered Securities”) on a continuous or delayed basis
pursuant to Rule 415 (or any similar or successor rule), if available, under the
Securities Act of 1933, as amended (the “Securities Act”); provided that no such
filing shall be required pursuant to this paragraph (ii) if Issuer shall have
filed a similar registration statement with unused capacity at least equal to
the relevant Early Settlement Payment and such registration statement has become
effective or been declared effective by the SEC on or prior to the Registration
Notice Date and no stop order is in effect with respect to such registration
statement as of the Registration Notice Date, in which case such registration
statement shall be the Registration Statement. Issuer shall use its commercially
reasonable efforts to file the Registration Statement as an automatic shelf
registration statement or have the Registration Statement declared effective by
the SEC as promptly as possible.

(iii) Promptly following the Registration Notice Date, Issuer shall afford
Dealer a reasonable opportunity to conduct a due diligence investigation with
respect to Issuer customary in scope for underwritten offerings of equity
securities of similar size by similar issuers (including, without limitation,
the availability of senior management to respond to questions regarding the
business and financial condition of Issuer and the right to have made available
to Dealer for inspection all financial and other records, pertinent corporate
documents and other information reasonably requested by Dealer), and Dealer
shall be satisfied in all material respects with the results of such due
diligence investigation of Issuer. For the avoidance of doubt, Issuer shall not
have the right to deliver Shares pursuant to this Section 8(a) (and the
conditions to delivery of Early Settlement Shares specified in this Section 8(a)
shall not be satisfied) until Dealer is satisfied in all material respects with
the results of such due diligence investigation of Issuer.

(iv) From the effectiveness of the Registration Statement until all Registered
Securities have been sold by Dealer, Issuer shall, at the request of Dealer,
make available to Dealer a printed prospectus relating to the Registered
Securities in form and substance (including, without limitation, any sections
describing the plan of distribution) reasonably satisfactory to Dealer (a
“Prospectus”, which term shall include any prospectus supplement thereto), in
such quantities as Dealer shall reasonably request.

(v) Issuer shall use its commercially reasonable efforts to avoid or prevent the
issuance of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any Prospectus
and, if any such order is issued, to obtain the lifting thereof as soon
thereafter as is possible. If the Registration Statement, the Prospectus or any
document incorporated therein by reference contains a misstatement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make any statement therein not misleading, Issuer shall as promptly
as practicable file any required document and prepare and furnish to Dealer a
reasonable number of copies of such supplement or amendment thereto as may be
necessary so that the Prospectus, as thereafter delivered to the purchasers of
the Registered Securities will not contain a misstatement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
any statement therein not misleading.

 

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(vi) On or prior to the Registered Share Delivery Date, Issuer shall enter into
an agreement (a “Transfer Agreement”) with Dealer (or any affiliate of Dealer
designated by Dealer) in connection with the public sale of the Registered
Securities, substantially similar to underwriting agreements customary for
underwritten offerings of equity securities of similar size by similar issuers,
in form and substance satisfactory to Dealer (or such affiliate), which Transfer
Agreement shall (without limiting of the foregoing) contain provisions
substantially similar to those contained in such underwriting agreements
relating to:

(A) the indemnification of, and contribution in connection with the liability
of, Dealer and its affiliates;

(B) delivery to Dealer (or such affiliate) of customary letters and opinions
(including, without limitation, accountants’ comfort letters, opinions relating
to the due authorization, valid issuance and fully paid and non-assessable
nature of the Registered Securities and the lack of material misstatements and
omissions in the Registration Statement, the Prospectus and Issuer’s filings
under the Exchange Act); and

(C) the payment by Issuer of all reasonable and documented fees and expenses in
connection with such resale, including all registration costs and all reasonable
and documented fees and expenses of counsel for Dealer (or such affiliate), but
such Transfer Agreement shall not provide for any underwriter discount,
commission or fee or any selling concessions.

(vii) On the Registered Share Delivery Date, a notional balance (the “Early
Settlement Balance”) shall be established with an initial balance equal to the
applicable amount of the relevant Early Settlement Payment. Following the
delivery of Early Settlement Shares or any Make-Whole Shares, Dealer shall sell
all such Registered Securities in a commercially reasonable manner.

(viii) At the end of each day on which sales have been made pursuant to
paragraph 8(a)(vii) above, the Early Settlement Balance shall be (A) reduced by
an amount equal to the aggregate proceeds received by Dealer upon settlement of
the sale of such Share, and (B) increased by an amount (as reasonably determined
by the Calculation Agent) equal to Dealer’s funding cost with respect to the
then-current Early Settlement Balance as of the close of business on such day.

(ix) If, on any date, the Early Settlement Balance has been reduced to zero but
not all of the Early Settlement Shares have been sold, no additional Early
Settlement Shares shall be sold and Dealer shall promptly deliver to Issuer
(A) any remaining Early Settlement Shares and (B) if the Early Settlement
Balance has been reduced to an amount less than zero, an amount in cash equal to
the absolute value of the then-current Early Settlement Balance.

 

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(x) If, on any date, all of the Early Settlement Shares have been sold and the
Early Settlement Balance has not been reduced to zero, Issuer shall promptly
deliver to Dealer an additional number of Shares (“Make-Whole Shares”) equal to
(A) the Early Settlement Balance as of such date divided by (B) the price per
Share on the date of such delivery as reasonably determined by the Calculation
Agent. This clause (x) shall be applied successively until the Early Settlement
Balance is reduced to zero.

(xi) If at any time the number of Shares covered by the Registration Statement
is less than the number of Registered Securities required to be delivered
pursuant to this Section 8(a), Issuer shall, at the request of Dealer, file
additional registration statement(s) to register the sale of all Registered
Securities required to be delivered to Dealer.

(xii) Issuer shall cooperate with Dealer and use its reasonable best efforts to
take any other action necessary to effect the intent of the provisions set forth
in this Section 8(a).

(b) If Issuer timely elects to deliver Early Settlement Shares and Make-Whole
Shares by means of a private placement, the following provisions shall apply:

(i) All Early Settlement Shares and Make-Whole Shares shall be delivered to
Dealer (or any affiliate of Dealer designated by Dealer) pursuant to the
exemption from the registration requirements of the Securities Act provided by
Section 4(a)(2) thereof.

(ii) Issuer shall afford Dealer and any potential purchaser of any such Shares
from Dealer (or any affiliate of Dealer designated by Dealer) identified by
Dealer shall have been afforded a commercially reasonable opportunity to conduct
a due diligence investigation with respect to Issuer 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) and Issuer shall not disclose
material non-public information in connection with such due diligence
investigation.

(iii) Issuer shall enter into an agreement (a “Private Placement Agreement”)
with Dealer (or any affiliate of Dealer designated by Dealer) in connection with
the private placement of such Shares by Issuer to Dealer (or any such affiliate)
and the private resale of such Shares by Dealer (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 Dealer and Issuer,
which Private Placement Agreement shall include, without limitation, provisions
substantially similar to those contained in such private placement purchase
agreements relating to the indemnification of, and contribution in connection
with the liability of, Dealer and its affiliates, and shall provide for the
payment by Issuer of all fees and expenses in connection with such resale,
including all reasonable fees and expenses of one counsel for Dealer but not
including any underwriter or broker discounts and commissions, and shall contain
representations, warranties and agreements of Issuer and Dealer reasonably
necessary or advisable to establish and maintain the availability of an
exemption from the registration requirements of the Securities Act for such
resales.

 

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(iv) If Issuer elects to deliver Early Settlement Shares to satisfy its payment
obligation of an Early Settlement Payment, neither Issuer nor Dealer shall take
or cause to be taken any action that would make unavailable either (A) the
exemption set forth in Section 4(a)(2) of the Securities Act for the sale of any
Early Settlement Shares or Make-Whole Shares by Issuer to Dealer or (B) an
exemption from the registration requirements of the Securities Act reasonably
acceptable to Dealer for resales of Early Settlement Shares and Make-Whole
Shares by Dealer.

(v) On the date requested by Dealer, (A) Issuer shall deliver a number of Early
Settlement Shares equal to the quotient of (I) the relevant Early Settlement
Payment divided by (II) a per Share value, determined by Dealer in a
commercially reasonable manner and which may be based on indicative bids from
institutional “accredited investors” (as defined in Rule 501 under the
Securities Act) and (B) the provisions of Section 8(a)(vii) through (x) shall
apply to the Early Settlement Shares delivered pursuant to this Section 8(b)(v).
For purposes of applying the foregoing, the Registered Share Delivery Date
referred to in Section 8(a)(vii) shall be the date on which Issuer delivers the
Early Settlement Shares.

(c) The provisions of Section 8(b) shall apply to any then-current Early
Settlement Balance if (i) on any given day, Issuer cannot satisfy any of the
conditions of Section 8(a) or (ii) for a period of at least ten (10) consecutive
Exchange Business Days, Dealer has determined that it is inadvisable to effect
sales of Registered Securities.

(d) If Issuer elects to deliver Early Settlement Shares to settle its delivery
obligation of an Early Settlement Payment, then, if necessary, Issuer shall use
its commercially reasonable efforts to cause the number of authorized but
unissued Shares to be increased to an amount sufficient to permit Issuer to
fulfill its obligations under Sections 8(a) and/or 8(b) above.

9. Special Provisions for Merger Events.

(a) Issuer agrees that it:

(i) will not during the period commencing on the Trade Date through the end of
the Calculation Period for 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 proposed Merger
Transaction that, in the reasonable judgment of Dealer, causes Rule 10b-18
Purchases by or for Issuer or any affiliated purchaser (as defined in Rule
10b-18) to be limited to purchases described in Rule 10b-18(a)(13)(iv)(B) (a
“Public Announcement”) unless such Public Announcement is made prior to the
opening or after the close of the regular trading session on the Exchange for
the Shares;

(ii) shall promptly (but in any event prior to the next opening of the regular
trading session on the Exchange) notify Dealer following any such Public
Announcement that such Public Announcement has been made; and

 

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(b) Promptly after request from Dealer, Issuer shall provide Dealer with written
notice specifying (i) Issuer’s average daily Rule 10b-18 Purchases (as defined
in Rule 10b-18) during the three full calendar months immediately preceding the
date of such Public Announcement that were not effected through Dealer or its
affiliates and (ii) the number of Shares purchased pursuant to the proviso in
Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months
preceding the date of such Public Announcement. 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.

(c) Issuer acknowledges that a Public Announcement may cause the terms of the
Transaction to be adjusted or the Transaction to be terminated; accordingly,
Issuer acknowledges that in making any Public Announcement, it must comply with
the standards set forth in Section 12(c) below.

(d) Upon the occurrence of any Public Announcement (whether made by Issuer or a
third party), Dealer shall (i) make adjustments in good faith and in a
commercially reasonable manner to the terms of the Transaction as appropriate to
account for the economic effect on the Transaction of such Public Announcement,
including, without limitation, the Scheduled Valuation Date and/or suspend the
Calculation Period and, in each case, determine the effective date of that
adjustment, or (ii) if it determines that no such adjustment would produce a
commercially reasonable result (and, in any event, if the Scheduled Valuation
Date is postponed more than 9 Scheduled Trading Days), and upon consultation
with Issuer, treat the occurrence of such Public Announcement as an Additional
Termination Event with Issuer as the sole Affected Party and the Transaction
hereunder as the Affected Transaction and with the amount under Section 6(e) of
the Agreement determined taking into account the fact that the Calculation
Period, as the case may be, had fewer Scheduled Trading Days than originally
anticipated.

“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, other than any such transaction in which the
consideration consists solely of cash and there is no valuation period.

10. Seller Adjustments.

In the event that Seller determines in good faith and commercially reasonable
discretion, based on advice of outside counsel, that it is advisable with regard
to any legal, regulatory or self-regulatory requirements or related policies and
procedures similarly applicable to transactions of the type of the Transaction
contemplated hereby and consistently applied (whether or not such policies or
procedures are imposed by law or have been voluntarily adopted by Seller, and
including, without limitation, Rule 10b-18, Rule 10b-5, Regulation 13D-G and
Regulation 14E, “Requirements”), for Seller to refrain from purchasing Shares or
to purchase fewer than the number of Shares Seller would otherwise purchase on
any Trading Day during the duration of the Transaction, then Seller may, in its
discretion, elect that a Market Disruption Event shall be deemed to have
occurred on such Trading Day and, therefore, without limiting the generality of
“Market Disruption Event” above, that the Calculation Period be suspended and,
if appropriate, extended with regard to any Requirements; provided that only the
consequences described in

 

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clause (ii) of the second paragraph under Market Disruption Event above shall
apply. Seller shall notify Issuer as soon as practicable upon the exercise of
Seller’s rights pursuant to this Section 10, but in no event later than the
second Business Day following such exercise, that a Market Disruption Event has
occurred and the Scheduled Trading Days affected by it and shall subsequently
notify Issuer on the day Seller believes that the circumstances giving rise to
such exercise have changed.

11. Covenants.

(a) Buyer covenants and agrees that:

(i) during the term of this Agreement, 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 derivative instrument) purchase Shares (or any security convertible
into or exchangeable for Shares) without the prior written approval of Seller,
except for open market repurchase programs effected through Seller or an
affiliate of Seller to the extent that such repurchases would not exceed 2.5% of
the “ADTV” (as defined in Rule 10b-18) for the Shares on any day during the term
of the Transaction; provided that (x) purchases of Shares that do not constitute
“Rule 10b-18 purchases” under subparagraphs (ii) or (iii) of Rule 10b-18(a)(13),
(y) withholding of Shares to cover amounts payable (including tax liabilities
and/or payment of exercise price) in respect of the exercise of employee stock
options or the vesting of restricted stock or stock units and (z) privately
negotiated (off-market) transactions by Buyer, not involving any derivative
instrument, to purchase Shares from existing holders of Shares in transactions
that do not result in, or relate to, purchases of Shares in the public market by
such existing holders in connection with such transactions, shall, in each case,
not be subject to this Section 11(a);

(ii) it is not relying, and has not relied, upon Seller 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 Seller
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 Buyer and that Seller and its affiliates may continue to
conduct such transactions during the term of this Agreement; and

(iii) that neither it nor any affiliates shall take any action that would cause
the Shares to be subject to a “restricted period” (as defined in Regulation M
under the Exchange Act (“Regulation M”)) during the Hedge Period or the
Calculation Period, unless Buyer has provided written notice to Dealer of such
restricted period not later than the Scheduled Trading Day immediately preceding
the first day of such “restricted period”; Buyer acknowledges that any such
notice may cause a Disrupted Day to occur pursuant to Section 10 above;
accordingly, Buyer acknowledges that its delivery of such notice must comply
with the standards set forth in Section 12(c) below.

(b) Dealer covenants and agrees that Dealer shall use good faith efforts not to
purchase Shares in connection with the Transaction in an amount greater than
22.5% of the “ADTV” (as defined under Rule 10b-18) for the Shares on any day
during the term of the Transaction.

 

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12. Representations, Warranties and Acknowledgments.

(a) Buyer hereby represents and warrants to Seller that:

(i) as of the date hereof, Buyer is not in possession of any material,
non-public information with respect to Buyer or any of its securities;

(ii) the transactions contemplated by this Confirmation and the performance of
the obligations of Buyer hereunder have been authorized by all necessary
corporate action of Buyer’s board of directors and/or an authorized committee of
Buyer’s board or directors, and are authorized under the terms of Buyer’s
publicly announced program to repurchase Shares;

(iii) Buyer 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 (it being understood that Buyer
may continue to issue Shares or options in the ordinary course under its
employee compensation plans);

(iv) Buyer 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 raise or depress the price of the Shares (or any security
convertible into or exchangeable for Shares);

(v) Buyer is as of the date hereof, and after giving effect to the transactions
contemplated hereby 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
Buyer is not less than the total amount required to pay the liabilities of Buyer
on its total existing debts and liabilities (including contingent liabilities)
as they become absolute and matured, (B) Buyer 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,
Buyer is not incurring debts or liabilities beyond its ability to pay as such
debts and liabilities mature, (D) Buyer 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 Buyer is
engaged and (E) Buyer is not a defendant in any civil action that could
reasonably be expected to result in a judgment that Buyer is or would become
unable to satisfy;

(vi) on the Trade Date, the Prepayment Date, the Initial Share Delivery Date and
the Settlement Date, Buyer 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 Buyer would be able to purchase the Shares
hereunder in compliance with the corporate laws of the jurisdiction of its
incorporation; and

 

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

(b) Each of Seller and Buyer hereby acknowledges that any transactions by Seller
in the Shares will be undertaken by Seller as principal for its own account.
Except as expressly set forth herein, all of the actions to be taken by Seller
in connection with this Agreement shall be taken by Seller independently and
without any advance or subsequent consultation with Buyer.

(c) 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 Rule 10b5-1(c). Without limiting the generality of the preceding
sentence, Buyer acknowledges and agrees that (A) Buyer does not have, and shall
not attempt to exercise, any influence over how, when or whether Seller effects
any purchases of Shares in connection with the Transaction, (B) during the
period beginning on (but excluding) the date of this Confirmation and ending on
(and including) the last Valuation Date, neither Buyer nor its officers or
employees shall, directly or indirectly, communicate any information regarding
Buyer or the Shares to any employee of Seller or its Affiliates (such employee
identified in writing by Seller) who is responsible for trading the Shares in
connection with the transactions contemplated hereby, (C) Buyer is entering into
the Transaction in good faith and not as part of a plan or scheme to evade
compliance with federal securities laws including, without limitation, Rule
10b-5 promulgated under the Exchange Act and (D) Buyer will not alter or deviate
from this Confirmation or enter into or alter a “corresponding or hedging
transaction” (within the meaning of Rule 10b5-1 under the Exchange Act) with
respect to the Shares. Buyer 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 Buyer or
any officer or director of Buyer is aware of any material nonpublic information
regarding Buyer or the Shares.

13. Acknowledgements of Buyer Regarding Hedging and Market Activity.

Buyer agrees, understands and acknowledges that:

(a) during the period from (and including) the Trade Date to (and including) the
Settlement Date, Seller 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 Positions with respect
to the Transaction;

(b) Seller and its affiliates also may be active in the market for the Shares
other than in connection with hedging activities in relation to the Transaction;

 

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(c) Seller shall make its own determination as to whether, when and in what
manner any hedging or market activities in Issuer’s securities shall be
conducted and shall do so in a manner that it deems appropriate to hedge its
price and market risk with respect to 10b-18 VWAP; and

(d) any market activities of Seller and its affiliates with respect to the
Shares may affect the market price and volatility of the Shares, as well as the
10b-18 VWAP, each in a manner that may be adverse to Buyer.

14. Other Provisions.

(a) The parties hereto agree and acknowledge that Seller is a “financial
participant” within the meaning of Section 101(22) of the Bankruptcy Code. The
parties hereto further agree and acknowledge that the Transaction is either
(i) a “securities contract” as such term is defined in Section 741(7) of the
Bankruptcy Code, in which case each payment and delivery made pursuant to the
Transaction is a “settlement payment”, as such term is defined in Section 741(8)
of the Bankruptcy Code, and that Seller is entitled to the protections afforded
by, among other sections, Sections 362(b)(6), 546(e) and 555 of the Bankruptcy
Code, or (ii) a “swap agreement”, as such term is defined in Section 101(53B) of
the Bankruptcy Code, in which case each party is a “swap participant”, as such
term is defined in Section 101(53C) of the Bankruptcy Code, and that Seller is
entitled to the protections afforded by, among other sections, Sections
362(b)(17), 546(g) and 560 of the Bankruptcy Code.

(b) Seller and Buyer hereby agree and acknowledge that Seller has authorized
Buyer 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 Buyer to use any information that Buyer receives or has received
with respect to the Transaction in any manner.

(c) If Buyer becomes the subject of proceedings (“Bankruptcy Proceedings”) under
the Bankruptcy Code or any other applicable bankruptcy or insolvency statute
from time to time in effect, any rights or claims of Seller hereunder in respect
of this transaction shall rank for all purposes no higher than, but on a parity
with, the rights or claims of holders of Shares, and Seller hereby agrees that
its rights and claims hereunder shall be subordinated to those of all parties
with claims or rights against Buyer (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
Seller 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, Seller 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, Seller 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.

 

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

(e) Notwithstanding anything to the contrary herein, Seller may, by prior notice
to Buyer, 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.

15. Share Caps.

Notwithstanding any other provision of this Confirmation or the Agreement to the
contrary, in no event shall Buyer be required to deliver to Seller in the
aggregate under the Transaction a number of Shares that exceeds the Share Cap
(as specified in Schedule I), subject to reduction by the number of Shares
delivered hereunder by the Buyer on any prior date.

16. Additional Termination Event.

It shall constitute an Additional Termination Event with respect to which the
Transaction is the sole Affected Transaction and Buyer is the sole Affected
Party and Seller shall be the party entitled to designate an Early Termination
Date pursuant to Section 6(b) of the Agreement if, for five or more Trading Days
in any period of 10 consecutive Trading Days during the Calculation Period, the
closing price per Share on the Exchange, as determined by the Calculation Agent,
was at or below the Threshold Price (as specified in Schedule I); provided that
Seller may only designate an Early Termination Date pursuant to Section 6(b) of
the Agreement in respect of such Additional Termination Event if Seller gives
notice of such designation during such a period of 10 consecutive Trading Days.

17. 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 ANY AND ALL RIGHTS TO TRIAL BY JURY WITH
RESPECT TO ANY LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS CONFIRMATION
OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

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18. 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, nor any similar legal certainty provision in any legislation enacted,
or rule or regulation promulgated, on or after the date of this Confirmation,
shall limit or otherwise impair either party’s 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, without limitation, rights arising from Change in Law, Loss of Stock
Borrow, Increased Cost of Stock Borrow, or Illegality).

19. Limit on Beneficial Ownership. Notwithstanding any other provisions hereof,
Dealer shall not be entitled to take delivery of any Shares deliverable
hereunder to the extent (but only to the extent) that, after such receipt of any
Shares hereunder (i) the Section 16 Percentage would exceed 8.0%, or (ii) the
Share Amount would exceed the Applicable Share Limit. Any purported delivery
hereunder shall be void and have no effect to the extent (but only to the
extent) that, after such delivery (i) the Section 16 Percentage would exceed
8.0%, or (ii) the Share Amount would exceed the Applicable Share Limit. If any
delivery owed to Dealer hereunder is not made, in whole or in part, as a result
of this provision, Issuer’s obligation to make such delivery shall not be
extinguished and Issuer shall make such delivery as promptly as practicable
after, but in no event later than one Exchange Business Day after, Dealer gives
notice to Issuer that, after such delivery, (i) the Section 16 Percentage would
not exceed 8.0%, and (ii) the Share Amount would not exceed the Applicable Share
Limit. 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 Issuer 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. 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
each person subject to aggregation of Shares with Dealer under Section 13 or
Section 16 of the Exchange Act and rules promulgated thereunder directly or
indirectly beneficially own (as defined under Section 13 or Section 16 of the
Exchange Act and rules promulgated thereunder) and (B) the denominator of which
is the number of Shares outstanding.

20. Designation by Dealer. 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 to or from Issuer, Dealer (the
“Designator”) may designate any of its Affiliates (the “Designee”) to deliver or
take delivery, as the case may be, and otherwise perform its obligations to
deliver, if any, or take delivery of, as the case may be, any such Shares or
other securities in

 

24

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respect of the Transaction, and the Designee may assume such obligations, if
any. Such designation shall not relieve the Designator of any of its
obligations, if any, hereunder. Notwithstanding the previous sentence, if the
Designee shall have performed the obligations, if any, of the Designator
hereunder, then the Designator shall be discharged of its obligations, if any,
to Issuer to the extent of such performance.

[Remainder of Page Intentionally Blank]

 

25

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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 us by facsimile to
the number provided on the attached facsimile cover page.

Confirmed as of the date first written above:

 

EXPRESS SCRIPTS HOLDING COMPANY     MORGAN STANLEY & CO. LLC By:  

/s/ Tim Smith

    By:  

/s/Mark Sullivan

  Name:   Tim Smith       Name:   Mark Sullivan   Title:   VP/Treasurer      
Title:   Managing Director

[Signature Page to Confirmation]

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SCHEDULE I

This Schedule I, dated February 25, 2016 may be amended and/or superseded from
time to time by mutual agreement of both parties. For the purposes of the
Transaction, the following terms shall have the following values/meanings:

 

1.   Trade Date:    February 26, 2016 2.   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; provided, however, that if the Forward Price
would otherwise be greater than the Forward Cap Price, the Forward Price shall
equal the Forward Cap Price. 3.   Discount:    [*] 4.   Calculation Period Start
Date:    February 26, 2016. 5.   Initial Shares:    32,142,345 6.   Prepayment
Amount:    USD 2,800,000,000 7.   Scheduled Valuation Date:    [*] 8.   Lock-Out
Date:    [*] 9.   Threshold Price:    USD 17.42 10.   Share Cap:    On any date,
in the aggregate for the Transaction, the lesser of (i) 80,355,862 Shares and
(ii) 20% of the total number of Shares outstanding as of such date. 11.  
Forward Cap Price:    USD $[*] per Share.

*This information has been omitted based on a request for confidential
treatment. The omitted portions have been separately filed with the Securities
and Exchange Commission.

[Remainder of Page Intentionally Blank]

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AGREED AND ACKNOWLEDGED (as of the date listed above)

EXPRESS SCRIPTS HOLDING COMPANY

 

By:  

/s/ Tim Smith

  Name:   Tim Smith   Title:   VP/Treasurer MORGAN STANLEY & CO. LLC By:  

/s/Mark Sullivan

  Name:   Mark Sullivan   Title:   Managing Director

[Signature Page to Schedule I]