Exhibit 10.94

     
Merrill Lynch International
   
Merrill Lynch Financial Centre
   
2 King Edward Street
   
London EC1A 1HQ
   
Attention: Manager, Fixed Income Settlements
   
Facsimile: 44 207 995 2004
   
Telephone: 44 207 995 3769
   
 
   
 
  December 14, 2006
 
   
To: Cadence Design Systems, Inc.
   
Bldg. 5, MS 5B1
   
2655 Seely Avenue
   
San Jose, CA 95134
   
Attention: Legal Department
   
Telephone No.: (408) 943-1234
   
Facsimile No.: (408) 943-0513
   
 
   
Re: Warrants
   
 
   
Reference: 06824056
   

     The purpose of this Confirmation (this “Confirmation”) is to confirm the
terms and conditions of the Warrants issued by Cadence Design Systems, Inc., a
Delaware corporation (“Company”), to Merrill Lynch International (“Dealer”),
represented by Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Agent”), as
its agent, on the Trade Date specified below (the “Transaction”). This
Confirmation constitutes a “Confirmation” as referred to in the ISDA Master
Agreement specified below. This Confirmation shall replace any previous letter
and serve as the final documentation for this Transaction.
     The definitions and provisions contained in the 2002 ISDA Equity
Derivatives Definitions (the “Equity Definitions”), as published by the
International Swaps and Derivatives Association, Inc., are incorporated into
this Confirmation. In the event of any inconsistency between the Equity
Definitions and this Confirmation, this Confirmation shall govern. This
Transaction shall be deemed to be a Share Option Transaction within the meaning
set forth in the Equity Definitions.
     Each party is hereby advised, and each such party acknowledges, that the
other party has engaged in, or refrained from engaging in, substantial financial
transactions and has taken other material actions in reliance upon the parties’
entry into the Transaction to which this Confirmation relates on the terms and
conditions set forth below.
     1. This Confirmation evidences a complete and binding agreement between
Dealer and Company as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall supplement, form a part of, and be subject to
an agreement in the form of the 2002 ISDA Master Agreement (the “Agreement”) as
if Dealer and Company had executed an agreement in such form (but without any
Schedule except for the election of the laws of the State of New York as the
governing law) on the Trade Date. In the event of any inconsistency between
provisions of that Agreement and this Confirmation, this Confirmation will
prevail for the purpose of the Transaction to which this Confirmation relates.
The parties hereby agree that no Transaction other than the Transaction to which
this Confirmation relates shall be governed by the Agreement.
     2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
General Terms:
Trade Date:                                             December 14, 2006

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Warrants:
  Equity call warrants, each giving the holder the right to purchase one Share
at the Strike Price, subject to the Settlement Terms set forth below. For the
purposes of the Equity Definitions, each reference to a Warrant herein shall be
deemed to be a reference to a Call Option.
 
   
Components:
  The Transaction will be divided into individual Components, each with the
terms set forth in this Confirmation, and, in particular, with the Number of
Warrants and Expiration Date set forth for such Components in this Confirmation.
The payments and deliveries to be made upon settlement of the Transaction will
be determined separately for each Component as if each Component were a separate
Transaction under the Agreement.
 
   
Warrant Style:
  European
 
   
Buyer:
  Dealer
 
   
Seller:
  Company
 
   
Shares:
  The common stock of Company, par value USD 0.01 per Share (Exchange symbol
“CDNS”)
 
   
Number of Warrants:
  For each Component, as provided in Annex A to this Confirmation.
 
   
Warrant Entitlement:
  One Share per Warrant
 
   
Strike Price:
  USD 31.50
 
   
Premium:

  USD 15,150,000
 
   
Premium Payment Date:
  The Effective Date or such later date as agreed upon by the parties
 
   
Effective Date:
  December 19, 2006
 
   
Exchange:
  NASDAQ Global Select Market.
 
   
Related Exchange(s):
  The principal exchange(s) for options contracts or futures contracts, if any,
with respect to the Shares
 
   
Exercise and Valuation:
   
In respect of any Component:
   
Expiration Time:
  The Valuation Time
 
   
Expiration Dates:
  As provided in Annex A to this Confirmation (or, if such date is not a
Scheduled Trading Day, the next following Scheduled Trading Day that is not
already an Expiration Date for another provided that if that date is a Disrupted
Day, the Expiration Date for such Component shall be the first succeeding

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  Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed
to be an Expiration Date in respect of any other Component of the Transaction
hereunder; and provided further that if such Expiration Date has not occurred
pursuant to the preceding proviso as of the Final Disruption Date, the Final
Disruption Date shall be the Expiration Date for such Component (irrespective of
whether such date is an Expiration Date in respect of any other Component for
the Transaction) and, notwithstanding anything to the contrary in this
Confirmation or the Definitions, the Relevant Price for such Expiration Date
shall be the prevailing market value per Share determined by the Calculation
Agent in a commercially reasonable manner. “Final Disruption Date” means
April 20, 2014. Notwithstanding the foregoing and anything to the contrary in
the Equity Definitions, if a Market Disruption Event occurs on any Expiration
Date, the Calculation Agent may determine that such Expiration Date is a
Disrupted Day only in part, in which case the Calculation Agent shall make
adjustments to the Number of Warrants for the relevant Component for which such
day shall be the Expiration Date and shall designate the Scheduled Trading Day
determined in the manner described in the immediately preceding sentence as the
Expiration Date for the remaining Warrants for such Component. Section 6.6 of
the Equity Definitions shall not apply to any Valuation Date occurring on an
Expiration Date.
 
   
          Market Disruption Event:
  Section 6.3(a) of the Equity Definitions is hereby amended by deleting the
words “during the one hour period that ends at the relevant Valuation Time,
Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as
the case may be,” in clause (ii) thereof.
 
   
          Automatic Exercise:
  Applicable; and means that, for each Component, each Warrant for such
Component not previously exercised will be deemed to be automatically exercised
at the Expiration Time on the Expiration Date for such Component unless Dealer
notifies Seller (by telephone or in writing) prior to the Expiration Time on
such Expiration Date that it does not wish Automatic Exercise to occur, in which
case Automatic Exercise will not apply.
 
   
          Company’s Telephone Number
   
          and Telex and/or Facsimile Number
   
          and Contact Details for purpose of
   
          Giving Notice:
  Cadence Design Systems, Inc.
Bldg. 5, MS 5B1
2655 Seely Avenue
San Jose, CA 95134
Attention: Legal Department
Telephone No.: (408) 943-1234
Facsimile No.: (408) 943-0513
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
Valuation applicable to each Warrant:
   

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Valuation Time:
  At the close of trading of the regular trading session on the Exchange;
provided that if the regular trading session is extended, the Calculation Agent
shall determine the Valuation Time in its reasonable discretion.
 
   
Valuation Date:
  Each Exercise Date.
 
   
Settlement Terms:
   
     In respect of any Component:
   
 
   
Method of Settlement:
  Net Share Settlement
 
   
Net Share Settlement:
  On each Settlement Date, Company shall deliver to Dealer the Delivery
Requirement for such Settlement Date to the account specified herein, free of
payment through the Clearance System.
 
   
Delivery Requirement:
  For any Settlement Date, (i) a number of Shares (rounded down to the nearest
whole Share), as calculated by the Calculation Agent, equal to (A) the Net Share
Settlement Amount for such Settlement Date divided by (B) the Settlement Price
on the Valuation Date in respect of such Settlement Date and (ii) cash in lieu
of any fractional shares (based on such Settlement Price).
 
   
Net Share Settlement Amount:
  For any Settlement Date, an amount equal to the product of (i) the Number of
Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the
Strike Price Differential for the relevant Valuation Date and (iii) the Warrant
Entitlement.
 
   
Settlement Price:
  For any Valuation Date, the per Share volume-weighted average price as
displayed under the heading “Bloomberg VWAP" on Bloomberg page <CDNS>.UQ
<equity> AQR (or any successor thereto) in respect of the period from 9:30 a.m.
to 4:00 p.m. (New York City time) on such Valuation Date (or if such
volume-weighted average price is unavailable, the market value of one Share on
such Valuation Date, as determined by the Calculation Agent). Notwithstanding
anything to the contrary in the Equity Definitions, if there is a Market
Disruption Event on any Valuation Date, then the Calculation Agent shall
determine the Settlement Price for such Valuation Date on the basis of its good
faith estimate of the market value for the relevant Shares on such Valuation
Date.
 
   
Settlement Date:
  For any Exercise Date, the date defined as such in Section 9,4 of the Equity
Definitions, subject to Section 9(n)(i) hereof.
 
   
Failure to Deliver:
  Inapplicable
 
   
Other Applicable Provisions:
  The provisions of Sections 9.1(c), 9,8, 9.9, 9.10, 9.11 (except that the
Representation and Agreement contained in Section 9.11 of the Equity Definitions
shall be modified by excluding any representations therein relating to
restrictions, obligations, limitations or requirements under applicable
securities laws as a applicable securities laws as a
 
 
 
 
 
 

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  result of the fact that Seller is the issuer of the Shares) and 9.12 of the
Equity Definitions will be applicable, as if “Physical Settlement” applied to
the Transaction.
 
    3. Additional Terms applicable to the Transaction:
 
   
Adjustments applicable to the Warrants:
   
      In respect of any Component:
   
 
   
Method of Adjustment:
  Calculation Agent Adjustment. For avoidance of doubt, in making any
adjustments under the Equity Definitions, the Calculation Agent may adjust the
Strike Price, the Number of Warrants and the Warrant Entitlement.
Notwithstanding the foregoing, any cash dividends or distributions, whether or
not extraordinary, shall be governed by Section 9(j) of this Confirmation and
not by Section 11.2 of the Equity Definitions.
 
    Extraordinary Events applicable to the Transaction:
 
   
Tender Offer:
  Applicable
 
   
Consequence of Merger Events and
   
Tender Offers
   
 
   
(a) Share-for-Share:
  Modified Calculation Agent Adjustment
 
   
(b) Share-for-Other:
  Cancellation and Payment (Calculation Agent Determination)
 
   
(c) Share-for-Combined:
  Cancellation and Payment (Calculation Agent Determination)
 
  provided that the Calculation Agent may elect Component Adjustment
(Calculation Agent Determination).
 
   
Nationalization, Insolvency
   
or Delisting:
  Cancellation and Payment (Calculation Agent Determination); provided that (i)
Section 12.6(a)(iii) of the Equity Definitions shall be amended to delete, in
the definition of the term “Delisting” the parenthetical “(or will cease)” and
(ii) 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 American Stock Exchange,
The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective
successors); if the Shares are immediately re-listed, re-traded or re-quoted on
any such exchange or quotation system, such exchange or quotation system shall
thereafter be deemed to be the Exchange and the Calculation Agent shall make any
adjustments it deems necessary to the terms of the Transaction, as if Modified
Calculation Agent Adjustment were applicable to such event.
 
   
Additional Disruption Events:
   
 
   
(a) Change in Law:
  Applicable

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(b) Insolvency Filing:
  Applicable
 
   
(c) Hedging Disruption:
  Applicable
 
   
(d) Increased Cost of Hedging:
  Applicable
 
   
(e) Loss of Stock Borrow:
  Applicable
 
   
  Maximum Stock Loan Rate:
  1.0%
 
   
(f) Increased Cost of Stock Borrow:
  Applicable
 
   
  Initial Stock Loan Rate:
  0.25%
 
   
Hedging Party:
  Dealer for all applicable Additional Disruption Events
 
   
Determining Party:
  Dealer for all applicable Additional Disruption Events
 
   
Non-Reliance:
  Applicable
 
   
Agreements and Acknowledgments
   
Regarding Hedging Activities:
  Applicable
 
   
Additional Acknowledgments:
  Applicable
 
   
4. Calculation Agent:
  Dealer. The Calculation Agent shall, upon request by either party, provide a
written explanation of any calculation or adjustment made by it hereunder,
including, where applicable, a description of the methodology and data applied.
 
 
 
 
 
 
 
   
5. Account Details:
   

  (a)   Account for payments to Company:

  Cadence Design Systems, Inc.
  Account                           
  Wells Fargo Bank
   550 California Street — 10th Floor
  San Francisco CA 94104
  ABA#                           
Account for delivery of Shares from Company:
Mellon Investor Services
235 Montgomery Street, 23rd Floor
San Francisco, CA 94104
Cadence Design Systems Book Memo Treasury Reserve Account
Comment: When you are ready to deliver Shares contact Cadence FIRST.

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  (b)   Account for payments to Dealer:

Chase Manhattan Bank, New York
ABA#:                           
FAO: ML Equity Derivatives
A/C:                           
Account for delivery of Shares to Dealer:
To be advised.
6. Offices:
The Office of Company for the Transaction is: Inapplicable, Company is not a
Multibranch Party.
The Office of Dealer for the Transaction is:
London
7. Notices: For purposes of this Confirmation:

  (a)   Address for notices or communications to Company:
Cadence Design Systems, Inc.
Bldg. 5, MS 5B1
2655 Seely Avenue
San Jose, CA 95134
Attention: Legal Department
Telephone No.: (408) 943-1234
Facsimile No.: (408) 943-0513

  (b)   Address for notices or communications to Dealer:

Merrill Lynch International
Merrill Lynch Financial Centre
2 King Edward Street
London EC 1A 1HQ
Attention: Manager, Fixed Income Settlements
Facsimile: 44 207 995 2004
Telephone: 44 207 995 3769

With a copy to:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
222 Broadway, 16th Floor
New York, New York 10038
Attention: Litigation Department
8. Representations and Warranties of Company
The representations and warranties of Company set forth in Section 1 of the
Purchase Agreement dated as of the Trade Date among Company, Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, J.P.
Morgan Securities Inc. and Deutsche Bank Securities Inc. are true and correct
and are hereby

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deemed to be repeated to Dealer as if set forth herein. Company hereby further
represents and warrants to Dealer that:

  (a)   Company has all necessary corporate power and authority to execute,
deliver and perform its obligations in respect of this Transaction; such
execution, delivery and performance have been duly authorized by all necessary
corporate action on Company’s part; and this Confirmation has been duly and
validly executed and delivered by Company and constitutes its valid and binding
obligation, enforceable against Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity) and except
that rights to indemnification and contribution hereunder may be limited by
federal or state securities laws or public policy relating thereto.     (b)  
Neither the execution and delivery of this Confirmation nor the incurrence or
performance of obligations of Company hereunder will conflict with or result in
a breach of (i) the certificate of incorporation or by-laws (or any equivalent
documents) of Company, or any applicable law or regulation, or (ii) any order,
writ, injunction or decree of any court or governmental authority or agency, or
any agreement or instrument to which Company or any of its subsidiaries is a
party or by which Company or any of its subsidiaries is bound or to which
Company or any of its subsidiaries is subject, or constitute a default under, or
result in the creation of any lien under, any such agreement or instrument, or
breach or constitute a default under any agreements and contracts of
Counterparty or its significant subsidiaries filed as exhibits to Counterparty’s
Annual Report on Form 10-K for the year ended December 31, 2005, incorporated by
reference in the Offering Memorandum, as updated by any subsequent filings.    
(c)   No consent, approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required in connection with the
execution, delivery or performance by Company of this Confirmation, except such
as have been obtained or made and such as may be required under the Securities
Act of 1933, as amended (the “Securities Act”) or state securities laws.     (d)
  Company is not, and after giving effect to the transactions contemplated
hereby will not be, an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.     (e)   The Shares of Company
initially issuable upon exercise of the Warrants by the net share settlement
method (the “Warrant Shares”) have been reserved for issuance by all required
corporate action of Company. The Warrant Shares have been duly authorized and,
when delivered as contemplated by the terms of the Warrants following the
exercise of the Warrants in accordance with its terms and conditions, will be
validly issued, fully-paid and non-assessable, and the issuance of the Warrant
Shares will not be subject to any preemptive or similar rights.     (f)  
Company is an “eligible contract participant” (as such term is defined in
Section 1a(12) of the Commodity Exchange Act, as amended (the “CEA”)) because
one or more of the following is true:         Company is a corporation,
partnership, proprietorship, organization, trust or other entity and:

  (A)   Company has total assets in excess of USD 10,000,000;     (B)   the
obligations of Company hereunder are guaranteed, or otherwise supported by a
letter of credit or keepwell, support or other agreement, by an entity of the
type described in

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      Section 1a(12)(A)(i) through (iv), 1a(12)(A)(v)(I), 1a(12)(A)(vii) or
1a(12)(C) of the CEA; or     (C)   Company has a net worth in excess of USD
1,000,000 and has entered into this Agreement in connection with the conduct of
Company’s business or to manage the risk associated with an asset or liability
owned or incurred or reasonably likely to be owned or incurred by Company in the
conduct of Company’s business.

  (g)   On the Trade Date, (A) none of Company and its officers and directors is
aware of any material nonpublic information regarding Company or the Shares and
(B) all reports and other documents filed by Company 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.     (h)
  Without limiting the generality of Section 3(a)(iii) of the Agreement, the
Transaction will not violate Rule 13e 1 or Rule 13e 4 under the Exchange Act    
(i)   Company’s investments in and liabilities in respect of the Transaction,
which it understands are not readily marketable, are not disproportionate to its
net worth, and it is able to bear any loss in connection with the Transaction,
including the loss of its entire investment in the Transaction.     (j)  
Company understands no obligations of Dealer to it hereunder will be entitled to
the benefit of deposit insurance and that such obligations will not be
guaranteed by any affiliate of Dealer or any governmental agency.     (k)  
Company is capable of assessing the merits of and understanding (on its own
behalf or through independent professional advice), and understands and accepts,
the terms, conditions and risks of the Transaction.     (l)   Without limiting
the generality of Section 13.1 of the Equity Definitions, Company acknowledges
that Dealer is not making any representations or warranties with respect to the
treatment of the Transaction under FASB Statements 128, 133, as amended, 149 or
150, EITF Issue No. 00-19, Issue No. 01-6 or Issue No. 03-6 (or any successor
issue statements) or under FASB’s Liabilities & Equity Project.     (m)  
Company agrees that, for purposes of Rule 144(d) under the Securities Act, the
holding period of Dealer in Shares received hereunder in any Net Share
Settlement or in Shares comprising Share Termination Delivery Units received
pursuant to Section 9(m) hereof shall start on the Premium Payment Date.

9. Other Provisions:

  (a)   Opinions. Company shall deliver to Dealer an opinion of counsel, dated
as of the Effective Date, with respect to the matters set forth in Sections 8(a)
through (e) of this Confirmation.     (b)   Limitations on Settement by Company.
Notwithstanding anything herein or in the Agreement to the contrary, in no event
shall Company be required to deliver Shares in connection with the Transaction
in excess of 21,276,585 Shares (the “Capped Number”). Company represents and
warrants (which shall be deemed to be repeated on each day that the Transaction
is outstanding) that the Capped Number is equal to or less than the number of
authorized but unissued Shares of

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      the Company that are not reserved for future issuance in connection with
transactions in the Shares (other than the Transaction) on the date of the
determination of the Capped Number (such Shares, the “Available Shares”).
Company shall not take any action to decrease the number of Available Shares
below the Capped Number. In the event Company shall not have delivered the full
number of Shares that would be deliverable but for this Section 9(b) (the
resulting deficit, the “Deficit Shares”) , Company shall be continually
obligated to deliver, from time to time until the full number of Deficit Shares
have been delivered pursuant to this paragraph, Shares when, and to the extent,
that (i) Shares are repurchased, acquired or otherwise received by Company or
any of its subsidiaries after the Trade Date (whether or not in exchange for
cash, fair value or any other consideration), (ii) authorized and unissued
Shares reserved for issuance in respect of other transactions prior to such date
which prior to the relevant date become no longer so reserved and (iii) Company
additionally authorizes any unissued Shares that are not reserved for other
transactions. Company shall immediately notify Dealer of the occurrence of any
of the foregoing events (including the number of Shares subject to clause (i),
(ii) or (iii) and the corresponding number of Shares to be delivered) and
promptly deliver such Shares thereafter.     (c)   Right to Extend. Dealer may
postpone any Exercise Date or any other date of valuation or delivery with
respect to some or all of the relevant Warrants (in which event the Calculation
Agent shall make appropriate adjustments to the Number of Warrants for one or
more Components), if (x) the average daily trading volume of the Shares for the
four calendar weeks immediately preceding the week in which such Exercise date
or date of valuation or delivery occurs is less than 1,505,000 Shares, which,
for the avoidance of doubt, shall be subject to adjustments as a result of
Potential Adjustment Events and (y) Dealer determines, in its reasonable
discretion, that such extension is reasonably necessary or appropriate to
preserve Dealer’s hedging or hedge unwind activity hereunder in light of
existing liquidity conditions or to enable Dealer to effect purchases of Shares
in connection with its hedging, hedge unwind or settlement activity hereunder in
a manner that would, if Dealer were Company or an affiliated purchaser of
Company, be reasonably deemed to be in compliance with applicable legal,
regulatory or self-regulatory requirements, or with related policies and
procedures applicable to Dealer.     (d)   No Manipulation. Company is not
entering into this Transaction to create actual or apparent trading activity in
the Shares (or any security convertible into or exchangeable for the Shares) or
to raise or depress or otherwise manipulate the price of the Shares (or any
security convertible into or exchangeable for the Shares) or to violate the
Exchange Act,     (e)   Repurchase Notices. Company shall, on any day on which
Company effects any repurchase of Shares, promptly give Dealer a written notice
of such repurchase (a “Repurchase Notice”) on such day if, following such
repurchase, the Warrant Equity Percentage as determined on such day is
(i) greater than 6% and (ii) greater by 0.5% than the Warrant Equity Percentage
included in the immediately preceding Repurchase Notice (or, in the case of the
first such Repurchase Notice, greater than the Warrant Equity Percentage as of
the date hereof). The “Warrant Equity Percentage” as of any day is the fraction
(A) the numerator of which is the sum of (x) the Number of Shares hereunder and
(y) the Number of Shares for the warrant transaction (reference no.06824052)
entered into by the parties on the date hereof and (B) the denominator of which
is the number of Shares outstanding on such day. Company agrees to indemnify and
hold harmless Dealer and its affiliates and their respective officers,
directors, employees, affiliates, advisors, agents and controlling persons
(each, an “Indemnified Person”) from and against any and all losses (including
losses relating to Dealer’s hedging activities as a consequence of becoming, or
of the risk of becoming, a Section 16 “insider”, including without limitation,
any forbearance from hedging activities or cessation of hedging activities and
any losses in connection therewith with respect to this Transaction), claims,
damages, judgments, liabilities and expenses (including reasonable attorney’s
fees), joint or several, which an Indemnified Person may become subject to, as a
result of Company’s failure to provide Dealer with a Repurchase Notice on the
day and in the

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      manner specified in this Section 9(e), and to reimburse, within 30 days,
upon written request, each of such Indemnified Persons for any reasonable legal
or other expenses incurred in connection with investigating, preparing for,
providing testimony or other evidence in connection with or defending any of the
foregoing. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
the Indemnified Person, such Indemnified Person shall promptly notify Company in
writing, and Company, upon request of the Indemnified Person, shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others Company may designate in such proceeding and
shall pay the fees and expenses of such counsel related to such proceeding.
Company shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, Company agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Company shall not, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding. If the indemnification provided for in this paragraph (e) is
unavailable to an Indemnified Person or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then Company under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities. The remedies provided for in
this paragraph (e) are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any Indemnified Person at law or in equity.
The indemnity and contribution agreements contained in this paragraph (e) shall
remain operative and in full force and effect regardless of the termination of
this Transaction.     (f)   Board Authorization. Company represents that it is
entering into the Transaction, solely for the purposes stated in the board
resolution authorizing this Transaction and in its public disclosure. Company
further represents that there is no internal policy, whether written or oral, of
Company that would prohibit Company from entering into any aspect of this
Transaction, including, but not limited to, the issuance of Shares to be made
pursuant hereto.     (g)   Transfer or Assignment. Company may not transfer any
of its rights or obligations under this Transaction without the prior written
consent of Dealer. Dealer may transfer or assign all or any portion of its
rights or obligations under this Transaction without consent of Company.     (h)
  Effectiveness. If, on or prior to the Effective Date (or such later date as
agreed upon by the parties), Dealer reasonably determines that it is advisable
to cancel the Transaction because of concerns that Dealer’s related hedging
activities would be reasonably viewed as not complying with applicable
securities laws, rules or regulations, the Transaction shall be cancelled and
shall not become effective, and neither party shall have any obligation to the
other party in respect of the Transaction,     (i)   Equity Rights. Dealer
acknowledges and agrees that this Confirmation is not intended to convey to it
rights with respect to the Transaction that are senior to the claims of common
stockholders in the event of Company’s bankruptcy.     (j)   Dividends. If at
any time during the period from and including the Trade Date, to but excluding
the Expiration Date, an ex-dividend date for a cash dividend occurs with respect
to the Shares (an “Ex-Dividend Date”) and that dividend is greater than the
Regular Dividend on a per Share basis, then the Calculation Agent will adjust
the Strike Price, the Number of Warrants and the Warrant

11

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      Entitlement to preserve the fair value of the Warrant to Dealer after
taking into account such dividend. “Regular Dividend” shall mean USD 0.00 per
Share per quarter.     (k)   Additional Provisions.         (i)The first
sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A)
thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent
Adjustment” is specified as the Method of Adjustment in the related Confirmation
of a Share Option Transaction, then following the announcement or occurrence of
any Potential Adjustment Event, the Calculation Agent will determine whether
such Potential Adjustment Event has a material effect on the theoretical value
of the relevant Shares or options on the Shares and, if so, will (i) make
appropriate adjustment(s), if any, to any one or more of:’ and, the portion of
such sentence immediately preceding clause (ii) thereof is hereby amended by
deleting the words “diluting or concentrative” and the words “(provided that no
adjustments will be made to account solely for changes in volatility, expected
dividends, stock loan rate or liquidity relative to the relevant Shares)” and
replacing such latter phrase with the words “(and, for the avoidance of doubt,
adjustments may be made to account solely for changes in volatility, expected
dividends, stock loan rate or liquidity relative to the relevant Shares)”;      
  (ii)Section ll.2(e)(vii) of the Equity Definitions is hereby amended by
deleting the words “diluting or concentrative” and replacing them with
“material”; and adding the following words at the end of the sentence “or
options on Shares”.     (1)   No Collateral; Setoff. Notwithstanding any
provision of the Agreement or any other agreement between the parties to the
contrary, the obligations of Company hereunder are not secured by any
collateral. The provisions of Section 2(c) of the Agreement shall not apply to
the Transaction. Each party waives any and all rights it may have to set-off
delivery or payment obligations it owes to the other party under the Transaction
against any delivery or payment obligations owed to it by the other party,
whether arising under the Agreement, under any other agreement between parties
hereto, by operation of law or otherwise.     (m)   Alternative Calculations and
Payment on Early Termination and on Certain Extraordinary Events. If, in respect
of this Transaction, an amount is payable by Company to Dealer, (i) pursuant to
Section 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions (except in the
event of a Nationalization or Insolvency or a Merger Event, in each case in
which the consideration to be paid to holders of Shares consists solely of cash)
or (ii) pursuant to Section 6(d)(ii) of the Agreement (except in the event of an
Event of Default in which Company is the Defaulting Party or a Termination Event
in which Company is the Affected Party, other than an Event of Default of the
type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement
or a Termination Event of the type described in Section 5(b)(i), (ii), (iii),
(iv), (v) or (vi) of the Agreement, in each case resulting from an event or
events outside Company’s control) (a “Payment Obligation”), Company may, in its
sole discretion, satisfy any such Payment Obligation by the Share Termination
Alternative (as defined below) and shall give irrevocable telephonic notice to
Dealer, confirmed in writing within one Currency Business Day, no later than
12:00 p.m. New York local time on the Merger Date, the Announcement Date or the
Early Termination Date, as applicable; provided that if Company does not validly
elect to satisfy its Payment Obligation by the Share Termination Alternative,
Dealer shall nevertheless have the right, in its sole discretion, to require
Company to satisfy its Payment Obligation by the Share Termination Alternative,
notwithstanding Company’s lack of election. In calculating any amounts under
Section 6(e) of the Agreement, notwithstanding anything to the contrary in the
Agreement, (1) separate amounts shall be calculated as set forth in Section 6(e)
with respect to (i) this Transaction and (ii) all other Transactions, and
(2) such separate amounts shall be payable pursuant to Section 6(d)(ii) of the

12

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Agreement, subject to, in the case of clause (1)(i), the Share Termination
Alternative right hereunder.

     
Share Termination Alternative:
  If applicable, Company shall deliver to Dealer the Share Termination Delivery
Property on the date when the Payment Obligation would otherwise be due pursuant
to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e)
of the Agreement, as applicable (the “Share Termination Payment Date”), subject
to paragraph (n)(i) below, in satisfaction, subject to paragraph (n)(ii) below,
of the Payment Obligation in the manner reasonably requested by Dealer free of
payment.
 
   
Share Termination Delivery Property:
  A number of Share Termination Delivery Units, as calculated by the Calculation
Agent, equal to the Payment Obligation divided by the Share Termination Unit
Price. The Calculation Agent shall adjust the Share Termination Delivery
Property by replacing any fractional portion of a security therein with an
amount of cash equal to the value of such fractional security based on the
values used to calculate the Share Termination Unit Price.
 
   
Share Termination Unit Price:
  The value to Dealer of property contained in one Share Termination Delivery
Unit on the date such Share Termination Delivery Units are to be delivered as
Share Termination Delivery Property, as determined by the Calculation Agent in
its discretion by commercially reasonable means and notified by the Calculation
Agent to Company at the time of notification of the Payment Obligation. In the
case of a Private Placement Settlement of Share Termination Delivery Units that
are Restricted Shares as set forth in paragraph (n)(i) below, the Share
Termination Unit Price shall be determined by the discounted price applicable to
such Share Termination Delivery Units. In the case of a Registration Settlement
of Share Termination Delivery Units that are Restricted Shares (as defined
below) as set forth in paragraph (n)(ii) below, the Share Termination Unit Price
shall be the Settlement Price on the Merger Date, the date of the occurrence of
the Nationalization or Insolvency, the date of the Share De-listing or the Early
Termination Date, as applicable.
 
   
Share Termination Delivery Unit:
  In the case of a De-listing, Termination Event or Event of Default, one Share
or, in the case of Nationalization or Insolvency, a Merger Event or a Tender
Offer, one Share or a unit consisting of the number or amount of each type of
property received by a holder of one Share (without consideration of any
requirement to pay cash or other consideration in

13

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

 

     
 
  lieu of fractional amounts of any securities) in such Nationalization,
Insolvency, Merger Event or Tender Offer, as determined by the Calculation
Agent, as the case may be. If such Nationalization, Insolvency, Merger Event or
Tender Offer involves a choice of consideration to be received by holders, such
holder shall be deemed to have elected to receive the maximum possible amount of
cash.
 
   
Failure to Deliver:
  Inapplicable
 
   
Other applicable provisions:
  If Share Termination Alternative is applicable, the provisions of
Sections 9.8, 9.9, 9.10, 9.11 (except that the Representation and Agreement
contained in Section 9.11 of the Equity Definitions shall be modified by
excluding any representations therein relating to restrictions, obligations,
limitations or requirements under applicable securities laws as a result of the
fact that Seller is the issuer of the Shares) and 9.12 of the Equity Definitions
will be applicable, as if “Physical Settlement” applied to such cancellation or
termination of the Transaction, except that all references therein to “Shares”
shall be read as references to “Share Termination Delivery Units”.

  (n)   Registration/Private Placement Procedures. If, in the reasonable opinion
of Dealer, following any delivery of Shares or Share Termination Delivery
Property to Dealer hereunder, such Shares or Share Termination Delivery Property
would be in the hands of Dealer subject to any applicable restrictions with
respect to any registration or qualification requirement or prospectus delivery
requirement for such Shares or Share Termination Delivery Property pursuant to
any applicable federal or state securities law (including, without limitation,
any such requirement arising under Section 5 of the Securities Act as a result
of such Shares or Share Termination Delivery Property being “restricted
securities”, as such term is defined in Rule 144 under the Securities Act, or as
a result of the sale of such Shares or Share Termination Delivery Property being
subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares or
Share Termination Delivery Property, “Restricted Shares”), then delivery of such
Restricted Shares shall be effected pursuant to either clause (i) or (ii) below
at the election of Company, unless waived by Dealer; provided that, in the event
such obligation to deliver Restricted Shares would have arisen from a Net Share
Settlement, at the election of the Company, Company may satisfy such Share
delivery obligation by paying Dealer on the relevant Settlement Date an amount
in cash equal to the relevant Net Share Settlement Amount. Notwithstanding
anything to the contrary in the Equity Definitions, Company shall notify Dealer,
prior to the first Expiration Date, whether (x) it elects to cash settle the
Number of Warrants for all Expiration Dates, if Dealer determines the Shares
that would be delivered in the Net Share Settlement of such Number of Warrants
would be Restricted Shares and (y) if cash settlement is not elected, whether a
Private Placement Settlement or Registered Settlement would apply. Such election
shall apply to all Expiration Dates and all Settlement Dates related to
Expiration Dates, and the procedures in clause (i) or clause (ii) below shall
apply for all such Restricted Shares delivered in respect of all Expiration
Dates on an aggregate basis commencing on the Settlement Date relating to the
first Expiration Date. In such case, the Calculation Agent shall make reasonable
adjustments to settlement terms and provisions under this Confirmation to
reflect a single Private Placement Settlement or Registered Settlement for such
aggregate Restricted Shares delivered hereunder. If Company elects Share
Termination Alternative

14

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      in accordance with Section 9(m) hereof and Dealer determines in accordance
with this paragraph that the Share Termination Delivery Property to be delivered
in such Share Termination Alternative would constitute Restricted Shares, then
Company shall immediately notify Dealer whether a Private Placement Settlement
or Registered Settlement would apply to the delivery of such Share Termination
Delivery Property.

  (i)   If Company elects to settle the Transaction pursuant to this clause (i)
(a “Private Placement Settlement”), then delivery of Restricted Shares by
Company shall be effected in customary private placement procedures with respect
to such Restricted Shares reasonably acceptable to Dealer; provided that Company
may not elect a Private Placement Settlement if, on the date of its election, it
has taken, or caused to be taken, any action that would make unavailable either
the exemption pursuant to Section 4(2) of the Securities Act for the sale by
Company to Dealer (or any affiliate designated by Dealer) of the Restricted
Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the
Securities Act for resales of the Restricted Shares by Dealer (or any such
affiliate of Dealer). The Private Placement Settlement of such Restricted Shares
shall include customary representations, covenants, blue sky and other
governmental filings and/or registrations, indemnities to Dealer, due diligence
rights (for Dealer or any designated buyer of the Restricted Shares by Dealer),
opinions and certificates, and such other documentation as is customary for
private placement agreements, all reasonably acceptable to Dealer. In the case
of a Private Placement Settlement, Dealer shall determine the appropriate
discount to the Share Termination Unit Price (in the case of settlement of Share
Termination Delivery Units pursuant to paragraph (m) above) or any Settlement
Price (in the case of settlement of Shares pursuant to Section 2 above)
applicable to such Restricted Shares in a commercially reasonable manner and
appropriately adjust the amount of such Restricted Shares to be delivered to
Dealer hereunder. Notwithstanding the Agreement or this Confirmation, the date
of delivery of such Restricted Shares shall be the Exchange Business Day
following notice by Dealer to Company of such applicable discount and the number
of Restricted Shares to be delivered pursuant to this clause (i). For the
avoidance of doubt, delivery of Restricted Shares shall be due as set forth in
the previous sentence and not be due on the Share Termination Payment Date (in
the case of settlement of Share Termination Delivery Units pursuant to paragraph
(m) above) or on the Settlement Date for such Restricted Shares (in the case of
settlement of Shares pursuant to Section 2 above).         In the event Company
shall not have delivered the full number of Restricted Shares otherwise
applicable as a result of either the proviso above or the last sentence of
clause (ii) below relating to the Maximum Amount (such deficit, the “Deficit
Restricted Shares”), Company shall be continually obligated to deliver, from
time to time until the full number of Deficit Restricted Shares have been
delivered pursuant to this paragraph, Restricted Shares when, and to the extent,
that (i) Shares are repurchased, acquired or otherwise received by Company or
any of its subsidiaries after the Trade Date (whether or not in exchange for
cash, fair value or any other consideration), (ii) authorized and unissued
Shares reserved for issuance in respect of other transactions prior to such date
which prior to the relevant date become no longer so reserved and (iii) Company
additionally authorizes any unissued Shares that are not reserved for other
transactions. Company shall immediately notify Dealer of the occurrence of any
of the foregoing events (including the number of Shares subject to clause (i),
(ii) or (iii) and the corresponding number of Restricted Shares to be delivered)
and promptly deliver such Restricted Shares thereafter.     (ii)   If Company
elects to settle the Transaction pursuant to this clause (ii) (a “Registration
Settlement”), then Company shall promptly (but in any event no later than the
beginning

15

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      of the Resale Period) file and use its reasonable best efforts to make
effective under the Securities Act a registration statement or supplement or
amend an outstanding registration statement in form and substance reasonably
satisfactory to Dealer, to cover the resale of such Restricted Shares in
accordance with customary resale registration procedures, including covenants,
conditions, representations, underwriting discounts (if applicable), commissions
(if applicable), indemnities due diligence rights, opinions and certificates,
and such other documentation as is customary for equity resale underwriting
agreements, all reasonably acceptable to Dealer. If Company shall fail to comply
with the requirements set forth in the immediately preceding sentence, Private
Placement Settlement shall apply. If Dealer is satisfied with such procedures
and documentation, it shall sell the Restricted Shares pursuant to such
registration statement during a period (the “Resale Period”) commencing on the
Exchange Business Day following delivery of such Restricted Shares (which, for
the avoidance of doubt, shall be (x) the Share Termination Payment Date in case
of settlement of Share Termination Delivery Units pursuant to paragraph
(m) above or (y) the Settlement Date in respect of the first Expiration Date)
and ending on the earliest of (x) the Exchange Business Day on which Dealer
completes the sale of all Restricted Shares or, in the case of settlement of
Share Termination Delivery Units, a sufficient number of Restricted Shares so
that the realized net proceeds of such sales exceed the Payment Obligation or
the Net Share Settlement Amount, as the case may be, (y) the date upon which all
Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar
provisions then in force) or Rule 145(d)( 1) or (2) (or any similar provision
then in force) under the Securities Act and (iii) the date upon which all
Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule
144(k) (or any similar provision then in force) or Rule 145(d)(3) (or any
similar provision then in force) under the Securities Act. If the Payment
Obligation or the Net Share Settlement Amount, as the case may be, exceeds the
realized net proceeds from such resale, Company shall transfer to Dealer by the
open of the regular trading session on the Exchange on the Exchange Trading Day
immediately following the last day of the Resale Period the amount of such
excess (the “Additional Amount”) in cash or in a number of Restricted Shares
(“Make-whole Shares”) in an amount that, based on the Settlement Price on the
last day of the Resale Period (as if such day was the “Valuation Date” for
purposes of computing such Settlement Price), has a dollar value equal to the
Additional Amount. The Resale Period shall continue to enable the sale of the
Make-whole Shares. If Company elects to pay the Additional Amount in Restricted
Shares, the requirements and provisions for Registration Settlement shall apply.
This provision shall be applied successively until the Additional Amount is
equal to zero. For the avoidance of doubt, Company’s obligation to deliver
Make-whole Shares shall apply to both Private Placement Settlements and
Registration Settlements.   (iii)   Without limiting the generality of the
foregoing, Company agrees that any Restricted Shares delivered to Dealer, as
purchaser of such Restricted Shares, (i) may be transferred by and among Dealer
and its affiliates and Company shall effect such transfer without any further
action by Dealer and (ii) after the minimum “holding period” within the meaning
of Rule 144(d) under the Securities Act has elapsed after any Settlement Date
for such Restricted Shares, Company shall promptly remove, or cause the transfer
agent for such Restricted Shares to remove, any legends referring to any such
restrictions or requirements from such Restricted Shares upon delivery by Dealer
(or such affiliate of Dealer) to Company or such transfer agent of seller’s and
broker’s representation letters customarily delivered by Dealer in connection
with resales of restricted securities pursuant to Rule 144 under the Securities
Act, without any further requirement for the delivery of any certificate,
consent, agreement, opinion of counsel, notice or any other document, any
transfer tax stamps or payment of any other amount or any other action by Dealer
(or such affiliate of Dealer).

16

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      If the Private Placement Settlement or the Registration Settlement shall
not be effected as set forth in clauses (i) or (ii), as applicable, then failure
to effect such Private Placement Settlement or such Registration Settlement
shall constitute an Event of Default with respect to which Company shall be the
Defaulting Party.     (o)   Limit on Beneficial Ownership. Notwithstanding any
other provisions hereof, Dealer may not exercise any Warrant hereunder, and
Automatic Exercise shall not apply with respect thereto, to the extent (but only
to the extent) that such receipt would result in Dealer directly or indirectly
beneficially owning (as such term is defined for purposes of Section 13(d) of
the Exchange Act) at any time in excess of 9.0% of the outstanding Shares. Any
purported delivery hereunder shall be void and have no effect to the extent (but
only to the extent) that such delivery would result in Dealer directly or
indirectly so beneficially owning in excess of 9.0% of the outstanding Shares.
If any delivery owed to Dealer hereunder is not made, in whole or in part, as a
result of this provision, Company’s obligation to make such delivery shall not
be extinguished and Company shall make such delivery as promptly as practicable
after, but in no event later than one Exchange Business Day after, Dealer gives
notice to Company that such delivery would not result in Dealer directly or
indirectly so beneficially owning in excess of 9.0% of the outstanding Shares.  
  (p)   Share Deliveries. Company acknowledges and agrees that, to the extent
the holder of this Warrant is not then an affiliate and has not been an
affiliate for 90 days (it being understood that Dealer will not be considered an
affiliate under this Section 9(p) solely by reason of its receipt of Shares
pursuant to this Transaction), and otherwise satisfies all holding period and
other requirements of Rule 144 of the Securities Act applicable to it, any
delivery of Shares or Share Termination Delivery Property hereunder at any time
after two years from the Premium Payment Date shall be eligible for resale under
Rule 144(k) of the Securities Act and Company agrees to promptly remove, or
cause the transfer agent for such Shares or Share Termination Delivery Property,
to remove, any legends referring to any restrictions on resale under the
Securities Act from the Shares or Share Termination Delivery Property. Company
further agrees, for any delivery of Shares or Share Termination Delivery
Property hereunder at any time after one year from the Premium Payment Date but
within 2 years of the Premium Payment Date, to the extent the holder of this
Warrant then satisfies the holding period and other requirements of Rule 144 of
the Securities Act, to promptly remove, or cause the transfer agent for such
Shares or Share Termination Delivery Property to remove, any legends referring
to any such restrictions or requirements from such Shares or Share Termination
Delivery Property. Such Shares or Share Termination Delivery Property will be
de-legended upon delivery by Dealer (or such affiliate of Dealer) to Company or
such transfer agent of customary seller’s and broker’s representation letters in
connection with resales of restricted securities pursuant to Rule 144 of the
Securities Act, without any further requirement for the delivery of any
certificate, consent, agreement, opinion of counsel, notice or any other
document, any transfer tax stamps or payment of any other amount or any other
action by Dealer (or such affiliate of Dealer). Company further agrees that any
delivery of Shares or Share Termination Delivery Property prior to the date that
is one year from the Premium Payment Date, may be transferred by and among
Dealer and its affiliates and Company shall effect such transfer without any
further action by Dealer. Notwithstanding anything to the contrary herein,
Company agrees that any delivery of Shares or Share Termination Delivery
Property shall be effected by book-entry transfer through the facilities of DTC,
or any successor depositary, if at the time of delivery, such class of Shares or
class of Share Termination Delivery Property is in book-entry form at DTC or
such successor depositary. Notwithstanding anything to the contrary herein, to
the extent the provisions of Rule 144 of the Securities Act or any successor
rule are amended, or the applicable interpretation thereof by the Securities and
Exchange Commission or any court change after the Trade Date, the agreements of
Company herein shall be deemed modified to the extent necessary, in the opinion
of outside counsel of Company, to comply with Rule 144 of the Securities Act,
including Rule 144(k) as in effect at the time of delivery of the relevant
Shares or Share Termination Delivery Property.

17

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  (q)   Additional Termination Event. If within the period commencing on the
Trade Date and ending on the second anniversary of the Premium Payment Date,
Buyer reasonably determines that it is advisable to terminate a portion of the
Transaction so that Buyer’s related hedging activities will reasonably be deemed
to comply with applicable securities laws, rules or regulations, an Additional
Termination Event shall occur in respect of which (1) Company shall be the sole
Affected Party and (2) the Transaction shall be the sole Affected Transaction.  
  (r)   Securities Contract; Swap Agreement. Each of Dealer and Company agrees
and acknowledges that Dealer is a “stock broker,” “swap participant” and
“financial participant” within the meaning of Sections 101(22), 101(53C) and
101(22A) of Title 11 of the United States Code {the “Bankruptcy Code”). The
parties hereto further agree and acknowledge (A) that this Confirmation is (i) a
“securities contract,” as such term is defined in Section 741(7) of the
Bankruptcy Code, with respect to which each payment and delivery hereunder is a
“settlement payment,” as such term is defined in Section 741(8) of the
Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in
Section 101(53B) of the Bankruptcy Code, with respect to which each payment and
delivery hereunder is a “transfer,” as such term is defined in Section 101(54)
of the Bankruptcy Code, and (B) that Dealer is entitled to the protections
afforded by, among other sections, Section 362(b)(6), 362(b)(17), 546(e),
546(g), 555 and 560 of the Bankruptcy Code.     (s)   Disclosure. Effective from
the date of commencement of discussions concerning the Transaction, Company and
each of its employees, representatives, or other agents may disclose to any and
all persons, without limitation of any kind, the tax treatment and tax structure
of the Transaction and all materials of any kind (including opinions or other
tax analyses) that are provided to Company relating to such tax treatment and
tax structure.     (t)   Governing Law. New York law (without reference to
choice of law doctrine).     (u)   Waiver of Jury Trial. Each party waives, to
the fullest extent permitted by applicable law, any right it may have to a trial
by jury in respect of any suit, action or proceeding relating to this
Transaction. Each party (i) certifies that no representative, agent or attorney
of the other party has represented, expressly or otherwise, that such other
party would not, in the event of such a suit, action or proceeding, seek to
enforce the foregoing waiver and (ii) acknowledges that it and the other party
have been induced to enter into this Transaction, as applicable, by, among other
things, the mutual waivers and certifications provided herein.     (v)  
Quarterly Valuations. Dealer hereby agrees, upon request by Company, to provide
to Company, within 5 Exchange Business Days after the end of the fiscal quarter
of Company during which Company made such request, a valuation estimate of the
fair value of the Transaction as of Company’s fiscal quarter end.     (w)   Role
of Agent. Each party agrees and acknowledges that:         1.  Agent will be
responsible for the operational aspects of the Transactions effected through it,
such as record keeping, reporting, and confirming Transactions to Counterparty
and Dealer;         2.  Agent’s sole role under this Agreement and with respect
to any Transaction is as an agent of Counterparty and Dealer on a disclosed
basis and Agent shall have no responsibility or liability to Counterparty or
Dealer hereunder except for gross negligence or willful misconduct in the
performance of its duties as agent. Agent is authorized to act as agent for
Dealer, but only to the extent expressly required to satisfy the requirements of
Rule 15a-6 under the Exchange Act in respect of the Options described hereunder.
A shall have no authority to act as agent for Counterparty generally or with
respect to transactions or other matters governed by this

18

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Agreement, except to the extent expressly required to satisfy the requirements
of Rule 15a-6 or in accordance with express instructions from Counterparty.

19

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     Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it by facsimile to the
address provided in the Notices section of this Confirmation.

                      Very truly yours,    
 
                        MERRILL LYNCH INTERNATIONAL    
 
               
 
      By:   Fran Jacobsen    
 
                        Authorized Signatory             Name: Fran Jacobsen    

Accepted and confirmed
as of the Trade Date:
Cadence Design Systems, Inc.
By: /s/ William Porter
 
Authorized Signatory
Name: William Porter
Acknowledged and agreed as to matters to the Agent:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
Solely in its capacity as Agent hereunder
By: /s/ B. Carrole
 
Authorized Signatory
Name: B. Carrole

 

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

          Component Number   Number of Warrants   Expiration Date
1.
  197,005   2/19/2014
2.
  197,005   2/20/2014
3.
  197,005   2/21/2014
4.
  197,005   2/24/2014
5.
  197,005   2/25/2014
6.
  197,005   2/26/2014
7.
  197,005   2/27/2014
8.
  197,005   2/28/2014
9.
  197,005   3/3/2014
10.
  197,005   3/4/2014
11.
  197,005   3/5/2014
12.
  197,005   3/6/2014
13.
  197,005   3/7/2014
14.
  197,005   3/10/2014
15.
  197,005   3/11/2014
16.
  197,005   3/12/2014
17.
  197,005   3/13/2014
18.
  197,005   3/14/2014
19.
  197,005   3/17/2014
20.
  197,005   3/18/2014
21.
  197,005   3/19/2014
22.
  197,005   3/20/2014
23.
  197,005   3/21/2014
24.
  197,005   3/24/2014
25.
  197,005   3/25/2014
26.
  197,005   3/26/2014
27.
  197,005   3/27/2014
28.
  197,005   3/28/2014
29.
  197,005   3/31/2014
30.
  197,005   4/1/2014
31.
  197,005   4/2/2014
32.
  197,005   4/3/2014
33.
  197,005   4/4/2014
34.
  197,005   4/7/2014
35.
  197,005   4/8/2014
36.
  197,020   4/9/2014