Exhibit 10.7

 

EXECUTION VERSION

 

Bank of Montreal

55 Bloor Street West, 18th Floor

Toronto, Ontario M4W 1A5

Telephone No.:             (416) 552-4177

Facsimile No.:                   (416) 552-7904

 

Opening Transaction

 

	
To:
    	
Winnebago Industries, Inc.
    
	
 
    	
P.O. Box 152
    
	
 
    	
Forest City, Iowa 50436
    
	
From:
    	
Bank of Montreal
    
	
Re:
    	
Base Issuer Warrant   Transaction
    
	
Date:
    	
October 29, 2019
    


 

Dear Ladies and Gentlemen:

 

The purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on the Trade Date specified below (the “Transaction”) between Bank of Montreal (“Dealer”) and Winnebago Industries, Inc. (“Counterparty”).  Dealer is acting as principal in this Transaction and BMO Capital Markets Corp. (“Agent”), its affiliate, is acting as agent for this Transaction solely in connection with Rule 15a-6 of the Exchange Act (as defined herein), as amended.  This communication constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.

 

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

 

Counterparty is hereby advised, and Counterparty acknowledges, that Dealer 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.

 

This Confirmation evidences a complete and binding agreement between Dealer and Counterparty 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 1992 ISDA Master Agreement (Multicurrency—Cross Border) as if Dealer and Counterparty had executed an agreement in such form on the date hereof (but without any Schedule except for (i) the election of Loss and Second Method and US Dollars (“USD”) as the Termination Currency, (ii) the replacement of the word “third” in the last line of Section 5(a)(i) of the Agreement with the word “first” and (iii) the election that the “Cross Default” provisions of Section 5(a)(vi) of the Agreement shall apply to Counterparty with a “Threshold Amount” of USD15.0 million).

 

All provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein.  In the event of any inconsistency among this Confirmation, the Equity Definitions, the 2006 Definitions or the Agreement, the following shall prevail in the order of precedence indicated: (i) this Confirmation; (ii) the Equity Definitions; (iii) the 2006 Definitions; and (iv) the Agreement. For the avoidance of doubt, except to the extent of an express conflict,

 











 

the application of any provision of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions shall not be construed to exclude or limit any other provision of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions.

 

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

 

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

 

General Terms:

 

	
Trade Date:
    	
 
    	
October 29, 2019
    
	
 
    	
 
    	
 
    
	
Effective Date:
    	
 
    	
November 1, 2019, or such other date as agreed   between the parties, subject to Section 8(l) below
    
	
 
    	
 
    	
 
    
	
Components:
    	
 
    	
The Transaction will be divided into individual   Components, each with the terms set forth in this Confirmation, and, in   particular, with the Number of Warrants and Expiration Date set forth in this   Confirmation. The payments and deliveries to be made upon settlement of the   Transaction will be determined separately for each Component as if each   Component were a separate Transaction under the Agreement.
    
	
 
    	
 
    	
 
    
	
Warrant Style:
    	
 
    	
European
    
	
 
    	
 
    	
 
    
	
Warrant Type:
    	
 
    	
Call
    
	
 
    	
 
    	
 
    
	
Seller:
    	
 
    	
Counterparty
    
	
 
    	
 
    	
 
    
	
Buyer:
    	
 
    	
Dealer
    
	
 
    	
 
    	
 
    
	
Shares:
    	
 
    	
The Common Stock of Counterparty, par value USD0.50   (Ticker Symbol: “WGO”).
    
	
 
    	
 
    	
 
    
	
Number of Warrants:
    	
 
    	
For each Component, as provided in Annex A to this   Confirmation.
    
	
 
    	
 
    	
 
    
	
Warrant Entitlement:
    	
 
    	
One Share per Warrant
    
	
 
    	
 
    	
 
    
	
Strike Price:
    	
 
    	
USD96.2000
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding anything to the contrary in the   Agreement, this Confirmation or the Equity Definitions, in no event shall the   Strike Price be subject to adjustment to the extent that, after giving effect   to such adjustment, the Strike Price would be less than USD48.1000, except   for any adjustment pursuant to the terms of this Confirmation and the Equity   Definitions in connection with a stock split or similar change to Counterparty’s   capitalization.
    


 

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Number of Shares:
    	
 
    	
As of any date, a number of Shares equal to the   product of the Number of Warrants and the Warrant Entitlement.
    
	
 
    	
 
    	
 
    
	
Premium:
    	
 
    	
USD18,994,500.00
    
	
 
    	
 
    	
 
    
	
Premium Payment Date:
    	
 
    	
The Effective Date
    
	
 
    	
 
    	
 
    
	
Exchange:
    	
 
    	
New York Stock Exchange
    
	
 
    	
 
    	
 
    
	
Related Exchange:
    	
 
    	
All Exchanges
    
	
 
    	
 
    	
 
    
	
Procedures for   Exercise:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
In respect of any Component:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Expiration Time:
    	
 
    	
Valuation Time
    
	
 
    	
 
    	
 
    
	
Expiration Date:
    	
 
    	
As provided in Annex A to this Confirmation   (or, if such date is not a Scheduled Trading Day, the next following   Scheduled Trading Day that is not already an Expiration Date for another   Component); provided that if that date is a   Disrupted Day, the Expiration Date for such Component shall be the first   succeeding Scheduled Trading Day that is not a Disrupted Day and is not and   is not deemed to be an Expiration Date in respect of any other Component of   the Transaction hereunder; and provided further   that if the Expiration Date has not occurred pursuant to the preceding   proviso as of the Final Disruption Date, the Calculation Agent shall have the   right to elect, in its sole discretion, that the Final Disruption Date shall   be the Expiration Date (irrespective of whether such date is an Expiration   Date in respect of any other Component for the Transaction). 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, shall designate the Scheduled Trading Day determined in the   manner described in the immediately preceding sentence as the Expiration Date   for the remaining Warrants for such Component and may determine the VWAP   Price for such Expiration Date based on transactions in the Shares taking   into account the nature and duration of such Market Disruption Event. Any   Scheduled Trading Day on which, as of the date hereof, the Exchange is   scheduled to close prior to its normal close of trading shall be deemed not   to be a Scheduled Trading Day; if a closure of the Exchange prior to its   normal close of trading on any Scheduled Trading Day is scheduled following   the date hereof, then such Scheduled Trading Day shall be deemed to be a   Disrupted Day in full.   Section 6.6 of the Equity Definitions shall not apply to any Valuation   Date
    


 

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occurring on an Expiration Date. “Final Disruption Date” means December 3, 2025.
    
	
 
    	
 
    	
 
    
	
Market Disruption   Event:
    	
 
    	
Section 6.3(a) of the Equity Definitions   is hereby amended by (A) deleting the words “during the one hour period   that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in   Valuation Time or Knock-out Valuation Time, as the case may be,” in clause   (ii) thereof and (B) by replacing the words “or (iii) an Early   Closure.” therein with “(iii) an Early Closure, or (iv) a   Regulatory Disruption.”
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Section 6.3(d) of the Equity Definitions   is hereby amended by deleting the remainder of the provision following the   term “Scheduled Closing Time” in the fourth line thereof.
    
	
 
    	
 
    	
 
    
	
Regulatory Disruption:
    	
 
    	
Any event that Dealer, in its discretion, determines   makes it appropriate, with regard to any legal, regulatory or self-regulatory   requirements or related policies and procedures (whether or not such   requirements or related policies and procedures are imposed by law or have   been voluntarily adopted by Dealer), for Dealer to refrain from or decrease   any market activity in connection with the Transaction.
    
	
 
    	
 
    	
 
    
	
Automatic Exercise:
    	
 
    	
Applicable; and means that the Number of Warrants   for the corresponding Expiration Date will be deemed to be automatically   exercised at the Expiration Time on such Expiration Date 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 to such Expiration Date.
    
	
 
    	
 
    	
 
    
	
Counterparty’s   Telephone Number and Telex and/or Facsimile Number and Contact Details for   purpose of Giving Notice:
    	
 
    	
As provided in Section 6(a) below.
    
	
 
    	
 
    	
 
    
	
Settlement Terms:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
In respect of any Component:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Settlement Currency:
    	
 
    	
USD
    
	
 
    	
 
    	
 
    
	
Net Share Settlement:
    	
 
    	
On each Settlement Date, Counterparty shall deliver   to Dealer a number of Shares equal to the Number of Shares to be Delivered   for such Settlement Date to the account specified by Dealer and cash in lieu   of any fractional Share valued at the Relevant Price on the Valuation Date   corresponding to such Settlement Date. If, in the reasonable opinion of   Dealer, based on advice of counsel, for any reason, the Shares deliverable   upon Net Share Settlement would not be immediately freely transferable by   Dealer under Rule 144 under the Securities Act of 1933, as amended (the   “Securities Act”), then Dealer may   elect to either (x) accept delivery of such Shares
    


 

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notwithstanding any restriction on transfer or   (y) have the provisions set forth in Section 8(c) below apply.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The Number of Shares to be Delivered shall be   delivered by Counterparty to Dealer no later than 12:00 noon (local time in   New York City) on the relevant Settlement Date.
    
	
 
    	
 
    	
 
    
	
Number of Shares to be   Delivered:
    	
 
    	
In respect of any Exercise Date, the product of   (i) the number of Warrants exercised or deemed exercised on such   Exercise Date, (ii) the Warrant Entitlement and (iii) (A) the   excess of the VWAP Price on the Valuation Date occurring in respect of such   Exercise Date over the Strike Price (or, if there is no such excess, zero) divided by (B) such VWAP Price.
    
	
 
    	
 
    	
 
    
	
VWAP Price:
    	
 
    	
For any Exchange Business Day, as determined by the   Calculation Agent based on the New York Volume Weighted Average Price per   Share for the regular trading session (including any extensions thereof) of   the Exchange on such Exchange Business Day (without regard to pre-open or   after hours trading outside of such regular trading session), as published by   Bloomberg at 4:15 P.M., New York City time (or 15 minutes following the end   of any extension of the regular trading session), on such Exchange Business   Day, on Bloomberg page “WGO.N <Equity> AQR” (or any successor   thereto) (or if such published volume weighted average price is unavailable   or is manifestly incorrect, the market value of one Share on such Exchange   Business Day, as determined by the Calculation Agent using, if practicable, a   volume weighted method).
    
	
 
    	
 
    	
 
    
	
Other Applicable   Provisions:
    	
 
    	
The provisions of Sections 9.1(c), 9.4, 9.8, 9.9,   9.10, 9.11 and 9.12 of the Equity Definitions will be applicable as if   “Physical Settlement” applied to the Transaction; provided   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 that exist as a result of the fact that   Counterparty is the issuer of the Shares.
    
	
 
    	
 
    	
 
    
	
Adjustments:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
In respect of any Component:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Method of Adjustment:
    	
 
    	
Calculation Agent Adjustment. For the avoidance of   doubt, Calculation Agent Adjustment shall continue to apply until the   obligations of the parties (including any obligations of Counterparty   pursuant to Section 8(f) below) under the Transaction have been   satisfied in full.
    
	
 
    	
 
    	
 
    
	
Extraordinary Dividend:
    	
 
    	
For any regular dividend period of Counterparty, any   dividend or distribution on the Shares with an ex-dividend date occurring   during such regular dividend
    


 

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period (other than any dividend or distribution of   the type described in Section 11.2(e)(i) or   Section 11.2(e)(ii)(A) of the Equity Definitions) (a “Dividend”) the amount or value of which (as determined by   the Calculation Agent), when aggregated with the amount or value (as   determined by the Calculation Agent) of any and all previous Dividends with   ex-dividend dates occurring in the same regular dividend period, exceeds the   Ordinary Dividend Amount.
    
	
 
    	
 
    	
 
    
	
Ordinary Dividend   Amount:
    	
 
    	
For the first Dividend on the Shares for which the   ex-dividend date occurs during any regular quarterly dividend period of   Counterparty, USD0.11, and for any other Dividend on the Shares for which the   ex-dividend date occurs during the same regular quarterly dividend period,   USD 0.00.
    
	
 
    	
 
    	
 
    
	
Extraordinary Events:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
New Shares:
    	
 
    	
In the definition of New Shares in   Section 12.1(i) of the Equity Definitions, the text in clause   (i) thereof shall be deleted in its entirety and replaced with “publicly   quoted, traded or listed on any of The New York Stock Exchange, The NASDAQ   Global Market or The NASDAQ Global Select Market (or their respective   successors) and of an entity or person that is a corporation organized under   the laws of the United States, any State thereof or the District of   Columbia”.
    
	
 
    	
 
    	
 
    
	
Merger Event:
    	
 
    	
Applicable; provided that   if an event occurs that constitutes both a Merger Event under   Section 12.1(b) of the Equity Definitions and an Additional Termination   Event under Section 8(k)(iv) of this Confirmation, Dealer may   elect, in its sole discretion, whether the provisions of Section 12.2 of   the Equity Definitions or Section 8(k)(iv) will apply.
    
	
 
    	
 
    	
 
    
	
Consequences of Merger   Events:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(a)  Share-for-Share:
    	
 
    	
Modified Calculation Agent Adjustment
    
	
 
    	
 
    	
 
    
	
(b)  Share-for-Other:
    	
 
    	
Cancellation and Payment (Calculation Agent   Determination); provided that Dealer may elect,   in its sole discretion, that Modified Calculation Agent Adjustment shall apply   for all or part of the Transaction.
    
	
 
    	
 
    	
 
    
	
(c)  Share-for-Combined:
    	
 
    	
Cancellation and Payment (Calculation Agent   Determination); provided that Dealer may elect,   in its sole discretion, that Modified Calculation Agent Adjustment or   Component Adjustment shall apply for all or part of the Transaction.
    
	
 
    	
 
    	
 
    
	
Tender Offer:
    	
 
    	
Applicable; provided   that if an event occurs that constitutes both a Tender Offer under   Section 12.1(d) of the Equity Definitions and an Additional   Termination Event under Section 8(k)(iii) of this Confirmation,   Dealer may elect, in its sole discretion,
    


 

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whether the provisions of Section 12.3 of the   Equity Definitions or Section 8(k)(iii) will apply.
    
	
 
    	
 
    	
 
    
	
Consequences of Tender   Offers:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(a)  Share-for-Share:
    	
 
    	
Modified Calculation Agent Adjustment
    
	
 
    	
 
    	
 
    
	
(b)  Share-for-Other:
    	
 
    	
Modified Calculation Agent Adjustment
    
	
 
    	
 
    	
 
    
	
(c)  Share-for-Combined:
    	
 
    	
Modified Calculation Agent Adjustment
    
	
 
    	
 
    	
 
    
	
Consequences of   Announcement Events:
    	
 
    	
Modified Calculation Agent Adjustment as set forth   in Section 12.3(d) of the Equity Definitions; provided   that, in respect of an Announcement Event, (x) references to “Tender   Offer” shall be replaced by references to “Announcement Event” and references   to “Tender Offer Date” shall be replaced by references to “date of such   Announcement Event”, (y) the word “shall” in the second line shall be   replaced with “may”, and (z) for the avoidance of doubt, the Calculation   Agent may determine whether the relevant Announcement Event has had an   economic effect on any Component (and, if so, adjust the terms of such Component   accordingly) on one or more occasions on or after the date of the   Announcement Event up to, and including, the Expiration Date, any Early   Termination Date and/or any other date of cancellation thereof, it being   understood that any adjustment in respect of an Announcement Event shall take   into account any earlier adjustment relating to the same Announcement Event.   An Announcement Event shall be an “Extraordinary Event” for purposes of the   Equity Definitions, to which Article 12 of the Equity Definitions is   applicable.
    
	
 
    	
 
    	
 
    
	
Announcement Event:
    	
 
    	
(i) The public announcement by any entity of   (x) any transaction or event that, if completed, would constitute a   Merger Event or Tender Offer, (y) any potential acquisition or   disposition by Issuer and/or its subsidiaries where the aggregate   consideration paid and/or delivered exceeds 15% of the market capitalization   of Issuer as of the date of such announcement (an “Transformative   Transaction”) or (z) the intention to enter into a Merger   Event or Tender Offer or an Transformative Transaction, (ii) the public   announcement by Issuer of an intention to solicit or enter into, or to   explore strategic alternatives or other similar undertaking that may include,   a Merger Event or Tender Offer or an Transformative Transaction or   (iii) any subsequent public announcement by any entity of a change to a   transaction or intention that is the subject of an announcement of the type   described in clause (i) or (ii) of this sentence (including,   without limitation, a new announcement, whether or not by the same party,   relating to such a transaction or intention or the announcement of a   withdrawal from, or the abandonment or discontinuation of, such a
    


 

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transaction or intention), as determined by the   Calculation Agent. For the avoidance of doubt, the occurrence of an   Announcement Event with respect to any transaction or intention shall not   preclude the occurrence of a later Announcement Event with respect to such   transaction or intention. For purposes of this definition of “Announcement   Event,” the remainder of the definition of “Merger Event” in   Section 12.1(b) of the Equity Definitions following the definition   of “Reverse Merger” therein shall be disregarded.
    
	
 
    	
 
    	
 
    
	
Modified Calculation   Agent Adjustment:
    	
 
    	
If, in respect of a Merger Event, the Counterparty   under the Transaction following such Merger Event will not be the issuer of   the New Shares, the Dealer may elect (in its sole discretion) for   Cancellation and Payment (Calculation Agent Determination) to apply. In   addition, if, in respect of any Merger Event to which Modified Calculation   Agent Adjustment applies, the adjustments to be made in accordance with   Section 12.2(e)(i) of the Equity Definitions would result in   Counterparty being different from the issuer of the Shares, then with respect   to such Merger Event, as a condition precedent to the adjustments   contemplated in Section 12.2(e)(i) of the Equity Definitions,   Counterparty and the issuer of the Shares shall, prior to the Merger Date,   have entered into such documentation containing representations, warranties   and agreements relating to securities law and other issues as requested by   Dealer that Dealer has determined, in its reasonable discretion, to be   reasonably necessary or appropriate to allow Dealer to continue as a party to   the Transaction, as adjusted under Section 12.2(e)(i) of the Equity   Definitions, and to preserve its hedging or hedge unwind activities in   connection with the Transaction in a manner compliant with applicable legal,   regulatory or self-regulatory requirements, or with related policies and   procedures applicable to Dealer (whether or not such requirements or related   policies and procedures are imposed by law or have been voluntarily adopted   by Dealer), and if such conditions are not met or if the Calculation Agent   determines that no adjustment that it could make under   Section 12.2(e)(i) of the Equity Definitions will produce a   commercially reasonable result, then the consequences set forth in   Section 12.2(e)(ii) of the Equity Definitions shall apply.
    
	
 
    	
 
    	
 
    
	
Composition of Combined   Consideration:
    	
 
    	
Notwithstanding anything to the contrary in the   Equity Definitions, if the composition of Combined Consideration in respect   of any Share-for-Combined Merger Event could be determined by a holder of   Shares, Dealer shall determine the composition of such Combined Consideration   assumed for purposes
    


 

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of adjustments and deliveries hereunder in its sole   discretion.
    
	
 
    	
 
    	
 
    
	
Nationalization, Insolvency   or Delisting:
    	
 
    	
Cancellation and Payment (Calculation Agent   Determination); provided that in addition to   the provisions of Section 12.6(a)(iii) of the Equity Definitions,   it will also constitute a Delisting if the Shares are not immediately   re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The   NASDAQ Global Select Market or The NASDAQ Global Market (or their respective   successors); if the Shares are immediately re-listed, re-traded or re-quoted   on any such exchange or quotation system, such exchange or quotation system   shall thereafter be deemed to be the Exchange.
    
	
 
    	
 
    	
 
    
	
Additional Termination   Event(s):
    	
 
    	
Notwithstanding anything to the contrary in the   Equity Definitions, if, as a result of an Extraordinary Event, the   Transaction would be cancelled or terminated (whether in whole or in part)   pursuant to Article 12 of the Equity Definitions, an Additional   Termination Event (with the Transaction (or the cancelled or terminated   portion thereof) being the Affected Transaction and Counterparty being the   sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7,   12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement   shall apply to such Affected Transaction.
    
	
 
    	
 
    	
 
    
	
Additional Disruption   Events:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(a)         Change in Law:
    	
 
    	
Applicable; provided that   Section 12.9(a)(ii) of the Equity Definitions is hereby amended by   (i) replacing the phrase “the interpretation” in the third line thereof   with the phrase “, or public announcement of, the formal or informal   interpretation”, (ii) by adding the phrase “and/or Hedge Position” after   the word “Shares” in clause (X) thereof and (iii) by immediately   following the word “Transaction” in clause (X) thereof, adding the   phrase “in the manner contemplated by the Hedging Party on the Trade Date”;   and provided further that Section 12.9(a)(ii) of the Equity   Definitions is hereby amended by (i) replacing the parenthetical   beginning after the word “regulation” in the second line thereof with the   phrase “(including, for the avoidance of doubt and without limitation,   (x) any tax law or (y) adoption or promulgation of new regulations   authorized or mandated by existing statute)” and (ii) adding the words   “, or holding, acquiring or disposing of Shares or any Hedge Positions   relating to,” after the words “obligations under” in clause (Y) thereof.
    
	
 
    	
 
    	
 
    
	
(b)         Failure to Deliver:
    	
 
    	
Not Applicable
    
	
 
    	
 
    	
 
    
	
(c)          Insolvency Filing:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
(d)         Hedging Disruption:
    	
 
    	
Applicable; provided   that:
    


 

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(i)             Section 12.9(a)(v) of   the Equity Definitions is hereby amended by
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a)         inserting the following   words at the end of clause (A) thereof: “in the manner contemplated by   the Hedging Party on the Trade Date” and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)         inserting the following   sentence at the end of such Section:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“For the avoidance of   doubt, (i) the term “equity price risk” shall be deemed to include, but   shall not be limited to, stock price and volatility risk, and (ii) the   transactions or assets referred to in phrases (A) or (B) above must   be available on commercially reasonable pricing and other terms.”; and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(ii)          Section 12.9(b)(iii) of   the Equity Definitions is hereby amended by inserting in the third line   thereof, after the words “to terminate the Transaction”, the words “or a   portion of the Transaction affected by such Hedging Disruption”.
    
	
 
    	
 
    	
 
    
	
(e)          Increased Cost of   Hedging:
    	
 
    	
Applicable; provided that   the following parenthetical shall be inserted immediately following the word   “expense” in the third line of Section 12.9(a)(vi) of the Equity   Definitions: “(including, for the avoidance of doubt, the incurrence of any   stock borrow expense in excess of Hedging Party’s expectation as of the Trade   Date, other than to the extent resulting from an Increased Cost of Stock   Borrow)”.
    
	
 
    	
 
    	
 
    
	
(f)           Loss of Stock Borrow:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Maximum Stock Loan   Rate:
    	
 
    	
2.00% per annum
    
	
 
    	
 
    	
 
    
	
(g)          Increased Cost of   Stock Borrow:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Initial Stock Loan   Rate:
    	
 
    	
Prior to April 2, 2025, 0% per annum, and   thereafter, 0.25% per annum.
    
	
 
    	
 
    	
 
    
	
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
    
	
 
    	
 
    	
 
    
	
3.              Calculation   Agent:
    	
 
    	
Dealer.
    
	
 
    	
 
    	
 
    
	
4.              Account Details:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dealer Payment   Instructions:
    	
 
    	
 
    


 

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Bank: Bank of New York
    	
 
    	
 
    
	
ABA#: 021000018
    	
 
    	
 
    
	
A/C#: 8661062712
    	
 
    	
 
    
	
Acct Name — BMO Nesbitt   Burns
    	
 
    	
 
    


 

Account for delivery of Shares to Dealer: To be provided by Dealer

 

Counterparty Payment Instructions: To be provided by Counterparty.

 

5.              Offices:

 

Dealer is a Multibranch Party and for purposes of this Confirmation and each Transaction, may act through its London, Chicago and Toronto Offices.

 

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

 

6.              Notices: For purposes of this Confirmation:

 

(a)                                 Address for notices or communications to Counterparty:

 

Winnebago Industries, Inc.

13200 Pioneer Trail, Suite 150

Eden Prarie, MN 55347

Attention: Bert Jameson, Treasurer

 

(b)                                 Address for notices or communications to Dealer:

 

To:                                                                             Bank of Montreal

55 Bloor Street West, 18th Floor

Toronto, Ontario M4W 1A5

Canada

Attn:                                                                    Manager, Derivatives Operations

Telephone:                                   (416) 552-7904

Facsimile:                                         (416) 552-4177

 

With a copy to:

 

To:                                                                             Bank of Montreal
 100 King Street West, 20th Floor
 Toronto, Ontario M5X 1A1
 Canada

Attn:                                                                    Associate General Counsel & Managing Director, Derivatives Legal Group

Facsimile:                                         (416) 956-2318

 

And a copy to:

 

To:                                                                             BMO Capital Markets Corp.
 3 Times Square 25th Floor
 New York, New York 10036

Attn:                                                                    Brian Riley

Telephone:                                   (212) 605-1414

Facsimile:                                         (212) 885-4165

 

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7.  Representations, Warranties and Agreements:

 

(a)                                 In addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants to and for the benefit of, and agrees with, Dealer as follows:

 

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

 

(ii)                                  Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither Dealer nor any of its affiliates is making any representations or warranties or taking any position or expressing any view with respect to the treatment of the Transaction under any accounting standards including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (or any successor issue statements).

 

(iii)                               Prior to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction and such other certificate or certificates as Dealer shall reasonably request.  Based on such resolutions, neither Dealer nor any of its affiliates shall be subject to the restrictions under Section 490.1110 of the Iowa Business Corporation Act as an “interested stockholder” of Counterparty by virtue of (A) its role as initial purchaser of, or market-maker in, any securities of Counterparty convertible into the Shares, (B) its entry into the Transaction and/or (C) any hedging transactions in Counterparty’s securities in connection with the Transaction.

 

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

 

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

 

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

 

(vii)                           Counterparty shall not take any action to decrease the number of Available Shares below the Capped Number (each as defined below, but without giving effect to the limitation on adjustments to the Capped Number set forth in the proviso in the first sentence of Section Error! Reference source not found.8(f)).

 

(viii)                        The representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement dated as of the Trade Date between Goldman Sachs & Co. LLC and BMO Capital Markets Corp. as the representatives (the “Representatives”) of the Initial Purchasers and Counterparty (the “Purchase Agreement”) are true and correct as of the Trade Date and the Effective Date and are hereby deemed to be repeated to Dealer as if set forth herein.

 

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(ix)                              (x) (A) On the Trade Date, the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not, and shall not be, subject to a “restricted period,” as such term is defined in Regulation M under the Exchange Act (“Regulation M”) and (B) Counterparty shall not engage in any “distribution,” as such term is defined in Regulation M, other than a distribution meeting the requirements of the exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business Day immediately following the Trade Date, and (y)(A) during the period starting on the first Expiration Date and ending on the last Expiration Date (the “Settlement Period”), the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not, and shall not be, subject to a “restricted period,” as defined in Regulation M and (B) Counterparty shall not engage in any “distribution,” as such term is defined in Regulation M until the second Exchange Business Day immediately following the Settlement Period.

 

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

 

(xi)                              Counterparty agrees that it (A) will not during the Settlement Period make, or permit to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction or potential Merger Transaction unless such public announcement is made prior to the opening or after the close of the regular trading session on the Exchange for the Shares; (B) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) notify Dealer following any such announcement that such announcement has been made; and (C) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide Dealer with written notice specifying (i) Counterparty’s average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months immediately preceding the announcement date that were not effected through Dealer or its affiliates and (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 announcement date.  Such written notice shall be deemed to be a certification by Counterparty to Dealer that such information is true and correct.  In addition, Counterparty shall promptly notify Dealer of the earlier to occur of the completion of such transaction and the completion of the vote by target shareholders.  “Merger Transaction” means any merger, acquisition or similar transaction involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act.

 

(xii)                           (A) Any issuance of Shares upon exercise or termination of the Transaction has been, and throughout the Transaction will continue to be, duly authorized and, upon issuance, such Shares will be validly issued, fully paid and non-assessable, and the issuance or delivery thereof shall not be subject to any preemptive or similar rights and such Shares shall, upon issuance, be accepted for listing or quotation on the Exchange; (B) a number of Shares of Counterparty equal to the Capped Number have been reserved for issuance upon exercise or termination of the Warrants by all required corporate action of the Counterparty and (C) the Shares issuable upon exercise of the Warrants shall upon issuance be accepted for listing or quotation on the Exchange, subject to notice that the listing of the Shares issuable upon exercise or termination of the Warrants on the Exchange has been approved by the Exchange.

 

(xiii)                        No state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its affiliates owning, holding (however defined) or having a right to acquire Shares.

 

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(xiv)        Counterparty (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, including, without limitation, the transaction that is the subject of this confirmation and any transactions related hereto or contemplated hereby; (B) will exercise independent judgment in evaluating the recommendations of Dealer and its affiliates or associated persons with regard to any such securities transactions or strategies unless it has otherwise notified Dealer in writing; and (C) has total assets of at least $50 million. Counterparty will notify Dealer if the immediately preceding statement contained in this Section 7(a)(xiv) ceases to be true.

 

(xv)         Without limiting the generality of Section 3(a) of the Agreement, neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Counterparty’s Annual Report on Form 10-K for the year ended August 31, 2019, as updated by any subsequent filings, to which Counterparty or any of its subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.

 

(b)           Each of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18) of the U.S. Commodity Exchange Act, as amended, and is entering into the Transaction as principal (and not as agent or in any other capacity, fiduciary or otherwise) and not for the benefit of any third party.

 

(c)           Each of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act, by virtue of Section 4(a)(2) thereof.  Accordingly, Dealer represents and warrants to Counterparty that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment and its 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, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account and without a view to the distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws, and (v) its financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and 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.

 

(d)           Each of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution” and “financial participant” within the meaning of Sections 101(22) 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 a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement payment” within the meaning of Section 546 of the Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 548(d)(2), 555 and 561 of the Bankruptcy Code.

 

(e)           Counterparty shall deliver to Dealer (i) an incumbency certificate, dated as of the Trade Date, of Counterparty in customary form and (ii) an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement and Sections 7(a)(v), 7(a)(xii) and 7(a)(xv) of this Confirmation and such other matters as Dealer may reasonably request and (iii) evidence that the listing of the Shares issuable upon exercise or

 

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termination of the Warrants on the Exchange has been approved by the Exchange, subject only to official notice of issuance.

 

(f)            Counterparty understands that notwithstanding any other relationship between Counterparty and Dealer and its affiliates, in connection with this Transaction and any other over-the-counter derivative transactions between Counterparty and Dealer or its affiliates, Dealer or its affiliate is acting as principal and is not a fiduciary or advisor in respect of any such transaction, including any entry, exercise, amendment, unwind or termination thereof.

 

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

 

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

 

8.     Other Provisions:

 

(a)           Right to Extend.  Dealer may postpone or add, in whole or in part, any Expiration Date or Settlement Date or any other date of valuation or delivery by Counterparty, with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the relevant delivery obligation), if Dealer determines, in its commercially reasonable discretion, that such extension is reasonably necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in light of existing liquidity conditions in the cash market, the stock borrow market or other relevant market or to enable Dealer to effect transactions with respect to Shares or Share Termination Delivery Units in connection with its commercially reasonable hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer).

 

(b)           Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events.  If Counterparty shall owe Dealer any amount pursuant to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Counterparty shall have the right, in its sole discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day (which written confirmation shall contain the representation and warranty set forth in Section 7(a)(i)), no later than 9:30 A.M., New York City time, on the Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable (“Notice of Share Termination”); provided that if Counterparty does not elect to satisfy its Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to elect to require Counterparty to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s failure to elect or election to the contrary; and provided further that Counterparty shall not have the right to so elect (but, for the avoidance of doubt, Dealer shall have the right to so elect) in the event of (i) an Insolvency, a Nationalization or a Merger Event, in each case, in which the consideration or proceeds to be paid to holders of Shares consists solely of cash or (ii) an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party or an Extraordinary Event, which Event of Default, Termination Event or Extraordinary Event resulted from an event or events within Counterparty’s control.  Upon such Notice of Share Termination, the following provisions shall apply on the Scheduled Trading Day immediately following the Merger Date, the Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable:

 

	
Share Termination Alternative:
    	
 
    	
If applicable, means that Counterparty shall deliver   to Dealer the Share Termination Delivery Property on the date on which the   Payment Obligation would otherwise be due pursuant to   Section 6(d)(ii) of the Agreement, or such later date or dates as   the Calculation Agent may reasonably determine (the “Share   Termination Payment Date”), in
    


 

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satisfaction of the Payment Obligation. 
    
	
 
    	
 
    	
 
    
	
Share Termination Delivery Property:
    	
 
    	
A number of Share Termination Delivery Units, as   calculated by the
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Calculation Agent, equal to the Payment Obligation   divided by the Share Termination Unit Price. The Calculation Agent shall   adjust the Share Termination Delivery Property by replacing any fractional   portion of the aggregate amount of a security therein with an amount of cash   in the Settlement Currency equal to the value of such fractional security   based on the values used to calculate the Share Termination Unit Price.
    
	
 
    	
 
    	
 
    
	
Share Termination Unit Price:
    	
 
    	
The value of property contained in one Share   Termination Delivery Unit on the date such Share Termination Delivery Units   are to be delivered as Share Termination Delivery Property, as determined by   the Calculation Agent and notified by the Calculation Agent to Counterparty   at the time of notification of the Payment Obligation.
    
	
 
    	
 
    	
 
    
	
Share Termination Delivery Unit:
    	
 
    	
In the case of a Termination Event (other than on   account of an Insolvency, Nationalization or Merger Event), Event of Default,   Delisting or Additional Disruption Event, one Share or, in the case of an   Insolvency, Nationalization or Merger Event, one Share or a unit consisting   of the number or amount of each type of property received by a holder of one   Share (without consideration of any requirement to pay cash or other   consideration in lieu of fractional amounts of any securities) in such   Insolvency, Nationalization or Merger Event, as applicable. If such   Insolvency, Nationalization or Merger Event 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:
    	
 
    	
Not Applicable
    
	
 
    	
 
    	
 
    
	
Other Applicable Provisions:
    	
 
    	
If Share Termination Alternative is applicable, the   provisions of Sections 9.1(c), 9.8, 9.9, 9.11 and 9.12 of the Equity   Definitions will be applicable as if “Physical Settlement” applied to the   Transaction, except that all references to “Shares” shall be read as   references to “Share Termination Delivery Units”; provided   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 Counterparty is the   issuer of any Share Termination Delivery Units (or any security forming a   part thereof). If, in the reasonable opinion of Dealer, based on advice of   counsel, for any reason, any securities comprising the Share Termination   Delivery Units deliverable pursuant to this Section 8(b) would not   be immediately freely transferable by Dealer under Rule 144 under the   Securities Act, then Dealer may elect to either (x) permit delivery of   such securities notwithstanding any restriction on transfer or (y) have   the provisions set forth in Section 8(c) below apply.
    


 

(c)             Registration/Private Placement Procedures.  (i) With respect to the Transaction, the following provisions shall apply to the extent provided for above opposite the caption “Net Share Settlement” in Section 2 or in paragraph (b) of this Section 8.  If so applicable, then, at the election of Counterparty by notice to Dealer within one Exchange Business Day after the relevant delivery obligation arises, but in any event at least one Exchange Business Day prior to the date on which such delivery obligation is due, either (A) all Shares or Share Termination Delivery Units, as the case may be, delivered by Counterparty to Dealer shall be, at the time of such delivery, covered by an effective registration statement of Counterparty for immediate resale by Dealer (such registration statement and the

 

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corresponding prospectus (the “Prospectus”) (including, without limitation, any sections describing the plan of distribution) in form and content commercially reasonably satisfactory to Dealer) or (B) Counterparty shall deliver additional Shares or Share Termination Delivery Units, as the case may be, so that the value of such Shares or Share Termination Delivery Units, as determined by the Calculation Agent to reflect a commercially reasonable liquidity discount, equals the value of the number of Shares or Share Termination Delivery Units that would otherwise be deliverable if such Shares or Share Termination Delivery Units were freely tradeable (without prospectus delivery) upon receipt by Dealer (such value, the “Freely Tradeable Value”); provided that, if requested by Dealer, Counterparty shall make the election described in this clause (B) with respect to Shares delivered on all Settlement Dates no later than one Exchange Business Day prior to the first Exercise Date, and the applicable procedures described below shall apply to all Shares delivered on the Settlement Dates on an aggregate basis.  (For the avoidance of doubt, as used in this paragraph (c) only, the term “Counterparty” shall mean the issuer of the relevant securities, as the context shall require.)

 

(ii)           It shall be a condition to Counterparty’s right to make the election described in clause (c)(i)(A) that:

 

(A)          Dealer (or an affiliate of Dealer designated by Dealer) shall be afforded a reasonable opportunity to conduct a due diligence investigation with respect to Counterparty that is customary in scope for underwritten offerings of equity securities and that yields results that are satisfactory to Dealer or such affiliate, as the case may be, in its discretion; and

 

(B)          Dealer (or an affiliate of Dealer designated by Dealer) and Counterparty shall enter into an agreement (a “Registration Agreement”) on commercially reasonable terms in connection with the public resale of such Shares or Share Termination Delivery Units, as the case may be, by Dealer or such affiliate substantially similar to underwriting agreements customary for underwritten offerings of equity securities, in form and substance commercially reasonably satisfactory to Dealer or such affiliate and Counterparty, which Registration Agreement shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating to the indemnification of, and contribution in connection with the liability of, Dealer and its affiliates and Counterparty, shall provide for the payment by Counterparty of all expenses in connection with such resale, including all registration costs and all fees and expenses of counsel for Dealer, and shall provide for the delivery of accountants’ “comfort letters” to Dealer or such affiliate with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus.

 

(iii)          If Counterparty makes the election described in clause (c)(i)(B) above:

 

(A)          Dealer (or an affiliate of Dealer designated by Dealer) and any potential institutional purchaser of any such Shares or Share Termination Delivery Units, as the case may be, from Dealer or such affiliate identified by Dealer shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation in compliance with applicable law with respect to Counterparty customary in scope for private placements of equity securities (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them), subject to execution by such recipients of customary confidentiality agreements reasonably acceptable to Counterparty;

 

(B)          Dealer (or an affiliate of Dealer designated by Dealer) and Counterparty shall enter into an agreement (a “Private Placement Agreement”) on commercially reasonable terms in connection with the private placement of such Shares or Share Termination Delivery Units, as the case may be, by Counterparty to Dealer or such affiliate and the private resale of such shares by Dealer or such affiliate, substantially similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to Dealer and Counterparty, 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 Counterparty, shall provide for the payment by Counterparty of all expenses in connection with such resale, including all fees and expenses of

 

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counsel for Dealer, shall contain representations, warranties and agreements of Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales, and shall use best efforts to provide for the delivery of accountants’ “comfort letters” to Dealer or such affiliate with respect to the financial statements and certain financial information contained in or incorporated by reference into the offering memorandum prepared for the resale of such Shares;

 

(C)          Counterparty agrees that (i) any Shares or Share Termination Delivery Units so delivered to Dealer may be transferred by and among Dealer and its affiliates, and Counterparty shall effect such transfer without any further action by Dealer and (ii) after the minimum “holding period” within the meaning of Rule 144(d) under the Securities Act has elapsed with respect to such Shares or any securities issued by Counterparty comprising such Share Termination Delivery Units, Counterparty shall promptly remove, or cause the transfer agent for such Shares or securities to remove, any legends referring to any such restrictions or requirements from such Shares or securities, 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); and

 

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

 

(d)             Make-whole Shares. If Counterparty makes the election described in clause (i)(B) of paragraph (c) of this Section 8, then Dealer or its affiliates may sell (which sale shall be made in a commercially reasonable manner) such Shares or Share Termination Delivery Units, as the case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Shares or Share Termination Delivery Units, as the case may be, and ending on the Exchange Business Day on which Dealer or its affiliates completes the sale of a sufficient number of Shares or Share Termination Delivery Units, as the case may be, so that the realized net proceeds of such sales exceed the Freely Tradeable Value.  If any of such delivered Shares or Share Termination Delivery Units remain after such realized net proceeds exceed the Freely Tradeable Value, Dealer shall return such remaining Shares or Share Termination Delivery Units to Counterparty.  If the Freely Tradeable Value exceeds the realized net proceeds from such resale, Counterparty shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the final day of the Resale Period (without giving effect to any extension thereof pursuant to the immediately succeeding sentence), the amount of such excess (the “Additional Amount”) in cash or in a number of additional Shares or Share Termination Delivery Units, as the case may be, (“Make-whole Shares”) in an amount that, based on the Relevant Price on such final day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a dollar value equal to the Additional Amount.  The Resale Period shall continue to enable the sale of the Make-whole Shares in the manner contemplated by this Section 8(d).  This provision shall be applied successively until the Additional Amount is equal to zero, subject to Section 8(f).

 

(e)             Beneficial Ownership.  Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Dealer be entitled to receive, or shall be deemed to receive, any Shares if, immediately upon giving effect to such receipt of such Shares (and after taking into account any Shares deliverable by Counterparty to Dealer at such time under any transaction or security other than the Transaction), (i) the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the rules promulgated thereunder) of Shares by Dealer, any of its affiliates subject to aggregation with Dealer for purposes of the “beneficial ownership” test under Section 13 of the Exchange Act and all persons who may form a “group” (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) with Dealer with respect to “beneficial ownership” of any Shares (collectively, “Dealer Group”) (or, to the extent that for any reason the equivalent calculation under Section 16 of the Exchange Act and the rules and regulations thereunder results in a higher number, such higher number) would be equal to or greater than 8.0% or more of the outstanding Shares on the date of determination or (ii) Dealer, Dealer Group or any person whose

 

18











 

ownership position would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer Group or any such person, a “Dealer Person”) under the Iowa Business Corporation Act or other federal, state or local law, rule, regulation or regulatory order or organizational documents or contracts of Counterparty applicable to ownership of Shares (“Applicable Restrictions”), would own, beneficially own, constructively own, control, hold the power to vote or otherwise meet a relevant definition of ownership in excess of a number of Shares equal to (x) the number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval by a state or federal regulator) of a Dealer Person under Applicable Restrictions and with respect to which such requirements have not been met or the relevant approval has not been received or that would subject a Dealer Person to restrictions (including restrictions relating to business combinations or other designated transactions) or have any other adverse effect on a Dealer Person under Applicable Restrictions minus (y) 1.0% of the number of Shares outstanding on the date of determination (either such condition described in clause (i) or (ii), an “Excess Ownership Position”).  If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s obligation to make such delivery shall not be extinguished and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Dealer gives notice to Counterparty that such delivery would not result in the existence of an Excess Ownership Position.

 

(f)            Limitations on Settlement by Counterparty. Notwithstanding anything herein or in the Agreement to the contrary (except as set forth in this Section 8(f)), in no event shall Counterparty be required to deliver Shares in connection with the Transaction in excess of 4,236,462 Shares, as such number may be adjusted from time to time in accordance with the provisions hereof; provided that no such adjustment shall cause the Capped Number to exceed the Available Shares (as in effect from time to time), other than as a result of actions of Counterparty or events within Counterparty’s control (the “Capped Number”).  Notwithstanding anything to the contrary in the Agreement or the Equity Definitions, such limitation shall not affect the calculation of any Payment Obligation (as defined in Section Error! Reference source not found.8(b)), it being understood that if the Share Termination Alternative applies pursuant to Section 8(b), the number of Shares deliverable pursuant to such Section shall not exceed the Capped Number.  Counterparty represents and warrants to Dealer (which representation and warranty shall be deemed to be repeated on each day that the Transaction is outstanding) that the Capped Number is equal to or less than the number of authorized but unissued Shares of the Counterparty that are not reserved for future issuance in connection with transactions in the Shares (other than the Transaction) on the date of the determination of the Capped Number (such Shares, the “Available Shares”). In the event Counterparty shall not have delivered the full number of Shares otherwise deliverable as a result of this Section 8(f) (the resulting deficit, the “Deficit Shares”), Counterparty shall be continually obligated to deliver Shares, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, when, and to the extent, that (A) Shares are repurchased, acquired or otherwise received by Counterparty or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares previously reserved for issuance in respect of other transactions become no longer so reserved or (C) Counterparty additionally authorizes any unissued Shares that are not reserved for other transactions (such events as set forth in clauses (A), (B) and (C) above, collectively, the “Share Issuance Events”).  In the event that there are any Deficit Shares or the proviso in the first sentence of this Section 8(f) has prevented any adjustment to the Capped Number, (i) Counterparty shall promptly notify Dealer of the occurrence of any of the Share Issuance Events (including the number of Shares subject to clause (A), (B) or (C) and the corresponding number of Shares to be delivered) and, as promptly as reasonably practicable, deliver such Shares thereafter, (ii) Counterparty shall use its best efforts to cause Share Issuance Events to the extent necessary to deliver the full number of Deficit Shares or cause the Capped Number to equal the Capped Number that would be in effect but for the proviso set forth in the first sentence of this Section 8(f), as the case may be, and (iii) Counterparty shall not, until Counterparty’s obligations under the Transaction have been satisfied in full, use any Shares that become available for potential delivery to Dealer as a result of any Share Issuance Event for the settlement or satisfaction of any transaction or obligation other than the Transaction or any other warrant transaction between Counterparty and Dealer or reserve any such Shares for future issuance for any purpose other than to satisfy Counterparty’s obligations to Dealer under the Transaction or any other warrant transaction between Counterparty and Dealer.

 

19











 

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

 

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

 

(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 an effect on the theoretical value of the relevant Shares or options on the Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and, the portion of such sentence immediately preceding clause (ii) thereof is hereby amended by deleting the words “diluting or concentrative” and the words “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)” and replacing such latter phrase with the words “(and, for the avoidance of doubt, adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)”;

 

(ii)           Sections 11.2(a) and 11.2(e)(vii) of the Equity Definitions are hereby amended by deleting the words “a diluting or concentrative” and, in the case of Section 11.2(e)(vii), replacing them with “an economic” and, in each case, adding the phrase “or options on the Shares” at the end of the sentence;

 

(iii)          Section 12.7(b) of the Equity Definitions is hereby amended by deleting the words “(and in any event within five Exchange Business Days) by the parties after” appearing after the words “agreed promptly” and replacing with the words “by the parties on or prior to”;

 

(iv)          Section 12.9(b)(iv) of the Equity Definitions is hereby amended by (A) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); (B) replacing “will lend” with “lends” in subsection (B); and (C) deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence; “Lending Party” means a third party that is not the Counterparty or an affiliate of the Counterparty that Dealer considers to be an acceptable counterparty (acting in good faith and in a reasonable manner in light of (x) other transactions that Dealer (or its agent or affiliate) may have entered into with such party and (y) any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements or related policies and procedures are imposed by law or have been voluntarily adopted by Dealer) that apply generally to transactions of a nature and kind similar to the transactions contemplated with such party); and

 

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

 

(i)                Transfer and Assignment.  Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part, at any time without the consent of Counterparty.

 

(j)                Disclosure.  Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all

 

20











 

materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure.

 

(k)           Additional Termination Events.  The occurrence of any of the following shall constitute an Additional Termination Event with respect to which the Transaction shall be the sole Affected Transaction and Counterparty shall be 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 and to determine the amount payable pursuant to Section 6(e) of the Agreement; provided that with respect to any Additional Termination Event, Dealer may choose to treat part of the Transaction as the sole Affected Transaction, and, upon the termination of the Affected Transaction, a Transaction with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated for all purposes as the Transaction, which shall remain in full force and effect:

 

(i)             Dealer reasonably determines that it is advisable to terminate a portion of the Transaction so that Dealer’s related hedging activities will comply with applicable securities laws, rules or regulations or related policies and procedures of Dealer (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer), or Dealer, despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal to hedge its obligations pursuant to this Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory or self-regulatory requirements;

 

(ii)            at any time at which any Excess Ownership Position occurs, Dealer, in its discretion, is unable to effect a transfer or assignment to a third party of the Transaction or any other transaction between the parties after using its commercially reasonable efforts on pricing and terms and within a time period reasonably acceptable to Dealer such that an Excess Ownership Position no longer exists; provided that Dealer shall treat only that portion of the Transaction as the Affected Transaction as necessary so that such Excess Ownership Position would no longer exist following the resulting partial termination of the Transaction (after taking into account commercially reasonable adjustments to Dealer’s commercially reasonable Hedge Positions from such partial termination);

 

(iii)           a “person” or “group” (within the meaning of Section 13(d) of the Exchange Act), other than Counterparty or its wholly-owned subsidiaries, becomes the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the common equity of Counterparty representing more than 50.0% of the voting power of such common equity;

 

(iv)          (1) any sale, lease or other transfer, in one transaction or a series of transactions, of all or substantially all of the assets of Counterparty and its subsidiaries, taken as a whole, to any person; or (2) any transaction or series of related transactions in connection with which (whether by means of merger, consolidation, share exchange, combination, reclassification, recapitalization, acquisition, liquidation or otherwise) all of the Shares are exchanged for, converted into, acquired for, or constitutes solely the right to receive, other securities, cash or other property;

 

provided that, notwithstanding the foregoing, any transaction or event set forth in the immediately preceding clause (iv) shall not constitute an Additional Termination Event if (x) at least 90% of the consideration received or to be received by holders of the Shares (excluding cash payments for fractional Shares or pursuant to dissenters rights) in connection with the transaction or transactions that would otherwise constitute an Additional Termination Event pursuant to clause (iv) of this Section 8(k) consists of shares of common stock listed on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or that will be so listed when issued or exchanged in connection with such transaction or transactions, and (y) following such transaction or transactions, the Shares will consist of such consideration, excluding cash payments for fractional shares.  For the avoidance of doubt, an event that is not considered an Additional Termination Event pursuant to the immediately preceding sentence shall not be an Additional Termination Event solely because such event could also be described by clause (iii) above; or

 

21











 

(v)           holders of Shares approve any plan or proposal for Counterparty’s liquidation or dissolution (other than in a transaction described in (iv) above).

 

(l)            Early Unwind.  In the event the sale by Counterparty of the Firm Securities (defined under the Purchase Agreement) is not consummated pursuant to the Purchase Agreement for any reason by the close of business in New York on November 1, 2019 (or such later date as agreed upon by the parties) (November 1, 2019 or such later date being the “Early Unwind Date”), the Transaction shall automatically terminate (the “Early Unwind”) on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Dealer and Counterparty thereunder shall be cancelled and terminated and (ii) Counterparty shall pay to Dealer an amount in cash equal to the aggregate amount of costs and expenses relating to the unwinding of Dealer’s hedging activities in respect of the Transaction (including market losses incurred in reselling any Shares purchased by Dealer or its affiliates in connection with such hedging activities, unless Counterparty agrees to purchase any such Shares at the cost at which Dealer purchased such Shares).  Following such termination, cancellation and payment, each party shall be released and discharged by the other party from, and agrees not to make any claim against the other party with respect to, any obligations or liabilities of either party arising out of, and to be performed in connection with, the Transaction either prior to or after the Early Unwind Date.  Dealer and Counterparty represent and acknowledge to the other that upon an Early Unwind and following the payment referred to above, all obligations with respect to the Transaction shall be deemed fully and finally discharged.

 

(m)          No Netting and Set-off.  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.

 

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

 

(o)           Agreements and Acknowledgements Regarding Hedging. Counterparty understands, acknowledges and agrees that: (A) at any time on and prior to the last Expiration Date, Dealer and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to adjust its hedge position with respect to the Transaction;  (B) Dealer and its affiliates also may be active in the market for Shares other than in connection with hedging activities in relation to the Transaction; (C) Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in securities of Counterparty shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the VWAP Prices; (D) any market activities of Dealer and its affiliates with respect to Shares may affect the market price and volatility of Shares, as well as the VWAP Prices, each in a manner that may be adverse to Counterparty; and (E) the Transaction is a derivatives transaction in which it has granted Dealer an option, and Dealer may purchase shares for its own account at an average price that may be greater than, or less than, the price paid by Counterparty under the terms of the Transaction.

 

(p)           Wall Street Transparency and Accountability Act.  In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (the “WSTAA”), the parties hereby agree that neither the enactment of the WSTAA (or any statute containing any legal certainty provision similar to Section 739 of the WSTAA) or any regulation under the WSTAA (or any such statute), nor any requirement under the WSTAA (or any statute containing any legal certainty provision similar to Section 739 of the WSTAA) or an amendment made by the WSTAA (or any such statute), 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 

 

22











 

Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging or Illegality).

 

(q)           Governing Law.  THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE, OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

(r)            Amendment.  This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty and Dealer.

 

(s)            Counterparts. This Confirmation may be executed in several counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

(t)            Tax Matters.

 

(i)            Withholding Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act.  “Indemnifiable Tax” as defined in Section 14 of the Agreement, shall not include any withholding tax imposed or collected pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (a “FATCA Withholding Tax”). For the avoidance of doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by applicable law for the purposes of Section 2(d) of the Agreement.

 

(ii)           HIRE Act.  To the extent that either party to the Agreement with respect to this Transaction is not an adhering party to the ISDA 2015 Section 871(m) Protocol published by the International Swaps and Derivatives Association, Inc. on November 2, 2015 and available at www.isda.org, as may be amended, supplemented, replaced or superseded from time to time (the “871(m) Protocol”), the parties agree that the provisions and amendments contained in the Attachment to the 871(m) Protocol are incorporated into and apply to the Agreement with respect to this Transaction as if set forth in full herein. The parties further agree that, solely for purposes of applying such provisions and amendments to the Agreement with respect to this Transaction, references to “each Covered Master Agreement” in the 871(m) Protocol will be deemed to be references to the Agreement with respect to this Transaction, and references to the “Implementation Date” in the 871(m) Protocol will be deemed to be references to the Trade Date of this Transaction.

 

(iii)          Tax documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on or before the date of execution of this Confirmation, (ii) upon reasonable request of Dealer and (iii) promptly upon learning that any such tax form previously provided by Counterparty has become obsolete or incorrect.  Dealer shall provide to Counterparty a valid U.S. Internal Revenue Service Form W-8ECI “Certificate of Foreign Person’s Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States” or any successor thereto, (i) on or before the date of execution of this Confirmation, (ii) upon reasonable request of Counterparty and (iii) promptly upon learning that any such tax form previously provided by Dealer has become obsolete or incorrect.

 

(iv)          Tax Representations.  For the purpose of Section 3(f) of the Agreement, Counterparty is a corporation for U.S. federal income tax purposes and is organized under the laws of the State of Iowa. Counterparty represents to Dealer that for U.S. federal income tax purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations) and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States Treasury Regulations).  Dealer represents to Counterparty that each payment received or to be received by it under the Agreement will be effectively connected with its conduct of a trade or business in the United States.

 

23












 

(u)           Role of Agent.  Each of Dealer and Counterparty acknowledges to and agrees with the other party hereto and to and with the Agent that (i) the Agent is acting as agent for Dealer under the Transactions pursuant to instructions from such party, (ii) the Agent is not a principal or party to the Transactions, and may transfer its rights and obligations with respect to the Transactions, (iii) the Agent shall have no responsibility, obligation or liability, by way of issuance, guaranty, endorsement or otherwise in any manner with respect to the performance of either party under the Transactions, (iv) Dealer and the Agent have not given, and Counterparty is not relying (for purposes of making any investment decision or otherwise) upon, any statements, opinions or representations (whether written or oral) of Dealer or the Agent, other than the representations expressly set forth in this Confirmation or the Agreement, and (v) each party agrees to proceed solely against the other party, and not the Agent, to collect or recover any money or securities owed to it in connection with the Transactions.  Each party hereto acknowledges and agrees that the Agent is an intended third party beneficiary hereunder.  Counterparty acknowledges that the Agent is an affiliate of Dealer.  Dealer will be acting for its own account in respect of this Confirmation and the Transactions contemplated hereunder.

 

9.     Arbitration:

 

(a)           All parties to this Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed.

 

(b)           Arbitration awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.

 

(c)           The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings.

 

(d)           The arbitrators do not have to explain the reason(s) for their award.

 

(e)           The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with the securities industry.

 

(f)            The rules of some arbitration forums may impose time limits for bringing a claim in arbitration.  In some cases, a claim that is ineligible for arbitration may be brought in court.

 

(g)           The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Confirmation.

 

(h)           Counterparty agrees that any and all controversies that may arise between Counterparty and Dealer, including, but not limited to, those arising out of or relating to the Agreement or the Transaction hereunder, shall be determined by arbitration conducted before FINRA Dispute Resolution (“FINRA-DR”), or, if FINRA-DR declines to hear the matter, before the American Arbitration Association, in accordance with their arbitration rules then in force.  The award of the arbitrator shall be final, and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction.

 

(i)            No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class is decertified; or (iii) Counterparty is excluded from the class by the court.

 

(j)            Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Confirmation except to the extent stated herein.

 

24











 

Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Counterparty with respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Dealer.

 

	
 
    	
Yours faithfully,
    
	
 
    	
 
    
	
 
    	
BMO CAPITAL MARKETS CORP.
    
	
 
    	
as agent for BANK OF MONTREAL
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Nick Stamou
    
	
 
    	
Name:
    	
Nick Stamou
    
	
 
    	
Title:
    	
Director, Derivatives   Operations
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian Riley
    
	
 
    	
Name:
    	
Brian Riley
    
	
 
    	
Title:
    	
Managing Director
    
	
 
    	
 
    
	
 
    	
BANK OF MONTREAL
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Andrew Henderson
    
	
 
    	
Name:
    	
Andrew Henderson
    
	
 
    	
Title:
    	
Director, Derivatives   Operations
    


 











 

	
Agreed and Accepted By:
    	
 
    
	
 
    	
 
    
	
WINNEBAGO   INDUSTRIES, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Bryan L. Hughes
    	
 
    
	
 
    	
Name: Bryan L. Hughes
    	
 
    
	
 
    	
Title: Vice President,   Chief Financial Officer
    	
 
    


 

2











 

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.
    	
 
    	
21,182
    	
 
    	
July 1, 2025
    
	
2.
    	
 
    	
21,182
    	
 
    	
July 2, 2025
    
	
3.
    	
 
    	
21,182
    	
 
    	
July 3, 2025
    
	
4.
    	
 
    	
21,182
    	
 
    	
July 7, 2025
    
	
5.
    	
 
    	
21,182
    	
 
    	
July 8, 2025
    
	
6.
    	
 
    	
21,182
    	
 
    	
July 9, 2025
    
	
7.
    	
 
    	
21,182
    	
 
    	
July 10, 2025
    
	
8.
    	
 
    	
21,182
    	
 
    	
July 11, 2025
    
	
9.
    	
 
    	
21,182
    	
 
    	
July 14, 2024
    
	
10.
    	
 
    	
21,182
    	
 
    	
July 15, 2025
    
	
11.
    	
 
    	
21,182
    	
 
    	
July 16, 2025
    
	
12.
    	
 
    	
21,182
    	
 
    	
July 17, 2025
    
	
13.
    	
 
    	
21,182
    	
 
    	
July 18, 2025
    
	
14.
    	
 
    	
21,182
    	
 
    	
July 21, 2025
    
	
15.
    	
 
    	
21,182
    	
 
    	
July 22, 2025
    
	
16.
    	
 
    	
21,182
    	
 
    	
July 23, 2025
    
	
17.
    	
 
    	
21,182
    	
 
    	
July 24, 2025
    
	
18.
    	
 
    	
21,182
    	
 
    	
July 25, 2025
    
	
19.
    	
 
    	
21,182
    	
 
    	
July 28, 2025
    
	
20.
    	
 
    	
21,182
    	
 
    	
July 29, 2025
    
	
21.
    	
 
    	
21,182
    	
 
    	
July 30, 2025
    
	
22.
    	
 
    	
21,182
    	
 
    	
July 31, 2025
    
	
23.
    	
 
    	
21,182
    	
 
    	
August 1, 2025
    
	
24.
    	
 
    	
21,182
    	
 
    	
August 4, 2025
    
	
25.
    	
 
    	
21,182
    	
 
    	
August 5, 2025
    
	
26.
    	
 
    	
21,182
    	
 
    	
August 6, 2025
    
	
27.
    	
 
    	
21,182
    	
 
    	
August 7, 2025
    
	
28.
    	
 
    	
21,182
    	
 
    	
August 8, 2025
    
	
29.
    	
 
    	
21,182
    	
 
    	
August 11, 2025
    
	
30.
    	
 
    	
21,182
    	
 
    	
August 12, 2025
    
	
31.
    	
 
    	
21,182
    	
 
    	
August 13, 2025
    
	
32.
    	
 
    	
21,182
    	
 
    	
August 14, 2025
    
	
33.
    	
 
    	
21,182
    	
 
    	
August 15, 2025
    
	
34.
    	
 
    	
21,182
    	
 
    	
August 18, 2025
    
	
35.
    	
 
    	
21,182
    	
 
    	
August 19, 2025
    
	
36.
    	
 
    	
21,182
    	
 
    	
August 20, 2025
    
	
37.
    	
 
    	
21,182
    	
 
    	
August 21, 2025
    
	
38.
    	
 
    	
21,182
    	
 
    	
August 22, 2025
    
	
39.
    	
 
    	
21,182
    	
 
    	
August 25, 2025
    
	
40.
    	
 
    	
21,182
    	
 
    	
August 26, 2025
    
	
41.
    	
 
    	
21,182
    	
 
    	
August 27, 2025
    
	
42.
    	
 
    	
21,182
    	
 
    	
August 28, 2025
    
	
43.
    	
 
    	
21,182
    	
 
    	
August 29, 2025
    
	
44.
    	
 
    	
21,182
    	
 
    	
September 2, 2025
    
	
45.
    	
 
    	
21,182
    	
 
    	
September 3, 2025
    
	
46.
    	
 
    	
21,182
    	
 
    	
September 4, 2025
    
	
47.
    	
 
    	
21,182
    	
 
    	
September 5, 2025
    
	
48.
    	
 
    	
21,182
    	
 
    	
September 8, 2025
    
	
49.
    	
 
    	
21,182
    	
 
    	
September 9, 2025
    
	
50.
    	
 
    	
21,182
    	
 
    	
September 10, 2025
    




 











 


	
51.
    	
 
    	
21,182
    	
 
    	
September 11, 2025
    
	
52.
    	
 
    	
21,182
    	
 
    	
September 12, 2025
    
	
53.
    	
 
    	
21,182
    	
 
    	
September 15, 2025
    
	
54.
    	
 
    	
21,182
    	
 
    	
September 16, 2025
    
	
55.
    	
 
    	
21,182
    	
 
    	
September 17, 2025
    
	
56.
    	
 
    	
21,182
    	
 
    	
September 18, 2025
    
	
57.
    	
 
    	
21,182
    	
 
    	
September 19, 2025
    
	
58.
    	
 
    	
21,182
    	
 
    	
September 22, 2025
    
	
59.
    	
 
    	
21,182
    	
 
    	
September 23, 2025
    
	
60.
    	
 
    	
21,182
    	
 
    	
September 24, 2025
    
	
61.
    	
 
    	
21,182
    	
 
    	
September 25, 2025
    
	
62.
    	
 
    	
21,182
    	
 
    	
September 26, 2025
    
	
63.
    	
 
    	
21,182
    	
 
    	
September 29, 2025
    
	
64.
    	
 
    	
21,182
    	
 
    	
September 30, 2025
    
	
65.
    	
 
    	
21,182
    	
 
    	
October 1, 2025
    
	
66.
    	
 
    	
21,182
    	
 
    	
October 2, 2025
    
	
67.
    	
 
    	
21,182
    	
 
    	
October 3, 2025
    
	
68.
    	
 
    	
21,182
    	
 
    	
October 6, 2025
    
	
69.
    	
 
    	
21,182
    	
 
    	
October 7, 2025
    
	
70.
    	
 
    	
21,183
    	
 
    	
October 8, 2025
    
	
71.
    	
 
    	
21,183
    	
 
    	
October 9, 2025
    
	
72.
    	
 
    	
21,183
    	
 
    	
October 10, 2025
    
	
73.
    	
 
    	
21,183
    	
 
    	
October 13, 2025
    
	
74.
    	
 
    	
21,183
    	
 
    	
October 14, 2025
    
	
75.
    	
 
    	
21,183
    	
 
    	
October 15, 2025
    
	
76.
    	
 
    	
21,183
    	
 
    	
October 16, 2025
    
	
77.
    	
 
    	
21,183
    	
 
    	
October 17, 2025
    
	
78.
    	
 
    	
21,183
    	
 
    	
October 20, 2025
    
	
79.
    	
 
    	
21,183
    	
 
    	
October 21, 2025
    
	
80.
    	
 
    	
21,183
    	
 
    	
October 22, 2025
    
	
81.
    	
 
    	
21,183
    	
 
    	
October 23, 2025
    
	
82.
    	
 
    	
21,183
    	
 
    	
October 24, 2025
    
	
83.
    	
 
    	
21,183
    	
 
    	
October 27, 2025
    
	
84.
    	
 
    	
21,183
    	
 
    	
October 28, 2025
    
	
85.
    	
 
    	
21,183
    	
 
    	
October 29, 2025
    
	
86.
    	
 
    	
21,183
    	
 
    	
October 30, 2025
    
	
87.
    	
 
    	
21,183
    	
 
    	
October 31, 2025
    
	
88.
    	
 
    	
21,183
    	
 
    	
November 3, 2025
    
	
89.
    	
 
    	
21,183
    	
 
    	
November 4, 2025
    
	
90.
    	
 
    	
21,183
    	
 
    	
November 5, 2025
    
	
91.
    	
 
    	
21,183
    	
 
    	
November 6, 2025
    
	
92.
    	
 
    	
21,183
    	
 
    	
November 7, 2025
    
	
93.
    	
 
    	
21,183
    	
 
    	
November 10, 2025
    
	
94.
    	
 
    	
21,183
    	
 
    	
November 11, 2025
    
	
95.
    	
 
    	
21,183
    	
 
    	
November 12, 2025
    
	
96.
    	
 
    	
21,183
    	
 
    	
November 13, 2025
    
	
97.
    	
 
    	
21,183
    	
 
    	
November 14, 2025
    
	
98.
    	
 
    	
21,183
    	
 
    	
November 17, 2025
    
	
99.
    	
 
    	
21,183
    	
 
    	
November 18, 2025
    
	
100.
    	
 
    	
21,183
    	
 
    	
November 19, 2025
    




 

2