Exhibit 10.2 


 





 


EXECUTION VERSION


 


RBC Capital Markets, LLC


3 World Financial Center


200 Vesey Street


New York, New York 10281


Telephone: (212) 858-7000


 


July 1, 2016


 


	To:	Intercept Pharmaceuticals, Inc.
	 	450 West 15th Street, Suite 505
	 	New York, NY 10011
	Attention:	Chief Financial Officer
	Telephone No.:	(646) 747-1000
	Facsimile No.:	(646) 747-1001


 


Re: Additional Call Option Transaction


 


The purpose of this letter
agreement (this “Confirmation”) is to confirm the terms and conditions of the call option transaction entered
into between Royal Bank of Canada (“Dealer”) and Intercept Pharmaceuticals, Inc. (“Counterparty”)
as of the Trade Date specified below (the “Transaction”). This letter agreement constitutes a “Confirmation”
as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any previous agreements and serve
as the final documentation for the Transaction.


 


The definitions and provisions
contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International
Swaps and Derivatives Association, Inc. (“ISDA”), are incorporated into this Confirmation. In the event of any
inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms used
herein are based on terms that are defined in the Prospectus dated April 1, 2014, as supplemented by the Prospectus Supplement
dated June 30, 2016 (as so supplemented, the “Prospectus”) relating to the 3.25% Convertible Senior Notes due
2023 (as originally issued by Counterparty, the “Convertible Notes” and each USD 1,000 principal amount of Convertible
Notes, a “Convertible Note”) issued by Counterparty in an aggregate initial principal amount of USD 400,000,000
(as increased by an aggregate principal amount of USD 60,000,000 pursuant to the exercise by the Underwriter (as defined herein)
of its over-allotment option to purchase additional Convertible Notes pursuant to the Underwriting Agreement (as defined herein))
pursuant to an Indenture to be dated July 6, 2016 (the “Base Indenture”), as supplemented by a Supplemental
Indenture thereto to be dated July 6, 2016 (the “Supplemental Indenture”), between Counterparty and U.S. Bank
National Association, as trustee (the Base Indenture as so supplemented, the “Indenture”). In the event of any
inconsistency between the terms defined in the Prospectus, the Indenture and this Confirmation, this Confirmation shall govern.
The parties acknowledge that this Confirmation is entered into on the date hereof with the understanding that (i) definitions set
forth in the Indenture that are also defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred
to herein will conform to the descriptions thereof in the Prospectus. If any such definitions in the Indenture or any such sections
of the Indenture differ from the descriptions thereof in the Prospectus, the descriptions thereof in the Prospectus will govern
for purposes of this Confirmation. The parties further acknowledge that the Supplemental Indenture section numbers used herein
are based on the draft of the Supplemental Indenture last reviewed by Dealer as of the date of this Confirmation, and if any such
section numbers are changed in the Supplemental Indenture as executed, the parties will amend this Confirmation in good faith to
preserve the intent of the parties. Subject to the foregoing, references to the Base Indenture or the Supplemental Indenture herein
are references to the Base Indenture or the Supplemental Indenture, as the case may be, as in effect on the date of its execution,
and if either the Base Indenture or the Supplemental Indenture is amended or supplemented following such date (other than any amendment
or supplement (x) pursuant to Section 10.02(m) of the Supplemental Indenture that, as determined by the Calculation Agent, conforms
the Indenture to the description of Convertible Notes in the Prospectus or (y) pursuant to Section 14.07 of the Supplemental Indenture,
subject, in the case of this clause (y), to the first proviso to the provision opposite the caption “Method of Adjustment”
in Section 3), any such amendment or supplement will be disregarded for purposes of this Confirmation unless the parties agree
otherwise in writing.


 




    	 	 	 



     


    

 


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


 


1.          This
Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which
this Confirmation relates. This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the
2002 ISDA Master Agreement (the “Agreement”) as if Dealer and Counterparty had executed an agreement in such
form (but without any Schedule except for (i) the election of the laws of the State of New York as the governing law (without reference
to choice of law doctrine); (ii) the election that the “Cross Default” provisions
of Section 5(a)(vi) of the Agreement shall apply to Dealer with (a) the phrase “, or becoming capable at such time of being
declared,” deleted from Section 5(a)(vi)(1) of the Agreement, (b) a “Threshold Amount” with respect to Dealer
of three percent (3%) of shareholders’ equity of Dealer as of the Trade Date, and (c) the following language added to the
end of Section 5(a)(vi): “Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (x) the default was caused solely by error or omission of an administrative or operational nature; (y) funds were
available to enable the party to make the payment when due; and (z) the payment is made within two Local Business Days of such
party’s receipt of written notice of its failure to pay.”; and (iii) the term “Specified Indebtedness”
shall have the meaning specified in Section 14 of the Agreement, except that such term shall not include obligations in respect
of deposits received in the ordinary course of Dealer’s banking business) on the Trade Date. In the event of any inconsistency
between provisions of the Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to
which this Confirmation relates. The parties hereby agree that no transaction other than the Transaction to which this Confirmation
relates shall be governed by the Agreement.


 


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


 


General Terms.


 


	 	Trade Date:	July 1, 2016
	 	 	 
	 	Effective Date:	The Trade Date
	 	 	 
	 	Option Style:	“Modified American”, as described under “Procedures for Exercise” below
	 	 	 
	 	Option Type:	Call
	 	 	 
	 	Buyer:	Counterparty
	 	 	 
	 	Seller:	Dealer
	 	 	 
	 	Shares:	The common stock of Counterparty, par value USD 0.001 per share (Exchange symbol “ICPT”).
	 	 	 
	 	Number of Options:	60,000.  For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised by Counterparty.  In no event will the Number of Options be less than zero.
	 	 	 
	 	Applicable Percentage:	50%
	 	 	 
	 	Option Entitlement:	A number equal to the product of the Applicable Percentage and 5.0358.
	 	 	 
	 	Strike Price:	USD 198.5782


 




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	 	Cap Price:	USD 262.2725
	 	 	 
	 	Premium:	USD 2,502,000
	 	 	 
	 	Premium Payment Date:	July 6, 2016
	 	 	 
	 	Exchange:	The NASDAQ Global Select Market
	 	 	 
	 	Related Exchange(s):	All Exchanges
	 	 	 
	 	Excluded Provisions:	Section 14.04(h) and Section 14.03 of the Supplemental Indenture.


 


Procedures for Exercise.


 


	 	Conversion Date:	With respect to any conversion of a Convertible Note (other than (x) any conversion of Convertible Notes with a Conversion Date occurring prior to the Free Convertibility Date (any such conversion, an “Early Conversion”), to which the provisions of Section 9(l)(i) of this Confirmation shall apply or (y) any conversion of Convertible Notes that are Make-Whole Convertible Notes (any such conversion, a “Make-Whole Conversion”) to which the provisions of Section ‎9(l)(ii) of this Confirmation shall apply), the date on which the Holder (as such term is defined in the Indenture) of such Convertible Note satisfies all of the requirements for conversion thereof as set forth in Section 14.02(b) of the Supplemental Indenture.
	 	 	 
	 	Make-Whole Convertible Notes:	Convertible Notes as to which the “Conversion Rate” (as defined in the Indenture) would be increased pursuant to Section 14.03 of the Supplemental Indenture.
	 	 	 
	 	Free Convertibility Date:	January 1, 2023
	 	 	 
	 	Expiration Time:	The Valuation Time
	 	 	 
	 	Expiration Date:	July 1, 2023, subject to earlier exercise.
	 	 	 
	 	Multiple Exercise:	Applicable, as described under “Automatic Exercise” below.
	 	 	 
	 	Automatic Exercise:	Notwithstanding Section 3.4 of the Equity Definitions, on each Conversion Date occurring on or after the Free Convertibility Date, in respect of which a “Notice of Conversion” (as such term is defined in the Indenture) that is effective as to Counterparty has been delivered by the relevant converting Holder, a number of Options equal to (i) the number of Convertible Notes in denominations of USD 1,000 as to which such Conversion Date has occurred, minus (ii) the number of Options that are or are deemed to be automatically exercised on such Conversion Date under the Base Call Option Transaction Confirmation letter agreement dated June 30, 2016 between Dealer and Counterparty (the “Base Call Option Confirmation”), shall be deemed to be automatically exercised; provided that such Options shall be exercised or deemed exercised only if Counterparty has provided a Notice of Exercise to Dealer in accordance with “Notice of Exercise” below.


 




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	 	 	Notwithstanding the foregoing, in no event shall the number of Options that are exercised or deemed exercised hereunder exceed the Number of Options.
	 	 	 
	 	Notice of Exercise:	Notwithstanding anything to the contrary in the Equity Definitions or under “Automatic Exercise” above, in order to exercise any Options relating to Convertible Notes (other than Convertible Notes being converted upon an Early Conversion or a Make-Whole Conversion), Counterparty must notify Dealer in writing before 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the Expiration Date (the “Exercise Notice Deadline”) of the number of such Options; provided that if the Relevant Settlement Method for such Options is (x) Net Share Settlement and the Specified Cash Amount (as defined below) is not USD 1,000, (y) Cash Settlement or (z) Combination Settlement, Counterparty must provide Dealer a separate notice (the “Notice of Final Settlement Method”) in respect of all such Convertible Notes before 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately following the Free Convertibility Date specifying (i) the Relevant Settlement Method for such Options and the settlement method for the related Convertible Notes, and (ii) if the settlement method for the related Convertible Notes is not Settlement in Shares or Settlement in Cash (each as defined below), the fixed amount of cash per Convertible Note that Counterparty has elected to deliver to Holders (as such term is defined in the Indenture) of the related Convertible Notes (the “Specified Cash Amount”). Notwithstanding the foregoing, any Notice of Exercise and the related automatic exercise of the related Options shall be effective if given after the Exercise Notice Deadline but prior to 5:00 p.m. (New York City time) on the fifth Scheduled Valid Day following the Exercise Notice Deadline and, in respect of any Options in respect of which such notice is delivered after the Exercise Notice Deadline pursuant to this provision, the Calculation Agent shall have the right to adjust the number of Shares and/or amount of cash deliverable by Dealer with respect to such Options in a commercially reasonable manner as appropriate to reflect the additional costs and losses (including, but not limited to, hedging mismatches and market losses) and expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) as a result of Dealer’s not having received such notice on or prior to the Exercise Notice Deadline. Counterparty acknowledges its responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of the Exchange Act (as defined below) and the rules and regulations thereunder, in respect of any election of a settlement method with respect to the Convertible Notes.  


 




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	 	Valuation Time:	At the close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in good faith in its commercially reasonable discretion.
	 	 	 
	 	Market Disruption Event:	Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following:
	 	 	 
	 	 	“‘Market Disruption Event’ means, in respect of a Share, (i) a failure by the primary U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m. (New York City time) on any Scheduled Valid Day for the Shares for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Shares or in any options contracts or futures contracts relating to the Shares.”


 


Settlement Terms.


 


	 	Settlement Method:	For any Option, Net Share Settlement; provided that if the Relevant Settlement Method set forth below for such Option is not Net Share Settlement, then the Settlement Method for such Option shall be such Relevant Settlement Method, but only if Counterparty shall have notified Dealer of the Relevant Settlement Method in the Notice of Final Settlement Method.
	 	 	 
	 	Relevant Settlement Method:	In respect of any Option:
	 	 	 
	 	 	(i)  if Counterparty has elected (or, in the case of (C), is deemed to have elected) to settle its conversion obligations in respect of the related Convertible Note (A) entirely in Shares pursuant to Section 14.02(a)(iv)(A) of the Supplemental Indenture (together with cash in lieu of fractional Shares) (such settlement method, “Settlement in Shares”), (B) in a combination of cash and Shares pursuant to Section 14.02(a)(iv)(C) of the Supplemental Indenture with a Specified Cash Amount less than USD 1,000 (such settlement method, “Low Cash Combination Settlement”) or (C) in a combination of cash and Shares pursuant to Section 14.02(a)(iv)(C) of the Supplemental Indenture with a Specified Cash Amount equal to USD 1,000, then, in each case, the Relevant Settlement Method for such Option shall be Net Share Settlement;


 




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	 	 	(ii)  if Counterparty has elected to settle its conversion obligations in respect of the related Convertible Note in a combination of cash and Shares pursuant to Section 14.02(a)(iv)(C) of the Supplemental Indenture with a Specified Cash Amount greater than USD 1,000, then the Relevant Settlement Method for such Option shall be Combination Settlement; and
	 	 	 
	 	 	(iii) if Counterparty has elected to settle its conversion obligations in respect of the related Convertible Note entirely in cash pursuant to Section 14.02(a)(iv)(B) of the Supplemental Indenture (such settlement method, “Settlement in Cash”), then the Relevant Settlement Method for such Option shall be Cash Settlement.
	 	 	 
	 	Net Share Settlement:	If Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on the relevant Settlement Date for each such Option, a number of Shares (the “Net Share Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for each such Option, of (i) (a) the Daily Option Value for such Valid Day, divided by (b) the Relevant Price on such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period; provided that in no event shall the Net Share Settlement Amount for such Option exceed a number of Shares equal to the Applicable Limit for such Option divided by the Applicable Limit Price on the Settlement Date for such Option.
	 	 	 
	 	 	Dealer will pay cash in lieu of delivering any fractional Shares to be delivered with respect to any Net Share Settlement Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period.
	 	 	 
	 	Combination Settlement:	If Combination Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will pay and/or deliver, as the case may be, to Counterparty, on the relevant Settlement Date for each such Option:


 


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


 




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


 


	 	 	provided that in no event shall the sum of (x) the Combination Settlement Cash Amount for such Option and (y) the Combination Settlement Share Amount for such Option, multiplied by the Applicable Limit Price on the Settlement Date for such Option, exceed the Applicable Limit for such Option.
	 	 	 
	 	 	Dealer will pay cash in lieu of delivering any fractional Shares to be delivered with respect to any Combination Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period.
	 	 	 
	 	Cash Settlement:	If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date for each such Option, an amount of cash (the “Cash Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period; provided that in no event shall the Cash Settlement Amount for such Option exceed the Applicable Limit for such Option.  
	 	 	 
	 	Daily Option Value:	For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied by (ii) (A) the lesser of the Relevant Price on such Valid Day and the Cap Price, minus (B) the Strike Price on such Valid Day; provided that, if the calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero.  In no event will the Daily Option Value be less than zero.
	 	 	 
	 	Applicable Limit:	For any Option, an amount of cash equal to the Applicable Percentage, multiplied by the excess of (i) the aggregate of (A) the amount of cash, if any, paid to the Holder of the related Convertible Note upon conversion of such Convertible Note and (B) the number of Shares, if any, delivered to the Holder of the related Convertible Note upon conversion of such Convertible Note, in each case, pursuant to the terms of the Indenture, multiplied by the Applicable Limit Price on the Settlement Date for such Option, over (ii) USD 1,000.  


 




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	 	Applicable Limit Price:	On any day, the opening price as displayed under the heading “Op” on Bloomberg page ICPT <equity> (or any successor thereto).
	 	 	 
	 	Valid Day:	A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the Exchange, on the principal other U.S. national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Shares are then listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Valid Day” means a Business Day.
	 	 	 
	 	Scheduled Valid Day:	A day that is scheduled to be a Valid Day on the principal U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading.  If the Shares are not so listed or admitted for trading, “Scheduled Valid Day” means a Business Day.
	 	 	 
	 	Business Day:	Any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law, regulation or executive order to close or be closed.
	 	 	 
	 	Relevant Price:	On any Valid Day, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page ICPT <equity> AQR (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading on the Exchange until the scheduled close of trading of the primary trading session on the Exchange on such Valid Day (or if such volume-weighted average price is unavailable, the market value of one Share on such Valid Day, as determined by the Calculation Agent, using, if practicable, a volume-weighted average method). The “Relevant Price” shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
	 	 	 
	 	Settlement Averaging Period:	For any Option, the 20 consecutive Valid Days commencing on, and including, the 22nd Scheduled Valid Day immediately prior to the Expiration Date; provided that if the Notice of Final Settlement Method for such Option specifies that Settlement in Shares or Low Cash Combination Settlement applies to the related Convertible Note, the Settlement Averaging Period shall be the 40 consecutive Valid Days commencing on, and including, the 42nd Scheduled Valid Day immediately prior to the Expiration Date.


 




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	 	Settlement Date:	For any Option, the third Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option.
	 	 	 
	 	Settlement Currency:	USD
	 	 	 
	 	Other Applicable Provisions:	The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-settled” shall be read as references to “Share Settled”.  “Share Settled” in relation to any Option means that Net Share Settlement or Combination Settlement is applicable to that Option.
	 	 	 
	 	Representation and Agreement:	Notwithstanding anything to the contrary in the Equity Definitions (including, but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any Shares delivered to Counterparty shall be, upon delivery, subject to restrictions and limitations arising from Counterparty’s status as issuer of the Shares under applicable securities laws, (ii) Dealer may deliver any Shares required to be delivered hereunder in certificated form in lieu of delivery through the Clearance System and (iii) any Shares delivered to Counterparty may be “restricted securities” (as defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)).


 


		3.	Additional Terms applicable to the Transaction.



 


Adjustments applicable to the Transaction:


 


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


 




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	 	Method of Adjustment:	Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the Calculation Agent, in a commercially reasonable manner and in consultation with Counterparty, shall make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction to the extent an analogous adjustment is required to be made pursuant to the Indenture in connection with such Potential Adjustment Event;
	 	 	 
	 	 	provided that, notwithstanding the foregoing and “Consequences of Merger Events / Tender Offers” below, if the Calculation Agent in good faith disagrees with any adjustment to the Convertible Notes that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation, pursuant to Section 14.05 of the Supplemental Indenture, Section 14.07 of the Supplemental Indenture or any supplemental indenture entered into thereunder or in connection with any proportional adjustment or the determination of the fair value of any securities, property, rights or other assets), then in each such case, the Calculation Agent will determine the adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction in a commercially reasonable manner and in consultation with Counterparty;
	 	 	 
	 	 	provided further that, notwithstanding the foregoing, if any Potential Adjustment Event occurs during the Settlement Averaging Period but no adjustment was made to any Convertible Note under the Indenture because the relevant Holder (as such term is defined in the Indenture) was deemed to be a record owner of the underlying Shares on the related Conversion Date, then the Calculation Agent shall make an adjustment, as determined by it, to the terms hereof in order to account for such Potential Adjustment Event in a commercially reasonable manner and in consultation with Counterparty.
	 	 	 
	 	 	Notwithstanding the foregoing, the Calculation Agent’s obligation to consult with Counterparty as set forth in this “—Method of Adjustment” section shall be subject to compliance with applicable legal, regulatory or self-regulatory requirements, and with related policies and procedures applicable to the Calculation Agent (as reasonably determined by the Calculation Agent). In addition, for the avoidance of doubt and notwithstanding the Calculation Agent’s obligation to consult with Counterparty as set forth in this “—Method of Adjustment” section, all calculations, adjustments and determinations made by the Calculation Agent shall be final and conclusive.


 




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	 	Dilution Adjustment Provisions:	Sections 14.04(a), (b), (c), (d) and (e) and Section 14.05 of the Supplemental Indenture.


 


Extraordinary Events applicable
to the Transaction:


 


	 	Merger Events:	Applicable; provided that notwithstanding Section 12.1(b) of the Equity Definitions, which shall not apply with respect to the Transaction, a “Merger Event” means the occurrence of a “Share Exchange Event” (as defined in Section 14.07 of the Supplemental Indenture).
	 	 	 
	 	Tender Offers:	Applicable; provided that notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 14.04(e) of the Supplemental Indenture.
	 	 	 
	 	Consequences of Merger Events/	 
	 	Tender Offers:	Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of Options and the Option Entitlement to the extent an analogous adjustment is required to be made pursuant to the Indenture in connection with such Merger Event or Tender Offer, as the case may be; provided, however, that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to any Excluded Provision;
	 	 	 
	 	 	provided further that if, with respect to a Merger Event or a Tender Offer, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction following such Merger Event or Tender Offer will not be a corporation, then, in either case, Cancellation and Payment (Calculation Agent Determination) may apply at Dealer’s sole election; and
	 	 	 
	 	 	provided further that, for the avoidance of doubt, adjustments shall be made pursuant to the provisions set forth above regardless of whether any Merger Event or Tender Offer gives rise to an Early Conversion.


 




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	 	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 the phrase “exercise, settlement, payment or any other terms of the Transaction (including, without limitation, the spread)” shall be replaced with the phrase “Cap Price (provided that in no event shall the Cap Price be less than the Strike Price)”, and (z) for the avoidance of doubt, the Calculation Agent may determine whether the relevant Announcement Event has had a material economic effect on the Transaction (and, if so, may adjust the Cap Price accordingly) on one or more occasions on or after the date of the Announcement Event up to, and including, the Expiration Date, any Early Termination Date and/or any other date of cancellation, it being understood that any adjustment in respect of an Announcement Event shall take into account any earlier adjustment relating to the same Announcement Event.  An Announcement Event shall be an “Extraordinary Event” for purposes of the Equity Definitions, to which Article 12 of the Equity Definitions is applicable.
	 	 	 
	 	Announcement Event:	(i) The public announcement by any entity of (x) any transaction or event that, if completed, would constitute a Merger Event or Tender Offer, (y) any potential acquisition by Issuer and/or its subsidiaries where the aggregate consideration exceeds 30% of the market capitalization of Issuer as of the date of such announcement (an “Acquisition Transaction”) or (z) the firm intention to enter into a Merger Event or Tender Offer or an Acquisition Transaction (provided that, in the case of this clause (z), such entity has or could obtain the financial resources necessary to consummate such transaction, as determined by the Calculation Agent (which determination, for the avoidance of doubt, may take into consideration the effect of such announcement, as determined by the Calculation Agent, on the market price of the Shares or options relating to the Shares)), (ii) the public announcement by Issuer of a firm 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 Acquisition Transaction or (iii) any subsequent public announcement by any entity of a material change to a transaction or intention that is the subject of an announcement of the type described in clause (i) or (ii) of this sentence (including, without limitation, a new announcement, whether or not by the same party, relating to such a transaction or intention or the announcement of a withdrawal from, or the abandonment or discontinuation of, such a transaction or intention), as determined by the Calculation Agent.  For the avoidance of doubt, the occurrence of an Announcement Event with respect to any transaction or intention shall not preclude the occurrence of a later Announcement Event with respect to such transaction or intention. For purposes of this definition of “Announcement Event,” (A) “Merger Event” shall mean such term as defined under Section 12.1(b) of the Equity Definitions (but, for the avoidance of doubt, the remainder of the definition of “Merger Event” in Section 12.1(b) of the Equity Definitions following the definition of “Reverse Merger” therein shall be disregarded) and (B) “Tender Offer” shall mean such term as defined under Section 12.1(d) of the Equity Definitions; provided that Section 12.1(d) of the Equity Definitions is hereby amended by (i) inserting the word “similar” immediately prior to the word “event” in the second line thereof and (ii) replacing “10%” with “30%” in the third line thereof.


 




    	 	12	 



     


    

 


	 	Nationalization, Insolvency or Delisting:	Cancellation and Payment (Calculation Agent Determination); provided that, in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange.
	 	 	 
	 	Additional Disruption Events:	 
	 	 	 
	 	Change in Law:	Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the word “Shares” with the phrase “Hedge Positions” in clause (X) thereof and (ii) inserting the parenthetical “(including, for the avoidance of doubt and without limitation, adoption or promulgation of new regulations authorized or mandated by existing statute)” at the end of clause (A) thereof.
	 	 	 
	 	Failure to Deliver:	Applicable
	 	 	 
	 	Hedging Disruption:	Applicable; provided that:


 


	 	(i)	Section 12.9(a)(v) of the Equity Definitions is hereby amended by inserting the following phrases at the end of such Section:


 




    	 	13	 



     


    

 


	 	 	“For the avoidance of doubt, the term “equity price risk” shall be deemed to include, but shall not be limited to, stock price and volatility risk. And, for the further avoidance of doubt, any such transactions or assets referred to in phrases (A) or (B) above must be available on commercially reasonable pricing terms as determined by Dealer (whose determination shall be final and conclusive) in consultation with Counterparty. For purposes of the immediately preceding sentence, a de minimis increase (as compared with circumstances existing on the Trade Date) in the cost of acquiring, establishing, re-establishing, substituting, maintaining, unwinding or disposing of any transaction(s) or asset(s) that the Hedging Party deems necessary to hedge the equity price risk of entering into and performing its obligations with respect to the relevant Transaction shall not give rise to a Hedging Disruption.”; and
	 	 	 
	 	(ii)	Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in the third line thereof, after the words “to terminate the Transaction”, the words “or a portion of the Transaction affected by such Hedging Disruption”.


 


	 	Increased Cost of Hedging:	Not Applicable
	 	 	 
	 	Hedging Party:	For all applicable Additional Disruption Events, Dealer.
	 	 	 
	 	Determining Party:	For all applicable Extraordinary Events, Dealer.
	 	 	 
	 	Non-Reliance:	Applicable
	 	 	 
	 	Agreements and Acknowledgments	 
	 	Regarding Hedging Activities:	Applicable
	 	 	 
	 	Additional Acknowledgments:	Applicable


 


	4.	Calculation Agent.	Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner; provided that, following the occurrence and during the continuance of an Event of Default of the type described in Section 5(a)(vii) of the Agreement with respect to which Dealer is the Defaulting Party, Counterparty shall have the right to designate a nationally recognized third-party dealer in over-the-counter corporate equity derivatives to act, during the period commencing on the date such Event of Default occurred and ending on the Early Termination Date with respect to such Event of Default (or, if earlier, the date on which such Event of Default is no longer continuing), as the Calculation Agent.  Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent shall promptly (but in any event within five (5) Scheduled Valid Days) provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such request, a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such determination or calculation (including any assumptions used in making such determination or calculation), it being understood that the Calculation Agent shall not be obligated to disclose any proprietary or confidential models or proprietary or confidential information used by it for such determination or calculation.


 




    	 	14	 



     


    

 


		5.	Account Details.



 


		(a)	Account for payments to Counterparty:



 


To be provided by Counterparty.


 


Account for delivery of Shares to Counterparty:


 


To be provided by Counterparty.


 


		(b)	Account for payments to Dealer:








 


Account for delivery of Shares from Dealer:


 


To be provided by Dealer.


 


		6.	Offices.



 


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



 


		(b)	The Office of Dealer for the Transaction is: New York



 


Royal Bank of Canada


c/o RBC Capital Markets, LLC


3 World Financial Center


200 Vesey Street


New York, New York 10281


	 	Attention:	Structured Derivatives Documentation
	 	Telephone:	(212) 858-7000
	 	Facsimile:	(212) 428-3053


 


		7.	Notices.



 


		(a)	Address for notices or communications to Counterparty:



 


	 	Intercept Pharmaceuticals, Inc.
	 	450 West 15th Street, Suite 505
	 	New York, NY 10011
	 	Attention:	Chief Financial Officer
	 	Telephone No.:	(646) 747-1000
	 	Facsimile No.:	(646) 747-1001


 




    	 	15	 



     


    

 


		(b)	Address for notices or communications to Dealer:



 


Royal Bank of Canada


 


	 	c/o RBC Capital Markets, LLC
	 	3 World Financial Center
	 	200 Vesey Street
	 	New York, New York 10281
	 	 	 


 


		8.	Representations and Warranties.



 


Other than for purposes of Section
5(a)(iv) of the Agreement, each of the representations and warranties of Counterparty set forth in Section 1 of the Underwriting
Agreement (the “Underwriting Agreement”) dated as of June 30, 2016 between Counterparty and RBC Capital Markets,
LLC and UBS Securities LLC, as representatives of the Underwriters party thereto (the “Underwriter”), are true
and correct and are hereby deemed to be repeated to Dealer as if set forth herein. Counterparty hereby further represents and warrants
to Dealer on the date hereof and on and as of the Premium Payment Date that:


 


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



 


		(b)	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 December 31, 2015, as updated by any subsequent filings, or constitute a default under, or result in the creation
of any lien under, any such agreement or instrument.



 


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



 


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



 


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



 


		(f)	Counterparty is not, on the date hereof, in possession of any material non-public information with
respect to Counterparty or the Shares.



 




    	 	16	 



     


    

 


		(g)	To Counterparty’s knowledge, no state or local (including any non-U.S. jurisdiction’s)
law, rule, regulation or regulatory order applicable to the Shares would give rise to any reporting, consent, registration or other
requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer
or its affiliates owning or holding (however defined) Shares.



 


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



 


		(i)	Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges
that Dealer is not making any representations or warranties with respect to the treatment of the Transaction under any accounting
standards including FASB Statements 128, 133, 149 (each as amended), or 150, EITF Issue No. 00-19, 01-6, 03-6 or 07-5 (or any successor
issue statements) or under FASB’s Liabilities & Equity Project.



 


		(j)	Without limiting the generality of Section 3(a)(iii) of the Agreement, the Transaction will not
violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.



 


		(k)	(A) Counterparty is acting for its own account, and it has made its own independent decisions to
enter into the Transaction and as to whether the Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisers as it has deemed necessary, (B) Counterparty is not relying on any communication (written or oral) of
Dealer or any of its affiliates as investment advice or as a recommendation to enter into the Transaction (it being understood
that information and explanations related to the terms and conditions of the Transaction shall not be considered investment advice
or a recommendation to enter into the Transaction) and (C) no communication (written or oral) received from Dealer or any of its
affiliates shall be deemed to be an assurance or guarantee as to the expected results of the Transaction.



 


Dealer hereby
represents and warrants to Counterparty on the date hereof and on and as of the Premium Payment Date, that Dealer is an “eligible
contract participant” (as such term is defined in Section 1a(18) of the Commodity Exchange Act, other than a person that
is an eligible contract participant under Section 1a(18)(C) of the Commodity Exchange Act).


 


		9.	Other Provisions.



 


		(a)	Opinions. Counterparty shall deliver to Dealer an opinion of counsel (subject to
customary qualifications, assumptions and exceptions), dated as of the Premium Payment Date, with respect to the matters set forth
in Sections 8(a) through (c) of this Confirmation. Delivery of such opinion to Dealer shall be a condition precedent for the purpose
of Section 2(a)(iii) of the Agreement with respect to each obligation of Dealer under Section 2(a)(i) of the Agreement.



 




    	 	17	 



     


    

 


		(b)	Repurchase Notices. Counterparty shall, on any day on which Counterparty effects
any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on
such day if following such repurchase, the Notice Percentage as determined on the date of such Repurchase Notice is (i) greater
than 6.0% and (ii) greater by 0.5% than the Notice Percentage included in the immediately preceding Repurchase Notice (or, in the
case of the first such Repurchase Notice, greater than the Notice Percentage as of the date hereof); provided that Counterparty
shall deliver a Repurchase Notice to Dealer at least five Scheduled Valid Days prior to effecting any non-open market repurchase
(including, without limitation, pursuant to a tender offer or an accelerated share repurchase program or other structured derivative
transaction) that Counterparty reasonably expects to result in the repurchase of a number of Shares constituting more than 10%
of the number of Shares outstanding on the date of such repurchase. The “Notice Percentage” as of any day is
the fraction, expressed as a percentage, the numerator of which is the Number of Shares and the denominator of which is the number
of Shares outstanding on such day. Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and their respective
officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”)
from and against any and all reasonable losses (including losses relating to Dealer’s commercially reasonable hedging activities
as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any
forbearance from commercially reasonable hedging activities or cessation of commercially reasonable hedging activities and any
reasonable losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses
(including reasonable attorney’s fees), joint or several, which an Indemnified Person may become subject to under applicable
securities laws, as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice on the day and in the manner
specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable
legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection
with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation),
claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide
Dealer with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in
writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees
and expenses of such counsel related to such proceeding. Counterparty shall not be liable to the extent that the Indemnified Person
fails to notify Counterparty within a commercially reasonable period of time after any action is commenced against it in respect
of which Indemnity may be sought hereunder. In addition, Counterparty shall not be liable for any settlement of any such proceeding
contemplated by this paragraph that is effected without its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability
by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person,
effect any settlement of any pending or threatened proceeding contemplated by this paragraph that is in respect of which any Indemnified
Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement
includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding
on terms reasonably satisfactory to such Indemnified Person. Counterparty shall not be liable for any losses, claims, damages or
liabilities (or expenses relating thereto) of any Indemnified Person that result from the bad faith, gross negligence, willful
misconduct or fraud of such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified
Person or insufficient in respect of any reasonable losses, claims, damages or liabilities referred to therein, then Counterparty
hereunder, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph (b) are not exclusive
and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity. The
indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless
of the termination of the Transaction.



 


		(c)	Regulation M. Counterparty is not on the Trade Date, and will not be during any “Observation
Period” (as defined in the Indenture) in respect of any conversion of a Convertible Note that is not an Early Conversion,
engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), of any securities of Counterparty, other than (i) a distribution meeting the requirements of the exception set
forth in Rules 101(b)(10) and 102(b)(7) of Regulation M and (ii) the distribution of the Convertible Notes. Counterparty shall
not, until the second Scheduled Valid Day immediately following the Trade Date, and from the beginning of such “Observation
Period” until the second Scheduled Valid Day immediately following the relevant Settlement Date, engage in any such distribution.



 




    	 	18	 



     


    

 


		(d)	Rule 10b-18. On the Trade Date and during any “Observation Period” (as
defined in the Indenture) in respect of any conversion of a Convertible Note that is not an Early Conversion, neither Counterparty
nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18 under 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.



 


		(e)	Resolutions. On or prior to the Trade Date, Counterparty shall deliver to Dealer
a resolution of Counterparty’s board of directors authorizing the Transaction.



 


		(f)	Solvency. On each of the Trade Date and the Premium Payment Date, Counterparty is
not, or will not be, “insolvent” (as such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title
11 of the United States Code) (the “Bankruptcy Code”)), and Counterparty would be able to purchase a number
of Shares equal to the Number of Shares in compliance with the corporate laws of the jurisdiction of its incorporation.



 


		(g)	Private Placement. 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, Counterparty
represents and warrants to Dealer that (i) it has the financial ability to bear the economic risk of its investment in the Transaction
and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined in
Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account and without
a view to the distribution or resale thereof and (iv) the assignment, transfer or other disposition of the Transaction has not
been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state
securities laws.



 


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



 


		(i)	Transfer or Assignment.



 


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



 


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



 


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



 




    	 	19	 



     


    

 


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



 


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



 


		(E)	Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such
tax documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses (C)
and (D) will not occur upon or after such transfer and assignment; and



 


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



 


		(ii)	Dealer may, without Counterparty’s consent, transfer or assign all or any part of its rights
or obligations under the Transaction (A) to any affiliate of Dealer that is a dealer as defined under Section 475(c)(1) of the
Code (1) that has a long-term issuer rating that is equal to or better than Dealer’s credit rating at the time of such transfer
or assignment, or (2) whose obligations hereunder will be guaranteed, pursuant to the terms of a full and unconditional customary
guarantee in a form used by Dealer generally for similar transactions, by Dealer or Dealer’s ultimate parent, or (B) to any
other third party that is a dealer as defined under Section 475(c)(1) of the Code with a long-term issuer rating equal to or better
than the lesser of (1) the credit rating of Dealer at the time of the transfer and (2) A- by Standard and Poor’s Rating Group,
Inc. or its successor (“S&P”), or A3 by Moody’s Investor Service, Inc. (“Moody’s”)
or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute rating
agency mutually agreed by Counterparty and Dealer. Without limiting the foregoing, no transfer or assignment by Dealer shall be
permitted hereunder if an Event of Default, Potential Event of Default or Termination Event would occur as a result of such transfer
or assignment. If at any time at which (A) the Section 16 Percentage exceeds 8.5%, (B) the Option Equity Percentage exceeds 14.5%
or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or
(C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect
a transfer or assignment of Options to a third party in accordance with the two immediately preceding sentences on pricing terms
reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position
exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction
(the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists.
In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall
be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction
having terms identical to the Transaction and a Number of Options equal to the number of Options underlying the Terminated Portion,
(2) Counterparty were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the
sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(o) shall apply to any amount that is payable
by Dealer to Counterparty pursuant to this sentence as if Counterparty was not the Affected Party); provided that in calculating
any amount due following such designation, Dealer shall act in good faith and in a commercially reasonable manner and shall comply
with the second sentence of the provision opposite the caption “Calculation Agent” above as if Dealer were acting as
Calculation Agent for this purpose. The “Section 16 Percentage” as of any day is the fraction, expressed as
a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with
Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially
own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of
which is the number of Shares outstanding. The “Option Equity Percentage” as of any day is the fraction, expressed
as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Options and the Option Entitlement and
(2) the aggregate number of Shares underlying any other call option transaction sold by Dealer to Counterparty, and (B) the denominator
of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that
Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer
Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Counterparty that
are, in each case, applicable to ownership of Shares (“Applicable Restrictions”), owns, beneficially owns, constructively
owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership under any Applicable Restriction,
as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares
equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filing
requirements on Form 13F, Schedule 13D or Schedule 13G under the Exchange Act, in each case, as in effect on the Trade Date) or
other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in a material
adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus
(B) 1% of the number of Shares outstanding.



 




    	 	20	 



     


    

 


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



 


		(j)	Staggered Settlement. If upon advice of counsel with respect to applicable legal
and regulatory requirements, including any requirements relating to Dealer’s commercially reasonable hedging activities hereunder,
Dealer reasonably determines that it would not be practicable or advisable to deliver, or to acquire Shares to deliver, any or
all of the Shares to be delivered by Dealer on any Settlement Date for the Transaction, Dealer may, by notice to Counterparty on
or prior to any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more dates
(each, a “Staggered Settlement Date”) as follows:



 


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



 


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



 




    	 	21	 



     


    

 


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



 


		(iv)	when specifying Staggered Settlement Dates pursuant to this Section 9(j), Dealer shall specify
the fewest number of Staggered Settlement Dates as is practicable under the circumstances, as determined by Dealer.



 


		(k)	Role of Agent. Dealer has appointed, as its agent, its indirect wholly-owned subsidiary,
RBC Capital Markets, LLC (“RBCCM”), for purposes of conducting, on Dealer’s behalf, a business in privately
negotiated transactions in options and other derivatives. Counterparty hereby is advised that Dealer, the principal and stated
counterparty in such transactions, duly has authorized RBCCM to market, structure, negotiate, document, price, execute and hedge
transactions in over-the-counter derivative products. RBCCM does not act as agent of Counterparty. For the avoidance of doubt,
any performance by Dealer of its obligations hereunder solely to RBCCM shall not relieve Dealer of such obligations. RBCCM’s
performance to Counterparty of Dealer’s obligations hereunder shall relieve Dealer of such obligations to the extent of such
performance. Any performance by Counterparty of its obligations (including notice obligations) through or by means of RBCCM’s
agency for Dealer shall constitute good performance of Counterparty’s obligations hereunder to Dealer.



 


		(l)	Additional Termination Events.



 


		(i)	Notwithstanding anything to the contrary in this Confirmation, upon any Early Conversion in respect
of which a “Notice of Conversion” (as such term is defined in the Indenture) that is effective as to Counterparty has
been delivered by the relevant converting Holder:



 


		(A)	Counterparty shall, within one Scheduled
Valid Day of the “Conversion Date” (as such term is defined in the Indenture)
for such Early Conversion, provide written notice (an “Early Conversion Notice”) to Dealer specifying the number
of Convertible Notes surrendered for conversion on such “Conversion Date” (such Convertible Notes, the “Affected
Convertible Notes”), and the giving of such Early Conversion Notice shall constitute
an Additional Termination Event as provided in this clause (i);



 


		(B)	upon receipt of any such Early Conversion Notice, Dealer shall designate an Exchange Business Day
as an Early Termination Date (which Exchange Business Day shall be no earlier than one Scheduled Valid Day following the “Conversion
Date” for such Early Conversion) with respect to the portion of the Transaction corresponding to a number of Options (the
“Affected Number of Options”) equal to the lesser of (x) the number of Affected Convertible Notes minus the
“Affected Number of Options” (as defined in the Base Call Option Confirmation), if any, that relate to such Affected
Convertible Notes and (y) the Number of Options as of the “Conversion Date” for such Early Conversion;



 




    	 	22	 



     


    

 


		(C)	any payment hereunder with respect to such termination shall be calculated pursuant to Section
6 of the Agreement as if (x) an Early Termination Date had been designated in respect of a Transaction having terms identical to
the Transaction and a Number of Options equal to the Affected Number of Options, (y) Counterparty were the sole Affected Party
with respect to such Additional Termination Event and (z) the terminated portion of the Transaction were the sole Affected Transaction;
provided that the amount payable with respect to such termination shall not be greater than (1) the Applicable Percentage,
multiplied by (2) the Affected Number of Options, multiplied by (3) (x) the sum of (i) the amount of cash paid (if
any) and (ii) the number of Shares delivered (if any) to the Holder (as such term is defined in the Indenture) of an Affected Convertible
Note upon conversion of such Affected Convertible Note, multiplied by the fair market value of one Share as determined by
the Calculation Agent, minus (y) USD 1,000;



 


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



 


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



 


		(ii)	Notwithstanding anything to the contrary in this Confirmation, upon any Make-Whole Conversion in
respect of which a “Notice of Conversion” (as such term is defined in the Indenture) that is effective as to Counterparty
has been delivered by the relevant converting Holder:



 


		(A)	Counterparty shall, within one Scheduled Valid Day of the “Conversion Date” (as such
term is defined in the Indenture) for such Make-Whole Conversion, provide written notice (a “Make-Whole Conversion Notice”)
to Dealer specifying the number of Convertible Notes surrendered for conversion on such “Conversion Date” (such Convertible
Notes, the “Make-Whole Convertible Notes”), and the giving of such Make-Whole Conversion Notice shall constitute
an Additional Termination Event as provided in this clause ‎(ii);



 


		(B)	upon receipt of any such Make-Whole Conversion Notice, Dealer shall designate an Exchange Business
Day as an Early Termination Date (which Exchange Business Day shall be no earlier than one Scheduled Valid Day following the “Conversion
Date” for such Make-Whole Conversion) with respect to the portion of the Transaction corresponding to a number of Options
(the “Make-Whole Number of Options”) equal to the lesser of (x) the number of Affected Convertible Notes minus
the “Make-Whole Number of Options” (as defined in the Base Call Option Confirmation), if any, that relate to such
Make-Whole Convertible Notes and (y) the Number of Options as of the “Conversion Date” for such Make-Whole Conversion;



 


		(C)	any payment hereunder with respect to such termination shall be calculated pursuant to Section
6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to
the Transaction and a Number of Options equal to the number of Make-Whole Number of Options, (2) Counterparty were the sole Affected
Party with respect to such Additional Termination Event and (3) the terminated portion of the Transaction were the sole Affected
Transaction (and, for the avoidance of doubt, in determining the amount payable pursuant to Section 6 of the Agreement, the Calculation
Agent shall not take into account any adjustments to the Option Entitlement that result from corresponding adjustments to the Conversion
Rate pursuant to Section 14.03 of the Supplemental Indenture); provided that the payment in respect of such early termination
by Dealer to Counterparty shall not be greater than the product of (x) the Applicable Percentage and (y) the excess of (I) (1)
the number of Make-Whole Conversion Options, multiplied by (2) the Conversion Rate (after taking into account any applicable
adjustments to the Conversion Rate pursuant to Section 14.03 of the Supplemental Indenture), multiplied by (3) the opening
price per Share on the Exchange on the “Conversion Date,” as determined by the Calculation Agent in good faith and
in a commercially reasonable manner, over (II) the aggregate principal amount of such Convertible Notes, as determined by the Calculation
Agent in good faith and in a commercially reasonable manner;



 




    	 	23	 



     


    

 


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



 


		(E)	the Transaction shall remain in full force and effect, except that, as of the “Conversion
Date” for such Make-Whole Conversion, the Number of Options shall be reduced by the Make-Whole Number of Options.



 


		(iii)	Notwithstanding anything to the contrary in this Confirmation, if an event of default with respect
to Counterparty occurs under the terms of the Convertible Notes as set forth in Section 6.02 of the Supplemental Indenture that
results in an acceleration of the Convertible Notes pursuant to the terms of the Indenture, then such event of default shall constitute
an Additional Termination Event applicable to the Transaction and, with respect to such Additional Termination Event, (A) Counterparty
shall be deemed to be the sole Affected Party, (B) the Transaction shall be the sole Affected Transaction and (C) Dealer shall
be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement.



 


		(m)	Amendments to Equity Definitions.



 


		(i)	Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “a
diluting or concentrative effect on the theoretical value of the relevant Shares” and replacing them with the words “an
economic effect on the Transaction”.



 


		(ii)	Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the fourth
line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the
semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or (C) the occurrence of any
of the events specified in Section 5(a)(vii) (1) through (9) of the ISDA Master Agreement with respect to that Issuer.”



 


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



 


		(n)	No Collateral, Netting or Setoff. Notwithstanding any provision of the Agreement
or any other agreement between the parties to the contrary, the obligations of Counterparty hereunder are not secured by any collateral.
Obligations under the Transaction shall not be netted or set off against any other obligations of the parties, whether arising
under the Agreement, this Confirmation, under any other agreement between the parties hereto, by operation of law or otherwise,
and no other obligations of the parties shall be netted or set off against obligations under the Transaction, whether arising under
the Agreement, this Confirmation, under any other agreement between the parties hereto, by operation of law or otherwise, and each
party hereby waives any such right of setoff.



 




    	 	24	 



     


    

 


		(o)	Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events.
If (a) an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with
respect to the Transaction or (b) the Transaction is cancelled or terminated upon the occurrence of an Extraordinary Event (except
as a result of (i) a Nationalization, Insolvency or Merger Event in which the consideration to be paid to holders of Shares consists
solely of cash, (ii) a Merger Event or Tender Offer that is within Counterparty’s control, or (iii) an Event of Default in
which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party other than an Event
of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the
type described in Section 5(b) of the Agreement, in each case that resulted from an event or events outside Counterparty’s
control), and if Dealer would owe any amount to Counterparty pursuant to Section 6(d)(ii) of the Agreement or any Cancellation
Amount pursuant to Article 12 of the Equity Definitions (any such amount, a “Payment Obligation”), then Dealer
shall satisfy the Payment Obligation by the Share Termination Alternative (as defined below), unless (a) Counterparty gives
irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Valid Day, no later than 12:00 p.m. (New York
City time) on the Merger Date, Tender Offer Date, Announcement Date (in the case of a Nationalization, Insolvency or Delisting),
Early Termination Date or date of cancellation, as applicable, of its election that the Share Termination Alternative shall not
apply and (b) Counterparty remakes the representation set forth in Section 8(f) as of the date of such election, in which case
the provisions of Section 12.7 or Section 12.9 of the Equity Definitions, or the provisions of Section 6(d)(ii) of the Agreement,
as the case may be, shall apply.



 


	 	Share Termination Alternative:	If applicable, Dealer shall deliver to Counterparty the Share Termination Delivery Property on, or within a commercially reasonable period of time after, the date when the relevant Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable, in satisfaction of such Payment Obligation in the manner reasonably requested by Counterparty free of payment.
	 	 	 
	 	Share Termination Delivery Property:	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price.  The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.  
	 	 	 
	 	Share Termination Unit Price:	The value to Dealer of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property, to the extent doing so is a commercially reasonable approximation of fair value.


 




    	 	25	 



     


    

 


	 	Share Termination Delivery Unit:	One Share or, if the Shares have changed into cash or any other property or the right to receive cash or any other property as the result of a Nationalization, Insolvency or Merger Event (any such cash or other property, the “Exchange Property”), a unit consisting of the type and amount of such Exchange Property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Nationalization, Insolvency or Merger Event, as determined by the Calculation Agent.
	 	 	 
	 	Failure to Deliver:	Applicable
	 	 	 
	 	Other applicable provisions:	If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions and the provisions set forth opposite the caption “Representation and Agreement” in Section 2 will be applicable, except that all references in such provisions to “Physically-settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”.  “Share Termination Settled” in relation to the Transaction means that Share Termination Alternative is applicable to the Transaction.


 


		(p)	Registration. Counterparty hereby agrees that if, in the good faith reasonable judgment
of Dealer, the Shares (“Hedge Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant
to the Transaction cannot be sold in the public market by Dealer without registration under the Securities Act, Counterparty shall,
at its election, either (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer
an effective registration statement under the Securities Act and enter into an agreement, in form and substance reasonably satisfactory
to Dealer, substantially similar to underwriting agreements customary for registered secondary offerings of a substantially similar
size; provided, however, that if Dealer, in its sole reasonable discretion, is not satisfied with access to due diligence
materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred
to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow
Dealer to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private
placement purchase agreements customary for private placements of equity securities of a substantially similar size, in form and
substance reasonably satisfactory to Dealer, including customary representations, covenants, blue sky and other governmental filings
and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of the Hedge Shares from
Dealer), opinions and certificates and such other documentation as is customary for private placements agreements, all reasonably
acceptable to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are
necessary, in its reasonable judgment, to compensate Dealer for any discount from the public market price of the Shares incurred
on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from Dealer at the Relevant Price on such
Exchange Business Days, and in the amounts, requested by Dealer. For the avoidance of doubt, unless Counterparty elects to repurchase
the Hedge Shares pursuant to clause (iii) of this Section 9(p), nothing in this Confirmation shall be interpreted as requiring
Counterparty to repurchase the Hedge Shares or otherwise pay any amount of cash to Dealer pursuant to this Section 9(p) and under
no circumstances shall Counterparty be required to repurchase the Hedge Shares or otherwise pay any amount of cash to Dealer pursuant
to this Section 9(p).



 




    	 	26	 



     


    

 


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



 


		(i)	promptly following the public announcement of the results of any election by the holders of Shares
with respect to the consideration due upon consummation of any Merger Event, Counterparty shall give Dealer written notice of (x)
the weighted average of the types and amounts of consideration that holders of Shares have elected to receive upon consummation
of such Merger Event or (y) if no holders of Shares affirmatively make such election, the types and amounts of consideration actually
received by holders of Shares (the date of such notification, the “Consideration Notification Date”); provided
that in no event shall the Consideration Notification Date be later than the date on which such Merger Event is consummated; and



 


		(ii)	promptly following any adjustment to the Convertible Notes in connection with any Potential Adjustment
Event, Merger Event or Tender Offer, Counterparty shall give Dealer written notice of the details of such adjustment.



 


		(r)	Tax Disclosure. Effective from the date of commencement of discussions concerning
the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons,
without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including
opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure.



 


		(s)	Right to Extend. Dealer may postpone or add, in whole or in part, any Valid Day or
Valid Days during the Settlement Averaging Period or any other date of valuation, payment or delivery by Dealer, with respect to
some or all of the Options hereunder, if Dealer reasonably determines, based on the advice of counsel in the case of the immediately
following clause (ii), that such action is reasonably necessary or appropriate (i) to preserve Dealer’s commercially reasonable
hedging or hedge unwind activity hereunder in light of existing liquidity conditions that are materially different from those in
existence as of the Trade Date or (ii) to enable Dealer to effect purchases of Shares in connection with its commercially reasonable
hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser
of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and
procedures applicable to Dealer; provided that no such Valid Day or other date of valuation, payment or delivery may be
postponed or added more than 50 Valid Days after the original Valid Day or other date of valuation, payment or delivery, as the
case may be.



 


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



 




    	 	27	 



     


    

 


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



 


		(v)	Wall Street Transparency and Accountability Act. In connection with Section 739 of
the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither
the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall
limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement
this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs,
regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including,
but not limited to, rights arising from Change in Law, Hedging Disruption, an Excess Ownership Position, or Illegality (as defined
in the Agreement)).



 


		(w)	Agreements and Acknowledgements Regarding Hedging. Counterparty understands, acknowledges
and agrees that: (A) at any time on and prior to the Expiration Date, Dealer and its affiliates may buy or sell Shares or other
securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to adjust its
hedge position with respect to the Transaction; (B) Dealer and its affiliates also may be active in the market for Shares other
than in connection with hedging activities in relation to the Transaction; (C) Dealer shall make its own determination as to whether,
when or in what manner any hedging or market activities in securities of Issuer shall be conducted and shall do so in a manner
that it deems appropriate to hedge its price and market risk with respect to the Relevant Prices; and (D) any market activities
of Dealer and its affiliates with respect to Shares may affect the market price and volatility of Shares, as well as the Relevant
Prices, each in a manner that may be adverse to Counterparty.



 


		(x)	Early Unwind. In the event the sale of the “Option Securities” (as defined
in the Underwriting Agreement) is not consummated with the Underwriter for any reason, or Counterparty fails to deliver to Dealer
opinions of counsel as required pursuant to Section 9(a), in each case by 5:00 p.m. (New York City time) on the Premium Payment
Date, or such later date as agreed upon by the parties (the Premium Payment Date or such later date 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 under the Transaction
shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to
make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to
be performed in connection with the Transaction either prior to or after the Early Unwind Date. Each of Dealer and Counterparty
represents and acknowledges to the other that, upon an Early Unwind, all obligations with respect to the Transaction shall be deemed
fully and finally discharged.



 


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



 


		(z)	Severability; Illegality. If compliance by either party with any provision of the
Transaction would be unenforceable or illegal, (a) the parties shall negotiate in good faith to resolve such unenforceability
or illegality in a manner that preserves the economic benefits of the transactions contemplated hereby and (b) the other provisions
of the Transaction shall not be invalidated, but shall remain in full force and effect.



 




    	 	28	 



     


    

 


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



 


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



 


		(cc)	Other Adjustments Pursuant to the Equity Definitions. Notwithstanding anything to
the contrary in this Confirmation, solely for the purpose of adjusting the Cap Price, the terms “Potential Adjustment Event,”
“Merger Event,” and “Tender Offer” shall each have the meanings assigned to such term in the Equity Definitions
(in the case of a Potential Adjustment Event, as amended by Section 9(m)(i), and in the case of a Merger Event or Tender Offer,
as amended by the provisions opposite the caption “Announcement Event” in Section 3), and upon the occurrence of a
Merger Date, the occurrence of a Tender Offer Date, or declaration by Counterparty of the terms of any Potential Adjustment Event,
respectively, as such terms are defined in the Equity Definitions, the Calculation Agent may, in its commercially reasonable discretion,
adjust the Cap Price to preserve the fair value of the Options to Dealer; provided that in no event shall the Cap Price
be less than the Strike Price.



 


		(dd)	Standard for Adjustments. For the avoidance of doubt, whenever the Calculation Agent
or Determining Party is called upon to make an adjustment pursuant to the terms of this Confirmation or the Equity Definitions
to take into account the effect of an event, the Calculation Agent or Determining Party shall make such adjustment in conformity
with the provisions hereof in a commercially reasonable manner by reference to the effect of such event on the Hedging Party, assuming
that the Hedging Party maintains a commercially reasonable hedge position.



 


		(ee)	Withholding Tax imposed on payments to non-US counterparties. “Tax” as
used in Part 2(a) (Payer Tax Representation) and “Indemnifiable Tax” as defined in Section 14 shall not include (i)
any U.S. federal withholding Tax imposed or collected pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code
of 1986, as amended (the “Code”) and any current or future regulations or official interpretations thereof,
any agreement entered into pursuant to Section 1471(b) of the Code, and any fiscal or regulatory legislation, rules or practices
adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections (“FATCA
Withholding Tax”) or (ii) any U.S. federal withholding Tax imposed under Section 871(m) of the Code (or the U.S. Treasury
Regulations or other guidance issued thereunder). For the avoidance of doubt, the FATCA Withholding Tax is a Tax the deduction
or withholding of which is required by applicable law for purposes of Section 2(d).



 


		(ff)	Payee Representation. For purposes of Section 3(f) of this Agreement, Counterparty
makes the following representation to Dealer:



 




    	 	29	 



     


    

 


Counterparty is a
corporation established under the laws of the State of Delaware and is a “United States person” (as that term is defined
in Section 7701(a)(30) of the Code).


 


		(gg)	Tax Forms.



 


	Party Required to Deliver

Document	 	Form/Document/Certificate	 	Date by which to be

Delivered
	 	 	 	 	 
	Counterparty	 	A complete and duly executed United States Internal Revenue Service Form W-9 (or successor thereto.)	 	(i) Upon execution and delivery of this Agreement; (ii) promptly upon reasonable demand by Dealer; and (iii) promptly upon learning that any such Form previously provided by Counterparty has become obsolete or incorrect.
	 	 	 	 	 
	Dealer	 	A complete and duly executed United States Internal Revenue Service Form W-8ECI (or successor thereto).	 	(i) Upon execution and delivery of this Agreement; (ii) promptly upon reasonable demand by Counterparty; and (iii) promptly upon learning that any such Form previously provided by Dealer has become obsolete or incorrect.


 




    	 	30	 



     


    

 





 


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


 


	 	Very truly yours,


 


	 	
        ROYAL BANK OF CANADA

        by its agent

        RBC Capital Markets, LLC

         

	 	By:	/s/ Amy Disbrow
	 	Authorized Signatory
	 	Name: Amy Disbrow


 




    	 	 	 



     


    

 


Accepted and confirmed


as of the Trade Date:


 


	INTERCEPT PHARMACEUTICALS, INC.	 
	 	 	 
	By:	/s/ Bryan Yoon	 
	Authorized Signatory	 
	Name:	Bryan Yoon	 
	 	SVP – Legal Affairs