ex101-bofa_patkxbasebond






        Certain account details on page 16 have been redacted as they are both 1) immaterial and 2) the type of  information that the Registrant customarily treats as private and confidential. Redacted information is indicated  with [***].    Bank of America, N.A.  One Bryant Park  New York, NY 10036  December 7, 2021  To:  Patrick Industries, Inc.  107 W. Franklin Street,      P.O. Box 638      Elkhart, Indiana 46515  Attention:  Chief Financial Officer  Telephone No.: (574) 294-7511  Facsimile No.: (574) 522-5213    Re:  Base 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 Bank of America, N.A. (“Dealer”) and Patrick Industries, 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.  Each party further agrees that this  Confirmation together with the Agreement evidence a complete binding agreement between Counterparty and Dealer  as to the subject matter and terms of the Transaction to which this Confirmation relates, and shall supersede all prior  or contemporaneous written or oral communications with respect thereto.  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 Offering  Memorandum dated December 7, 2021 (the “Offering Memorandum”) relating to the Convertible Senior Notes due  2028 (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  225,000,000 (as increased by up to an aggregate principal amount of USD 33,750,000 if and to the extent that the  Initial Purchasers (as defined below) exercise their option to purchase additional Convertible Notes pursuant to the  Purchase Agreement (the “Purchase Agreement”) dated as of December 7, 2021, among Counterparty, the guarantors  party thereto, and BofA Securities, Inc., Truist Securities, Inc., and Wells Fargo Securities, LLC, as representatives  of the Initial Purchasers party thereto (the “Initial Purchasers”)) pursuant to an Indenture to be dated December 13,  2021 among Counterparty, the guarantors from time to time party thereto, and U.S. Bank National Association, as  trustee (the “Indenture”).  In the event of any inconsistency between the terms defined in the Offering Memorandum,  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 which are also  defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred to herein will conform  in all material respects to the descriptions thereof in the Offering Memorandum.  If any such definitions in the  Indenture or any such sections of the Indenture differ from the descriptions thereof in the Offering Memorandum, the  descriptions thereof in the Offering Memorandum will govern for purposes of this Confirmation.  The parties further  acknowledge that the Indenture section numbers used herein are based on the draft of the Indenture last reviewed by  Dealer as of the date of this Confirmation, and if any such section numbers are changed in the Indenture as executed,  the parties will amend this Confirmation in good faith and in a commercially reasonable manner to preserve the intent  of the parties.  Subject to the foregoing, references to the Indenture herein are references to the Indenture as in effect  on the date of its execution, and if the Indenture is amended or supplemented following such date (other than any  amendment or supplement (x) pursuant to Section 10.01(h) of the Indenture that, as reasonably determined by the  Calculation Agent in good faith and in a commercially reasonable manner, conforms the Indenture to the description  of Convertible Notes in the Offering Memorandum or (y) pursuant to Section 14.07 of the Indenture, subject, in the  case of this clause (y), to the second paragraph under “Method of Adjustment” in Section 3), any such amendment or  





 






    2       supplement will be disregarded for purposes of this Confirmation (other than as provided in Section 9(i)(iii) below)  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 on the date hereof (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)) on  the Trade Date and (ii) in respect of Section 5(a)(vi) of the Agreement, the election that the “Cross Default” provisions  shall apply to Dealer with a “Threshold Amount” of three percent of the shareholders’ equity of Bank of America  Corporation (“Dealer Parent”) as of the Trade Date; provided that (a) the phrase “or becoming capable at such time  of being declared” shall be deleted from clause (1) of such Section 5(a)(vi) of the Agreement, (b) the following  sentence shall be added to the end thereof: “Notwithstanding the foregoing, a default under subsection (2) hereof shall  not constitute an Event of Default if (i) the default was caused solely by error or omission of an administrative or  operational nature; (ii) funds were available to enable the party to make the payment when due; and (iii) the payment  is made within two Local Business Days of such party’s receipt of written notice of its failure to pay.”; and (c) 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 a party’s banking business).  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 Transaction hereunder shall be the  sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Counterparty  or any confirmation or other agreement between Dealer and Counterparty pursuant to which an ISDA Master  Agreement is deemed to exist between Dealer and Counterparty, then notwithstanding anything to the contrary in such  ISDA Master Agreement, such confirmation or agreement or any other agreement to which Dealer and Counterparty  are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such existing or  deemed ISDA Master Agreement.  2. The terms of the particular Transaction to which this Confirmation relates are as follows:  General Terms.  Trade Date: December 7, 2021  Effective Date: The second Exchange Business Day immediately prior to  the Premium Payment Date, subject to Section 9(v).  Option Style: “Modified American”, as described under “Procedures for  Exercise” below  Option Type: Call  Buyer: Counterparty  Seller: Dealer  Shares: The common stock of Counterparty, without par value  (Exchange symbol “PATK”).  Number of Options: 225,000.  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: 33 1/3 %  





 






    3       Option Entitlement: A number equal to the product of the Applicable  Percentage and 9.9887.  Strike Price: USD 100.1131  Premium:  USD 16,650,000   Premium Payment Date:  December 13, 2021  Exchange:  The Nasdaq Global Select Market  Related Exchange(s):  All Exchanges; provided that Section 1.26 of the Equity  Definitions shall be amended to add the words “United  States” before the word “exchange” in the tenth line of such  section.  Excluded Provisions: Section 14.04(h) and Section 14.03 of the Indenture.  Procedures for Exercise.  Conversion Date: With respect to any conversion of a Convertible Note, 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 Indenture; provided that if Counterparty has  not delivered to Dealer a related Notice of Exercise, then  in no event shall a Conversion Date be deemed to occur  hereunder (and no Option shall be exercised or deemed to  be exercised hereunder) with respect to any surrender of a  Convertible Note for conversion in respect of which  Counterparty has elected to designate a financial institution  for exchange in lieu of conversion of such Convertible  Note pursuant to Section 14.12 of the Indenture.  Free Convertibility Date: June 1, 2028  Expiration Time:  The Valuation Time  Expiration Date:  December 1, 2028, 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 in respect of which a “Notice of  Conversion” (as 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 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.   Notwithstanding the foregoing, in no event shall the  number of Options that are exercised or deemed exercised  hereunder exceed the Number of Options.  





 






    4       Notice of Exercise: Notwithstanding anything to the contrary in the Equity  Definitions or under “Automatic Exercise” above, in order  to exercise any Options, Counterparty must notify Dealer  in writing before 5:00 p.m. (New York City time) on the  Scheduled Valid Day immediately preceding the scheduled  first day of the Settlement Averaging Period (the “Exercise  Notice Deadline”) for the Options being exercised of (i)  the aggregate principal amount of Convertible Notes as to  which a Conversion Date has occurred in respect of such  Exercise Notice Deadline (including, if applicable, whether  all or any portion of such Convertible Notes (x) are  Convertible Notes as to which additional Shares would be  added to the “Conversion Rate” (as defined in the  Indenture) pursuant to Section 14.03 of the Indenture  and/or (y) have a Conversion Date occurring on or after the  date that Counterparty issues a “Notice of Redemption” (as  defined in the Indenture) and prior to the close of business  on the Scheduled Valid Day immediately preceding the  related “Redemption Date” (as defined in the Indenture)  (each such conversion referred to in this clause (y), a  “Redemption Conversion”)), (ii) the scheduled first day  of the Settlement Averaging Period and the scheduled  Settlement Date, (iii) the Relevant Settlement Method for  such Options, and (iv) if the settlement method for the  related Convertible Notes is not Net Share Settlement (as  defined below), the fixed percentage of the consideration  due upon conversion per Convertible Note in excess of the  principal amount thereof that Counterparty has elected to  deliver to Holders (as such term is defined in the Indenture)  of the related Convertible Notes in cash (the “Cash  Percentage”); provided that notwithstanding the  foregoing, in respect of any Options relating to Convertible  Notes with a Conversion Date occurring prior to the Free  Convertibility Date, such notice (and the related exercise  of Options) shall be effective if given after the Exercise  Notice Deadline, but prior to 4:00 p.m. (New York City  time) on the fifth Scheduled Valid Day following the  Exercise Notice Deadline, in which event the Calculation  Agent shall have the right to adjust the delivery obligation  under this Confirmation as appropriate to reflect the  commercially reasonable additional costs (including, but  not limited to, additional costs related to hedging  mismatches and market losses and gains) and  commercially reasonable expenses incurred by Dealer in  connection with commercially reasonable hedging  activities (including the unwinding of any commercially  reasonable Hedge Positions) as a result of Dealer not  having received such notice on or prior to the Exercise  Notice Deadline, and Dealer’s obligation to make any  payment or delivery in respect of such exercise shall not be  extinguished; and  provided further that in respect of any  Options relating to Convertible Notes with a Conversion  Date occurring on or after the Free Convertibility Date  (other than any Redemption Conversion), (A) such notice  may be given on or prior to the Scheduled Valid Day  immediately preceding the Expiration Date and need only  





 






    5       specify the information required in clause (i) above, and  (B) if the Relevant Settlement Method for such Options is  (x) Cash Settlement or (y) Combination Settlement, Dealer  shall have received 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 Free  Convertibility Date specifying the information required in  clauses (iii) and (iv) above.  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 Cash Percentage  in connection with the settlement of the conversion of the  related Convertible Notes.  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 and in a commercially  reasonable manner.  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 United States 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  Exercise or Notice of Final Settlement Method, as  applicable, for such Option.   Relevant Settlement Method: In respect of any Option:   (i) if Counterparty has not elected to settle all or any  portion of its conversion obligations in respect of the  related Convertible Note in excess of the principal amount  in cash, either by specifying a Cash Percentage of 0% or  not timely specifying a Cash Percentage, in each case  pursuant to Section 14.02(a) of the Indenture, then the  





 






    6       Relevant Settlement Method for such Option shall be Net  Share Settlement;  (ii) if Counterparty has elected to settle its conversion  obligations in respect of the related Convertible Note in  excess of its principal amount in a combination of cash and  Shares by specifying a Cash Percentage less than 100% but  greater than 0% pursuant to Section 14.02(a) of the  Indenture, 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 in  excess of its principal amount entirely in cash pursuant to  Section 14.02(a) of the 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 any 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 applicable 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 for such Valid Day (the  “Daily Combination Settlement Cash Amount”)  equal to the product of (1) the Cash Percentage 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  





 






    7       (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  on 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 any 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.  If any reduction is made to the  delivery obligation hereunder as a result of the foregoing  proviso, such reduction shall first be made to any  Combination Settlement Share Amount.   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 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) the  Relevant Price on such Valid Day less 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.  Make-Whole Adjustment: Notwithstanding anything to the contrary herein, in respect  of any exercise of Options relating to a conversion of  Convertible Notes for which additional Shares will be  added to the “Conversion Rate” (as defined in the  Indenture) as determined pursuant to Section 14.03 of the  





 






    8       Indenture, the Daily Option Value shall be calculated as if  the Option Entitlement included the Applicable Percentage  of the number of such additional Shares as determined with  reference to the adjustment set forth in such Section 14.03  of the Indenture; provided that if the sum of (i) the product  of (a) the number of Shares (if any) deliverable by Dealer  to Counterparty per exercised Option and (b) the  Applicable Limit Price on the Settlement Date and (ii) the  amount of cash (if any) payable by Dealer to Counterparty  per exercised Option would otherwise exceed the amount  per Option, as determined by the Calculation Agent, that  would be payable by Dealer under Section 6 of the  Agreement if (x) the relevant  Conversion Date were an  Early Termination Date resulting from an Additional  Termination Event with respect to which the Transaction  was the sole Affected Transaction and Counterparty was  the sole Affected Party and (y) Section 14.03 of the  Indenture were deleted, then each Daily Option Value shall  be proportionately reduced to the extent necessary to  eliminate such excess, with such reduction first being made  to any Shares deliverable hereunder.  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 payable to the Holder of the related  Convertible Note upon conversion of such Convertible  Note and (B) the number of Shares, if any, deliverable to  the Holder of the related Convertible Note upon conversion  of such Convertible Note multiplied by the Applicable  Limit Price on the Settlement Date for such Option, over  (ii) USD 1,000.  Applicable Limit Price: On any day, the opening price as displayed under the  heading “Op” on Bloomberg page PATK <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 United States national or regional securities  exchange on which the Shares are then listed or, if the  Shares are not then listed on a United States 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  United States 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 or executive order to close or be closed.  





 






    9       Relevant Price: On any Valid Day, the per Share volume-weighted average  price as displayed under the heading “Bloomberg VWAP”  on Bloomberg page PATK <equity> AQR (or its  equivalent successor if such page is not available) in  respect of the period from the scheduled opening time of  the Exchange to the Scheduled Closing Time of the  Exchange on such Valid Day (or if such volume-weighted  average price is unavailable at such time, the market value  of one Share on such Valid Day, as determined by the  Calculation Agent in good faith and a commercially  reasonable manner using, if practicable, a volume- weighted average method).  The Relevant Price will 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:  (i) if the related Conversion Date occurs (x) prior to the  Free Convertibility Date or (y) in respect of a  Redemption Conversion, in each case, the 40  consecutive Valid Days commencing on, and  including, the second Valid Day following such  Conversion Date; provided that if the Notice of  Exercise 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 80  consecutive Valid Day period commencing on, and  including, the second Valid Day immediately  following such Conversion Date; or  (ii) if the related Conversion Date occurs on or  following the Free Convertibility Date (other than  in respect of any Redemption Conversion), the 40  consecutive Valid Days commencing on, and  including, the 41st Scheduled Valid Day  immediately prior to the Expiration Date; provided  that if the Notice of Exercise or Notice of Final  Settlement Method, as applicable, 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 80 consecutive Valid Days  commencing on, and including, the 81st Scheduled  Valid Day immediately prior to the Expiration Date.  Settlement Date: For any Option, the second 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”  





 






    10       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, (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”)) and (iv) the “Representation and  Agreement” contained in Section 9.11 of the Equity  Definitions shall be deemed modified accordingly.  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,” “Daily Net Settlement Amounts” 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 Indenture or the fifth  sentence of Section 14.04(d) of the Indenture).   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, acting in good faith and commercially reasonable in  accordance with the terms of the Indenture, 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.  





 






    11        Notwithstanding the foregoing and “Consequences of  Merger Events / Tender Offers” below:  (i) if the Calculation Agent in good faith and in a  commercially reasonable manner disagrees with  any adjustment to the Convertible Notes (based  on the terms of the Indenture and that is a basis of  any calculation hereunder) that involves an  exercise of discretion by Counterparty or its board  of directors (including, without limitation,  pursuant to Section 14.05 of the Indenture,  Section 14.07 of the 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 taking into account the relevant  provisions of the Indenture;  (ii) in connection with any Potential Adjustment  Event as a result of an event or condition set forth  in Section 14.04(b) of the Indenture or Section  14.04(c) of the Indenture where, in either case, the  period for determining “Y” (as such term is used  in Section 14.04(b) of the Indenture) or “SP0” (as  such term is used in Section 14.04(c) of the  Indenture), as the case may be, begins before  Counterparty has publicly announced the event or  condition giving rise to such Potential Adjustment  Event, then the Calculation Agent shall have the  right to adjust in good faith and in a commercially  reasonable manner, taking into account the terms  of the Indenture, any variable relevant to the  exercise, settlement or payment for the  Transaction as appropriate to reflect the  commercially reasonable costs (including, but not  limited to, hedging mismatches and market losses  customary for transactions similar to the  Transaction with counterparties similar to  Counterparty) and commercially reasonable,  documented out-of-pocket expenses incurred by  Dealer in connection with its commercially  reasonable hedging activities customary for  transactions similar to the Transaction with  counterparties similar to Counterparty as a result  of such event or condition not having been  publicly announced prior to the beginning of such  period; and  (iii) if any Potential Adjustment Event is declared and  (a) the event or condition giving rise to such  





 






    12       Potential Adjustment Event is subsequently  amended, modified, cancelled or abandoned, (b)  the “Conversion Rate” (as defined in the  Indenture) is otherwise not adjusted at the time or  in the manner contemplated by the relevant  Dilution Adjustment Provision based on such  declaration or (c) the “Conversion Rate” (as  defined in the Indenture) is adjusted as a result of  such Potential Adjustment Event and  subsequently re-adjusted (each of clauses (a), (b)  and (c), a “Potential Adjustment Event  Change”) then, in each case, the Calculation  Agent shall have the right to adjust, in good faith  and in a commercially reasonable manner, taking  into account the terms of the Indenture, any  variable relevant to the exercise, settlement or  payment for the Transaction as appropriate to  reflect the costs (including, but not limited to,  hedging mismatches and market losses customary  for transactions similar to the Transaction with  counterparties similar to Counterparty) and  commercially reasonable, documented out-of- pocket expenses incurred by Dealer in connection  with its commercially reasonable hedging  activities customary for transactions similar to the  Transaction with counterparties similar to  Counterparty as a result of such Potential  Adjustment Event Change.  Dilution Adjustment Provisions: Sections 14.04(a), (b), (c), (d) and (e) and Section 14.05 of  the Indenture.  Extraordinary Events applicable to the Transaction:  Merger Events: Applicable; provided that notwithstanding Section 12.1(b)  of the Equity Definitions, a “Merger Event” means the  occurrence of any event or condition set forth in the  definition of “Merger Event” in Section 14.07 of the  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 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, in a  commercially reasonable manner, 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, 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  





 






    13       with such Merger Event or Tender Offer, as the case may  be, subject to the second paragraph under “Method of  Adjustment”; provided, however, that no such adjustment  shall be made in respect of any adjustment to the  Conversion Rate pursuant to any Excluded Provision;  provided further that in respect of any election by the  holders of Shares with respect to the consideration due  upon consummation of any Merger Event, the Calculation  Agent shall have the right to adjust any variable relevant to  the exercise, settlement or payment for the Transaction as  appropriate to compensate Dealer for any losses (including,  without limitation, market losses customary for  transactions similar to the Transaction with counterparties  similar to Counterparty) solely as a result of any mismatch  on its Hedge Position, assuming Dealer maintains a  commercially reasonable Hedge Position, and the type and  amount of consideration actually paid or issued to the  holders of Shares in respect of such Merger Event;  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 organized under the laws of  the United States, any State thereof or the District of  Columbia, then, in either case, Cancellation and Payment  (Calculation Agent Determination) may apply at Dealer’s  commercially reasonable discretion.  Nationalization, Insolvency or Delisting: Cancellation and Payment (Calculation Agent  Determination); provided that, in addition to the provisions  of Section 12.6(a)(iii) of the Equity Definitions, it will also  constitute a Delisting if the 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 phrase  "the interpretation" in the third line thereof with the phrase  ", or the public announcement of, the formal or informal  interpretation", (ii) replacing the word “Shares” where it  appears in clause (X) thereof with the words “Hedge  Position” and (iii) replacing the parenthetical beginning  after the word “regulation” in the second line thereof the  words “(including, for the avoidance of doubt and without  limitation, (x) any tax law or (y) adoption, effectiveness or  





 






    14       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 (a) inserting the following  words at the end of clause (A) thereof:  “in the  manner contemplated by the Hedging Party on the  Trade Date” and (b) inserting the following two  phrases at the end of such Section:   “, provided that any such inability that occurs solely  due to the deterioration of the creditworthiness of  the Hedging Party shall not be deemed a Hedging  Disruption.  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.”; 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.   All calculations by Hedging Party shall be made in good  faith and in a commercially reasonable manner.  Following  any calculation by Hedging Party hereunder, upon written  request by Counterparty, Hedging Party will provide to  Counterparty by email to the email address provided by  Counterparty in such written request a report (in a  commonly used file format for the storage and  manipulation of financial data) displaying in reasonable  detail the basis for such calculation; provided that in no  event will Hedging Party be obligated to share with  Counterparty any proprietary or confidential data or  information or any proprietary or confidential models used  by it or any information that is subject to an obligation not  to disclose such information.  Determining Party: For all applicable Extraordinary Events, Dealer.  All  calculations by Determining Party shall be made in good  faith and in a commercially reasonable manner.  Following  any calculation by Determining Party hereunder, upon  written request by Counterparty, Determining Party will  provide to Counterparty by email to the email address  provided by Counterparty in such written request a report  (in a commonly used file format for the storage and  





 






    15       manipulation of financial data) displaying in reasonable  detail the basis for such calculation; provided that in no  event will Determining Party be obligated to share with  Counterparty any proprietary or confidential data or  information or any proprietary or confidential models used  by it or any information that is subject to an obligation not  to disclose such information.   Non-Reliance: Applicable   Agreements and Acknowledgments  Regarding Hedging Activities: Applicable  Additional Acknowledgments: Applicable  4. Calculation Agent.  Dealer, whose judgments, adjustment, 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 sole  Defaulting Party, if the Calculation Agent fails to timely  make any calculation, adjustment or determination  required to be made by the Calculation Agent hereunder or  to perform any obligation of the Calculation Agent  hereunder and such failure continues for five (5) Exchange  Business Days following notice to the Calculation Agent  by Counterparty of such failure, 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, adjustment or calculation by the Calculation  Agent hereunder, upon a request by Counterparty, the  Calculation Agent shall promptly (but in any event within  five Scheduled Trading 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,  adjustment or calculation (including any assumptions used  in making such determination, adjustment or calculation),  it being understood that the Calculation agent shall not be  obligated to disclose any proprietary models used by it for  such determination, adjustment or calculation or any  information that may be proprietary or confidential or  subject to an obligation not to disclose such information.  Hedging Adjustments: For the avoidance of doubt, whenever the Calculation  Agent, Determining Party or Dealer is permitted to make  an adjustment pursuant to the terms of this Confirmation or  the Equity Definitions to take into account the economic  effect of an event (other than, for the avoidance of doubt,  any adjustment that is required to be made by reference to  





 






    16       the Indenture), the Calculation Agent, Determining Party  or Dealer shall make such adjustment, if any, by reference  to the effect of such event on Dealer assuming that Dealer  maintains a commercially reasonable hedge position.  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:  [***]  SWIFT: [***]  Bank Routing: [***]  Account Name: [***]  Account No. : [***]    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  Bank of America, N.A.  One Bryant Park  New York, NY 10036  7. Notices.   (a) Address for notices or communications to Counterparty:  Patrick Industries, Inc.  107 W. Franklin Street,   P.O. Box 638   Elkhart, Indiana  46515  Attention:  Chief Financial Officer   Telephone No.: (574) 294-7511  Facsimile No.: (574) 522-5213    (b) Address for notices or communications to Dealer:  Bank of America, N.A.  One Bryant Park  New York, NY 10036  Attention: Strategic Equity Solutions Group, 8th Floor  Telephone: 646-855-8900  Email:  dg.issuer_derivatives_notices@bofa.com  





 






    17         8. Representations and Warranties of Counterparty.  Counterparty hereby represents and warrants to Dealer on the date hereof and on and as of the Premium  Payment Date that:    (a) Counterparty 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, 2020, as updated by any subsequent filings, to which Counterparty  or any of its subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or  to which Counterparty or any of its subsidiaries is subject, or constitute a default under, or result in  the creation of any lien under, any such agreement or instrument.  (c) To the knowledge of Counterparty, 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; provided that  Counterparty makes no representation or warranty regarding any such requirement that is applicable  generally to the ownership of equity securities by Dealer or any of its affiliates solely as a result of  it or any of such affiliate being financial institutions or broker-dealers.  (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.  (g) To Counterparty’s actual 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  





 






    18       associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total  assets of at least USD 50 million.  (i) The assets of Counterparty do not constitute “plan assets” under the Employee Retirement Income  Security Act of 1974, as amended, the Department of Labor Regulations promulgated thereunder or  similar law.  (j) On each of the Trade Date and the Premium Payment Date, Counterparty is not “insolvent” (as such  term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States  Code) (the “Bankruptcy Code”)) and Counterparty would be able to purchase a number of Shares  equal to the Number of Shares in compliance with the laws of the jurisdiction of Counterparty’s  incorporation.  (k) Counterparty represents and warrants that it and any of its subsidiaries has not applied, and shall  not, until after the first date on which no portion of the Transaction remains outstanding following  any final exercise and settlement, cancellation or early termination of the Transaction, apply, for a  loan, loan guarantee, direct loan (as that term is defined in the Coronavirus Aid, Relief and  Economic Security Act (the “CARES Act”)) or other investment, or to receive any financial  assistance or relief under any program or facility (collectively “Financial Assistance”) that (a) is  established under applicable law (whether in existence as of the Trade Date or subsequently enacted,  adopted or amended), including without limitation the CARES Act and the Federal Reserve Act, as  amended, and (b) (i) requires under applicable law (or any regulation, guidance, interpretation or  other pronouncement of a governmental authority with jurisdiction for such program or facility) as  a condition of such Financial Assistance, that the Counterparty comply with any requirement not to,  or otherwise agree, attest, certify or warrant that it has not, as of the date specified in such condition,  repurchased, or will not repurchase, any equity security of Counterparty, and that Counterparty has  not, as of the date specified in the condition, made a capital distribution or will not make a capital  distribution, or (ii) where the terms of the Transaction would cause Counterparty to fail to satisfy  any condition for application for or receipt or retention of the Financial Assistance (collectively  “Restricted Financial Assistance”); provided that Counterparty or any of its subsidiaries may  apply for Restricted Financial Assistance if Counterparty either (a) determines based on the advice  of outside counsel of national standing that the terms of the Transaction would not cause  Counterparty or any of its subsidiaries to fail to satisfy any condition for application for or receipt  or retention of such Financial Assistance based on the terms of the program or facility as of the date  of such advice or (b) delivers to Dealer evidence or other guidance from a governmental authority  with jurisdiction for such program or facility that the Transaction is permitted under such program  or facility (either by specific reference to the Transaction or by general reference to transactions  with the attributes of the Transaction in all relevant respects). Counterparty further represents and  warrants that the Premium is not being paid, in whole or in part, directly or indirectly, with funds  received under or pursuant to any program or facility, including the U.S. Small Business  Administration’s “Paycheck Protection Program”, that (a) is established under applicable law  (whether in existence as of the Trade Date or subsequently enacted, adopted or amended), including  without limitation the CARES Act and the Federal Reserve Act, as amended, and (b) requires under  such applicable law (or any regulation, guidance, interpretation or other pronouncement of a  governmental authority with jurisdiction for such program or facility) that such funds be used for  specified or enumerated purposes that do not include the purchase of the Transaction (either by  specific reference to the Transaction or by general reference to transactions with the attributes of  the Transaction in all relevant respects).  9. Other Provisions.  (a) Opinions.  Counterparty shall deliver to Dealer one or more opinions of counsel, dated as of the  Premium Payment Date, with respect to the matters set forth in Sections 8(a) through (c) of this  Confirmation (except as to whether this Confirmation constitutes Counterparty’s valid and binding  obligation or is enforceable in accordance with its terms); provided that any such opinion of counsel  may contain customary exceptions and qualifications.  Delivery of such opinion to Dealer shall be  





 






    19       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.  (b) Repurchase Notices.  Counterparty shall, on or prior to the opening of the regular trading session  for the Shares on the Exchange on the date that is one Scheduled Trading Day following any date  on which Counterparty obtains actual knowledge that it has effected any repurchase of Shares, give  Dealer a written notice of such repurchase (a “Repurchase Notice”) if following such repurchase,  the number of outstanding Shares as determined on such day is (i) less than 22.3 million (in the case  of the first such notice) or (ii) thereafter more than 1.2 million less than the number of Shares  included in the immediately preceding Repurchase Notice.  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 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 hedging activities or cessation of hedging activities and any losses  in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and  reasonable, documented out-of-pocket expenses (including reasonable external attorney’s fees),  joint or several, which an Indemnified Person may become subject to, in each case, as a result of  Counterparty’s failure to provide Dealer with a Repurchase Notice when 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 reasonable, documented fees and expenses of such  counsel related to such proceeding.  Counterparty shall not be liable for any such settlement of any  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 be relieved from liability to the extent that any Indemnified Person  fails promptly to notify Counterparty of any action commenced against it in respect of which  indemnity may be sought hereunder to the extent Counterparty is materially prejudiced as a result  thereof.  Counterparty shall not, without the prior written consent of the Indemnified Person, effect  any settlement of any such proceeding that is pending or threatened 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.  If the  indemnification provided for in this paragraph is unavailable to an Indemnified Person or  insufficient in respect of any 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 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 a distribution meeting the requirements of the exception  set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M.  Counterparty shall not, until the  





 






    20       second Scheduled Trading Day immediately following the Effective Date, engage in any such  distribution.  (d) 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 manipulate the price of the Shares (or any security convertible into or  exchangeable for the Shares) in violation of the Exchange Act.  (e) 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(n) or 9(s) of this Confirmation;  (B) Any Transfer Options shall only be transferred or assigned to a third party that is  a United States person (as defined in the Internal Revenue Code of 1986, as  amended);  (C) 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;  (D) 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;  (E) An Event of Default, Potential Event of Default or Termination Event will not  occur as a result of such transfer and assignment;  (F) Without limiting the generality of clause (B), 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 (D) and (E) will not occur upon or after  such transfer and assignment; and  (G) 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, transfer or assign all or any part of its rights or obligations under the  Transaction (A) without Counterparty’s consent, to any affiliate of Dealer (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 customary guarantee in a form used by Dealer generally for  similar transactions, by Dealer or Dealer Parent, or (B) with Counterparty’s prior written  consent, such consent not to be unreasonably withheld or delayed, to any other nationally  





 






    21       recognized dealer in over-the-counter corporate equity derivatives 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 or assignment 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; provided that, under the  applicable law effective on the date of such assignment, (1) Counterparty will not, as a  result of such transfer or assignment, receive from the transferee or assignee on any  payment date an amount under Section 2(d)(i)(4) of the Agreement less than the amount  that Counterparty would have received from Dealer in the absence of such transfer or  assignment, except to the extent of any deduction or withholding that results from a Change  in Tax Law occurring after the date of such transfer and/or assignment; (2) such transfer or  assignment does not cause a deemed exchange for Counterparty of the Transaction under  Section 1001 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”); and  (3) no Event of Default, Potential Event of Default or Termination Event will occur as a  result of such transfer and 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, acting in  good faith, is unable after using its commercially reasonable efforts to effect a transfer or  assignment of Options to a third party in accordance with the preceding sentence 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(l) shall apply to any amount that is payable by Dealer to  Counterparty pursuant to this sentence as if Counterparty was not the Affected Party).   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 any of its affiliates or any other  person subject to aggregation with Dealer for purposes of the “beneficial ownership” test  under Section 13 of the Exchange Act, or any “group” (within the meaning of Section 13  of the Exchange Act) of which Dealer is or may be deemed to be a part beneficially owns  (within the meaning of Section 13 of the Exchange Act), without duplication, on such day  (or, to the extent that for any reason the equivalent calculation under Section 16 of the  Exchange Act and the rules and regulations thereunder results in a higher number, such  higher number) and (B) the denominator of which is the number of Shares outstanding on  such day.  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  





 






    22       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 an adverse effect on a Dealer Person, under  any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B)  1% of the number of Shares outstanding. Dealer shall provide Counterparty with written  notice of any transfer or assignment on, or as promptly as practicable after, the date of such  transfer or assignment.  (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 (each, a “Dealer Designated Affiliate”) 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; provided that such Dealer Designated Affiliate shall comply with  the provisions of the Transaction in the same manner as Dealer would have been required  to comply.  Dealer shall be discharged of its obligations to Counterparty under this  Confirmation solely to the extent such Dealer Designated Affiliate fully performs the  obligations designated by Dealer to such Dealer Designated Affiliate under this Section  9(e)(iii).  (f) Staggered Settlement.  If upon advice of counsel with respect to applicable legal, regulatory or self- regulatory requirements, including any requirements relating to Dealer’s commercially reasonable  hedging activities hereunder that would be customarily applicable to transactions similar to the  Transaction with counterparties similar to Counterparty as determined by the Calculation Agent,  Dealer reasonably determines that it would not be practicable or advisable, based upon such advice  of counsel, under such applicable legal, regulatory or self-regulatory requirements, 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; and  (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 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.  (g) [Reserved].  (h) Dividends.  If at any time during the period from and including the Effective Date, to but excluding  the Expiration Date, (i) an ex-dividend date for a regular quarterly cash dividend occurs with respect  to the Shares (an “Ex-Dividend Date”), and that dividend is less than the Regular Dividend on a  per Share basis or (ii) if no Ex-Dividend Date for a regular quarterly cash dividend occurs with  respect to the Shares in any quarterly dividend period of Counterparty, then the Calculation Agent  will make a corresponding adjustment to any one or more of the Strike Price, Number of Options,  





 






    23       Option Entitlement and/or any other variable relevant to the exercise, settlement or payment for the  Transaction to preserve the fair value of the Options to Dealer after taking into account such  dividend or lack thereof.  “Regular Dividend” shall mean USD 0.33 per Share per quarter.  Upon  any adjustment to the “Initial Dividend Threshold” (as defined in the Indenture) for the Convertible  Notes pursuant to the Indenture, the Calculation Agent will make a corresponding adjustment to the  Regular Dividend for the Transaction.  (i) Additional Termination Events.  (i) 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 6.01 of the Indenture that results in the Convertible Notes becoming or being  declared due and payable 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.  (ii) Promptly (but in any event within three Scheduled Trading Days) following any  redemption or repurchase and cancellation of Convertible Notes, including without  limitation pursuant to Article 15 of the Indenture in connection with a “Fundamental  Change” (as defined in the Indenture) (a “Convertible Notes Repurchase Event”),  Counterparty may notify Dealer in writing of such redemption or repurchase and  cancellation and the number of Convertible Notes in USD 1,000 principal amount so  redeemed or repurchased and cancelled (any such notice, a “Notes Repurchase Notice”),  which Notes Repurchase Notice shall contain an acknowledgement by Counterparty of its  responsibilities under applicable securities laws, and in particular Section 9 and Section  10(b) of the Exchange Act and the rules and regulations thereunder, in respect of such  redemption or repurchase and cancellation and its delivery of such Notes Repurchase  Notice. Notwithstanding anything to the contrary in this Confirmation, the receipt by  Dealer from Counterparty of any Notes Repurchase Notice shall constitute an Additional  Termination Event as provided in this paragraph.  Upon receipt of any such Notes  Repurchase Notice, Dealer shall promptly designate an Exchange Business Day following  receipt of such Notes Repurchase Notice (which in no event shall be earlier than the related  redemption or repurchase settlement date for such Convertible Notes) as an Early  Termination Date with respect to the portion of the Transaction corresponding to a number  of Options (the “Repurchase Options”) equal to the lesser of (A) the number of such  Convertible Notes specified in such Notes Repurchase Notice, and (B) the Number of  Options as of the date Dealer designates such Early Termination Date and, as of such date,  the Number of Options shall be reduced by the number of Repurchase Options. 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 Repurchase 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. For the avoidance of doubt, in determining  the amount payable in respect of such Additional Termination Event pursuant to Section 6  of the Agreement, Dealer shall assume (1) the relevant Convertible Notes Repurchase  Event and any conversions, adjustments, agreements, payments, deliveries or acquisitions  of, by or on behalf of Counterparty leading thereto had not occurred, (2) no adjustments to  the Conversion Rate have occurred pursuant to any Excluded Provision and (3) the  Convertible Notes remain outstanding.  (iii) Notwithstanding anything to the contrary in this Confirmation, the occurrence of an  Amendment Event shall constitute an Additional Termination Event applicable to the  Transaction and, with respect to such Additional Termination Event, (A) Counterparty  





 






    24       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. “Amendment Event” means that  Counterparty amends, modifies, supplements or obtains a waiver in respect of any term of  the Indenture or the Convertible Notes that would require consent of the holders of not less  than 100% of the principal amount of the Convertible Notes to amend (other than, in each  case, any amendment or supplement (x) pursuant to Section 10.01(h) of the Indenture that,  as determined by the Calculation Agent, conforms the Indenture to the description of  Convertible Notes in the Offering Memorandum or (y) pursuant to Section 14.07 of the  Indenture), in each case, without the consent of Dealer (such consent not to be  unreasonably withheld or delayed).  (j) Amendments to Equity Definitions and the Agreement.    (i) Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) inserting “(1)”  immediately following the word “means” in the first line thereof and (2) inserting  immediately prior to the semi-colon at the end of subsection (B) thereof the following  words: “or (2) 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”.  (ii) 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.  (iii) Section 12(a) of the Agreement is hereby amended by (1) deleting the phrase “or email” in  the third line thereof and (2) deleting the phrase “or that communication is delivered (or  attempted) or received, as applicable, after the close of business on a Local Business Day”  in the final clause thereof.  (k) No Setoff.  The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each  party waives any and all rights it may have to set-off delivery or payment obligations it owes to the  other party under the Agreement and the Transaction against any delivery or payment obligations  owed to it by the other party under any other agreement between the parties hereto, by operation of  law or otherwise.  (l) 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 Trading 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 acknowledges to Dealer, as of the date of such election, its  responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of the  Exchange Act and the rules and regulations thereunder, in connection with such election, in which  





 






    25       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 good faith and in a commercially  reasonable manner 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 that was purchased in connection  with the delivery of the Share Termination Delivery  Units.  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  





 






    26       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.  (m) Waiver of Jury Trial.  Each party waives, to the fullest extent permitted by applicable law, any right  it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction.   Each party (i) certifies that no representative, agent or attorney of either party has represented,  expressly or otherwise, that such other party would not, in the event of such a suit, action or  proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party  have been induced to enter into the Transaction, as applicable, by, among other things, the mutual  waivers and certifications provided herein.  (n) Registration.  Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer  based on advice of counsel, 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 (other than any such Hedge Shares that were, at the  time of acquisition by Dealer, “restricted securities” (as defined in Rule 144 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 customary form and substance reasonably satisfactory  to Dealer, substantially in the form of an underwriting agreement for a registered secondary offering  of equity securities of comparable size, maturity and line of business; 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 comparable size, maturity and line of  business, in customary form and substance reasonably satisfactory to Dealer (in which case, the  Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in  its commercially 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.  (o) 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.  (p) Right to Extend.  The Calculation Agent may postpone or add, in a commercially reasonable manner,  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 (in which event the Calculation Agent shall make appropriate adjustments to the  Transaction), if Dealer reasonably determines (based on advice of counsel in the case of clause (y)  only) that such action is reasonably necessary or appropriate (x) to preserve commercially  reasonable hedging or hedge unwind activity hereunder in light of existing liquidity conditions (but  only if liquidity as of the relevant time is less than the Calculation Agent’s commercially reasonable  expectations of liquidity at such time as of the Trade Date) or (y) to enable Dealer to effect  transactions with respect to Shares or Share Termination Delivery Units in connection with its  commercially reasonable hedging, hedge unwind or settlement activity hereunder in a manner that  





 






    27       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 such policies and procedures have been adopted by  Dealer in good faith and are generally applicable in similar situations and applied in a non- discriminatory manner; provided further 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.  (q) 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.  (r) 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.  (s) 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 the weighted average of the types and  amounts of consideration that holders of Shares actually receive upon consummation of  such Merger Event (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) (A) Counterparty shall give Dealer commercially reasonable advance (but in no event less  than one Exchange Business Day) written notice of the section or sections of the Indenture  and, if applicable, the formula therein, pursuant to which any adjustment will be made to  the Convertible Notes in connection with any Potential Adjustment Event, Merger Event  or Tender Offer and (B) promptly following any such adjustment, Counterparty shall give  Dealer written notice of the details of such adjustment; and  (t) 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)).  (u) 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;  





 






    28       (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.  (v) Early Unwind. In the event the sale of the “Initial Securities” (as defined in the Purchase Agreement)  is not consummated with the Initial Purchasers 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.  (w) 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.  (x) Calculations; Determinations; Adjustments. All calculations, adjustments and determinations by the  Calculation Agent or the Determining Party shall be made in good faith and in a commercially  reasonable manner. Following any calculation, adjustment or determination by the Calculation  Agent or the Determining Party, as the case may be, hereunder, upon written request by  Counterparty, the Calculation Agent or the Determining Party, as the case may be, shall promptly  (but in any event within four Scheduled Trading 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  calculation, adjustment or determination (including any assumptions used in making such  adjustment, determination or calculation), it being understood that neither the Calculation Agent nor  the Determining Party shall be obligated to disclose any proprietary or confidential data or  information or any proprietary or confidential models used by it for such calculation, adjustment or  determination, as applicable.  For the avoidance of doubt, whenever the Calculation Agent or the  Determining Party (as the case may be) is called upon to make an adjustment pursuant to the terms  of this Confirmation or the Equity Definitions (other than any adjustment required to be made by  reference to the terms of the Convertible Notes or the Indenture) to take into account the effect of  an event, the Calculation Agent or Determining Party (as the case may be) shall make such  adjustment by reference to the effect of such event on the Hedging Party, assuming that the Hedging  Party maintains a commercially reasonable Hedge Position.  (y) Tax Matters.  (i) Withholding Tax Imposed on Payments to non-U.S. Counterparties under the United States  Foreign Account Tax Compliance Act. “Indemnifiable Tax” as defined in Section 14 of the  Agreement, shall not include any withholding tax imposed or collected pursuant to Sections  1471 through 1474 of the Code, any current or future regulations or official interpretations  thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal  





 






    29       or regulatory legislation, rules or practices adopted pursuant to any intergovernmental  agreement entered into in connection with the implementation of such Sections of the Code  (a “FATCA Withholding Tax”). For the avoidance of doubt, a FATCA Withholding Tax  is a Tax the deduction or withholding of which is required by applicable law for the  purposes of Section 2(d) of the Agreement.  (ii) Tax Documentation. For purposes of Section 4(a)(i) of the Agreement: (x) Counterparty  shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor  thereto, (i) on or before the date of execution of this Confirmation, (ii) upon reasonable  request of Dealer and (iii) promptly upon learning that any such tax form previously  provided by Counterparty has become obsolete or incorrect. Additionally, Counterparty  shall, promptly upon request by Dealer, provide such other tax forms and documents  reasonably requested by Dealer; and (y) Dealer shall provide to Counterparty a valid U.S.  Internal Revenue Service Form W-9, or any successor thereto, (i) on or before the date of  execution of this Confirmation, (ii) upon reasonable request of Counterparty and (iii)  promptly upon learning that any such tax form previously provided by Dealer has become  obsolete or incorrect.   (iii) Tax Representations. For purposes of Section 3(f) of the Agreement: (i) Counterparty  represents to Dealer that for U.S. federal income tax purposes it is a “U.S. person” (as that  term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations) and  an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States  Treasury Regulations); and (ii) Dealer represents to Counterparty that for U.S. federal  income tax purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii)  of the United States Treasury Regulations) and an “exempt recipient” (as that term is used  in section 1.6049-4(c)(1) of the United States Treasury Regulations).  (z) Counterparts. This Confirmation may be executed in several counterparts, each of which shall be  deemed an original but all of which together shall constitute one and the same instrument. Delivery  of an executed signature page by facsimile or electronic transmission (e.g. “pdf” or “tif”), or any  electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic  Transactions Act or other applicable law, e.g., www.docusign.com, shall be effective as delivery of  a manually executed counterpart hereof.  (aa) U.S. Resolution Stay Protocol.  The parties agree that (i) to the extent that prior to the date hereof  both parties have adhered to the 2018 ISDA U.S. Resolution Stay Protocol (the “Protocol”), the  terms of the Protocol are incorporated into and form a part of this Confirmation, and for such  purposes this Confirmation shall be deemed a Protocol Covered Agreement and each party shall be  deemed to have the same status as “Regulated Entity” and/or “Adhering Party” as applicable to it  under the Protocol; (ii) to the extent that prior to the date hereof the parties have executed a separate  agreement the effect of which is to amend the qualified financial contracts between them to conform  with the requirements of the QFC Stay Rules (the “Bilateral Agreement”), the terms of the Bilateral  Agreement are incorporated into and form a part of this Confirmation and each party shall be deemed  to have the status of “Covered Entity” or “Counterparty Entity” (or other similar term) as applicable  to it under the Bilateral Agreement; or (iii) if clause (i) and clause (ii) do not apply, the terms of  Section 1 and Section 2 and the related defined terms (together, the “Bilateral Terms”) of the form  of bilateral template entitled “Full-Length Omnibus (for use between U.S. G-SIBs and Corporate  Groups)” published by ISDA on November 2, 2018 (currently available on the 2018 ISDA U.S.  Resolution Stay Protocol page at www.isda.org and, a copy of which is available upon request), the  effect of which is to amend the qualified financial contracts between the parties thereto to conform  with the requirements of the QFC Stay Rules, are hereby incorporated into and form a part of this  Confirmation, and for such purposes this Confirmation shall be deemed a “Covered Agreement,”  Dealer shall be deemed a “Covered Entity” and Counterparty shall be deemed a “Counterparty  Entity.” In the event that, after the date of this Confirmation, both parties hereto become adhering  parties to the Protocol, the terms of the Protocol will replace the terms of this paragraph. In the event  of any inconsistencies between this Confirmation and the terms of the Protocol, the Bilateral  Agreement or the Bilateral Terms (each, the “QFC Stay Terms”), as applicable, the QFC Stay  





 






    30       Terms will govern. Terms used in this paragraph without definition shall have the meanings assigned  to them under the QFC Stay Rules. For purposes of this paragraph, references to “this Confirmation”  include any related credit enhancements entered into between the parties or provided by one to the  other. In addition, the parties agree that the terms of this paragraph shall be incorporated into any  related covered affiliate credit enhancements, with all references to Dealer replaced by references  to the covered affiliate support provider.  “QFC Stay Rules” means the regulations codified at 12  C.F.R. 252.2, 252.81–8, 12 C.F.R. 382.1-7 and 12 C.F.R. 47.1-8, which, subject to limited  exceptions, require an express recognition of the stay-and-transfer powers of the FDIC under the  Federal Deposit Insurance Act and the Orderly Liquidation Authority under Title II of the Dodd  Frank Wall Street Reform and Consumer Protection Act and the override of default rights related  directly or indirectly to the entry of an affiliate into certain insolvency proceedings and any  restrictions on the transfer of any covered affiliate credit enhancements.      





 






                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,  BANK OF AMERICA, N.A.        By:   Authorized Signatory  Name:     Accepted and confirmed  as of the Trade Date:  PATRICK INDUSTRIES, INC.  By:   Authorized Signatory  Name: