exhibit101






Execution Version    [  ]  April 8, 2021  To:  Progress Software Corporation    14 Oak Park   Bedford, Massachusetts 01730   Attention: Anthony Folger, CFO   Telephone No.: (781) 280-4000   Email: anthony.folger@progress.com  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 [  ] (“Dealer”) and Progress Software Corporation (“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 April 8, 2021 (the “Offering Memorandum”), relating to the 1.00% Convertible Senior Notes  due 2026 (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  325,000,000 (as increased by up to an aggregate principal amount of USD 50,000,000 if and to the extent that the  Initial Purchasers (as defined herein) exercise their option to purchase additional Convertible Notes pursuant to the  Purchase Agreement (as defined herein)), pursuant to an Indenture to be dated April 13, 2021 between Counterparty  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 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 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 8.01(I) 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 5.09 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 supplement will be disregarded for purposes of this  Confirmation (other than as provided in Section 10(i)(iv) below) unless the parties agree otherwise in writing.  For  the purposes of the Equity Definitions, the Transaction shall be deemed to be a Share Option Transaction.   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 Trade Date  but without any Schedule except for:  





 






2  (a) the election of the laws of the State of New York as the governing law (without reference to  choice of law doctrine) and the election of USD as the Termination Currency;   (b) [(i) the election of an executed guarantee of [Dealer’s ultimate parent] (“Guarantor”) dated as of  the Trade Date in substantially the form attached hereto as Schedule I as a Credit Support  Document and (ii) the election of Guarantor as Credit Support Provider in relation to Dealer;] and  (c) (i) the election that the “Cross Default” provisions of Section 5(a)(vi) of the Agreement shall  apply to Dealer with a “Threshold Amount” of three percent of the shareholders’ equity of  [Dealer][Dealer’s ultimate parent] as of the Trade Date; provided that “Specified Indebtedness”  shall not include obligations in respect of deposits received in the ordinary course of Dealer’s  banking business, (ii) the phrase “or becoming capable at such time of being declared” shall be  deleted from clause (1) of such Section 5(a)(vi) and (iii) the following language shall be added to  the end thereof “Notwithstanding the foregoing, a default under subsection (2) hereof shall not  constitute an Event of Default if (x) the default was caused solely by error or omission of an  administrative or operational nature; (y) funds were available to enable the party to make the  payment when due; and (z) the payment is made within two Local Business Days of such party’s  receipt of written notice of its failure to pay.”   In the event of any inconsistency between provisions of the Agreement and this Confirmation, this  Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates.  The parties  hereby agree that no transaction other than the Transaction to which this Confirmation relates shall be  governed by the Agreement.  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: April 8, 2021  Effective Date: The Trade Date, subject to Section 10(w) below  Option Style: “Modified American”, as described under “Procedures for  Exercise” below  Option Type: Call  Buyer: Counterparty  Seller: Dealer  Shares: The common stock of Counterparty, par value USD 0.01  per share (Exchange symbol: “PRGS”).  Number of Options: 325,000.  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: [  ]%  Option Entitlement: A number equal to the product of the Applicable  Percentage and 17.4525.  Strike Price: USD 57.2984  





 






3  Cap Price: USD 89.8800  Premium:  USD [  ]   Premium Payment Date:  April 13, 2021  Exchange:  The Nasdaq Global Select Market  Related Exchange(s):  All Exchanges  Excluded Provisions: Section 5.06 and Section 5.07 of the Indenture.  Procedures for Exercise.  Conversion Date: With respect to any conversion of a Convertible Note  (other than any conversion of Convertible Notes with a  Conversion Date occurring prior to the Free  Convertibility Date (any such conversion, an “Early  Conversion”), to which the provisions of 10(i)(i) of this  Confirmation shall apply), the date on which the Holder  (as such term is defined in the Indenture) of such  Convertible Note satisfies all of the requirements for  conversion thereof as set forth in Section 5.02 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 5.08 of the  Indenture.  Free Convertibility Date: January 15, 2026  Expiration Time:  The Valuation Time  Expiration Date:  April 15, 2026, subject to earlier exercise.  Multiple Exercise: Applicable, as described under “Automatic Exercise upon  Conversion” and “Notice of Exercise” below.  Automatic Exercise upon Conversion:  Notwithstanding Section 3.4 of the Equity Definitions, on  each Conversion Date occurring on or after the Free  Convertibility Date in respect of which a Notice of  Conversion that is effective as to Counterparty has been  delivered by the relevant converting Holder, a number of  Options equal to 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 upon  Conversion” above, in order to exercise any Options (a)  relating to Convertible Notes with a Conversion Date  occurring on or after the Free Convertibility Date or  (b) that remain outstanding following a Repayment Event  (as defined below) other than the repurchase of any  Convertible Notes by Counterparty pursuant to Section  4.02 of the Indenture or Section 4.03 of the Indenture (any  Options described in this clause (b), “Repayment  Options”), Counterparty must notify Dealer in writing  (which, for the avoidance of doubt, may be by email)  before 5:00 p.m. (New York City time) on the Scheduled  Valid Day immediately preceding the Expiration Date  specifying the number of such Options; provided that if  the Relevant Settlement Method for such Options is (x)  Net Share Settlement and the Specified Cash Amount (as  defined below) is not USD 1,000, (y) Cash Settlement or  (z) Combination Settlement, Counterparty shall provide  Dealer a separate notice (the “Notice of Final Settlement  Method”) (which, for the avoidance of doubt, may be by  email) in respect of all such Convertible Notes before  5:00 p.m. (New York City time) on the Free  Convertibility Date specifying (1) the Relevant Settlement  Method for such Options, and (2) if the settlement method  for the related Convertible Notes is not Settlement in  Cash (as defined below), the fixed amount of cash per  Convertible Note that Counterparty has elected to deliver  to Holders (as such term is defined in the Indenture) of  the related Convertible Notes (the “Specified Cash  Amount”) and if Counterparty fails to timely provide  such Notice of Final Settlement Method, it shall be  deemed to have provided a Notice of Final Settlement  Method indicating that the Relevant Settlement Method is  Net Share Settlement and that the settlement method for  the related Convertible Notes is a combination of cash  and shares with a Specified Cash Amount of USD 1,000.  Counterparty acknowledges its responsibilities under  applicable securities laws, and in particular Section 9 and  Section 10(b) of the Exchange Act (as defined below) and  the rules and regulations thereunder, in respect of any  election of a settlement method with respect to the  Convertible Notes that is not Net Share Settlement with a  Specified Cash Amount of USD1,000 that applies  pursuant to Section 5.03(A) of the Indenture.  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 its commercially reasonable  discretion.  Market Disruption Event: Section 6.3(a) of the Equity Definitions is hereby replaced  in its entirety by the following:   “‘Market Disruption Event’ means, in respect of a Share,  (i) a failure by the primary United States national or  regional securities exchange or market on which the  





 






5  Shares are then listed, or if the Shares are not then listed  on a United States national or regional securities  exchange, the principal other market on which the Shares  are then traded, to open for trading during its regular  trading session or (ii) the occurrence or existence, for  more than one half-hour period in the aggregate, 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, and such suspension or limitation occurs or exists  at any time before 1:00 p.m. (New York City time) on any  Scheduled Valid Day.”  Settlement Terms.    Settlement Method: For any Option, Net Share Settlement; provided that if the  Relevant Settlement Method set forth below for such  Option is not Net Share Settlement, then the Settlement  Method for such Option shall be such Relevant Settlement  Method, but only if Counterparty shall have notified  Dealer of the Relevant Settlement Method in the Notice  of Final Settlement Method for such Option.  Relevant Settlement Method: In respect of any Option:  (i) if Counterparty has elected to settle its conversion  obligations in respect of the related Convertible Note in a  combination of cash and Shares pursuant to Section  5.03(B)(i)(2) of the Indenture with a Specified Cash  Amount equal to USD 1,000, then, in each case, the  Relevant Settlement Method for such Option shall be Net  Share Settlement;  (ii) if Counterparty has elected to settle its conversion  obligations in respect of the related Convertible Note in a  combination of cash and Shares pursuant to Section  5.03(B)(i)(2) of the Indenture with a Specified Cash  Amount greater than USD 1,000, then the Relevant  Settlement Method for such Option shall be Combination  Settlement; and  (iii) if Counterparty has elected to settle its conversion  obligations in respect of the related Convertible Note  entirely in cash pursuant to Section 5.03(B)(i)(1) of the  Indenture (such settlement method, “Settlement in  Cash”), then the Relevant Settlement Method for such  Option shall be Cash Settlement.  Notwithstanding the foregoing, the Relevant Settlement  Method for any Repayment Options exercised pursuant to  “Notice of Exercise” above shall be Net Share Settlement  or such other Settlement Method notified by Counterparty  to Dealer in the Notice of Final Settlement Method and, if  such Relevant Settlement Method is not Settlement in  Cash or Net Share Settlement, the Specified Cash Amount  for such Repayment Options shall be deemed to be the  amount identified in the Notice of Final Settlement  Method.  





 






6  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  that is not a Repayment Option exceed a number of  Shares equal to the Applicable Limit for such Option  divided by the Applicable Limit Price on the Settlement  Date for such Option.   Dealer will pay cash in lieu of delivering any fractional  Shares to be delivered with respect to any Net Share  Settlement Amount valued at the Relevant Price for the  last Valid Day of the Settlement Averaging Period.  Combination Settlement: If Combination Settlement is applicable to any Option  exercised or deemed exercised hereunder, Dealer will pay  or deliver, as the case may be, to Counterparty, on the  relevant Settlement Date for each such Option:  (i) cash (the “Combination Settlement Cash  Amount”) equal to the sum, for each Valid Day  during the Settlement Averaging Period for such  Option, of (A) an amount (the “Daily  Combination Settlement Cash Amount”) equal  to the lesser of (1) the product of (x) the Applicable  Percentage and (y) the Specified Cash Amount  minus USD 1,000 and (2) the Daily Option Value,  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  (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  





 






7  Option that is not a Repayment Option and (y) the  Combination Settlement Share Amount for such  Option multiplied by the Applicable Limit Price on  the Settlement Date for such Option, exceed the  Applicable Limit for such Option.   Dealer will pay cash in lieu of delivering any fractional  Shares to be delivered with respect to any Combination  Settlement Share Amount valued at the Relevant Price for  the last Valid Day of the Settlement Averaging Period.  Cash Settlement: If Cash Settlement is applicable to any Option exercised  or deemed exercised hereunder, in lieu of Section 8.1 of  the Equity Definitions, Dealer will pay to Counterparty,  on the relevant Settlement Date for each such Option, an  amount of cash (the “Cash Settlement Amount”) equal  to the sum, for each Valid Day during the Settlement  Averaging Period for such Option, of (i) the Daily Option  Value for such Valid Day, divided by (ii) the number of  Valid Days in the Settlement Averaging Period; provided  that in no event shall the Cash Settlement Amount for any  Option that is not a Repayment Option exceed the  Applicable Limit for such Option.    Daily Option Value: For any Valid Day, an amount equal to (i) the Option  Entitlement on such Valid Day, multiplied by (ii) (A) the  lesser of the Relevant Price on such Valid Day and the  Cap Price, less (B) the Strike Price on such Valid Day;  provided that if the calculation contained in clause (ii)  above results in a negative number, the Daily Option  Value for such Valid Day shall be deemed to be zero.  In  no event will the Daily Option Value be less than zero.  Applicable Limit: For any Option that is not a Repayment Option, an  amount of cash equal to the Applicable Percentage  multiplied by the excess of (i) the aggregate of (A) the  amount of cash, if any, paid to the Holder of the related  Convertible Note upon conversion of such Convertible  Note and (B) the number of Shares, if any, delivered to  the Holder of the related Convertible Note upon  conversion of such Convertible Note 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 PRGS <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  principal 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 traded.  If the Shares  are not so listed or traded, “Valid Day” means a Business  Day.  





 






8  Scheduled Valid Day: A day that is scheduled to be a Valid Day on the principal  United States national or regional securities exchange on  which the Shares are 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 traded.  If the Shares are not so listed or  traded, “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.  Relevant Price: On any Valid Day, the per Share volume-weighted  average price of the Shares as displayed under the  heading “Bloomberg VWAP” on Bloomberg page PRGS  <equity> AQR (or, if such page is not available, its  equivalent successor page) in respect of the period from  the scheduled open of trading to the scheduled close of  trading of the primary trading session on such Valid Day  (or if such volume-weighted average price is unavailable,  the market value of one Share on such Valid Day, as  determined by the Calculation Agent in 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.  Settlement Averaging Period: For any Option, the 50 consecutive Valid Days  commencing on, and including, the 51st 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”  in relation to any Option means that Net Share Settlement  or Combination Settlement is applicable to that Option.  Representation and Agreement: Notwithstanding anything to the contrary in the Equity  Definitions (including, but not limited to, Section 9.11  thereof), the parties acknowledge that (i) any Shares  delivered to Counterparty shall be, upon delivery, subject  to restrictions and limitations arising from Counterparty’s  status as issuer of the Shares under applicable securities  laws, (ii) Dealer may deliver any Shares required to be  delivered hereunder in certificated form in lieu of delivery  through the Clearance System and (iii) any Shares  delivered to Counterparty may be “restricted securities”  (as defined in Rule 144 under the Securities Act of 1933,  as amended (the “Securities Act”)).  3. Additional Terms applicable to the Transaction.  





 






9  Adjustments applicable to the Transaction:  Potential Adjustment Events: Notwithstanding Section 11.2(e) of the Equity Definitions  (which Section shall not apply for purposes of the  Transaction, except as provided in Section 10(y) below), 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 “Reference Property Unit” or to any “Last Reported  Sale Price”, “Daily VWAP,” “Daily Conversion Value,”  “Daily Share Amount” or “Daily Cash 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 proviso to  the first sentence of Section 5.05(A)(iii)(1) of the  Indenture or the  proviso to the first sentence of Section  5.05(A)(iv) of the Indenture).   Method of Adjustment:  Calculation Agent Adjustment, which means that,  notwithstanding Section 11.2(c) of the Equity Definitions  (which Section shall not apply for purposes of the  Transaction, except as provided in Section 10(y) below),  upon any Potential Adjustment Event, the Calculation  Agent shall make a commercially reasonable adjustment  to any one or more of the Strike Price, the Option  Entitlement, the Relevant Price and/or other applicable  price with respect to the Shares and the composition of  the “Shares” hereunder, in each case, corresponding to the  applicable adjustment required to be made pursuant to the  Indenture.     Notwithstanding the foregoing and “Consequences of  Merger Events / Tender Offers” below:  (i) if the Calculation Agent in good faith disagrees  with any adjustment to the Convertible Notes  that involves an exercise of discretion by  Counterparty or its board of directors (including,  without limitation, pursuant to Section 5.05(H)  of the Indenture, Section 5.09 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 in good faith  and in a commercially reasonable manner the  adjustment to be made to any one or more of the  Strike Price, Number of Options, Option  





 






10  Entitlement and any other variable relevant to the  exercise, settlement or payment for the  Transaction in a commercially reasonable  manner; provided that, notwithstanding the  foregoing, if any Potential Adjustment Event  occurs during the Settlement Averaging Period  but no adjustment was made to any Convertible  Note under the Indenture because the relevant  Holder (as such term is defined in the Indenture)  was deemed to be a record owner of the  underlying Shares on the related Conversion  Date, then the Calculation Agent shall make a  commercially reasonable adjustment, as  determined by it, to the terms hereof in order to  account for such Potential Adjustment Event;  (ii) in connection with any Potential Adjustment  Event as a result of an event or condition set  forth in Section 5.05(A)(ii) of the Indenture or  Section 5.05(A)(iii) of the Indenture where, in  either case, the period for determining “Y” (as  such term is used in Section 5.05(A)(ii) of the  Indenture) or “SP” (as such term is used in  Section 5.05(A)(iii) 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, in good faith and in a  commercially reasonable manner,  have the right  to adjust 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) and  expenses incurred by Dealer in connection with  its hedging activities, with such adjustments  made assuming that Dealer maintains  commercially reasonable hedge positions, 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  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, in good faith and in a commercially  reasonable manner, have the right to adjust any  





 






11  variable relevant to the exercise, settlement or  payment for the Transaction as appropriate to  reflect the costs (including, but not limited to, for  hedging mismatches and market losses) and  expenses incurred by Dealer in connection with  its hedging activities, with such adjustments  made assuming that Dealer maintains  commercially reasonable hedge positions, as a  result of such Potential Adjustment Event  Change.  Dilution Adjustment Provisions: Sections 5.05(A)(i), (ii), (iii), (iv) and (v) and Section  5.05(H) 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 “Common Stock Change Event” in Section  5.09(A) 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  5.05(A)(v) of the Indenture.  Consequences of Merger Events /  Tender Offers: Notwithstanding Section 12.2 and Section 12.3 of the  Equity Definitions (which Section shall not apply for  purposes of the Transaction except as provided in  Section 10(y) below), upon the occurrence of a Merger  Event or a Tender Offer, the Calculation Agent shall  make a corresponding adjustment in respect of any  adjustment under the Indenture to any one or more of the  nature of the Shares (in the case of a Merger Event),  Strike Price, Number of Options, Option Entitlement and  any other variable relevant to the exercise, settlement or  payment for the Transaction, subject to the second  paragraph under “Method of Adjustment”; provided,  however, that such adjustment shall be made without  regard to any adjustment to the Conversion Rate pursuant  to any Excluded Provision; provided further that if, with  respect to a Merger Event or a Tender Offer, (i) the  consideration for the Shares includes (or, at the option of  a holder of Shares, may include) shares of an entity or  person that is not a corporation or is not organized under  the laws of the United States, any State thereof or the  District of Columbia or (ii) the Counterparty to the  Transaction following such Merger Event or Tender Offer  will not be a corporation 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  reasonable election; provided further that, for the  avoidance of doubt, adjustments shall be made pursuant  to the provisions set forth above regardless of whether  





 






12  any Merger Event or Tender Offer gives rise to an Early  Conversion.  Consequences of Announcement Events: Modified Calculation Agent Adjustment as set forth in  Section 12.3(d) of the Equity Definitions; provided that,  in respect of an Announcement Event, (w) references to  “Tender Offer” shall be replaced by references to  “Announcement Event” and references to “Tender Offer  Date” shall be replaced by references to “date of such  Announcement Event”, (x) the word “shall” in the second  line shall be replaced with “may (and, if it would be  commercially reasonable to do so, shall)”,  (y) the phrase  “exercise, settlement, payment or any other terms of the  Transaction (including, without limitation, the spread)”  shall be replaced with the phrase “Cap Price (provided  that in no event shall the Cap Price be less than the Strike  Price)” and the words “whether within a commercially  reasonable (as determined by the Calculation Agent)  period of time prior to or after the Announcement Event”  shall be inserted prior to the word “which” in the seventh  line, and (z) for the avoidance of doubt, the Calculation  Agent shall determine, in good faith and in a  commercially reasonable manner, whether the relevant  Announcement Event has had a material economic effect  on the Transaction (and, if so, shall adjust the Cap Price  accordingly to account for such economic effect in a  commercially reasonable manner) on one or more  occasions on or after the date of the Announcement Event  up to, and including, the Expiration Date, any Early  Termination Date and/or any other date of cancellation, it  being understood that any adjustment in respect of an  Announcement Event shall take into account any earlier  adjustment relating to the same Announcement Event and  shall not be duplicative with any other adjustment or  cancellation valuation made pursuant to this  Confirmation, the Equity Definitions or the Agreement;  provided that in no event shall the Cap Price be adjusted  to be less than the Strike Price (subject in all cases to  clause (ii) of Section 12.3(d) of the Equity Definitions).   In making any adjustment the Calculation Agent shall  take into account stock price, volatility, expected  dividends, stock loan rate, liquidity relevant to the Shares  or to the Transaction, and other commercially reasonable  option pricing inputs that the Calculation Agent  determines in a commercially reasonable manner to be  relevant, whether within a commercially reasonable (as  determined by the Calculation Agent) period of time prior  to or after such Announcement Event. An Announcement  Event shall be an “Extraordinary Event” for purposes of  the Equity Definitions, to which Article 12 of the Equity  Definitions is applicable.  Announcement Event: (w) An Announcement Date occurs in respect of a  potential Merger Event (for the avoidance of doubt,  determined without regard to the language in the  definition of “Merger Event” following the definition of  “Reverse Merger” therein) or Tender Offer or any  transaction or event or series of transactions and/or events  





 






13  that, if consummated, would lead to a Merger Event or  Tender Offer (as determined by the Calculation Agent),  (x) Counterparty, a subsidiary, affiliate, agent or  representative of Counterparty makes a public  announcement of an intention to solicit or enter into, or to  explore strategic alternatives or other similar undertaking  that may include a Merger Event, Tender Offer or an  Acquisition Transaction, (y) there occurs a public  announcement by (1) any Valid Third-Party Entity in  respect of the relevant transaction, (2) Counterparty or  (3) any subsidiary, affiliate, agent or representative of  Counterparty, in each case, of any potential acquisition or  disposition by Counterparty and/or its subsidiaries where  the aggregate consideration exceeds 35% of the market  capitalization of Counterparty as of the date of such  announcement (an “Acquisition Transaction”) or (z)  there occurs any subsequent public announcement of a  change to a transaction or intention that is the subject of  an announcement of the type described in clause (w), (x)  or (y) of this sentence (including, without limitation, a  new announcement, whether or not by the same party,  relating to such a transaction or intention or the  announcement of a withdrawal from, or the abandonment  or discontinuation of, such a transaction or intention) (in  each case, whether such announcement (and only if such  announcement) is made by Counterparty, its subsidiary,  affiliate, agent or representative, or a Valid Third-Party  Entity) (any event described in clause (w), (x), (y) or (z),  an “Announcement Event”) as determined by the  Calculation Agent.  For the avoidance of doubt, the  occurrence of an Announcement Event with respect to  any transaction or intention shall not preclude the  occurrence of a later Announcement Event with respect to  such transaction or intention. For purposes of this  definition of “Announcement Event,” each of “Merger  Event” and “Tender Offer” shall mean such term as  defined under Section 10(y) below .  Valid Third-Party Entity: In respect of any potential transaction,  any third party  that the Calculation Agent determines has a bona fide  intent to enter into or consummate such transaction (it  being understood and agreed that in determining whether  such third party has such a bona fide intent, the  Calculation Agent may take into consideration the effect  of the relevant announcement by such third party on the  Shares and/or options relating to the Shares).  Announcement Date: The definition of “Announcement Date” in Section 12.1  of the Equity Definitions is hereby amended by (i)  replacing the words “the first” with “any” and replacing  the words “a firm” with the word “any” in the second and  fourth lines thereof, (ii) replacing the word “leads to the”  with the words “, if completed, would lead to a” in the  third and the fifth lines thereof, (iii) replacing the words  “voting shares” with the word “Shares” in the fifth line  thereof, (iv) inserting the words “by Counterparty, a  subsidiary, affiliate, agent or representative of  Counterparty, or any Valid Third-Party Entity” after the  





 






14  word “announcement” in the second and the fourth lines  thereof and (v) inserting the word “potential” following  the words “in the case of a” at the beginning of clauses (i)  and (ii) therein.  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 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”, (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 promulgation of new regulations  authorized or mandated by existing statute)” and (iv)  adding the words “provided that, in the case of clause (Y)  hereof where such determination is based on Dealer’s  policies and procedures, 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;” after the semi-colon in the  last line 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:   “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  





 






15  (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.  Following any determination or calculation by Hedging  Party hereunder, upon a written request by Counterparty  (which may be by email), Hedging Party will promptly  (but in any event within five Exchange Business Days)  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 determination or calculation  (including any quotations, market data or information  from internal or external sources, and any assumptions  used in making such determination or calculation), it  being understood 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 in making such  determination or calculation or any information that is  subject to an obligation not to disclose such information.  Determining Party: For all applicable Extraordinary Events, Dealer; provided  that when making any determination or calculation as  “Determining Party,” Dealer shall be bound by the same  obligations relating to required acts of the Calculation  Agent as set forth in Section 1.40 of the Equity  Definitions and this Confirmation as if Determining Party  were the Calculation Agent.   Following any determination or calculation by  Determining Party hereunder, upon a written request by  Counterparty (which may be by email), Determining  Party will promptly (but in any event within five  Exchange Business Days) 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  determination or calculation (including any quotations,  market data or information from internal or external  sources, and any assumptions used in making such  determination or calculation), it being understood 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 in making such determination or calculation or  any information that is subject to an obligation not to  disclose such information.  





 






16  Non-Reliance: Applicable   Agreements and Acknowledgments  Regarding Hedging Activities: Applicable  Additional Acknowledgments: Applicable  4. Calculation Agent.  Dealer; 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 two Exchange Business Days  following notice to the Calculation Agent by  Counterparty of such failure, Counterparty shall have the  right to designate a nationally recognized independent  equity derivatives dealer to replace Dealer as the  Calculation Agent, and the parties shall work in good  faith to execute any appropriate documentation required  by such replacement Calculation Agent.   Following any adjustment, determination or calculation  by the Calculation Agent hereunder, upon a written  request by Counterparty (which may be by email), the  Calculation Agent will promptly (but in any event within  five Exchange Business Days) 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  adjustment, determination or calculation (including any  quotations, market data or information from internal or  external sources, and any assumptions used in making  such adjustment, determination or calculation), it being  understood that in no event will the Calculation Agent be  obligated to share with Counterparty any proprietary or  confidential data or information or any proprietary or  confidential models used by it in making such adjustment,  determination or calculation or any information that is  subject to an obligation not to disclose such information.  All calculations and determinations by the Calculation  Agent shall be made in good faith and in a commercially  reasonable manner.  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:  





 






17  [  ]    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: [  ]  7. Notices.   (a) Address for notices or communications to Counterparty:  To:  Progress Software Corporation    14 Oak Park   Bedford, Massachusetts 01730   Attention: Anthony Folger, CFO   Telephone No.: (781) 280-4000    Email: anthony.folger@progress.com  With a copy to:   Attention: Steve Faberman, Chief Legal Officer   Telephone No.: (781) 280-4473   Email: sfaberma@progress.com    (b) Address for notices or communications to Dealer:  [  ]  8. Representations and Warranties of Counterparty.  Each of the representations and warranties of Counterparty set forth in Section 1 of the Purchase Agreement  (the “Purchase Agreement”) dated as of April 8, 2021 between Counterparty and Citigroup Global  Markets Inc. and J.P. Morgan Securities LLC, as representatives of the Initial Purchasers party thereto (the  “Initial Purchasers”), are true and correct on and as of the Trade Date and the Premium Payment Date and  are hereby deemed to be repeated to Dealer as if set forth herein.  Counterparty hereby further represents  and warrants to Dealer on the date hereof and on and as of the Premium Payment Date (or such other date  as specified below) 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) In lieu of the representation set forth in Section 3(a)(iii) of the Agreement, neither the execution  and delivery of this Confirmation nor the incurrence or performance of obligations of  Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or  





 






18  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 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) No consent, approval, authorization, or order of, or filing with, any governmental agency or body  or any court is required in connection with the execution, delivery or performance by Counterparty  of this Confirmation, except such as have been obtained or made and such as may be required  under the Securities Act or state securities laws.  (d) Counterparty is not and, after consummation of the transactions contemplated hereby, will not be  required to register as an “investment company” as such term is defined in the Investment  Company Act of 1940, as amended.  (e) Counterparty is an “eligible contract participant” (as such term is defined in Section 1a(18) of the  Commodity Exchange Act, as amended, other than a person that is an eligible contract participant  under Section 1a(18)(C) of the Commodity Exchange Act).  (f) Counterparty is not, on the date hereof, aware of any material non-public information with respect  to Counterparty or the Shares.  (g) To the knowledge of Counterparty, 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; provided that Counterparty makes no representation or warranty  regarding any such requirement that is applicable generally to the ownership of, or transactions in,  common equity securities of a U.S. incorporated corporation listed on the Exchange by Dealer or  any of its affiliates solely as a result of it or any of such affiliates being a financial institution or  broker-dealer.  (h) Counterparty (A) is capable of evaluating investment risks independently, both in general and with  regard to all transactions and investment strategies involving a security or securities; (B) will  exercise independent judgment in evaluating the recommendations of any broker-dealer or its  associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total  assets of at least USD 50 million.  (i) 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) As of and immediately after each of the Trade Date and the Premium Payment Date, (A) the value  of the total assets of Counterparty is greater than the sum of the total liabilities (including  contingent liabilities) and the capital (as such terms are defined in Section 154 and Section 244 of  the General Corporation Law of the State of Delaware) of Counterparty, (B) the capital of  Counterparty is adequate to conduct its business, and its entry into the Transaction will not impair  its capital, (C) Counterparty has the ability to pay its debts and obligations as such debts mature  and does not intend to, and does not believe that it will, incur debt beyond its ability to pay as such  debts mature, (D) Counterparty will be able to continue as a going concern, (E) Counterparty is  not, and will not be, “insolvent” (as such term is defined under Section 101(32) of the U.S.  Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and (F)  Counterparty would be able to purchase the Number of Shares with respect to the Transaction in  compliance with the laws of its jurisdiction of incorporation (including the adequate surplus and  capital requirements of Sections 154 and 160 of the General Corporation Law of the State of  Delaware).  





 






19  (k) Counterparty acknowledges that the Transaction may constitute a purchase of its equity securities  or a capital distribution. Counterparty further acknowledges that, pursuant to the provisions of the  Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the Counterparty will be  required to agree to certain time-bound restrictions on its ability to purchase its equity securities or  make capital distributions if it receives loans, loan guarantees or direct loans (as that term is  defined in the CARES Act) under section 4003(b) of the CARES Act. Counterparty further  acknowledges that it may be required to agree to certain time-bound restrictions on its ability to  purchase its equity securities or make capital distributions if it receives loans, loan guarantees or  direct loans (as that term is defined in the CARES Act) under programs or facilities established by  the Board of Governors of the Federal Reserve System or the U.S. Department of Treasury for the  purpose of providing liquidity to the financial system, and may be required to agree to similar  restrictions under programs or facilities established in the future. Accordingly, Counterparty  represents and warrants that neither it nor any of its subsidiaries has applied for, and throughout  the term of this Transaction shall not apply, for a loan, loan guarantee, direct loan (as that term is  defined in the CARES Act) or other investment, or to receive any financial assistance or relief  (howsoever defined) under any program or facility 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 applicable law (or any regulation, guidance, interpretation or other pronouncement  thereunder), as a condition of such loan, loan guarantee, direct loan (as that term is defined in the  CARES Act), investment, financial assistance or relief, that Counterparty or any of its subsidiaries  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 it has not, as of  the date specified in such condition, made a capital distribution or will not make a capital  distribution (collectively, “Restricted Financial Assistance”); provided, that Counterparty 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 to fail to satisfy any condition for application for or receipt or retention of such loan,  loan guarantee, direct loan (as that term is defined in the CARES Act), investment, financial  assistance or relief based on the terms of the program or facility as of the date of such advice or (b)  delivers to Dealer evidence of a waiver 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  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 this Transaction (either by specific  reference to this Transaction or by general reference to transactions with the attributes of this  Transaction in all relevant respects).  9. Representation and Warranty of the Dealer.   (a) Dealer hereby represents and warrants to Counterparty on the date hereof and on and as of the  Premium Payment Date, that Dealer is an “eligible contract participant” (as such term is defined in  Section 1a(18) of the Commodity Exchange Act, other than a person that is an eligible contract  participant under Section 1a(18)(C) of the Commodity Exchange Act).  10. Other Provisions.  (a) Opinions.  On or prior to the Premium Payment Date, Counterparty shall deliver to Dealer an  opinion of counsel, dated as of the Premium Payment Date, with respect to the matters set forth in  Sections 8(a) through (d) of this Confirmation, subject to customary exceptions and limitations  (and, with respect to absence of conflicts with agreements or instruments, limited to those  





 






20  agreements and instruments filed by Counterparty as exhibits to its Form 10-K filed with the SEC,  as updated by any subsequent filings). Delivery of such opinion to Dealer shall be a condition  precedent for the purpose of Section 2(a)(iii) of the Agreement with respect to each obligation of  Dealer under Section 2(a)(i) of the Agreement.  (b) Repurchase Notices.  Counterparty shall, on any day on which Counterparty effects any  repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase  Notice”) on such day if following such repurchase, the number of outstanding Shares as  determined on such day is (i) less than 40.6 million (in the case of the first such notice) or (ii)  thereafter more than 2.9 million less than the number of Shares included in the immediately  preceding Repurchase Notice; provided that Counterparty may provide Dealer advance notice on  or prior to any such day, which may include the maximum number of Shares that may be  repurchased under a repurchase program entered into in reliance or Rule 10b5-1(c) and the  approximate period in which such purchases may occur, to the extent it expects that repurchases  effected on such day may result in an obligation to deliver a Repurchase Notice (and in such case,  any such advance notice shall be deemed a Repurchase Notice to the maximum extent of  repurchases set forth in such advance notice as if Counterparty had executed such repurchases);  provided further that, if such repurchase, or the intention to effect the same, would constitute  material non-public information with respect to Counterparty or the Shares, Counterparty shall  make public disclosure thereof at or prior to delivery of such 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 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 and documented out-of-pocket expenses (including  reasonable attorney’s fees of one outside counsel in each relevant jurisdiction), joint or several,  which an Indemnified Person may become subject to, as a result of Counterparty’s failure to  provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph,  and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any  reasonable legal or other out-of-pocket expenses incurred (and supported by invoices or other  documentation setting forth in reasonable detail such expenses) 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 fees and expenses of such counsel  related to such proceeding.  Counterparty shall not be liable to the extent that the Indemnified  Person fails to notify Counterparty within a commercially reasonable period of time after any  action is commenced against it in respect of which indemnity may be sought hereunder (it being  understood that any such notice delivered within 30 calendar days of the commencement of any  such action shall be deemed to have been delivered within a commercially reasonable period of  time for such purpose), but only to the extent that Counterparty is materially prejudiced by such  failure to provide such notice.  In addition, Counterparty shall not have liability for any 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 not, without the prior written consent of the  Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated  by this paragraph that is in respect of which any Indemnified Person is or could have been a party  and indemnity could have been sought hereunder by such Indemnified Person, unless such  settlement includes an unconditional release of such Indemnified Person from all liability on  claims that are the subject matter of such proceeding on terms reasonably satisfactory to such  Indemnified Person. Counterparty shall not be liable for any losses, claims, damages or liabilities  





 






21  (or expenses relating thereto) of any Indemnified Person that result from the bad faith, gross  negligence, willful misconduct or fraud of such Indemnified Person (in each case, as conclusively  determined by a court of competent jurisdiction in a final and non-appealable judgment).  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 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 otherwise manipulate the price of the Shares (or any security convertible into or  exchangeable for the Shares) or otherwise in violation of the Exchange Act.  (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 that are generally applicable in similar  situations (if any) and applied in a non-discriminatory manner, 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 (b) or any  obligations under Section (o) or(t) 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 (the “Code”);  (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 applicable securities laws and other  matters by such third party and Counterparty, as are 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, nor receive from  the transferee on any payment date an amount under Section 2(d)(i)(4) of the  Agreement that is less than the amount that Dealer would have received from  Counterparty in the absence of such transfer and assignment;  





 






22  (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 commercially reasonable costs and  expenses, including commercially reasonable counsel fees, incurred by Dealer in  connection with such transfer or assignment.  (ii) Dealer may, (A) without Counterparty’s consent, transfer or assign (a “Transfer”) all or  any part of its rights or obligations under the Transaction to any affiliate or branch of  Dealer (1) that has a rating for its long term, unsecured and unsubordinated indebtedness  that is equal to or better than Dealer’s credit rating at the time of such Transfer, 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][Dealer’s ultimate parent] or (B) with Counterparty’s consent (which consent will  not be unreasonably withheld) to any other third party with a rating for its long term,  unsecured and unsubordinated indebtedness equal to or better than the lesser of (1) the  credit rating of Dealer at the time of the Transfer and (2) BBB+ by Standard and Poor’s  Rating Group, Inc. or its successor (“S&P”), or Baa1 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 such transferee is an “eligible contract participant” (as such term is  defined in Section 1a(18) of the Commodity Exchange Act, as amended); provided  further that, in the case of a transfer or assignment under (A) or (B) above, (i) under the  applicable law effective on the date of transfer or assignment by Dealer, (1) Counterparty  will not, as a result of such transfer or assignment, be required to pay the transferee or  assignee on any payment date an amount under Section 2(d)(i)(4) of the Agreement  greater than an amount that Counterparty would have been required to pay to Dealer in  the absence of such transfer or assignment, (2) 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 that is less than the amount that  Counterparty would have received from Dealer in the absence of such transfer or  assignment and (3) such transfer or assignment would not result in a taxable exchange  from Counterparty’s perspective for U.S. federal income tax purposes; (ii) Dealer shall  cause the transferee to make such Payee Tax Representations and to provide such tax  documentation as may be reasonably requested by Counterparty to permit Counterparty  to determine that the results described in clause (i) of this proviso will not occur upon or  after such transfer or assignment; and (iii) Dealer shall provide prompt written notice to  Counterparty following any such Transfer.  If at any time at which (A) the Section 16  Percentage exceeds 7.5%, (B) the Option Equity Percentage exceeds 14.5%, or (C) the  Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition  described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable  after using its commercially reasonable efforts to effect a transfer or assignment of  Options to a third party on pricing terms reasonably acceptable to Dealer and within a  time period reasonably acceptable to Dealer such that (after giving effect to such transfer  or assignment and any resulting change in Dealer’s commercially reasonable Hedge  Positions) 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 (after giving effect to such transfer or assignment  and any resulting change in Dealer’s commercially reasonable Hedge Positions)  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  





 






23  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 10(m) 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 on such day.  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  reasonably be expected to 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  reasonably be expected to 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.  (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, to the extent applicable, 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 to the extent such Dealer Designated Affiliate fully  performs the obligations designated by Dealer to such Dealer Designated Affiliate under  this Section (iii).  (f) Staggered Settlement.  If upon advice of counsel with respect to applicable legal and regulatory  requirements, including any requirements relating to Dealer’s commercially reasonable hedging  activities hereunder, Dealer reasonably determines that it would not be practicable or advisable to  deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Dealer on any  Settlement Date for the Transaction, Dealer may, by notice to Counterparty on or prior to any  Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more dates  (each, a “Staggered Settlement Date”) as follows:  





 






24  (i) in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates  (each of which will be on or prior to the 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) [Insert relevant Dealer agency language, if any].  (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 adjust the Cap Price to preserve the fair value of the Options after taking  into account such dividend or lack thereof.  “Regular Dividend” shall mean USD 0.175 per Share  per quarter.  Upon any adjustment to the “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, upon any Early  Conversion 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) Counterparty shall, within five Scheduled Trading Days of the “Conversion  Date” (as defined in the Indenture) for such Early Conversion, provide written  notice (an “Early Conversion Notice”) to Dealer specifying the number of  Convertible Notes surrendered for conversion on such Conversion Date (such  Convertible Notes, the “Affected Convertible Notes”) and the anticipated  settlement date, and the giving of such Early Conversion Notice shall constitute  an Additional Termination Event as provided in this clause (i);  (B) upon receipt of any such Early Conversion Notice, Dealer shall designate an  Exchange Business Day as an Early Termination Date (which Exchange  Business Day shall correspond to a settlement date in respect of the Affected  Number of Options (as defined below) that occurs on or as promptly as  reasonably practicable after the related conversion settlement date for the  Affected Convertible Notes for such Early Conversion) with respect to the  portion of the Transaction corresponding to a number of Options (the “Affected  Number of Options”) equal to the lesser of (x) the number of Affected  Convertible Notes and (y) the Number of Options as of the Conversion Date for  such Early Conversion;  (C) any payment hereunder with respect to such termination shall be calculated  pursuant to Section 6 of the Agreement as if (x) an Early Termination Date had  been designated in respect of a Transaction having terms identical to the  Transaction and a Number of Options equal to the Affected Number of Options,  (y) Counterparty were the sole Affected Party with respect to such Additional  Termination Event and (z) the terminated portion of the Transaction were the  





 






25  sole Affected Transaction (and, for the avoidance of doubt, the provisions of  Section 10(m) shall apply to any amount that is payable by Dealer to  Counterparty pursuant to this Section 10(i)(i)(C) as if, solely for the purpose of  electing the settlement method, Counterparty were not the Affected Party);  provided that the amount payable with respect to such termination shall not be  greater than (1) the Applicable Percentage, multiplied by (2) the Affected  Number of Options, multiplied by (3) (x) the sum of (i) the amount of cash paid  (if any) and (ii) the number of Shares delivered (if any) to the Holder (as such  term is defined in the Indenture) of an Affected Convertible Note upon  conversion of such Affected Convertible Note, multiplied by the Applicable  Limit Price on the settlement date for the conversion of such Affected  Convertible Note, minus (y) USD 1,000.   (D) for the avoidance of doubt, in determining the amount payable in respect of such  Affected Transaction pursuant to Section 6 of the Agreement, the Calculation  Agent shall assume that (x) the relevant Early Conversion and any conversions,  adjustments, agreements, payments, deliveries or acquisitions by or on behalf of  Counterparty leading thereto had not occurred, (y) no adjustments to the  Conversion Rate have occurred pursuant to any Excluded Provision and (z) the  corresponding Convertible Notes remain outstanding until their final maturity  date; and  (E) the Transaction shall remain in full force and effect, except that, as of the  Conversion Date for such Early Conversion, the Number of Options shall be  reduced by the Affected Number of Options.  (ii) Notwithstanding anything to the contrary in this Confirmation if an event of default with  respect to Counterparty occurs under the terms of the Convertible Notes as set forth in  Section 7.01 of the Indenture and such event of default results in the Convertible Notes  being accelerated and declared due and payable, 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 (which Early Termination Date shall be on or as promptly  as reasonably practicable after Dealer becomes aware of the occurrence of such  acceleration).  (iii) Within five Scheduled Trading Days following any Repayment Event (as defined below),  Counterparty (x) in the case of a Repayment Event resulting from the repurchase of any  Convertible Notes by Counterparty pursuant to Section 4.02 of the Indenture or Section  4.03 of the Indenture, shall notify Dealer in writing of such Repayment Event and (y) in  the case of a Repayment Event not described in clause (x) above, may notify Dealer in  writing of such Repayment Event, in each case, including the aggregate principal amount  of Convertible Notes (the “Repayment Convertible Notes”) subject to such Repayment  Event (any such notice, a “Repayment Notice”); provided that no such Repayment  Notice described in clause (y) above shall be effective unless it contains the  representation by Counterparty set forth in Section 8(f) as of the date of such Repayment  Notice. The receipt by Dealer from Counterparty of any Repayment Notice shall  constitute an Additional Termination Event as provided in this Section 10(i)(iii). Upon  receipt of any such Repayment Notice, Dealer shall designate an Exchange Business Day  following receipt of such Repayment Notice as an Early Termination Date with respect to  the portion of the Transaction corresponding to a number of Options (the “Repayment  Options”) equal to the lesser of (A) the aggregate principal amount of such Convertible  Notes specified in such Repayment Notice, divided by USD 1,000, 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 Repayment Options. Any  payment hereunder with respect to such termination (the “Repayment Unwind  





 






26  Payment”) 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 Repayment 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; provided that in the event of a Repayment Event pursuant to  Section 4.02 of the Indenture or Section 4.03 of the Indenture, the Repayment Unwind  Payment shall not be greater than (x) the number of Repayment Options multiplied by (y)  the product of (A) the Applicable Percentage and (B) the excess, if any, of (I) the amount  paid by the Counterparty per Convertible Note pursuant to the relevant sections of the  Indenture over (II) USD 1,000.  “Repayment Event” means that (i) any Convertible  Notes are repurchased or redeemed (whether in connection with or as a result of a  fundamental change, howsoever defined, or for any other reason) by Counterparty or any  of its subsidiaries, (ii) any Convertible Notes are delivered to Counterparty or any of its  subsidiaries in exchange for delivery of any property or assets of such party (howsoever  described), (iii) any principal of any of the Convertible Notes is repaid prior to the final  maturity date of the Convertible Notes (for any reason other than as a result of an  acceleration of the Convertible Notes that results in an Additional Termination Event  pursuant to Section 10(i)(ii)), or (iv) any Convertible Notes are exchanged by or for the  benefit of the “Holders” (as defined in the Indenture) thereof for any other securities of  Counterparty or any of its subsidiaries (or any other property, or any combination thereof)  pursuant to any exchange offer or similar transaction.  For the avoidance of doubt, any  conversion of Convertible Notes (whether into cash, Shares, “Reference Property” (as  defined in the Indenture) or any combination thereof) pursuant to the terms of the  Indenture shall not constitute a Repayment Event.  (iv) 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  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, waives or obtains a waiver in  respect of any term of the Indenture or the Convertible Notes governing the principal  amount, coupon, maturity, repurchase obligation of Counterparty, redemption right of  Counterparty, any term relating to conversion of the Convertible Notes (including  changes to the conversion rate, conversion rate adjustment provisions, conversion  settlement dates or conversion conditions), or any term 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 8.01(I) 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  5.09 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.    (i) Solely in respect of adjustments to the Cap Price pursuant to Section 10(y),  Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words  “that may have a diluting or concentrative effect on the theoretical value of the relevant  Shares” and replacing them with the words “that is the result of a corporate event  involving the Issuer or its securities that has a material economic effect on the Shares or  options on the Shares; provided that such event is not based on (a) an observable market,  other than the market for Issuer’s own stock or (b) an observable index, other than an  index calculated and measured solely by reference to Issuer’s own operations.”   (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  





 






27  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; provided that the  period for dismissal, discharge, stay or restraint therein shall be increased from within 15  days to within 30 days.”  (ii) Without derogating from the provisions of Section 5(b)(i) of the Agreement, 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.  (k) Setoff.  Neither party shall have the right to set off any obligation that it may have to the other  party under the Transaction against any obligation such other party may have to it, whether arising  under the Agreement, this Confirmation or any other agreement between the parties hereto, by  operation of law or otherwise and each party hereby waives any such right to setoff.   (l) Adjustments. For the avoidance of doubt, whenever the Hedging Party, Determining Party or  Calculation Agent is required or permitted to make a calculation, adjustment, determination or  election pursuant to the terms of this Confirmation or the Equity Definitions to take into account  the effect of an event (other than on adjustments made by reference to the Indenture), the Hedging  Party, Determining Party or Calculation Agent shall make such adjustment in a commercially  reasonable manner by reference to the effect of such event on Dealer, assuming that Dealer  maintains a commercially reasonable hedge position.   (m) 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) an Announcement Event, 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 date of  the Announcement Event, 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, (b) Counterparty  remakes the representation set forth in Section 8(f) as of the date of such election and (c) Dealer  agrees, in its commercially reasonable discretion, to such election, in which case the provisions of  Section 12.7 or Section 12.9 of the Equity Definitions, or the provisions of Section 6(d)(ii) and  Section 6(e) 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.  





 






28  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 of property contained in one Share  Termination Delivery Unit, as determined by the  Calculation Agent in its reasonable discretion by  commercially reasonable means and notified by the  Calculation Agent to Dealer at the time of  notification of the Payment Obligation.  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 in a commercially reasonable manner. If such  Nationalization, Insolvency, or Merger Event  involves a choice of Exchange Property to be  received by holders, such holder shall be deemed to  have elected to receive the maximum possible  amount of cash.  Failure to Deliver:  Applicable.  Other Applicable Provisions:  If Share Termination Alternative is applicable, the  provisions of Sections 9.8, 9.9 and 9.11 (as modified  above) of the Equity Definitions and the provisions  set forth opposite the caption “Representation and  Agreement” in Section 2 will be applicable, except  that all references in such provisions to “Physically- settled” shall be read as references to “Share  Termination Settled” and all references to “Shares”  shall be read as references to “Share Termination  Delivery Units”.  “Share Termination Settled” in  relation to the Transaction means that Share  Termination Alternative is applicable to the  Transaction.  (n) 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.  





 






29  (o) Registration.  Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer,  based on the advice of counsel, the Shares (“Hedge Shares”) acquired by Dealer for the purpose  of effecting a commercially reasonable hedge of its obligations pursuant to the Transaction cannot  be sold in the public market by Dealer without registration under the Securities Act, Counterparty  shall, at its election, either (i) in order to allow Dealer to sell the Hedge Shares in a registered  offering, make available to Dealer an effective registration statement under the Securities Act and  enter into an agreement, in form and substance reasonably satisfactory to Dealer, substantially in  the form of an underwriting agreement customary for a registered secondary offering of a similar  size in respect of a similar issuer; provided, however, that if Dealer, in its sole reasonable  discretion, is not satisfied with access to due diligence materials, the results of its due diligence  investigation, or the procedures and documentation for the registered offering referred to above,  then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in  order to allow Dealer to sell the Hedge Shares in a private placement, enter into a private  placement agreement substantially similar to private placement purchase agreements customary  for private placements of equity securities of a similar size in respect of a similar issuer, in 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 commercially reasonable discount from the public market  price of the Shares incurred on the sale of Hedge Shares in a private placement) provided that no  “comfort letter” or accountants’ consent shall be required to be delivered in connection with any  private placements, or (iii) purchase the Hedge Shares from Dealer at the then-current market  price on such Exchange Business Days, and in the amounts and at such time(s), reasonably  requested by Dealer.  (p) 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.  (q) Right to Extend.  Dealer may postpone or add, in whole or in part, any Valid Day or Valid Days  during the Settlement Averaging Period or any other date of valuation, payment or delivery by  Dealer, with respect to some or all of the Options hereunder, if Dealer reasonably determines, in  the case of clause (i), in its commercially reasonable judgment or, in the case of clause (ii), based  on advice of counsel, that such action is reasonably necessary or appropriate (i) to preserve  Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in light of existing  liquidity conditions in the stock loan market or other relevant market or (ii) to enable Dealer to  effect transactions with respect to Shares in connection with its commercially reasonable hedging,  hedge unwind or settlement activity hereunder in a manner that would, if Dealer were  Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal,  regulatory or self-regulatory requirements, or with related policies and procedures adopted by  Dealer in good faith so long as such policies and procedures are generally applicable in similar  situations and applied in a non-discriminatory manner; provided that no such Valid Day or other  date of valuation, payment or delivery may be postponed or added more than 100 Valid Days  after the original Valid Day or other date of valuation, payment or delivery, as the case may be.  (r) 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.  (s) 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  





 






30  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.   (t) 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 received by holders of Shares 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   (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  (other than a Potential Adjustment in respect of the Dilution Adjustment Provisions set  forth in Section 5.05(A)(ii) or Section 5.05(A)(iv) of the Indenture) or Merger Event and  (B) promptly following any such adjustment, Counterparty shall give Dealer written  notice of the details of such adjustment. The “Adjustment Notice Deadline” means (i)  for any Potential Adjustment in respect of the Dilution Adjustment Provision set forth in  Section 5.05(A)(i) of the Indenture, the relevant Ex-Dividend Date (as such term is  defined in the Indenture) or “effective date” (as such term is used in Section 5.05(A)(i) of  the Indenture), as the case may be, (ii) for any Potential Adjustment in respect of the  Dilution Adjustment Provision in the formula set forth in Section 5.05(A)(iii)(1) of the  Indenture, the first Trading Day (as such term is defined in the Indenture) of the period  referred to in the definition of “SP” in such formula, (iii) for any Potential Adjustment in  respect of the Dilution Adjustment Provision in the formula set forth in Section  5.05(A)(iii)(2) of the Indenture, the first Trading Day (as such term is defined in the  Indenture) of the Spin-off Valuation Period (as such term is defined in the Indenture), (iv)  for any Potential Adjustment in respect of the Dilution Adjustment Provision set forth in  Section 5.05(A)(v) of the Indenture, the first Trading Day (as such term is defined in the  Indenture) of the period referred to in the definition of “SP’” in the formula in such  Section, and (v) for any Merger Event, the effective date of such Merger Event (or, if  earlier, the first day of any valuation or similar period in respect of such Merger Event).  (u) 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, Increased Cost of Hedging, an Excess Ownership  Position, or Illegality (as defined in the Agreement)).  (v) Agreements and Acknowledgements Regarding Hedging. Counterparty understands, acknowledges  and agrees that: (A) at any time on and prior to the Expiration Date, Dealer and its affiliates may  buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps  or other derivative securities in order to adjust its hedge position with respect to the Transaction;  (B) Dealer and its affiliates also may be active in the market for Shares other than in connection  with hedging activities in relation to the Transaction; (C) Dealer shall make its own determination  as to whether, when or in what manner any hedging or market activities in securities of  





 






31  Counterparty shall be conducted and shall do so in a manner that it deems appropriate to hedge its  price and market risk with respect to the 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.  (w) Early Unwind. In the event the sale of the “Firm 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 10(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.  (x) 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.  (y) Other Adjustments Pursuant to the Equity Definitions.  Notwithstanding anything to the contrary  in this Confirmation, solely for the purpose of adjusting the Cap Price, the terms “Potential  Adjustment Event,” “Merger Event,” and “Tender Offer” shall each have the meanings assigned to  such term in the Equity Definitions (as amended by Section 10(j)(i)); provided that Section 12.1(d)  of the Equity Definitions is hereby amended by replacing “10%” with “20%” in the third line  thereof, and upon the occurrence of a Merger Date, the occurrence of a Tender Offer Date, or  declaration by Counterparty of the terms of any Potential Adjustment Event, respectively, as such  terms are defined in the Equity Definitions, the Calculation Agent shall determine in a  commercially reasonable manner whether such occurrence or declaration, as applicable, has had a  material economic effect on the Transactions and, if so, shall adjust the Cap Price to preserve the  fair value of the Options (including adjustments to account for changes in volatility, expected  dividends, stock loan rate or liquidity relative to the relevant Shares as determined by the  Calculation Agent in a commercially reasonable manner, but, for the avoidance of doubt, solely in  the case of Section 11.2(e)(i), (ii)(A) and (iv), no adjustments will be made to account for changes  in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares);  provided that in no event shall the Cap Price be less than the Strike Price; provided further that, if  no adjustment to the Cap Price will preserve such fair value of the Options, Cancellation and  Payment will be deemed to apply and any payment to be made by one party to the other shall be  calculated in accordance with Section 12.7 of the Equity Definitions, and the Calculation Agent  shall determine the amount of such payment as if “Calculation Agent Determination” applied to  the Option Transaction; provided further that (i) any adjustment to the Cap Price made pursuant to  this Section 10(y) shall be made without duplication of any other adjustment hereunder (including,  for the avoidance of doubt, adjustment made pursuant to the provisions opposite the captions  “Method of Adjustment,” “Consequences of Merger Events / Tender Offers” and “Consequence of  Announcement Events” in Section 3 above); provided further that any Share repurchases by  Counterparty, whether pursuant to Rule 10b-18 of the Exchange Act, Rule 10b5-1 of the  Exchange Act or pursuant to forward contracts or accelerated stock repurchase contracts or similar  derivatives transactions on customary terms, at prevailing market prices, volume-average weighted  prices or discounts thereto shall not be considered Potential Adjustment Events, to the extent that  (I) such Share repurchases are pursuant to the Concurrent Repurchase (as defined below), or (II) in  respect of Share repurchases other than the Concurrent Repurchase, (A) the aggregate number of  





 






32  Shares so repurchased during the term of the Transaction would not exceed 25% of the number of  Shares outstanding as of the Trade Date and (B) the aggregate number of Shares so repurchased  during any calendar year would not exceed 15% of the number of Shares outstanding as of the  Trade Date, in each case as determined by Calculation Agent. “Concurrent Repurchase” means  the repurchase by Counterparty of an aggregate of up to 445,037 Shares on or around the Premium  Payment Date in connection with the offering of the Convertible Notes.  (z) Reserved.  (aa) Risk Disclosure Statement. Counterparty represents and warrants that it has received, read and  understands the OTC Options Risk Disclosure Statement provided by Dealer and a copy of the  most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled  “Characteristics and Risks of Standardized Options”.  (bb) Delivery of Tax Certificates. For purposes of Section 4(a)(i) and (ii) of the Agreement,  Counterparty shall have delivered to Dealer a properly completed Internal Revenue Service Form  W-9 (or successor thereto) and Dealer agrees to deliver to Counterparty a complete and duly  executed Internal Revenue Service Form W-[9][8ECI] “Certificate of Foreign Person’s Claim  That Income Is Effectively Connected With the Conduct of a Trade or Business in the United  States” (or successor thereto). Such forms shall be delivered (i) upon execution and delivery of  this Confirmation, (ii) upon reasonable request by the other party and (iii) promptly upon learning  that any such tax form previously provided by it has become obsolete or incorrect.   (cc) 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 U.S. federal withholding tax imposed or collected pursuant to  FATCA (a “FATCA Withholding Tax”). “FATCA” is defined as 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 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. 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.   (dd) Incorporation of ISDA 2015 Section 871(m) Protocol Provisions. To the extent that either party to  the Agreement with respect to this Transaction is not an adhering party to the ISDA 2015 Section  871(m) Protocol published by the International Swaps and Derivatives Association, Inc. on  November 2, 2015 and available at www.isda.org, as may be amended, supplemented, replaced or  superseded from time to time (the “871(m) Protocol”), the parties agree that the provisions and  amendments contained in the Attachment to the 871(m) Protocol are incorporated into and apply  to the Agreement with respect to this Transaction as if set forth in full herein. The parties further  agree that, solely for purposes of applying such provisions and amendments to the Agreement with  respect to this Transaction, references to “each Covered Master Agreement” in the 871(m)  Protocol will be deemed to be references to the Agreement with respect to this Transaction, and  references to the “Implementation Date” in the 871(m) Protocol will be deemed to be references to  the Trade Date of this Transaction.  (ee) Payee Tax Representations. For purposes of Section 3(f) of the Agreement, each party makes the  following representations, as applicable:  Counterparty represents that it is a “U.S. person” (as that term is used in Section 1.1441-4(a)(3)(ii)  of United States Treasury Regulations), a corporation for U.S. federal income tax purposes and an  exempt recipient under Section 1.6049-4(c)(l)(ii) of the United States Treasury Regulations.   Dealer represents that it is a is a [  ].      





 






    [Signature Page to Base Capped Call Confirmation]  Counterparty hereby agrees to check this Confirmation and to confirm that the foregoing correctly sets  forth the terms of the Transaction by signing in the space provided below and returning to Dealer the fully executed  Confirmation via e-mail.  Very truly yours,    [  ]    By:     Name:  Title:    Accepted and confirmed  as of the Trade Date:  Progress Software Corporation  By:   Authorized Signatory  Name: