Document:

exv10w09

Exhibit 10.09

	 	 	 

	To:
	 	Cadence Design Systems, Inc.

	 
	 	2655 Seely Avenue, Building 5

	 
	 	San Jose, CA 95134

	 
	 	Attention:  Office of the General Counsel
	 
	 	 
	From:
	 	Deutsche Bank AG, London Branch

	 
	 	Winchester House

	 
	 	1 Great Winchester St, London EC2N 2DB

	 
	 	 
	 
	 	c/o Deutsche Bank Securities Inc.

	 
	 	60 Wall Street New

	 
	 	York, NY 10005

	 
	 	Telephone: 212-250-2500
	 
	 	 
	Re:
	 	Base Issuer Warrant Transaction
	 
	 	 
	Ref. No:
	 	386875
	 
	 	 
	Date:
	 	June 9, 2010

Dear Sir(s):

     DEUTSCHE BANK AG, LONDON BRANCH IS NOT REGISTERED AS A BROKER DEALER UNDER THE
U.S. SECURITIES EXCHANGE ACT OF 1934. DEUTSCHE BANK SECURITIES INC. (“DBSI”) HAS
ACTED SOLELY AS AGENT IN CONNECTION WITH THE TRANSACTION AND HAS NO OBLIGATION, BY WAY
OF ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH RESPECT TO THE PERFORMANCE OF
EITHER PARTY UNDER THE TRANSACTION. AS SUCH, ALL DELIVERY OF FUNDS, ASSETS, NOTICES,
DEMANDS AND COMMUNICATIONS OF ANY KIND RELATING TO THIS TRANSACTION BETWEEN DEUTSCHE
BANK AG, LONDON BRANCH, AND ISSUER SHALL BE TRANSMITTED EXCLUSIVELY THROUGH DEUTSCHE
BANK SECURITIES INC. DEUTSCHE BANK AG, LONDON BRANCH IS NOT A MEMBER OF THE SECURITIES
INVESTOR PROTECTION CORPORATION (SIPC).

     The purpose of this communication (this “Confirmation”) is to set forth the terms
and conditions of the above-referenced transaction entered into on the Trade Date
specified below (the “Transaction”) between Deutsche Bank AG, London Branch (“Dealer”)
and Cadence Design Systems, Inc. (“Issuer”). This communication constitutes a
“Confirmation” as referred to in the ISDA Master Agreement specified below.

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

     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.

     This Confirmation evidences a complete and binding agreement between Dealer and
Issuer as to the terms of the Transaction to which this Confirmation relates. This
Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA
Master Agreement (Multicurrency—Cross Border) as if Dealer and Issuer had executed an
agreement in such form on the date hereof (but without any Schedule except for (i) the
election of Loss and Second Method and US Dollars (“USD”) as the Termination Currency,
(ii) the replacement of the word “third” in the last line of Section 5(a)(i) of the
Agreement with the word “second” and (iii) such other elections as set forth in this
Confirmation.

     All provisions contained in, or incorporated by reference to, the Agreement will
govern this Confirmation except as expressly modified herein. In the event of any
inconsistency between this Confirmation and either the Equity Definitions or the
Agreement, this Confirmation shall govern.

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

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

General Terms:

	 	 	 

	Trade Date:

	 	June 9, 2010
	 
	 	 
	Effective Date:

	 	June 15, 2010, or such other date as agreed between
the parties, subject to Section 8(k) below.
	 
	 	 
	Components:

	 	The Transaction will be divided into individual
Components, each with the terms set forth in this
Confirmation, and, in particular, with the Number of
Warrants and Expiration Date set forth in this
Confirmation. The payments and deliveries to be
made upon settlement of the Transaction will be
determined separately for each Component as if each
Component were a separate Transaction under the
Agreement.
	 
	 	 
	Warrant Style:

	 	European
	 
	 	 
	Warrant Type:

	 	Call
	 
	 	 
	Seller:

	 	Issuer
	 
	 	 
	Buyer:

	 	Dealer

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	Shares:

	 	The Common Stock of Issuer, par value USD 0.01
per share (Ticker Symbol: “CDNS”).
	 
	 	 
	Number of Warrants:

	 	For each Component, as provided in Annex A to this
Confirmation.
	 
	 	 
	Warrant Entitlement:

	 	One Share per Warrant
	 
	 	 
	Strike Price:

	 	USD 10.78
	 
	 	 
	Premium:

	 	USD 9,475,740.00
	 
	 	 
	Premium Payment Date:

	 	The Effective Date
	 
	 	 
	Exchange:

	 	NASDAQ Global Select Market
	 
	Related Exchange:

	 	All Exchanges.

Procedures for Exercise:

     In respect of any Component:

	 	 	 

	Expiration Time:

	 	Valuation Time
	 
	 	 
	Expiration Date:

	 	As provided in Annex A to this Confirmation (or, if
such date is not a Scheduled Trading Day, the next
following Scheduled Trading Day that is not already
an Expiration Date for another Component); provided
that if that date is a Disrupted Day, the Expiration
Date for such Component shall be the first
succeeding Scheduled Trading Day that is not a
Disrupted Day and is not or is not deemed to be an
Expiration Date in respect of any other Component of
the Transaction hereunder; and provided further that
if the Expiration Date has not occurred pursuant to
the preceding proviso as of the Final Disruption Date,
the Calculation Agent shall have the right to elect, in
its sole discretion, that the Final Disruption Date shall
be the Expiration Date for such Component
(irrespective of whether such date is an Expiration
Date in respect of any other Component for the
Transaction). “Final Disruption Date” means
December 21, 2015. Notwithstanding the foregoing
and anything to the contrary in the Equity
Definitions, if a Market Disruption Event occurs on
any Expiration Date, the Calculation Agent may
determine that such Expiration Date is a Disrupted
Day only in part, in which case (i) the Calculation
Agent shall make adjustments to the Number of
Warrants for the relevant Component for which such
day shall be the Expiration Date and shall designate
the Scheduled Trading Day determined in the manner
described in the immediately preceding sentence as
the Expiration Date for the remaining Warrants for
such Component and (ii) the VWAP Price for such
Disrupted Day shall be determined by the Calculation
Agent based on transactions in the Shares effected on
such Disrupted Day taking into account the nature
and duration of such Market Disruption Event on
such day. Section 6.6 of the Equity Definitions shall

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	 	not apply to any Valuation Date occurring on an
Expiration Date.
	 
	 	 
	Market Disruption Event:

	 	Section 6.3(a) of the Equity Definitions is hereby
amended by (A) deleting the words “during the one
hour period that ends at the relevant Valuation Time,
Latest Exercise Time, Knock-in Valuation Time or
Knock-out Valuation Time, as the case may be,” in
clause (ii) thereof and (B) replacing the words “or
(iii) an Early Closure.” therein with “(iii) an Early
Closure, or (iv) a Regulatory Disruption.”.
Section 6.3(d) of the Equity Definitions is hereby
amended by deleting the remainder of the provision
following the term “Scheduled Closing Time” in the
fourth line thereof.
	 
	 	 
	Regulatory Disruption:

	 	Any event that Dealer, in its reasonable discretion
based on advice of counsel, determines makes it
appropriate with regard to any legal, regulatory or
self-regulatory requirements or generally applicable
related policies and procedures applicable to Dealer
and applied to the Transaction in a non-discriminatory manner, for Dealer to refrain from or
decrease any market activity in connection with the
Transaction.
	 
	 	 
	Automatic Exercise:

	 	Applicable; and means that the Number of Warrants
for the corresponding Expiration Date will be deemed
to be automatically exercised at the Expiration Time
on such Expiration Date unless Dealer notifies Seller
(by telephone or in writing) prior to the Expiration
Time on such Expiration Date that it does not wish
Automatic Exercise to occur, in which case
Automatic Exercise will not apply to such Expiration
Date.
	 
	 	 
	Issuer’s Telephone Number
and Telex and/or Facsimile Number
and Contact Details for purpose of
Giving Notice:

	 	As provided in Section 6(a) below.

Valuation Terms:

     In respect of any Component:

	 	 	 

	Valuation Time:

	 	At the close of trading of the regular trading session
on the Exchange; provided that if the regular trading
session is extended, the Calculation Agent shall
determine the Valuation Time in its reasonable
discretion.
	 
	 	 
	Valuation Date:

	 	The Expiration Date.

Settlement Terms:

     In respect of any Component:

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	Settlement Currency:

	 	USD
	 
	 	 
	Net Share Settlement:

	 	On each Settlement Date, Issuer shall deliver to
Dealer a number of Shares equal to the Number of
Shares to be Delivered for such Settlement Date to
the account specified by Dealer and cash in lieu of
any fractional Share valued at the VWAP Price on
the Valuation Date corresponding to such Settlement
Date. If, in the reasonable judgment of Issuer or
Dealer, based on advice of counsel, for any reason,
the Shares deliverable upon Net Share Settlement
would not be immediately freely transferable by
Dealer under Rule 144 under the Securities Act of
1933, as amended (the “Securities Act”), then Dealer
may elect to either (x) accept delivery of such Shares
notwithstanding any restriction on transfer or (y)
have the provisions set forth in Section 8(b) below
apply.
	 
	 	 
	 

	 	The Number of Shares to be Delivered shall be
delivered by Issuer to Dealer no later than 5:00 p.m.
(local time in New York City) on the relevant
Settlement Date.
	 
	 	 
	Number of Shares to be Delivered:

	 	In respect of any Exercise Date, subject to the last
sentence of Section 9.5 of the Equity Definitions, the
product of (i) the number of Warrants exercised or
deemed exercised on such Exercise Date, (ii) the
Warrant Entitlement and (iii) (A) the excess of the
VWAP Price on the Valuation Date occurring in
respect of such Exercise Date over the Strike Price
(or, if there is no such excess, zero) divided by (B)
such VWAP Price.
	 
	 	 
	VWAP Price:

	 	For any Exchange Business Day, the volume
weighted average price per Share for the regular
trading session (including any extensions thereof) of
the Exchange on such Exchange Business Day
(without regard to pre-open or after hours trading
outside of such regular trading session), as published
by Bloomberg at 4:15 P.M., New York City time (or
15 minutes following the end of any extension of the
regular trading session), on such Exchange Business
Day, on Bloomberg page “CDNS.Q <Equity> AQR”
(or any successor thereto) (or if such published
volume weighted average price is unavailable or is
manifestly incorrect, the market value of one Share
on such Exchange Business Day, as reasonably
determined by the Calculation Agent using a volume
weighted method).
	 
	 	 
	Other Applicable Provisions:

	 	The provisions of Sections 9.1(c), 9.4, 9.8, 9.9, 9.10,
9.11 and 9.12 of the Equity Definitions will be
applicable as if “Physical Settlement” applied to the
Transaction; provided that the Representation and
Agreement contained in Section 9.11 of the Equity
Definitions shall be modified by excluding any
representations therein relating to restrictions,

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	 	obligations, limitations or requirements under
applicable securities laws that exist as a result of the
fact that Issuer is the issuer of the Shares.

Adjustments:

     In respect of any Component:

	 	 	 

	Method of Adjustment:

	 	Calculation Agent Adjustment; provided that in
respect of an Extraordinary Dividend, “Calculation
Agent Adjustment” shall be as described in the
provision below. For the avoidance of doubt,
Calculation Agent Adjustment shall continue to apply
until the obligations of the parties (including any
obligations of Issuer pursuant to Section 8(e) below)
under the Transaction have been satisfied in full.
	 
	 	 
	Extraordinary Dividend:

	 	Any cash dividend or distribution on the Shares with
an ex-dividend date occurring on or after the Trade
Date and on or prior to the Expiration Date (or, if any
Deficit Shares are owed pursuant to Section 8(e)
below, such later date on which Issuer’s obligations
under this Transaction have been satisfied in full).
	 
	 	 
	Extraordinary Dividend Adjustment:

	 	If at any time during the period from and including
the Trade Date, to and including the Expiration Date
for the Component with the latest Expiration Date
(or, if any Deficit Shares are owed pursuant to
Section 8(e) below, such later date on which Issuer’s
obligations under this Transaction have been satisfied
in full), an ex-dividend date for an Extraordinary
Dividend occurs or is deemed to occur, then the
Calculation Agent will make adjustments to any one
or more of the Strike Price, the Number of Warrants,
the Warrant Entitlement and/or any other variable
relevant to the exercise, settlement, payment or other
terms of the Transaction as it determines appropriate
to account for the economic effect on the Transaction
of such Extraordinary Dividend.

Extraordinary Events:

	 	 	 

	New Shares:

	 	In the definition of New Shares in Section 12.1(i) of
the Equity Definitions (A) the text in clause (i)
thereof shall be deleted in its entirety and replaced
with “publicly quoted, traded or listed on any of the
New York Stock Exchange, The NASDAQ Global
Market or The NASDAQ Global Select Market (or
their respective successors)” and (B) the phrase “and
(iii) of an entity or person organized under the laws
of the United States, any State thereof or the District
of Columbia that also becomes Issuer under the
Transaction following such Merger Event or Tender
Offer” shall be inserted at the end thereof.
	 
	 	 
	Consequences of Merger Events:
	 	 

	 	 	 

	(a) Share-for-Share:

	 	Modified Calculation Agent Adjustment

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	(b) Share-for-Other:

	 	Cancellation and Payment (Calculation Agent
Determination)
	 
	 	 
	(c) Share-for-Combined:

	 	Cancellation and Payment (Calculation Agent
Determination); provided that the Calculation Agent
may elect Component Adjustment for all or part of
the Transaction.

	 	 	 

	Tender Offer:

	 	Applicable.
	 
	 	 
	Consequences of Tender Offers:
	 	 

	 	 	 

	(a) Share-for-Share:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	(b) Share-for-Other:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	(c) Share-for-Combined:

	 	Modified Calculation Agent Adjustment

	 	 	 

	Modified Calculation
Agent Adjustment:

	 	Upon the occurrence of any Merger Event pursuant
to which the holders of Issuer’s Shares would be
entitled to receive cash, securities or other property
for their Shares and for which Modified Calculation
Agent Adjustment would apply, if, as a result of such
Merger Event, Issuer would be different from the
issuer of the Shares under this Confirmation, then, on
or prior to the effective date of such Merger Event,
the Issuer and the issuer of the Shares under this
Confirmation will enter into a supplemental
confirmation as a condition precedent to the
adjustments contemplated in Section 12.2(e)(i) of the
Equity Definitions, with such supplemental
confirmation containing representations, warranties
and agreements relating to securities law and other
issues as requested by Dealer that Dealer has
determined, in its reasonable discretion, to be
reasonably necessary or appropriate to allow Dealer
to continue as a party to the Transaction, as adjusted
under Section 12.2(e)(i) of the Equity Definitions,
and to preserve its hedging or hedge unwind
activities in connection with the Transaction in a
manner compliant with applicable legal, regulatory or
self-regulatory requirements, or with generally
applicable related policies and procedures applicable
to Dealer and applied to the Transaction in a non-discriminatory manner, and if such conditions are not
met or if the Calculation Agent determines that no
adjustment that it could make under Section
12.2(e)(i) of the Equity Definitions will produce a
commercially reasonable result, then the
consequences set forth in Section 12.2(e)(ii) of the
Equity Definitions shall apply.
	 
	 	 
	Nationalization, Insolvency
or Delisting:

	 	Cancellation and Payment (Calculation Agent
Determination); provided that (i) Section 12.6(a)(iii)
of the Equity Definitions shall be amended to delete,
in the definition of the term “Delisting” the

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	 	parenthetical “(or will cease)” and (ii) in addition to
the provisions of Section 12.6(a)(iii) of the Equity
Definitions, it shall also constitute a Delisting if the
Exchange is located in the United States and the
Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The
NASDAQ Global Select Market or The NASDAQ
Global Market (or their respective successors); if the
Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system,
such exchange or quotation system shall thereafter be
deemed to be the Exchange.

Additional Disruption Events:

	 	 	 

	(a) Change in Law:

	 	Applicable; provided that Section 12.9(a)(ii) of the
Equity Definitions is hereby amended by (i) replacing
the phrase “the interpretation” in the third line thereof
with the phrase “or announcement or statement of the
interpretation” and (ii) replacing the word “Shares”
with the phrase “Hedge Positions” in clause (X)
thereof.
	 
	 	 
	(b) Failure to Deliver:

	 	Not Applicable
	 
	 	 
	(c) Insolvency Filing:

	 	Applicable; provided that only Dealer shall have the
right to terminate the Transaction upon an Insolvency
Filing.
	 
	 	 
	(d) Hedging Disruption:

	 	Applicable; provided that
	 
	 	 
	 

	 	(i) Section 12.9(a)(v) of the Equity Definitions is
hereby amended by inserting the following two
sentences 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 (B) above must
be available on commercially reasonable pricing
terms.”
	 
	 	 
	 

	 	(ii) Section 12.9(b)(iii) of the Equity Definitions is
hereby amended by inserting in the third line thereof,
after the words “to terminate the Transaction”, the
words “or a portion of the Transaction affected by
such Hedging Disruption”.
	 
	 	 
	(e) Increased Cost of Hedging:

	 	Applicable
	 
	 	 
	(f) Loss of Stock Borrow:

	 	Applicable
	 
	 	 
	     Maximum Stock Loan Rate:

	 	2.00% per annum
	 
	 	 
	(g) Increased Cost of Stock Borrow:

	 	Applicable
	 
	 	 
	     Initial Stock Loan Rate:

	 	0.25% per annum

	 	 	 

	Hedging Party:

	 	Dealer for all applicable Additional Disruption
Events.

8

 

	 	 	 

	Determining Party:

	 	Dealer for all applicable Additional Disruption
Events.
	 
	 	 
	Non-Reliance:

	 	Applicable
	 
	 	 
	Agreements and Acknowledgments Regarding Hedging Activities:

	 	Applicable
	 
	 	 
	Additional Acknowledgments:

	 	Applicable
	 
	 	 
	3.
Calculation Agent:

	 	

     

Dealer. All determinations made by the Calculation
Agent shall be made in good faith and in a
commercially reasonable manner. Following any
determination or calculation by the Calculation Agent
hereunder, upon a written request by Issuer, the
Calculation Agent will provide to Issuer by e-mail to
the e-mail address provided by Issuer 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, where
applicable, a description of the methodology and data
applied, it being understood that the Calculation
Agent shall not be obligated to disclose any
proprietary models used by it for such determination
or calculation.

	 	4.	 	Account Details:
	 
	 	 	 	Dealer Payment Instructions:

	 	 	 	Deutsche Bank AG, London Branch

The Bank of New York

Account Name: Deutsche Bank Securities, Inc.

	 	 	 	Account for delivery of Shares to Dealer:

	 	 	 	To be provided by Dealer.

	 	 	 	Issuer Payment Instructions:

	 	 	 	To be provided by Issuer.

	 	5.	 	Offices:
	 
	 	 	 	The Office of Dealer for the Transaction is: London

	 	 	 	Deutsche Bank AG, London Branch

Winchester house

1 Great Winchester St, London

EC2N 2DB

	 	 	 	The Office of Issuer for the Transaction is:

	 	 	 	Inapplicable. Issuer is not a Multibranch Party.

	 	6.	 	Notices: For purposes of this Confirmation:

	 	(a)	 	Address for notices or communications to Issuer:

9

 

	 	 	 
	To:

	 	Cadence Design Systems, Inc.

2655 Seely Avenue, Building 5

San Jose, California 95134
	Attn:

	 	Office of the General Counsel
	Facsimile:

	 	(408) 904-6946

	 	(b)	 	Address for notices or communications to Dealer:

	 	 	 

	To:

	 	Deutsche Bank AG, London Branch

c/o Deutsche Bank Securities Inc.

60 Wall Street

New York, NY 10005
	Attn:

	 	Peter Barna
	 
	 	 
	With a copy to:

	 	Deutsche Bank AG, London Branch

c/o Deutsche Bank Securities Inc.

60 Wall Street

New York, NY 10005
	Attn:

	 	Lars Kestner

	 	7.	 	Representations, Warranties and Agreements:

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

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

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

     (iii) Issuer is not entering into this Confirmation, and on the date of
any election by Issuer of the Share Termination Alternative under Section 8(a)
below, Issuer represents that it is not making such election, to create actual
or apparent trading activity in the Shares (or any security convertible into
or exchangeable for Shares) or to raise or depress or otherwise manipulate the
price of the Shares (or any security convertible into or exchangeable for
Shares) or otherwise in violation of the Exchange Act.

10

 

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

     (v) Issuer shall not take any action to decrease the number of Available
Shares below the Capped Number (each as defined below).

     (vi) Issuer understands no obligations of Dealer to it hereunder will be
entitled to the benefit of deposit insurance and that such obligations will
not be guaranteed by any governmental agency.

     (vii) (A) On the Trade Date and during the period starting on the first
Expiration Date and ending on the last Expiration Date (the “Settlement
Period”), the Shares or securities that are convertible into, or exchangeable
or exercisable for Shares, are not, and shall not be, subject to a “restricted
period,” as such term is defined in Regulation M under the Exchange Act
(“Regulation M”) and (B) Issuer shall not engage in any “distribution,” as
such term is defined in Regulation M until the second Exchange Business Day
immediately following the Trade Date or Settlement Period, as applicable.

     (ix) Issuer agrees that it (A) will not during the Settlement Period make,
or permit to be made, any public announcement (as defined in Rule 165(f)
under the Securities Act) of any Merger Transaction or potential Merger
Transaction unless such public announcement is made prior to the opening or
after the close of the regular trading session on the Exchange for the Shares;
(B) shall promptly (but in any event prior to the next opening of the regular
trading session on the Exchange) notify Dealer following any such announcement
that such announcement has been made; and (C) shall promptly (but in any event
prior to the next opening of the regular trading session on the Exchange)
provide Dealer with written notice specifying (i) Issuer’s average daily Rule
10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar
months immediately preceding the announcement date that were not effected
through Dealer or its affiliates and (ii) the number of Shares purchased
pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the
three full calendar months preceding the announcement date. Such written
notice shall be deemed to be a certification by Issuer to Dealer that such
information is true and correct. In addition, Issuer shall promptly notify
Dealer of the earlier to occur of the completion of such transaction and the
completion of the vote by target shareholders. “Merger Transaction” means any
merger, acquisition or similar transaction involving a recapitalization as
contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act.

     (x) A number of Shares equal to the Capped Number have been reserved for
issuance by all required corporate action of the Issuer. Any Shares issued or
delivered in connection with the Transaction shall be duly authorized and,
when delivered as contemplated hereby following the exercise of the Warrants
in accordance with their terms and conditions, will be validly issued, fully
paid and non-assessable, and the issuance or delivery thereof shall not be
subject to any preemptive or similar rights and shall, upon issuance, be
accepted for listing or quotation on the Exchange.

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

     (xii) The representations and warranties of Issuer set forth in Section 3 of
the Agreement and Section 1 of the Purchase Agreement dated as of June 9, 2010
between Issuer and J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated
as representatives of the initial purchasers party thereto (the “Purchase
Agreement”) are true and correct as of the Trade Date and the Effective Date and are
hereby deemed to be repeated to Dealer as if set forth herein.

     (b) Each of Dealer
and Issuer agrees and represents that it is an “eligible contract participant” as
defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended, and is
entering into the

11

 

Transaction as principal (and not as agent or in any other capacity, fiduciary or otherwise)
and not for the benefit of any third party.

     (c) Each of Dealer and Issuer acknowledges that the offer and sale of the
Transaction to it is intended to be exempt from registration under the Securities Act,
by virtue of Section 4(2) thereof. Accordingly, Dealer represents and warrants to
Issuer that (i) it has the financial ability to bear the economic risk of its
investment in the Transaction and is able to bear a total loss of its investment and
its investments in and liabilities in respect of the Transaction, which it understands
are not readily marketable, are not disproportionate to its net worth, and it is able
to bear any loss in connection with the Transaction, including the loss of its entire
investment in the Transaction, (ii) it is an “accredited investor” as that term is
defined in Regulation D as promulgated under the Securities Act, (iii) it is entering
into the Transaction for its own account without a view to the distribution or resale
thereof, (iv) the assignment, transfer or other disposition of the Transaction has not
been and will not be registered under the Securities Act and is restricted under this
Confirmation, the Securities Act and state securities laws, and (v) its financial
condition is such that it has no need for liquidity with respect to its investment in
the Transaction and no need to dispose of any portion thereof to satisfy any existing
or contemplated undertaking or indebtedness and is capable of assessing the merits of
and understanding (on its own behalf or through independent professional advice), and
understands and accepts, the terms, conditions and risks of the Transaction.

     (d) Each of Dealer and Issuer agrees and acknowledges that Dealer is a “financial
institution,” “swap participant” and “financial participant” within the meaning of
Sections 101(22), 101(53C) and 101(22A) of Title 11 of the United States Code (the
“Bankruptcy Code”). The parties hereto further agree and acknowledge (A) that this
Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7)
of the Bankruptcy Code, with respect to which each payment and delivery hereunder or
in connection herewith is a “termination value,” “payment amount” or “other transfer
obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement
payment” within the meaning of Section 546 of the Bankruptcy Code, and (ii) a “swap
agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with
respect to which each payment and delivery hereunder or in connection herewith is a
“termination value,” “payment amount” or “other transfer obligation” within the
meaning of Section 362 of the Bankruptcy Code and a “transfer” within the meaning of
Section 546 of the Bankruptcy Code, and (B) that Dealer is entitled to the protections
afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 362(b)(27), 362(o),
546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code.

     (e) For the purposes of Section 3(f) of the Agreement, Dealer represents that, as
of the time any payment is made after December 31, 2012, (i) if it is a “foreign
financial institution” within the meaning of section 1471(d)(4) of the Internal
Revenue Code of 1986 as amended (the “Code”), it meets the requirements of section
1471(b) of the Code and has not elected the application of section 1471(b)(3) of the
Code, and (ii) if it is a “non-financial foreign entity” within the meaning of section
1472(d) of the Code, it meets the requirements of section 1472(b) of the Code, unless
one or more of the exceptions of Code section 1472(c) are applicable with respect to
such payment.

     (f) As a condition to effectiveness of the Transaction, Issuer shall deliver to
Dealer an opinion of counsel, dated as of the Trade Date and reasonably acceptable to
Dealer in form and substance, with respect to the matters set forth in Section 3(a) of
the Agreement and Section 7(a)(x) hereof, subject to customary assumptions,
qualifications and exceptions.

     8. Other
Provisions:

     (a) Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events. If Issuer shall owe Dealer any amount pursuant to Section 12.2,
12.3, 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of a Tender Offer, Merger Event,
Insolvency or Nationalization, in each case, in which the consideration or proceeds to be paid
to holders of Shares consists solely of cash) or pursuant to Section 6(d)(ii) of the Agreement
(except in the event of an Event of Default in which Issuer is the Defaulting Party or a
Termination Event in which Issuer is the Affected Party that resulted from an event or events
within Issuer’s control) (a “Payment Obligation”), Issuer shall have the right, in its sole
discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as
defined below) by giving irrevocable telephonic notice to Dealer, confirmed in writing

12

 

within one Scheduled Trading Day, between the hours of 9:00 A.M. and 4:00 P.M., New York City time,
on the Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or other date the
Transaction is cancelled or terminated, as applicable (“Notice of Share Termination”). Upon such
Notice of Share Termination, the following provisions shall apply on the Scheduled Trading Day
immediately following the Merger Date, the Tender Offer Date, Announcement Date, Early Termination
Date or other date the Transaction is cancelled or terminated, as applicable:

	 	 	 

	Share Termination Alternative:

	 	Applicable and means that Issuer shall deliver to Dealer the Share Termination
Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to
Section 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) of
the Agreement, as applicable (the “Share Termination Payment
Date”), in satisfaction of the Payment Obligation.
	 
	 	 
	Share Termination Delivery
Property:

	 	A number of Share Termination Delivery Units, as calculated by the Calculation
Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The
Calculation Agent shall adjust the Share Termination Delivery Property by replacing any
fractional portion of the aggregate amount of a security therein with an amount of cash equal
to the value of such fractional security based on the values used to calculate the Share
Termination Unit Price.
	 
	 	 
	Share Termination Unit Price:

	 	The value of property contained in one Share Termination
Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share
Termination Delivery
Property, as determined by the Calculation Agent in its discretion by commercially reasonable
means and notified by the Calculation Agent to Issuer at the time of notification of the
Payment Obligation.
	 
	 	 
	Share Termination Delivery Unit:

	 	In the case of a Termination Event, Event of Default,
Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency,
Nationalization, Merger Event or Tender Offer, a Share or a unit consisting of the number or
amount of each type of property received by a holder of one Share (without consideration of
any requirement to pay cash or other consideration in lieu of fractional amounts of any
securities) in such Insolvency, Nationalization, Merger Event or Tender Offer. If such
Insolvency, Nationalization, Merger Event or Tender Offer involves a choice of consideration
to be received by holders, such holder shall be deemed to have elected to receive the maximum
possible amount of cash.
	 
	 	 
	Failure to Deliver:

	 	Applicable
	 
	 	 
	Other Applicable Provisions:

	 	If Share Termination Alternative is applicable, the provisions
of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be
applicable as if “Physical Settlement” applied to the Transaction, except that all references
to “Shares” shall be read as references to “Share Termination Delivery Units”; provided that
the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be
modified by excluding any representations therein relating to restrictions, obligations,
limitations or requirements under applicable securities laws as a result of the fact that
Issuer is the issuer of any Share Termination Delivery Units (or any security forming a part
thereof). If, in the reasonable judgment of Issuer or Dealer, based on advice of counsel, for
any reason, any securities comprising the Share Termination Delivery Units deliverable
pursuant to this Section 8(a) would not be immediately freely transferable by Dealer under
Rule

13

 

	 	 	 

	 

	 	144 under the Securities Act, then Dealer may elect to either
(x) permit delivery of such securities notwithstanding any
restriction on transfer or (y) have the provisions set forth
in Section 8(b) below apply.

     (b) Registration/Private Placement Procedures. (i) With respect to the Transaction,
the following provisions shall apply to the extent provided for above opposite the caption
“Net Share Settlement” in Section 2 or in paragraph (a) of this Section 8. If so
applicable, then, at the election of Issuer by notice to Dealer within one Exchange Business
Day after the relevant delivery obligation arises, but in any event at least one Exchange
Business Day prior to the date on which such delivery obligation is due, either (A) all
Shares or Share Termination Delivery Units, as the case may be, delivered by Issuer to
Dealer shall be covered by an effective registration statement of Issuer for immediate
resale by Dealer (such registration statement and the corresponding prospectus (the
“Prospectus”) (including, without limitation, any sections describing the plan of
distribution) in form and content commercially reasonably satisfactory to Dealer) or (B)
Issuer shall deliver additional Shares or Share Termination Delivery Units, as the case may
be, so that the value of such Shares or Share Termination Delivery Units, as determined by
the Calculation Agent to reflect an appropriate liquidity discount, equals the value of the
number of Shares or Share Termination Delivery Units that would otherwise be deliverable if
such Shares or Share Termination Delivery Units were freely tradeable (without prospectus
delivery) upon receipt by Dealer (such value, the “Freely Tradeable Value”); provided that,
if requested by Dealer on or prior to the second Exchange Business Day prior to the first
Exercise Date, any election to be made by Issuer described in this clause (B) shall be made
with respect to Shares delivered on all Settlement Dates no later than one Exchange Business
Day prior to the first Exercise Date, and the applicable procedures described below shall
apply to all Shares delivered on the Settlement Dates on an aggregate basis. (For the
avoidance of doubt, as used in this paragraph (b) only, the term “Issuer” shall mean the
issuer of the relevant securities, as the context shall require.)

     (ii) If Issuer makes the
election described in clause (b)(i)(A) above:

     (A) Dealer (or an affiliate of Dealer
designated by Dealer) shall be afforded a reasonable opportunity to conduct a due diligence
investigation with respect to Issuer that is customary in scope for underwritten follow-on
offerings of equity securities of companies of comparable size, maturity and lines of
business and that yields results that are commercially reasonably satisfactory to Dealer or
such affiliate, as the case may be, in its discretion; and

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

     (iii) If Issuer makes the election described in clause (b)(i)(B) above:

     (A) Dealer (or an affiliate of Dealer designated by Dealer) and any
potential institutional purchaser of any such Shares or Share Termination
Delivery Units, as the case may be, from Dealer or such affiliate identified by
Dealer shall be afforded a commercially reasonable opportunity to conduct a due
diligence investigation in compliance with applicable law with

14

 

respect to Issuer customary in scope for private placements of equity securities of
companies of comparable size, maturity and lines of business (including, without limitation,
the right to have made available to them for inspection all financial and other records,
pertinent corporate documents and other information reasonably requested by them), subject
to execution by such recipients of customary confidentiality agreements reasonably
acceptable to Issuer;

     (B) Dealer (or an affiliate of Dealer designated by Dealer) and
Issuer shall enter into an agreement (a “Private Placement Agreement”) on commercially
reasonable terms in connection with the private placement of such Shares or Share
Termination Delivery Units, as the case may be, by Issuer to Dealer or such affiliate and
the private resale of such shares by Dealer or such affiliate, substantially similar to
private placement purchase agreements customary for private placements of equity securities
of companies of comparable size, maturity and lines of business, in form and substance
commercially reasonably satisfactory to Dealer and Issuer, which Private Placement Agreement
shall include, without limitation, provisions substantially similar to those contained in
such private placement purchase agreements relating to the indemnification of, and
contribution in connection with the liability of, Dealer and its affiliates and Issuer,
shall provide for the payment by Issuer of all expenses in connection with such resale,
including all fees and expenses of counsel for Dealer, shall contain representations,
warranties and agreements of Issuer reasonably necessary or advisable to establish and
maintain the availability of an exemption from the registration requirements of the
Securities Act for such resales, and shall use reasonable best efforts to provide for the
delivery of accountants’ “comfort letters” to Dealer or such affiliate with respect to the
financial statements and certain financial information contained in or incorporated by
reference into the offering memorandum prepared for the resale of such Shares as are
customarily requested in comfort letters covering private placements of equity securities of
companies of comparable size, maturity and lines of business and delivery of disclosure
opinions of nationally recognized outside counsel to Issuer reasonably acceptable to Dealer;

     (C) Issuer agrees that any Shares or Share Termination Delivery Units so delivered to
Dealer, (i) may be transferred by and among Dealer and its affiliates, and Issuer shall
effect such transfer without any further action by Dealer and (ii) after the minimum
“holding period” within the meaning of Rule 144(d) under the Securities Act has elapsed with
respect to such Shares or any securities issued by Issuer comprising such Share Termination
Delivery Units, Issuer shall promptly remove, or cause the transfer agent for such Shares or
securities to remove, any legends referring to any such restrictions or requirements from
such Shares or securities upon delivery by Dealer (or such affiliate of Dealer) to Issuer or
such transfer agent of seller’s and broker’s representation letters customarily delivered by
Dealer in connection with resales of restricted securities pursuant to Rule 144 under the
Securities Act (if any), without any further requirement for the delivery of any
certificate, consent, agreement, opinion of counsel, notice or any other document, any
transfer tax stamps or payment of any other amount or any other action by Dealer (or such
affiliate of Dealer); and

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

     (c) Make-whole Shares. If Issuer makes the election described in clause (i)(B) of
paragraph (b) of this Section 8, then Dealer or its affiliates may sell (which sale
shall be made in a commercially reasonable manner) such Shares or Share Termination Delivery Units,
as the case may be, during a period (the “Resale Period”) commencing on the Exchange
Business Day following delivery of such Shares or Share Termination Delivery Units, as
the case may be, and ending on the Exchange Business Day on which Dealer or its
affiliates completes the sale of all such Shares or Share Termination Delivery Units,
as the case may be, or a sufficient number of Shares or Share Termination Delivery
Units, as the case may be, so that the realized net proceeds of such sales exceed the
Freely Tradeable Value. If any of such delivered Shares or Share Termination Delivery
Units remain after such realized net proceeds exceed the Freely

15

 

Tradeable Value, Dealer shall return such remaining Shares or Share Termination Delivery Units
to Issuer. If the Freely Tradeable Value exceeds the realized net proceeds from such resale,
Issuer shall transfer to Dealer by the open of the regular trading session on the Exchange on
the Exchange Trading Day immediately following the last day of the Resale Period the amount of
such excess (the “Additional Amount”) in cash or in a number of additional Shares or Share
Termination Delivery Units, as the case may be (“Make-whole Shares”) in an amount that, based
on the VWAP Price on the last day of the Resale Period (as if such day was the “Valuation
Date” for purposes of computing such VWAP Price), has a dollar value equal to the Additional
Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares in the
manner contemplated by this Section 8(c). This provision shall be applied successively until
the Additional Amount is equal to zero, subject to Section 8(e).

     (d) Beneficial Ownership. Notwithstanding anything to the contrary in the
Agreement or this Confirmation, in no event shall Dealer be entitled to receive, or
shall be deemed to receive, any Shares if, immediately upon giving effect to such
receipt of such Shares, (i) the “beneficial ownership” (within the meaning of Section
13 of the Exchange Act and the rules promulgated thereunder) of Shares by Dealer, any
of its affiliates subject to aggregation with Dealer for purposes of the “beneficial
ownership” test under Section 13 of the Exchange Act and all persons who may form a
“group” (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) with Dealer
with respect to “beneficial ownership” of any Shares (collectively, “Dealer Group”)
would be equal to or greater than 8.5% or more of the outstanding Shares on the date
of determination, (ii) the Warrant Equity Percentage exceeds 14.5% or (iii) Dealer,
Dealer Group or any person whose ownership position would be aggregated with that of
Dealer or Dealer Group (Dealer, Dealer Group or any such person, a “Dealer Person”)
under Section 203 of the Delaware General Corporation Law (the “DGCL Takeover
Statute”), or any state or federal bank holding company or banking laws, or other
federal, state or local regulations, regulatory orders or organizational documents or
contracts of Issuer that are, in each case, applicable to ownership of Shares
(“Applicable Laws”), would own, beneficially own, constructively own, control, hold
the power to vote or otherwise meet a relevant definition of ownership in excess of a
number of Shares equal to (x) the number of Shares that would give rise to reporting
or registration obligations or other requirements (including obtaining prior approval
by a state or federal regulator) of a Dealer Person under Applicable Laws (including,
without limitation, “interested stockholder” or “acquiring person” status under the
DGCL Takeover Statute) and with respect to which such requirements have not been met
or the relevant approval has not been received minus (y) 1.0% of the number of Shares
outstanding on the date of determination (either such condition described in clause
(i), (ii) or (iii), an “Excess Ownership Position”). The “Warrant 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 Warrants and the Warrant Entitlement
and (2) the aggregate number of Shares underlying any other call option transaction
sold by Issuer to Dealer and (B) the denominator of which is the number of Shares
outstanding on such day. If any delivery owed to Dealer hereunder is not made, in
whole or in part, as a result of this provision, Issuer’s obligation to make such
delivery shall not be extinguished and Issuer shall make such delivery as promptly as
practicable after, but in no event later than one Exchange Business Day after, Dealer
gives notice to Issuer that such delivery would not result in the existence of an
Excess Ownership Position.

     (e) Limitations on Settlement by Issuer. Notwithstanding anything herein or in
the Agreement to the contrary, in no event shall Issuer be required to deliver Shares
in connection with the Transaction in excess of the product of two, the aggregate
Number of Warrants for all Components at the time of delivery and the Warrant
Entitlement at the time of delivery (such product, the “Capped Number”). Issuer
represents and warrants to Dealer (which representation and warranty shall be deemed
to be repeated on each day that the Transaction is outstanding) that
the Capped Number is equal to or less than the number of authorized but unissued
Shares of the Issuer that are not reserved for future issuance in connection with
transactions in the Shares (other than the Transaction) on the date of the
determination of the Capped Number (such Shares, the “Available Shares”). In the
event Issuer shall not have delivered the full number of Shares otherwise deliverable
as a result of this Section 8(e) (the resulting deficit, the “Deficit Shares”), Issuer
shall be continually obligated to deliver Shares, from time to time until the full
number of Deficit Shares have been delivered pursuant to this paragraph, when, and to
the extent, that (A) Shares are repurchased, acquired or otherwise received by Issuer
or any of its subsidiaries after the Trade Date (whether or not in exchange for cash,
fair value or any other consideration), (B) authorized and

16

 

unissued Shares reserved for issuance in respect of other transactions prior to such date
which prior to the relevant date become no longer so reserved and (C) Issuer additionally
authorizes any unissued Shares that are not reserved for other transactions (such events as
set forth in clauses (A), (B) and (C) above, collectively, the “Share Issuance Events”).
Issuer shall promptly notify Dealer of the occurrence of any of the Share Issuance Events
(including the number of Shares subject to clause (A), (B) or (C) and the corresponding
number of Shares to be delivered) and, as promptly as reasonably practicable, deliver such
Shares thereafter.

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

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

     (i) For the purposes of any adjustment under Section 11.2(c) of the
Equity Definitions, the first sentence of Section 11.2(c) of the Equity Definitions, prior
to clause (A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent
Adjustment” is specified as the Method of Adjustment in the related Confirmation of a Share
Option Transaction, then following the announcement or occurrence of any Potential
Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment
Event has a material effect on the theoretical value of the relevant Shares or options on
the Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more
of:’ and, the portion of such sentence immediately preceding clause (ii) thereof is hereby
amended by deleting the words “diluting or concentrative” and the words “(provided that no
adjustments will be made to account solely for changes in volatility, expected dividends,
stock loan rate or liquidity relative to the relevant Shares)” and replacing such latter
phrase with the words “(and, for the avoidance of doubt, adjustments may be made to account
solely for changes in volatility, expected dividends, stock loan rate or liquidity relative
to the relevant Shares)”;

     (ii) Sections 11.2(a) and 11.2(e)(vii) of the Equity Definitions
are hereby amended by inserting at the end of each Section the phrase “or a material effect
on the theoretical value of the Warrants;”

     (iii) Section 12.9(b)(iv) of the Equity
Definitions is hereby amended by (A) deleting (1) subsection (A) in its entirety, (2) the
phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection
(B); (B) replacing “will lend” with “lends” in subsection (B); and (C) deleting the phrase
“neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the
Hedging Shares or” in the penultimate sentence; and

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

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

     (i) Disclosure. Effective from the date of commencement of discussions
concerning the Transaction, Issuer 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 Issuer relating to
such tax treatment and tax structure.

17

 

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

     (i) Dealer
reasonably determines that it is advisable to terminate a portion of the Transaction (the
“Affected Portion”) so that Dealer’s related hedging activities with respect thereto will
comply with applicable securities laws, rules or regulations or generally applicable related
policies and procedures of Dealer applied to the Transaction in a non-discriminatory manner
(whether or not such requirements, policies or procedures are imposed by law or have been
voluntarily adopted by Dealer); provided that Dealer shall treat only the Affected Portion
of the Transaction as the Affected Transaction; or

     (ii) at any time at which any Excess
Ownership Position (as defined above) occurs, Dealer, in its reasonable discretion, is
unable to effect a transfer or assignment to a third party of the Transaction or any other
transaction between the parties after using its commercially reasonable efforts on pricing
terms and within a time period reasonably acceptable to Dealer (the “Transfer Time Period”)
(it being understood that a period of at least one Exchange Business Day shall be considered
reasonable for this purpose (without prejudice to whether a shorter period of time would be
considered reasonable)) such that an Excess Ownership Position no longer exists; provided
that Dealer shall treat only that portion of the Transaction as the Affected Transaction as
necessary so that such Excess Ownership Position no longer exists; and provided further
that, unless such Excess Ownership Position is the result of a repurchase of Shares by
Issuer or any other event or events within Issuer’s control, Dealer shall promptly notify
Issuer of its Excess Ownership Position and shall use its commercially reasonable efforts to
consult with Issuer during the Transfer Time Period regarding potential transfers or
assignments to third parties prior to designating an Early Termination Date pursuant to this
Section 8(j)(ii); or

     (iii) a “person” or “group” within the meaning of Section 13(d) of the
Exchange Act other than Issuer, its subsidiaries and its and their employee benefit plans,
files a Schedule TO or any schedule, form or report under the Exchange Act, disclosing that
such person or group has become the direct or indirect “beneficial owner,” as defined in
Rule 13d-3 under the Exchange Act, of Issuer’s common equity representing more than 50% of
the voting power of Issuer’s common equity; or

     (iv) consummation of (A) any
recapitalization, reclassification or change of the Shares (other than changes resulting
from a subdivision or combination) as a result of which the Shares would be converted into,
or exchanged for, stock, other securities, other property or assets or (B) any share
exchange, consolidation or merger of Issuer pursuant to which the Shares will be converted
into cash, securities or other assets or any sale, lease or other transfer in one
transaction or a series of transactions of all or substantially all of the consolidated
assets of Issuer and its subsidiaries, taken as a whole, to any person other than Issuer or
one of Issuer’s subsidiaries; provided, however, that a transactions where (x) the Shares
are not changed or exchanged except to the extent necessary to reflect a change in Issuer’s
jurisdiction of incorporation or (y) the holders of more than 50% of all classes of Issuer’s
common equity immediately prior to such transaction own, directly or indirectly, more than
50% of the aggregate voting power of the common equity of the continuing or surviving
corporation or transferee or the parent thereof immediately after such event shall not
constitute an Additional Termination Event; or

     (v) Issuer’s stockholders approve any plan or
proposal for Issuer’s liquidation or dissolution; or

18

 

     (vi) the Shares (or any New Shares that would be deliverable by Issuer
hereunder) cease to be listed on any of The New York Stock Exchange, The
NASDAQ Global Select Market, The NASDAQ Global Market (or any of their
respective successors) or an alternate exchange of equivalent or greater
liquidity with respect to the Shares (or any such New Shares).

Notwithstanding the foregoing, a transaction or transactions described in clause (iv) above
will not constitute an Additional Termination Event if at least 90% of the consideration
received or to be received by holders of the Shares, excluding cash payments for fractional
shares and cash payments made pursuant to dissenters’ appraisal rights, in connection with
such transaction or transactions consists of shares of common stock that are listed or quoted
on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or that
will be so listed or quoted when issued or exchanged in connection with such transaction or
transactions.

     (k) Effectiveness. If, on or prior to the Effective Date, Dealer reasonably
determines that it is advisable to cancel the Transaction because of concerns that
Dealer’s related hedging activities could be viewed as not complying with applicable
securities laws, rules or regulations, the Transaction shall be cancelled and shall
not become effective, and neither party shall have any obligation to the other party
in respect of the Transaction.

     (l) Extension of Settlement. Dealer may divide any Component into additional
Components and designate the Expiration Date and the Number of Warrants for each such
Component if Dealer determines, in its reasonable discretion, that such further
division is necessary or advisable to preserve Dealer’s hedging or hedge unwind
activity hereunder in light of existing liquidity conditions in the cash market or
stock loan market or to enable Dealer to effect purchases of Shares in connection with
its hedging, hedge unwind or settlement activity hereunder in a manner that would, if
Dealer were Issuer or an affiliated purchaser of Issuer, be compliance with applicable
legal, regulatory and self-regulatory requirements, or with related policies and
procedures applicable to Dealer.

     (m) No Netting and Set-off. The provisions of Section 2(c) of the Agreement
shall not apply to the Transaction. Each party waives any and all rights it may have
to set-off delivery or payment obligations it owes to the other party under the
Transaction against any delivery or payment obligations owed to it by the other party,
whether arising under the Agreement, under any other agreement between parties hereto,
by operation of law or otherwise.

     (n) Delivery or Receipt of Cash. For the avoidance of doubt, other than receipt
of the Premium by Issuer, nothing in this Confirmation shall be interpreted as
requiring Issuer to cash settle this Transaction, except in circumstances where such
cash settlement is within Issuer’s control (including, without limitation, where
Issuer elects to deliver or receive cash, where Issuer fails timely to elect the Share
Termination Alternative, or where Issuer is not able to effect a private placement
settlement pursuant to Section 8(b)(i)(B) above due to the occurrence of events within
its control) or in those circumstances in which holders of the Shares would also
receive cash.

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

     (p) Designation by Dealer. 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 to or from Issuer, Dealer may designate any
of its affiliates to purchase, sell, receive or deliver such Shares or other
securities and otherwise to perform Dealer’s obligations in respect of the Transaction
and any such designee may assume such obligations. Dealer shall be discharged of its
obligations to Issuer only to the extent of any such performance.

     (q) Strike Price Adjustment. Notwithstanding anything to the contrary in the
Agreement, this Confirmation or the Equity Definitions (but without limiting Dealer’s
right to adjust any variable relevant to the exercise, settlement, payment or other
terms of the Transaction, other than the Strike Price and the Warrant Entitlement), in
no event shall (i) the Warrant Entitlement be adjusted, or (ii) the Strike Price be
adjusted to the extent that, after giving effect to such adjustment, the Strike Price
would be less than USD 6.16, in each case, other than any such adjustment in
connection with stock splits or similar changes to Issuer’s capitalization.

19

 

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

     (s) Share Deliveries. Issuer acknowledges and agrees that, to the extent the
holder of this Warrant is not then an affiliate and has not been an affiliate for 90
days (it being understood that Dealer will not be considered an affiliate under this
paragraph solely by reason of its receipt of Shares pursuant to this Transaction), and
otherwise satisfies all holding period and other requirements of Rule 144 of the
Securities Act applicable to it, any delivery of Shares or Share Termination Delivery
Property hereunder at any time after 6 months from the Trade Date (or 1 year from the
Trade Date if, at such time, informational requirements of Rule 144(c) are not
satisfied with respect to Issuer) shall be eligible for resale under Rule 144 of the
Securities Act and Issuer agrees to promptly remove, or cause the transfer agent for
such Shares or Share Termination Delivery Property, to remove, any legends referring to any
restrictions on resale under the Securities Act from the Shares or Share Termination
Delivery Property. Issuer further agrees that any delivery of Shares or Share
Termination Delivery Property prior to the date that is 6 months from the Trade Date
(or 1 year from the Trade Date if, at such time, informational requirements of Rule
144(c) are not satisfied with respect to Issuer), may be transferred by and among
Dealer and its affiliates and Issuer shall effect such transfer without any further
action by Dealer. Notwithstanding anything to the contrary herein, Issuer agrees that
any delivery of Shares or Share Termination Delivery Property shall be effected by
book-entry transfer through the facilities of DTC, or any successor depositary, if at
the time of delivery, such class of Shares or class of Share Termination Delivery
Property is in book-entry form at DTC or such successor depositary. Notwithstanding
anything to the contrary herein, to the extent the provisions of Rule 144 of the
Securities Act or any successor rule are amended, or the applicable interpretation
thereof by the Securities and Exchange Commission or any court change after the Trade
Date, the agreements of Issuer herein shall be deemed modified to the extent
necessary, in the opinion of outside counsel of Issuer, to comply with Rule 144 of the
Securities Act, as in effect at the time of delivery of the relevant Shares or Share
Termination Delivery Property.

     (t) Quarterly Valuations. Dealer hereby agrees, upon request by Issuer, to
provide or cause its affiliate to provide to Issuer, within five Exchange Business
Days after the end of the fiscal quarter of Issuer during which Issuer made such
request, a valuation estimate of the fair value of the Transaction as of Issuer’s
fiscal quarter end.

     (u) Waiver of Trial by Jury. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING RELATING TO THIS TRANSACTION. EACH PARTY (I) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH A SUIT, ACTION OR
PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE
OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THIS TRANSACTION, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS PROVIDED HEREIN.

     (v) Governing Law; Jurisdiction. THE AGREEMENT, THIS CONFIRMATION AND ALL
MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE, OTHER THAN TITLE 14 OF THE
NEW YORK GENERAL OBLIGATIONS LAW). THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS
RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF
INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

     (w) Method of Delivery. Whenever delivery of funds or other assets is required
hereunder by or to Issuer, such delivery shall be effected through DBSI. In addition,
all notices, demands and

20

 

communications of any kind relating to the Transaction between Deutsche and Issuer shall be
transmitted exclusively through DBSI.

21

 

     Please confirm that the foregoing correctly sets forth the terms of our
agreement by sending to us a letter or telex substantially similar to this
facsimile, which letter or telex sets forth the material terms of the Transaction
to which this Confirmation relates and indicates your agreement to those terms.
Dealer will make the time of execution of the Transaction available upon request.

     Dealer is regulated by the Financial Services Authority.

	 	 	 	 	 
	 	Yours faithfully,

DEUTSCHE BANK AG, LONDON BRANCH

 	 
	 	By:  	/s/ Lars Kestner
 	 
	 	 	Name:  	Lars Kestner 	 
	 	 	Title:  	Managing Director 	 
	 	 	 
	 	By:  	                                      /s/ Michael Sanderson
 	 
	 	 	Name:  	Michael Sanderson 	 
	 	 	Title:  	Managing Director 	 
	 
	 	DEUTSCHE BANK SECURITIES INC.,

acting solely as Agent in connection with the Transaction

 	 
	 	By:  	/s/ Lars Kestner
 	 
	 	 	Name:  	Lars Kestner 	 
	 	 	Title:  	Managing Director 	 
	 	 	 
	 	By:  	                                      /s/ Michael Sanderson
 	 
	 	 	Name:  	Michael Sanderson 	 
	 	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	Confirmed and Acknowledged as of the date first above written: 

CADENCE DESIGN SYSTEMS, INC.

 	 
	By:  	/s/
Kevin S. Palatnik
 	 
	 	Name:  	Kevin S. Palatnik	 
	 	Title:  	Sr. Vice President &  Chief Financial
Officer	 
	 

	 	 	 

	Chairman of the Supervisory
Board: Clemens Börsig Management
Board: Josef Ackermann
(Chairman), Hugo Bänziger,
Michael Cohrs, Jürgen Fitschen,
Anshuman Jain, Stefan Krause,
Hermann-Josef Lamberti, Rainer
Neske

	 	Deutsche Bank AG is authorised under
German Banking Law (competent
authority: BaFin — Federal Financial
Supervising Authority) and regulated
by the Financial Services Authority
for the conduct of UK business; a
member of the London Stock Exchange.
Deutsche Bank AG is a joint stock
corporation with limited liability
incorporated in the Federal Republic
of Germany HRB No. 30 000 District
Court of Frankfurt am Main; Branch
Registration in England and Wales
BR000005; Registered address:
	 

	 	Winchester House, 1 Great Winchester
Street, London EC2N 2DB. Deutsche
Bank Group online:
	 

	 	http://www.deutsche-bank.com

Signature Page to Base Warrant

Confirmation

 

Annex A

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

	 	 	 	 	 

	Component Number
	 	Number of Warrants
	 	Expiration Date
	 
	 	 
	 	 
	1
	 	170,383
	 	September 1, 2015
	2
	 	170,383
	 	September 2, 2015
	3
	 	170,383
	 	September 3, 2015
	4
	 	170,383
	 	September 4, 2015
	5
	 	170,383
	 	September 8, 2015
	6
	 	170,383
	 	September 9, 2015
	7
	 	170,383
	 	September 10, 2015
	8
	 	170,383
	 	September 11, 2015
	9
	 	170,383
	 	September 14, 2015
	10
	 	170,383
	 	September 15, 2015
	11
	 	170,383
	 	September 16, 2015
	12
	 	170,383
	 	September 17, 2015
	13
	 	170,383
	 	September 18, 2015
	14
	 	170,383
	 	September 21, 2015
	15
	 	170,383
	 	September 22, 2015
	16
	 	170,383
	 	September 23, 2015
	17
	 	170,383
	 	September 24, 2015
	18
	 	170,383
	 	September 25, 2015
	19
	 	170,383
	 	September 28, 2015
	20
	 	170,383
	 	September 29, 2015
	21
	 	170,383
	 	September 30, 2015
	22
	 	170,383
	 	October 1, 2015
	23
	 	170,383
	 	October 2, 2015
	24
	 	170,383
	 	October 5, 2015
	25
	 	170,383
	 	October 6, 2015
	26
	 	170,383
	 	October 7, 2015
	27
	 	170,383
	 	October 8, 2015
	28
	 	170,383
	 	October 9, 2015
	29
	 	170,383
	 	October 12, 2015
	30
	 	170,383
	 	October 13, 2015
	31
	 	170,383
	 	October 14, 2015
	32
	 	170,383
	 	October 15, 2015
	33
	 	170,383
	 	October 16, 2015
	34
	 	170,383
	 	October 19, 2015
	35
	 	170,383
	 	October 20, 2015
	36
	 	170,384
	 	October 21, 2015
	37
	 	170,384
	 	October 22, 2015
	38
	 	170,384
	 	October 23, 2015
	39
	 	170,384
	 	October 26, 2015
	40
	 	170,384
	 	October 27, 2015
	41
	 	170,384
	 	October 28, 2015
	42
	 	170,384
	 	October 29, 2015
	43
	 	170,384
	 	October 30, 2015
	44
	 	170,384
	 	November 2, 2015
	45
	 	170,384
	 	November 3, 2015
	46
	 	170,384
	 	November 4, 2015
	47
	 	170,384
	 	November 5, 2015
	48
	 	170,384
	 	November 6, 2015
	49
	 	170,384
	 	November 9, 2015

Annex A - 1

 

	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date
	50
	 	170,384
	 	November 10, 2015
	51
	 	170,384
	 	November 11, 2015
	52
	 	170,384
	 	November 12, 2015
	53
	 	170,384
	 	November 13, 2015
	54
	 	170,384
	 	November 16, 2015
	55
	 	170,384
	 	November 17, 2015
	56
	 	170,384
	 	November 18, 2015
	57
	 	170,384
	 	November 19, 2015
	58
	 	170,384
	 	November 20, 2015
	59
	 	170,384
	 	November 23, 2015
	60
	 	170,384
	 	November 24, 2015
	61
	 	170,384
	 	November 25, 2015
	62
	 	170,384
	 	November 27, 2015
	63
	 	170,384
	 	November 30, 2015
	64
	 	170,384
	 	December 1, 2015
	65
	 	170,384
	 	December 2, 2015
	66
	 	170,384
	 	December 3, 2015
	67
	 	170,384
	 	December 4, 2015
	68
	 	170,384
	 	December 7, 2015
	69
	 	170,384
	 	December 8, 2015
	70
	 	170,384
	 	December 9, 2015

Annex A - 2exv10w10

Exhibit 10.10

	 	 	 

	To:

	 	Cadence Design Systems, Inc.
	 

	 	2655 Seely Avenue, Building 5
	 

	 	San Jose, CA 95134
	 

	 	Attention: Office of the General Counsel
	 
	 	 
	From:

	 	JPMorgan Chase Bank, National Association
	 

	 	P.O. Box 161
	 

	 	60 Victoria Embankment
	 

	 	London EC4Y 0JP
	 

	 	England
	 
	 	 
	Re:

	 	Additional Issuer Warrant Transaction
	 
	Date:

	 	June 18, 2010

Dear Sir(s):

     The purpose of this communication (this “Confirmation”) is to set forth the terms and
conditions of the above-referenced transaction entered into on the Trade Date specified below (the
“Transaction”) between JPMorgan Chase Bank, National Association, London Branch (“Dealer”) and
Cadence Design Systems, Inc. (“Issuer”). This communication constitutes a “Confirmation” as
referred to in the ISDA Master Agreement specified below.

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

     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.

     This Confirmation evidences a complete and binding agreement between Dealer and Issuer
as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall be
subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement
(Multicurrency—Cross Border) as if Dealer and Issuer had executed an agreement in such form on
the date hereof (but without any Schedule except for (i) the election of Loss and Second Method
and US Dollars (“USD”) as the Termination Currency, (ii) the replacement of the word “third” in
the last line of Section 5(a)(i) of the Agreement with the word “second” and (iii) such other
elections as set forth in this Confirmation.

     All provisions contained in, or incorporated by reference to, the Agreement will govern this
Confirmation except as expressly modified herein. In the event of any inconsistency between this
Confirmation and either the Equity Definitions or the Agreement, this Confirmation shall govern.

JPMorgan Chase Bank, National Association

Organised under the laws of the United States as a National Banking Association

Main Office 1111 Polaris Parkway, Columbus, Ohio 43271

Registered as a branch in England & Wales branch No. BR000746

Registered Branch Office 125 London Wall, London EC2Y 5AJ

Authorised and regulated by the Financial Services Authority

1

 

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

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

General Terms:

	 	 	 

	Trade Date:

	 	June 18, 2010
	 
	 	 
	Effective Date:

	 	June 22, 2010, or such other date as agreed between
the parties, subject to Section 8(k) below.
	 
	 	 
	Components:

	 	The Transaction will be divided into individual
Components, each with the terms set forth in this
Confirmation, and, in particular, with the Number of
Warrants and Expiration Date set forth in this
Confirmation. The payments and deliveries to be
made upon settlement of the Transaction will be
determined separately for each Component as if each
Component were a separate Transaction under the
Agreement.
	 
	 	 
	Warrant Style:

	 	European
	 
	 	 
	Warrant Type:

	 	Call
	 
	 	 
	Seller:

	 	Issuer
	 
	 	 
	Buyer:

	 	Dealer
	 
	 	 
	Shares:

	 	The Common Stock of Issuer, par value USD 0.01
per share (Ticker Symbol: “CDNS”).
	 
	 	 
	Number of Warrants:

	 	For each Component, as provided in Annex A to this
Confirmation.
	 
	 	 
	Warrant Entitlement:

	 	One Share per Warrant
	 
	 	 
	Strike Price:

	 	USD 10.78
	 
	 	 
	Premium:

	 	USD 3,518,691.84
	 
	 	 
	Premium Payment Date:

	 	The Effective Date
	 
	 	 
	Exchange:

	 	NASDAQ Global Select Market
	 
	 	 
	Related Exchange:

	 	All Exchanges.
	 
	 	 
	Procedures for Exercise:
	 	 
	 
	 	 
	In respect of any Component:
	 	 
	 
	 	 
	Expiration Time:

	 	Valuation Time
	 
	 	 
	Expiration Date:

	 	As provided in Annex A to this Confirmation (or, if
such date is not a Scheduled Trading Day, the next

2

 

	 	 	 
	 

	 	following Scheduled Trading Day that is not already
an Expiration Date for another Component); provided
that if that date is a Disrupted Day, the Expiration
Date for such Component shall be the first
succeeding Scheduled Trading Day that is not a
Disrupted Day and is not or is not deemed to be an
Expiration Date in respect of any other Component of
the Transaction hereunder; and provided further that
if the Expiration Date has not occurred pursuant to
the preceding proviso as of the Final Disruption Date,
the Calculation Agent shall have the right to elect, in
its sole discretion, that the Final Disruption Date shall
be the Expiration Date for such Component
(irrespective of whether such date is an Expiration
Date in respect of any other Component for the
Transaction). “Final Disruption Date” means
December 21, 2015. Notwithstanding the foregoing
and anything to the contrary in the Equity
Definitions, if a Market Disruption Event occurs on
any Expiration Date, the Calculation Agent may
determine that such Expiration Date is a Disrupted
Day only in part, in which case (i) the Calculation
Agent shall make adjustments to the Number of
Warrants for the relevant Component for which such
day shall be the Expiration Date and shall designate
the Scheduled Trading Day determined in the manner
described in the immediately preceding sentence as
the Expiration Date for the remaining Warrants for
such Component and (ii) the VWAP Price for such
Disrupted Day shall be determined by the Calculation
Agent based on transactions in the Shares effected on
such Disrupted Day taking into account the nature
and duration of such Market Disruption Event on
such day. Section 6.6 of the Equity Definitions shall
not apply to any Valuation Date occurring on an
Expiration Date.
	 
	 	 
	Market Disruption Event:

	 	Section 6.3(a) of the Equity Definitions is hereby
amended by (A) deleting the words “during the one
hour period that ends at the relevant Valuation Time,
Latest Exercise Time, Knock-in Valuation Time or
Knock-out Valuation Time, as the case may be,” in
clause (ii) thereof and (B) replacing the words “or
(iii) an Early Closure.” therein with “(iii) an Early
Closure, or (iv) a Regulatory Disruption.”.
	 
	 	 
	 

	 	Section 6.3(d) of the Equity Definitions is hereby
amended by deleting the remainder of the provision
following the term “Scheduled Closing Time” in the
fourth line thereof.
	 
	 	 
	Regulatory Disruption:

	 	Any event that Dealer, in its reasonable discretion
based on advice of counsel, determines makes it
appropriate with regard to any legal, regulatory or
self-regulatory requirements or generally applicable
related policies and procedures applicable to Dealer

3

 

	 	 	 
	 

	 	and applied to the Transaction in a non-discriminatory manner, for Dealer to refrain from or
decrease any market activity in connection with the
Transaction.
	 
	 	 
	Automatic Exercise:

	 	Applicable; and means that the Number of Warrants
for the corresponding Expiration Date will be deemed
to be automatically exercised at the Expiration Time
on such Expiration Date unless Dealer notifies Seller
(by telephone or in writing) prior to the Expiration
Time on such Expiration Date that it does not wish
Automatic Exercise to occur, in which case
Automatic Exercise will not apply to such Expiration
Date.
	 
	 	 
	Issuer’s Telephone Number
and Telex and/or Facsimile Number
and Contact Details for purpose of
Giving Notice:

	 	As provided in Section 6(a) below.
	 
	 	 
	Valuation Terms:
	 	 
	 
	 	 
	In respect of any Component:
	 	 
	 
	 	 
	Valuation Time:

	 	At the close of trading of the regular trading session
on the Exchange; provided that if the regular trading
session is extended, the Calculation Agent shall
determine the Valuation Time in its reasonable
discretion.
	 
	 	 
	Valuation Date:

	 	The Expiration Date.
	 
	 	 
	Settlement Terms:
	 	 
	 
	 	 
	In respect of any Component:
	 	 
	 
	 	 
	Settlement Currency:

	 	USD
	 
	 	 
	Net Share Settlement:

	 	On each Settlement Date, Issuer shall deliver to
Dealer a number of Shares equal to the Number of
Shares to be Delivered for such Settlement Date to
the account specified by Dealer and cash in lieu of
any fractional Share valued at the VWAP Price on
the Valuation Date corresponding to such Settlement
Date. If, in the reasonable judgment of Issuer or
Dealer, based on advice of counsel, for any reason,
the Shares deliverable upon Net Share Settlement
would not be immediately freely transferable by
Dealer under Rule 144 under the Securities Act of
1933, as amended (the “Securities Act”), then Dealer
may elect to either (x) accept delivery of such Shares
notwithstanding any restriction on transfer or (y)
have the provisions set forth in Section 8(b) below
apply.
	 
	 	 
	 

	 	The Number of Shares to be Delivered shall be
delivered by Issuer to Dealer no later than 5:00 p.m.

4

 

	 	 	 
	 

	 	(local time in New York City) on the relevant
Settlement Date.
	 
	 	 
	Number of Shares to be Delivered:

	 	In respect of any Exercise Date, subject to the last
sentence of Section 9.5 of the Equity Definitions, the
product of (i) the number of Warrants exercised or
deemed exercised on such Exercise Date, (ii) the
Warrant Entitlement and (iii) (A) the excess of the
VWAP Price on the Valuation Date occurring in
respect of such Exercise Date over the Strike Price
(or, if there is no such excess, zero) divided by (B)
such VWAP Price.
	 
	 	 
	VWAP Price:

	 	For any Exchange Business Day, the volume
weighted average price per Share for the regular
trading session (including any extensions thereof) of
the Exchange on such Exchange Business Day
(without regard to pre-open or after hours trading
outside of such regular trading session), as published
by Bloomberg at 4:15 P.M., New York City time (or
15 minutes following the end of any extension of the
regular trading session), on such Exchange Business
Day, on Bloomberg page “CDNS.Q <Equity> AQR”
(or any successor thereto) (or if such published
volume weighted average price is unavailable or is
manifestly incorrect, the market value of one Share
on such Exchange Business Day, as reasonably
determined by the Calculation Agent using a volume
weighted method).
	 
	 	 
	Other Applicable Provisions:

	 	The provisions of Sections 9.1(c), 9.4, 9.8, 9.9, 9.10,
9.11 and 9.12 of the Equity Definitions will be
applicable as if “Physical Settlement” applied to the
Transaction; provided that the Representation and
Agreement contained in Section 9.11 of the Equity
Definitions shall be modified by excluding any
representations therein relating to restrictions,
obligations, limitations or requirements under
applicable securities laws that exist as a result of the
fact that Issuer is the issuer of the Shares.
	 
	 	 
	Adjustments:
	 	 
	 
	 	 
	In respect of any Component:
	 	 
	 
	 	 
	Method of Adjustment:

	 	Calculation Agent Adjustment; provided that in
respect of an Extraordinary Dividend, “Calculation
Agent Adjustment” shall be as described in the
provision below. For the avoidance of doubt,
Calculation Agent Adjustment shall continue to apply
until the obligations of the parties (including any
obligations of Issuer pursuant to Section 8(e) below)
under the Transaction have been satisfied in full.
	 
	 	 
	Extraordinary Dividend:

	 	Any cash dividend or distribution on the Shares with
an ex-dividend date occurring on or after the Trade
Date and on or prior to the Expiration Date (or, if any

5

 

	 	 	 
	 

	 	Deficit Shares are owed pursuant to Section 8(e)
below, such later date on which Issuer’s obligations
under this Transaction have been satisfied in full).
	 
	 	 
	Extraordinary Dividend Adjustment:

	 	If at any time during the period from and including
the Trade Date, to and including the Expiration Date
for the Component with the latest Expiration Date
(or, if any Deficit Shares are owed pursuant to
Section 8(e) below, such later date on which Issuer’s
obligations under this Transaction have been satisfied
in full), an ex-dividend date for an Extraordinary
Dividend occurs or is deemed to occur, then the
Calculation Agent will make adjustments to any one
or more of the Strike Price, the Number of Warrants,
the Warrant Entitlement and/or any other variable
relevant to the exercise, settlement, payment or other
terms of the Transaction as it determines appropriate
to account for the economic effect on the Transaction
of such Extraordinary Dividend.
	 
	 	 
	Extraordinary Events:
	 	 
	 
	 	 
	New Shares:

	 	In the definition of New Shares in Section 12.1(i) of
the Equity Definitions (A) the text in clause (i)
thereof shall be deleted in its entirety and replaced
with “publicly quoted, traded or listed on any of the
New York Stock Exchange, The NASDAQ Global
Market or The NASDAQ Global Select Market (or
their respective successors)” and (B) the phrase “and
(iii) of an entity or person organized under the laws
of the United States, any State thereof or the District
of Columbia that also becomes Issuer under the
Transaction following such Merger Event or Tender
Offer” shall be inserted at the end thereof.
	 
	 	 
	Consequences of Merger Events:
	 	 
	 
	 	 
	(a) Share-for-Share:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	(b) Share-for-Other:

	 	Cancellation and Payment (Calculation Agent
Determination)
	 
	 	 
	(c) Share-for-Combined:

	 	Cancellation and Payment (Calculation Agent
Determination); provided that the Calculation Agent
may elect Component Adjustment for all or part of
the Transaction.
	 
	 	 
	Tender Offer:

	 	Applicable.
	 
	 	 
	Consequences of Tender Offers:
	 	 
	 
	 	 
	(a) Share-for-Share:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	(b) Share-for-Other:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	(c) Share-for-Combined:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	Modified Calculation Agent Adjustment:

	 	Upon the occurrence of any Merger Event pursuant
to which the holders of Issuer’s Shares would be

6

 

	 	 	 
	 

	 	entitled to receive cash, securities or other property
for their Shares and for which Modified Calculation
Agent Adjustment would apply, if, as a result of such
Merger Event, Issuer would be different from the
issuer of the Shares under this Confirmation, then, on
or prior to the effective date of such Merger Event,
the Issuer and the issuer of the Shares under this
Confirmation will enter into a supplemental
confirmation as a condition precedent to the
adjustments contemplated in Section 12.2(e)(i) of the
Equity Definitions, with such supplemental
confirmation containing representations, warranties
and agreements relating to securities law and other
issues as requested by Dealer that Dealer has
determined, in its reasonable discretion, to be
reasonably necessary or appropriate to allow Dealer
to continue as a party to the Transaction, as adjusted
under Section 12.2(e)(i) of the Equity Definitions,
and to preserve its hedging or hedge unwind
activities in connection with the Transaction in a
manner compliant with applicable legal, regulatory or
self-regulatory requirements, or with generally
applicable related policies and procedures applicable
to Dealer and applied to the Transaction in a non-discriminatory manner, and if such conditions are not
met or if the Calculation Agent determines that no
adjustment that it could make under Section
12.2(e)(i) of the Equity Definitions will produce a
commercially reasonable result, then the
consequences set forth in Section 12.2(e)(ii) of the
Equity Definitions shall apply.
	 
	 	 
	Nationalization, Insolvency
or Delisting:

	 	Cancellation and Payment (Calculation Agent
Determination); provided that (i) Section 12.6(a)(iii)
of the Equity Definitions shall be amended to delete,
in the definition of the term “Delisting” the
parenthetical “(or will cease)” and (ii) in addition to
the provisions of Section 12.6(a)(iii) of the Equity
Definitions, it shall also constitute a Delisting if the
Exchange is located in the United States and the
Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The
NASDAQ Global Select Market or The NASDAQ
Global Market (or their respective successors); if the
Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system,
such exchange or quotation system shall thereafter be
deemed to be the Exchange.
	 
	 	 
	Additional Disruption Events:
	 	 
	 
	(a) Change in Law:

	 	Applicable; provided that Section 12.9(a)(ii) of the
Equity Definitions is hereby amended by (i) replacing
the phrase “the interpretation” in the third line thereof
with the phrase “or announcement or statement of the

7

 

	 	 	 
	 

	 	interpretation” and (ii) replacing the word “Shares”
with the phrase “Hedge Positions” in clause (X)
thereof.
	 
	 	 
	(b) Failure to Deliver:

	 	Not Applicable
	 
	 	 
	(c) Insolvency Filing:

	 	Applicable; provided that only Dealer shall have the
right to terminate the Transaction upon an Insolvency
Filing.
	 
	 	 
	(d) Hedging Disruption:

	 	Applicable; provided that
	 
	 	 
	 

	 	(i) Section 12.9(a)(v) of the Equity Definitions is
hereby amended by inserting the following two
sentences 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 (B) above must
be available on commercially reasonable pricing
terms.”
	 
	 	 
	 

	 	(ii) Section 12.9(b)(iii) of the Equity Definitions is
hereby amended by inserting in the third line thereof,
after the words “to terminate the Transaction”, the
words “or a portion of the Transaction affected by
such Hedging Disruption”.
	 
	 	 
	(e) Increased Cost of Hedging:

	 	Applicable
	 
	 	 
	(f) Loss of Stock Borrow:

	 	Applicable
	 
	 	 
	Maximum Stock Loan Rate:

	 	2.00% per annum
	 
	 	 
	(g) Increased Cost of Stock Borrow:

	 	Applicable
	 
	 	 
	Initial Stock Loan Rate:

	 	0.25% per annum
	 
	 	 
	Hedging Party:

	 	Dealer for all applicable Additional Disruption
Events.
	 
	 	 
	Determining Party:

	 	Dealer for all applicable Additional Disruption
Events.
	 
	 	 
	Non-Reliance:

	 	Applicable
	 
	 	 
	Agreements and Acknowledgments
Regarding Hedging Activities:

	 	Applicable
	 
	 	 
	Additional Acknowledgments:

	 	Applicable

8

 

     3. Calculation Agent:

     
Dealer. All determinations made by the Calculation
Agent shall be made in good faith and in a
commercially reasonable manner. Following any
determination or calculation by the Calculation Agent
hereunder, upon a written request by Issuer, the
Calculation Agent will provide to Issuer by e-mail to
the e-mail address provided by Issuer 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, where
applicable, a description of the methodology and data
applied, it being understood that the Calculation
Agent shall not be obligated to disclose any
proprietary models used by it for such determination
or calculation.

     4. Account Details:

Dealer Payment Instructions:

JPMORGAN CHASE BANK, N.A.

Beneficiary JPMorgan Chase Bank, N.A. New York

Ref: Derivatives

Account for delivery of Shares to Dealer:

DTC 0060

Issuer Payment Instructions:

To be provided by Issuer.

     5. Offices:

The Office of Dealer for the Transaction is: London

JPMorgan Chase Bank, National Association

London Branch

P.O. Box 161

60 Victoria Embankment

London EC4Y 0JP

England

The Office of Issuer for the Transaction is:

Inapplicable. Issuer is not a Multibranch Party.

     6. Notices: For purposes of this Confirmation:

     (a) Address for notices or communications to Issuer:

	 	 	 

	To:

	 	Cadence Design Systems, Inc.
	 

	 	2655 Seely Avenue, Building 5
	 

	 	San Jose, California 95134
	Attn:

	 	Office of the General Counsel
	Facsimile:

	 	(408) 904-6946

9

 

	(b)	 	Address for notices or communications to Dealer:

	 	 	 

	To:
	 	JPMorgan Chase Bank, National Association
	 
	 	4 New York Plaza, Floor 18
	 
	 	New York, NY 10004-2413
	Attn:
	 	Mariusz Kwasnik
	 
	 	Operations Analyst, EDG Corporate Marketing

	 	7.	 	Representations, Warranties and Agreements:

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

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

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

     (iii) Issuer is not entering into this Confirmation, and on the date of any election
by Issuer of the Share Termination Alternative under Section 8(a) below, Issuer represents
that it is not making such election, to create actual or apparent trading activity in the
Shares (or any security convertible into or exchangeable for Shares) or to raise or
depress or otherwise manipulate the price of the Shares (or any security convertible into
or exchangeable for Shares) or otherwise in violation of the Exchange Act.

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

     (v) Issuer shall not take any action to decrease the number of Available Shares below
the Capped Number (each as defined below).

     (vi) Issuer understands no obligations of Dealer to it hereunder will be entitled to
the benefit of deposit insurance and that such obligations will not be guaranteed by any
governmental agency.

     (vii) (A) On the Trade Date and during the period starting on the first
Expiration Date and ending on the last Expiration Date (the “Settlement Period”), the
Shares or securities that are convertible into, or exchangeable or exercisable for Shares,
are not, and shall not be, subject to a “restricted period,” as such term is defined in
Regulation M under the Exchange Act (“Regulation M”) and (B) Issuer shall not engage in
any “distribution,” as such term is defined in Regulation M

10

 

until the second Exchange Business Day immediately following the Trade Date or Settlement
Period, as applicable.

     (ix) Issuer agrees that it (A) will not during the Settlement Period make, or permit to
be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any
Merger Transaction or potential Merger Transaction unless such public announcement is made prior
to the opening or after the close of the regular trading session on the Exchange for the Shares;
(B) shall promptly (but in any event prior to the next opening of the regular trading session on
the Exchange) notify Dealer following any such announcement that such announcement has been made;
and (C) shall promptly (but in any event prior to the next opening of the regular trading session
on the Exchange) provide Dealer with written notice specifying (i) Issuer’s average daily Rule
10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months immediately
preceding the announcement date that were not effected through Dealer or its affiliates and (ii)
the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act
for the three full calendar months preceding the announcement date. Such written notice shall be
deemed to be a certification by Issuer to Dealer that such information is true and correct. In
addition, Issuer shall promptly notify Dealer of the earlier to occur of the completion of such
transaction and the completion of the vote by target shareholders. “Merger Transaction” means any
merger, acquisition or similar transaction involving a recapitalization as contemplated by Rule
10b-18(a)(13)(iv) under the Exchange Act.

     (x) A number of Shares equal to the Capped Number have been reserved for issuance by all
required corporate action of the Issuer. Any Shares issued or delivered in connection with the
Transaction shall be duly authorized and, when delivered as contemplated hereby following the
exercise of the Warrants in accordance with their terms and conditions, will be validly issued,
fully paid and non-assessable, and the issuance or delivery thereof shall not be subject to any
preemptive or similar rights and shall, upon issuance, be accepted for listing or quotation on the
Exchange.

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

     (xii) The representations and warranties of Issuer set forth in Section 3 of the Agreement
and Section 1 of the Purchase Agreement dated as of June 9, 2010 between Issuer and J.P. Morgan
Securities Inc. and Morgan Stanley & Co. Incorporated as representatives of the initial purchasers
party thereto (the “Purchase Agreement”) are true and correct as of the Trade Date and the
Effective Date and are hereby deemed to be repeated to Dealer as if set forth herein.

     (b) Each of Dealer and Issuer agrees and represents that it is an “eligible contract
participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended, and is
entering into the Transaction as principal (and not as agent or in any other capacity, fiduciary
or otherwise) and not for the benefit of any third party.

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

11

 

and is capable of assessing the merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the terms, conditions and risks of
the Transaction.

     (d) Each of Dealer and Issuer agrees and acknowledges that Dealer is a “financial
institution,” “swap participant” and “financial participant” within the meaning of Sections
101(22), 101(53C) and 101(22A) of Title 11 of the United States Code (the “Bankruptcy Code”). The
parties hereto further agree and acknowledge (A) that this Confirmation is (i) a “securities
contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which
each payment and delivery hereunder or in connection herewith is a “termination value,” “payment
amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code
and a “settlement payment” within the meaning of Section 546 of the Bankruptcy Code, and (ii) a
“swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect
to which each payment and delivery hereunder or in connection herewith is a “termination value,”
“payment amount” or “other transfer obligation” within the meaning of Section 362 of the
Bankruptcy Code and a “transfer” within the meaning of Section 546 of the Bankruptcy Code, and (B)
that Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6),
362(b)(17), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the
Bankruptcy Code.

     (e) For the purposes of Section 3(f) of the Agreement, Dealer represents that, as of the time
any payment is made after December 31, 2012, (i) if it is a “foreign financial institution” within
the meaning of section 1471(d)(4) of the Internal Revenue Code of 1986 as amended (the “Code”), it
meets the requirements of section 1471(b) of the Code and has not elected the application of
section 1471(b)(3) of the Code, and (ii) if it is a “non-financial foreign entity” within the
meaning of section 1472(d) of the Code, it meets the requirements of section 1472(b) of the Code,
unless one or more of the exceptions of Code section 1472(c) are applicable with respect to such
payment.

     (f) As a condition to effectiveness of the Transaction, Issuer shall deliver to Dealer
an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Dealer in form and
substance, with respect to the matters set forth in Section 3(a) of the Agreement and Section
7(a)(x) hereof, subject to customary assumptions, qualifications and exceptions.

	 	8.	 	Other Provisions:

     (a) Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events. If Issuer shall owe Dealer any amount pursuant to Section 12.2, 12.3, 12.6,
12.7 or 12.9 of the Equity Definitions (except in the event of a Tender Offer, Merger Event,
Insolvency or Nationalization, in each case, in which the consideration or proceeds to be paid to
holders of Shares consists solely of cash) or pursuant to Section 6(d)(ii) of the Agreement
(except in the event of an Event of Default in which Issuer is the Defaulting Party or a
Termination Event in which Issuer is the Affected Party that resulted from an event or events
within Issuer’s control) (a “Payment Obligation”), Issuer shall have the right, in its sole
discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as
defined below) by giving irrevocable telephonic notice to Dealer, confirmed in writing within one
Scheduled Trading Day, between the hours of 9:00 A.M. and 4:00 P.M., New York City time, on the
Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or other date the
Transaction is cancelled or terminated, as applicable (“Notice of Share Termination”). Upon such
Notice of Share Termination, the following provisions shall apply on the Scheduled Trading Day
immediately following the Merger Date, the Tender Offer Date, Announcement Date, Early Termination
Date or other date the Transaction is cancelled or terminated, as applicable:

	 	 	 

	Share Termination Alternative:

	 	Applicable and means that Issuer shall deliver to Dealer the Share
Termination Delivery Property on the date on which the Payment
Obligation would otherwise be due pursuant to Section 12.2, 12.3, 12.6,
12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) of the
Agreement, as applicable (the “Share Termination Payment Date”),
in satisfaction of the Payment Obligation.
	 
	 	 
	Share Termination Delivery
Property:

	 	A number of Share Termination Delivery Units, as calculated by the

12

 

	 	 	 

	 

	 	Calculation Agent, equal to the Payment Obligation divided
by the
Share Termination Unit Price. The Calculation Agent shall
adjust the
Share Termination Delivery Property by replacing any
fractional
portion of the aggregate amount of a security therein with an
amount of
cash equal to the value of such fractional security based on the
values
used to calculate the Share Termination Unit Price.
	 
	 	 
	Share Termination Unit Price:

	 	The value of property contained in one Share Termination
Delivery
Unit on the date such Share Termination Delivery Units are to
be
delivered as Share Termination Delivery Property, as
determined by the
Calculation Agent in its discretion by commercially reasonable
means
and notified by the Calculation Agent to Issuer at the
time of
notification of the Payment Obligation.
	 
	 	 
	Share Termination Delivery Unit:

	 	In the case of a Termination Event, Event of Default,
Delisting or
Additional Disruption Event, one Share or, in the case of
an
Insolvency, Nationalization, Merger Event or Tender Offer, a
Share or
a unit consisting of the number or amount of each type of
property
received by a holder of one Share (without consideration of
any
requirement to pay cash or other consideration in lieu of
fractional
amounts of any securities) in such Insolvency,
Nationalization, Merger
Event or Tender Offer. If such Insolvency, Nationalization,
Merger
Event or Tender Offer involves a choice of consideration to be
received
by holders, such holder shall be deemed to have elected to receive
the
maximum possible amount of cash.
	 
	 	 
	Failure to Deliver:

	 	Applicable
	 
	 	 
	Other Applicable Provisions:

	 	If Share Termination Alternative is applicable, the provisions of
Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity
Definitions
will be applicable as if “Physical Settlement” applied
to the
Transaction, except that all references to “Shares” shall be
read as
references to “Share Termination Delivery Units”; provided that
the
Representation and Agreement contained in Section 9.11 of the
Equity
Definitions shall be modified by excluding any representations
therein
relating to restrictions, obligations, limitations or
requirements under
applicable securities laws as a result of the fact that Issuer
is the issuer
of any Share Termination Delivery Units (or any security
forming a
part thereof). If, in the reasonable judgment of Issuer or
Dealer, based
on advice of counsel, for any reason, any securities
comprising the
Share Termination Delivery Units deliverable pursuant to this
Section
8(a) would not be immediately freely transferable by Dealer under
Rule
144 under the Securities Act, then Dealer may elect to either (x)
permit
delivery of such securities notwithstanding any restriction on
transfer or
(y) have the provisions set forth in Section 8(b) below
apply.

     (b) Registration/Private Placement Procedures. (i) With respect to the Transaction, the
following provisions shall apply to the extent provided for above opposite the caption “Net Share
Settlement” in Section 2 or in paragraph (a) of this Section 8. If so applicable, then, at the
election of Issuer by notice to Dealer within one Exchange Business Day after the relevant
delivery obligation arises, but in any event at least one Exchange Business Day prior to the date
on which such delivery obligation is due, either (A) all Shares or Share Termination Delivery
Units, as the case may be, delivered by Issuer to Dealer shall be covered by an effective
registration statement of Issuer for immediate resale by Dealer (such registration statement and
the corresponding prospectus (the “Prospectus”) (including, without limitation, any sections
describing the plan of distribution) in form and content commercially reasonably satisfactory to
Dealer) or (B) Issuer shall deliver additional Shares or Share Termination Delivery Units, as the
case may be, so that the value of such Shares or Share Termination Delivery Units, as determined
by

13

 

the Calculation Agent to reflect an appropriate liquidity discount, equals the value of the
number of Shares or Share Termination Delivery Units that would otherwise be deliverable if such
Shares or Share Termination Delivery Units were freely tradeable (without prospectus delivery)
upon receipt by Dealer (such value, the “Freely Tradeable Value”); provided that, if requested by
Dealer on or prior to the second Exchange Business Day prior to the first Exercise Date, any
election to be made by Issuer described in this clause (B) shall be made with respect to Shares
delivered on all Settlement Dates no later than one Exchange Business Day prior to the first
Exercise Date, and the applicable procedures described below shall apply to all Shares delivered
on the Settlement Dates on an aggregate basis. (For the avoidance of doubt, as used in this
paragraph (b) only, the term “Issuer” shall mean the issuer of the relevant securities, as the
context shall require.)

     (ii) If Issuer makes the election described in clause (b)(i)(A) above:

     (A) Dealer (or an affiliate of Dealer designated by Dealer) shall be afforded a
reasonable opportunity to conduct a due diligence investigation with respect to Issuer
that is customary in scope for underwritten follow-on offerings of equity securities of
companies of comparable size, maturity and lines of business and that yields results that
are commercially reasonably satisfactory to Dealer or such affiliate, as the case may be,
in its discretion; and

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

     (iii) If Issuer makes the election described in clause (b)(i)(B) above:

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

     (B) Dealer (or an affiliate of Dealer designated by Dealer) and Issuer shall enter
into an agreement (a “Private Placement Agreement”) on commercially reasonable terms in
connection with the private placement of such Shares or Share Termination Delivery Units,
as the case may be, by Issuer to Dealer or such affiliate and the private resale of such
shares by Dealer or such affiliate, substantially similar to private placement purchase
agreements customary for private placements of equity securities of companies of
comparable size, maturity and lines of business, in form and substance commercially
reasonably satisfactory to Dealer and Issuer, which Private Placement Agreement shall
include, without limitation, provisions substantially similar to those contained in such
private placement purchase agreements relating to the indemnification of,

14

 

and contribution in connection with the liability of, Dealer and its affiliates and
Issuer, shall provide for the payment by Issuer of all expenses in connection with such
resale, including all fees and expenses of counsel for Dealer, shall contain
representations, warranties and agreements of Issuer reasonably necessary or advisable to
establish and maintain the availability of an exemption from the registration requirements
of the Securities Act for such resales, and shall use reasonable best efforts to provide
for the delivery of accountants’ “comfort letters” to Dealer or such affiliate with
respect to the financial statements and certain financial information contained in or
incorporated by reference into the offering memorandum prepared for the resale of such
Shares as are customarily requested in comfort letters covering private placements of
equity securities of companies of comparable size, maturity and lines of business and
delivery of disclosure opinions of nationally recognized outside counsel to Issuer
reasonably acceptable to Dealer;

     (C) Issuer agrees that any Shares or Share Termination Delivery Units so
delivered to Dealer, (i) may be transferred by and among Dealer and its affiliates, and
Issuer shall effect such transfer without any further action by Dealer and (ii) after the
minimum “holding period” within the meaning of Rule 144(d) under the Securities Act has
elapsed with respect to such Shares or any securities issued by Issuer comprising such
Share Termination Delivery Units, Issuer shall promptly remove, or cause the transfer
agent for such Shares or securities to remove, any legends referring to any such
restrictions or requirements from such Shares or securities upon delivery by Dealer (or
such affiliate of Dealer) to Issuer or such transfer agent of seller’s and broker’s
representation letters customarily delivered by Dealer in connection with resales of
restricted securities pursuant to Rule 144 under the Securities Act (if any), without any
further requirement for the delivery of any certificate, consent, agreement, opinion of
counsel, notice or any other document, any transfer tax stamps or payment of any other
amount or any other action by Dealer (or such affiliate of Dealer); and

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

     (c) Make-whole Shares. If Issuer makes the election described in clause (i)(B) of
paragraph
(b) of this Section 8, then Dealer or its affiliates may sell (which sale shall be made in a
commercially reasonable manner) such Shares or Share Termination Delivery Units, as the case may
be, during a period (the “Resale Period”) commencing on the Exchange Business Day following
delivery of such Shares or Share Termination Delivery Units, as the case may be, and ending on the
Exchange Business Day on which Dealer or its affiliates completes the sale of all such Shares or
Share Termination Delivery Units, as the case may be, or a sufficient number of Shares or Share
Termination Delivery Units, as the case may be, so that the realized net proceeds of such sales
exceed the Freely Tradeable Value. If any of such delivered Shares or Share Termination Delivery
Units remain after such realized net proceeds exceed the Freely Tradeable Value, Dealer shall
return such remaining Shares or Share Termination Delivery Units to Issuer. If the Freely
Tradeable Value exceeds the realized net proceeds from such resale, Issuer shall transfer to
Dealer by the open of the regular trading session on the Exchange on the Exchange Trading Day
immediately following the last day of the Resale Period the amount of such excess (the “Additional
Amount”) in cash or in a number of additional Shares or Share Termination Delivery Units, as the
case may be (“Make-whole Shares”) in an amount that, based on the VWAP Price on the last day of
the Resale Period (as if such day was the “Valuation Date” for purposes of computing such VWAP
Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to
enable the sale of the Make-whole Shares in the manner contemplated by this Section 8(c). This
provision shall be applied successively until the Additional Amount is equal to zero, subject to
Section 8(e).

     (d) Beneficial Ownership. Notwithstanding anything to the contrary in the Agreement or this
Confirmation, in no event shall Dealer be entitled to receive, or shall be deemed to receive, any
Shares if, immediately upon giving effect to such receipt of such Shares and after taking into
account any Shares deliverable to Dealer under the Base Issuer Warrant Transaction between the
parties hereto, entered into on

15

 

June 9, 2010 (the “Base Warrant Transaction”), (i) the “beneficial ownership” (within the
meaning of Section 13 of the Exchange Act and the rules promulgated thereunder) of Shares by
Dealer, any of its affiliates subject to aggregation with Dealer for purposes of the “beneficial
ownership” test under Section 13 of the Exchange Act and all persons who may form a “group”
(within the meaning of Rule 13d-5(b)(1) under the Exchange Act) with Dealer with respect to
“beneficial ownership” of any Shares (collectively, “Dealer Group”) would be equal to or greater
than 8.5% or more of the outstanding Shares on the date of determination, (ii) the Warrant Equity
Percentage exceeds 14.5% or (iii) Dealer, Dealer Group or any person whose ownership position
would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer Group or any such person,
a “Dealer Person”) under Section 203 of the Delaware General Corporation Law (the “DGCL Takeover
Statute”), or any state or federal bank holding company or banking laws, or other federal, state
or local regulations, regulatory orders or organizational documents or contracts of Issuer that
are, in each case, applicable to ownership of Shares (“Applicable Laws”), would own, beneficially
own, constructively own, control, hold the power to vote or otherwise meet a relevant definition
of ownership in excess of a number of Shares equal to (x) the number of Shares that would give
rise to reporting or registration obligations or other requirements (including obtaining prior
approval by a state or federal regulator) of a Dealer Person under Applicable Laws (including,
without limitation, “interested stockholder” or “acquiring person” status under the DGCL Takeover
Statute) and with respect to which such requirements have not been met or the relevant approval
has not been received minus (y) 1.0% of the number of Shares outstanding on the date of
determination (either such condition described in clause (i), (ii) or (iii), an “Excess Ownership
Position”). The “Warrant 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 Warrants and
the Warrant Entitlement and (2) the aggregate number of Shares underlying any other call option
transaction sold by Issuer to Dealer and (B) the denominator of which is the number of Shares
outstanding on such day. If any delivery owed to Dealer hereunder is not made, in whole or in
part, as a result of this provision, Issuer’s obligation to make such delivery shall not be
extinguished and Issuer shall make such delivery as promptly as practicable after, but in no event
later than one Exchange Business Day after, Dealer gives notice to Issuer that such delivery would
not result in the existence of an Excess Ownership Position.

     (e) Limitations on Settlement by Issuer. Notwithstanding anything herein or in the
Agreement to the contrary, in no event shall Issuer be required to deliver Shares in connection
with the Transaction in excess of the product of two, the aggregate Number of Warrants for all
Components at the time of delivery and the Warrant Entitlement at the time of delivery (such
product, the “Capped Number”). Issuer represents and warrants to Dealer (which representation and
warranty shall be deemed to be repeated on each day that the Transaction is outstanding) that the
Capped Number is equal to or less than the number of authorized but unissued Shares of the Issuer
that are not reserved for future issuance in connection with transactions in the Shares (other
than the Transaction) on the date of the determination of the Capped Number (such Shares, the
“Available Shares”). In the event Issuer shall not have delivered the full number of Shares
otherwise deliverable as a result of this Section 8(e) (the resulting deficit, the “Deficit
Shares”), Issuer shall be continually obligated to deliver Shares, from time to time until the
full number of Deficit Shares have been delivered pursuant to this paragraph, when, and to the
extent, that (A) Shares are repurchased, acquired or otherwise received by Issuer or any of its
subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other
consideration), (B) authorized and unissued Shares reserved for issuance in respect of other
transactions prior to such date which prior to the relevant date become no longer so reserved and
(C) Issuer additionally authorizes any unissued Shares that are not reserved for other
transactions (such events as set forth in clauses (A), (B) and (C) above, collectively, the “Share
Issuance Events”). Issuer shall promptly notify Dealer of the occurrence of any of the Share
Issuance Events (including the number of Shares subject to clause (A), (B) or (C) and the
corresponding number of Shares to be delivered) and, as promptly as reasonably practicable,
deliver such Shares thereafter.

     (f) Equity Rights. Dealer acknowledges and agrees that this Confirmation is not intended
to convey to it rights with respect to the Transaction that are senior to the claims of common
stockholders in the event of Issuer’s bankruptcy. For the avoidance of doubt, the parties agree
that the preceding sentence shall not apply at any time other than during Issuer’s bankruptcy to
any claim arising as a result of a breach

16

 

by Issuer of any of its obligations under this Confirmation or the Agreement. For the
avoidance of doubt, the parties acknowledge that the obligations of Issuer under this Confirmation
are not secured by any collateral that would otherwise secure the obligations of Issuer herein
under or pursuant to any other agreement.

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

     (i) For the purposes of any adjustment under Section 11.2(c) of the Equity
Definitions, the first sentence of Section 11.2(c) of the Equity Definitions, prior to
clause (A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent
Adjustment” is specified as the Method of Adjustment in the related Confirmation of a
Share Option Transaction, then following the announcement or occurrence of any Potential
Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment
Event has a material effect on the theoretical value of the relevant Shares or options on
the Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more
of:’ and, the portion of such sentence immediately preceding clause (ii) thereof is hereby
amended by deleting the words “diluting or concentrative” and the words “(provided that no
adjustments will be made to account solely for changes in volatility, expected dividends,
stock loan rate or liquidity relative to the relevant Shares)” and replacing such latter
phrase with the words “(and, for the avoidance of doubt, adjustments may be made to
account solely for changes in volatility, expected dividends, stock loan rate or liquidity
relative to the relevant Shares)”;

     (ii) Sections 11.2(a) and 11.2(e)(vii) of the Equity Definitions are hereby
amended by inserting at the end of each Section the phrase “or a material effect on the
theoretical value of the Warrants;”

     (iii) Section 12.9(b)(iv) of the Equity Definitions is hereby amended by (A)
deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following
subsection (A) and (3) the phrase “in each case” in subsection (B); (B) replacing “will
lend” with “lends” in subsection (B); and (C) deleting the phrase “neither the Non-Hedging
Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the
penultimate sentence; and

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

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

     (i) Disclosure. Effective from the date of commencement of discussions concerning the
Transaction, Issuer 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 Issuer relating to such tax treatment and tax structure.

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

17

 

     (i) Dealer reasonably determines that it is advisable to terminate a portion of
the Transaction (the “Affected Portion”) so that Dealer’s related hedging activities with
respect thereto will comply with applicable securities laws, rules or regulations or
generally applicable related policies and procedures of Dealer applied to the Transaction
in a non-discriminatory manner (whether or not such requirements, policies or procedures
are imposed by law or have been voluntarily adopted by Dealer); provided that Dealer shall
treat only the Affected Portion of the Transaction as the Affected Transaction; or

     (ii) at any time at which any Excess Ownership Position (as defined above)
occurs, Dealer, in its reasonable discretion, is unable to effect a transfer or assignment
to a third party of the Transaction or any other transaction between the parties after
using its commercially reasonable efforts on pricing terms and within a time period
reasonably acceptable to Dealer (the “Transfer Time Period”) (it being understood that a
period of at least one Exchange Business Day shall be considered reasonable for this
purpose (without prejudice to whether a shorter period of time would be considered
reasonable)) such that an Excess Ownership Position no longer exists; provided that Dealer
shall treat only that portion of the Transaction as the Affected Transaction as necessary
so that such Excess Ownership Position no longer exists; and provided further that, unless
such Excess Ownership Position is the result of a repurchase of Shares by Issuer or any
other event or events within Issuer’s control, Dealer shall promptly notify Issuer of its
Excess Ownership Position and shall use its commercially reasonable efforts to consult
with Issuer during the Transfer Time Period regarding potential transfers or assignments
to third parties prior to designating an Early Termination Date pursuant to this Section
8(j)(ii); or

     (iii) a “person” or “group” within the meaning of Section 13(d) of the Exchange
Act other than Issuer, its subsidiaries and its and their employee benefit plans, files a
Schedule TO or any schedule, form or report under the Exchange Act, disclosing that such
person or group has become the direct or indirect “beneficial owner,” as defined in Rule
13d-3 under the Exchange Act, of Issuer’s common equity representing more than 50% of the
voting power of Issuer’s common equity; or

     (iv) consummation of (A) any recapitalization, reclassification or change of the
Shares (other than changes resulting from a subdivision or combination) as a result of
which the Shares would be converted into, or exchanged for, stock, other securities, other
property or assets or (B) any share exchange, consolidation or merger of Issuer pursuant
to which the Shares will be converted into cash, securities or other assets or any sale,
lease or other transfer in one transaction or a series of transactions of all or
substantially all of the consolidated assets of Issuer and its subsidiaries, taken as a
whole, to any person other than Issuer or one of Issuer’s subsidiaries; provided, however,
that a transactions where (x) the Shares are not changed or exchanged except to the extent
necessary to reflect a change in Issuer’s jurisdiction of incorporation or (y) the holders
of more than 50% of all classes of Issuer’s common equity immediately prior to such
transaction own, directly or indirectly, more than 50% of the aggregate voting power of
the common equity of the continuing or surviving corporation or transferee or the parent
thereof immediately after such event shall not constitute an Additional Termination Event;
or

     (v) Issuer’s stockholders approve any plan or proposal for Issuer’s
liquidation or
dissolution; or

     (vi) the Shares (or any New Shares that would be deliverable by Issuer hereunder)
cease to be listed on any of The New York Stock Exchange, The NASDAQ Global Select Market,
The NASDAQ Global Market (or any of their respective successors) or an alternate exchange
of equivalent or greater liquidity with respect to the Shares (or any such New Shares).

Notwithstanding the foregoing, a transaction or transactions described in clause (iv) above will
not constitute an Additional Termination Event if at least 90% of the consideration received or to
be received by holders of the Shares, excluding cash payments for fractional shares and cash
payments made pursuant to dissenters’ appraisal rights, in connection with such transaction or
transactions consists of shares of

18

 

common stock that are listed or quoted on any of The New York Stock Exchange, The NASDAQ
Global Select Market or The NASDAQ Global Market (or any of their respective successors) or that
will be so listed or quoted when issued or exchanged in connection with such transaction or
transactions.

     (k) Effectiveness. If, on or prior to the Effective Date, Dealer reasonably determines
that it is advisable to cancel the Transaction because of concerns that Dealer’s related hedging
activities could be viewed as not complying with applicable securities laws, rules or regulations,
the Transaction shall be cancelled and shall not become effective, and neither party shall have
any obligation to the other party in respect of the Transaction.

     (l) Extension of Settlement. Dealer may divide any Component into additional Components
and designate the Expiration Date and the Number of Warrants for each such Component if Dealer
determines, in its reasonable discretion, that such further division is necessary or advisable to
preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity
conditions in the cash market or stock loan market or to enable Dealer to effect purchases of
Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner
that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be compliance with
applicable legal, regulatory and self-regulatory requirements, or with related policies and
procedures applicable to Dealer.

     (m) No Netting and Set-off. The provisions of Section 2(c) of the Agreement shall not
apply to the Transaction. Each party waives any and all rights it may have to set-off delivery or
payment obligations it owes to the other party under the Transaction against any delivery or
payment obligations owed to it by the other party, whether arising under the Agreement, under any
other agreement between parties hereto, by operation of law or otherwise.

     (n) Delivery or Receipt of Cash. For the avoidance of doubt, other than receipt of the
Premium by Issuer, nothing in this Confirmation shall be interpreted as requiring Issuer to cash
settle this Transaction, except in circumstances where such cash settlement is within Issuer’s
control (including, without limitation, where Issuer elects to deliver or receive cash, where
Issuer fails timely to elect the Share Termination Alternative, or where Issuer is not able to
effect a private placement settlement pursuant to Section 8(b)(i)(B) above due to the occurrence
of events within its control) or in those circumstances in which holders of the Shares would also
receive cash.

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

     (p) Designation by Dealer. 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 to or from Issuer, Dealer may designate any of its affiliates to purchase, sell,
receive or deliver such Shares or other securities and otherwise to perform Dealer’s obligations
in respect of the Transaction and any such designee may assume such obligations. Dealer shall be
discharged of its obligations to Issuer only to the extent of any such performance.

     (q) Strike Price Adjustment. Notwithstanding anything to the contrary in the Agreement, this
Confirmation or the Equity Definitions (but without limiting Dealer’s right to adjust any variable
relevant to the exercise, settlement, payment or other terms of the Transaction, other than the
Strike Price and the Warrant Entitlement), in no event shall (i) the Warrant Entitlement be
adjusted, or (ii) the Strike Price be adjusted to the extent that, after giving effect to such
adjustment, the Strike Price would be less than USD 6.42, in each case, other than any such
adjustment in connection with stock splits or similar changes to Issuer’s capitalization.

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

     (s) Share Deliveries. Issuer acknowledges and agrees that, to the extent the holder of this
Warrant is not then an affiliate and has not been an affiliate for 90 days (it being understood
that Dealer will not be considered an affiliate under this paragraph solely by reason of its
receipt of Shares pursuant to this Transaction and under the Base Warrant Transaction), and
otherwise satisfies all holding period and other requirements of Rule 144 of the Securities Act
applicable to it, any delivery of Shares or Share

19

 

Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1
year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not
satisfied with respect to Issuer) shall be eligible for resale under Rule 144 of the Securities
Act and Issuer agrees to promptly remove, or cause the transfer agent for such Shares or Share
Termination Delivery Property, to remove, any legends referring to any restrictions on resale
under the Securities Act from the Shares or Share Termination Delivery Property. Issuer further
agrees that any delivery of Shares or Share Termination Delivery Property prior to the date that
is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational
requirements of Rule 144(c) are not satisfied with respect to Issuer), may be transferred by and
among Dealer and its affiliates and Issuer shall effect such transfer without any further action
by Dealer. Notwithstanding anything to the contrary herein, Issuer agrees that any delivery of
Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the
facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares
or class of Share Termination Delivery Property is in book-entry form at DTC or such successor
depositary. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule
144 of the Securities Act or any successor rule are amended, or the applicable interpretation
thereof by the Securities and Exchange Commission or any court change after the Trade Date, the
agreements of Issuer herein shall be deemed modified to the extent necessary, in the opinion of
outside counsel of Issuer, to comply with Rule 144 of the Securities Act, as in effect at the time
of delivery of the relevant Shares or Share Termination Delivery Property.

     (t) Quarterly Valuations. Dealer hereby agrees, upon request by Issuer, to provide or
cause its affiliate to provide to Issuer, within five Exchange Business Days after the end of the
fiscal quarter of Issuer during which Issuer made such request, a valuation estimate of the fair
value of the Transaction as of Issuer’s fiscal quarter end.

     (u) Waiver of Trial by Jury. EACH PARTY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING RELATING TO THIS TRANSACTION. EACH PARTY (I) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH A SUIT, ACTION OR PROCEEDING, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO
THIS TRANSACTION, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
PROVIDED HEREIN.

     (v) Governing Law; Jurisdiction. THE AGREEMENT, THIS CONFIRMATION AND
ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO ITS CHOICE OF LAW DOCTRINE, OTHER THAN TITLE 14 OF THE NEW YORK GENERAL OBLIGATIONS
LAW). THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN
CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND
ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

     (w) Role of Agent. Each party agrees and acknowledges that (i) J.P. Morgan Securities
Inc., an affiliate of Dealer (“JPMSI”), has acted solely as agent and not as principal with
respect to this Transaction and (ii) JPMSI has no obligation or liability, by way of guaranty,
endorsement or otherwise, in any manner in respect of this Transaction (including, if applicable,
in respect of the settlement thereof). Each party agrees it will look solely to the other party
(or any guarantor in respect thereof) for performance of such other party’s obligations under this
Transaction.

20

 

     Please confirm that
the foregoing correctly sets forth the terms of the agreement
between Dealer and Issuer with respect to the Transaction, by manually signing this Confirmation or
this page hereof as evidence of agreement to such terms and providing the other information
requested herein and returning an executed copy to Dealer.

	 	 	 	 	 
	 	Yours faithfully,

J.P. MORGAN SECURITIES INC., as agent for

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

 	 
	 	By:  	/s/ James Rothschild
 	 
	 	 	Name:  	James Rothschild 	 
	 	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	Agreed and Accepted By:

CADENCE DESIGN SYSTEMS, INC.

 	 
	By:  	/s/ Kevin S. Palatnik	 
	 	Name:  	Kevin S. Palatnik	 
	 	Title:  	Sr. Vice President & Chief Financial Officer	 
	 

JPMorgan Chase Bank, National Association

Organised under the laws of the United States as a National Banking Association

Main Office 1111 Polaris Parkway, Columbus, Ohio 43271

Registered as a branch in England & Wales branch No. BR000746

Registered Branch Office 125 London Wall, London EC2Y 5AJ

Authorised and regulated by the Financial Services Authority

Signature Page to Additional Warrant

Confirmation

 

 

Annex A

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

	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date
	1
	 	56,794
	 	September 1, 2015
	2
	 	56,794
	 	September 2, 2015
	3
	 	56,794
	 	September 3, 2015
	4
	 	56,794
	 	September 4, 2015
	5
	 	56,794
	 	September 8, 2015
	6
	 	56,794
	 	September 9, 2015
	7
	 	56,794
	 	September 10, 2015
	8
	 	56,794
	 	September 11, 2015
	9
	 	56,794
	 	September 14, 2015
	10
	 	56,794
	 	September 15, 2015
	11
	 	56,794
	 	September 16, 2015
	12
	 	56,794
	 	September 17, 2015
	13
	 	56,794
	 	September 18, 2015
	14
	 	56,794
	 	September 21, 2015
	15
	 	56,794
	 	September 22, 2015
	16
	 	56,794
	 	September 23, 2015
	17
	 	56,794
	 	September 24, 2015
	18
	 	56,794
	 	September 25, 2015
	19
	 	56,794
	 	September 28, 2015
	20
	 	56,794
	 	September 29, 2015
	21
	 	56,794
	 	September 30, 2015
	22
	 	56,794
	 	October 1, 2015
	23
	 	56,794
	 	October 2, 2015
	24
	 	56,794
	 	October 5, 2015
	25
	 	56,794
	 	October 6, 2015
	26
	 	56,794
	 	October 7, 2015
	27
	 	56,794
	 	October 8, 2015
	28
	 	56,794
	 	October 9, 2015
	29
	 	56,794
	 	October 12, 2015
	30
	 	56,794
	 	October 13, 2015
	31
	 	56,794
	 	October 14, 2015
	32
	 	56,794
	 	October 15, 2015
	33
	 	56,794
	 	October 16, 2015
	34
	 	56,794
	 	October 19, 2015
	35
	 	56,794
	 	October 20, 2015
	36
	 	56,795
	 	October 21, 2015
	37
	 	56,795
	 	October 22, 2015
	38
	 	56,795
	 	October 23, 2015
	39
	 	56,795
	 	October 26, 2015
	40
	 	56,795
	 	October 27, 2015
	41
	 	56,795
	 	October 28, 2015
	42
	 	56,795
	 	October 29, 2015
	43
	 	56,795
	 	October 30, 2015
	44
	 	56,795
	 	November 2, 2015
	45
	 	56,795
	 	November 3, 2015
	46
	 	56,795
	 	November 4, 2015
	47
	 	56,795
	 	November 5, 2015
	48
	 	56,795
	 	November 6, 2015
	49
	 	56,795
	 	November 9, 2015

Annex A - 1

 

	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date
	50
	 	56,795
	 	November 10, 2015
	51
	 	56,795
	 	November 11, 2015
	52
	 	56,795
	 	November 12, 2015
	53
	 	56,795
	 	November 13, 2015
	54
	 	56,795
	 	November 16, 2015
	55
	 	56,795
	 	November 17, 2015
	56
	 	56,795
	 	November 18, 2015
	57
	 	56,795
	 	November 19, 2015
	58
	 	56,795
	 	November 20, 2015
	59
	 	56,795
	 	November 23, 2015
	60
	 	56,795
	 	November 24, 2015
	61
	 	56,795
	 	November 25, 2015
	62
	 	56,795
	 	November 27, 2015
	63
	 	56,795
	 	November 30, 2015
	64
	 	56,795
	 	December 1, 2015
	65
	 	56,795
	 	December 2, 2015
	66
	 	56,795
	 	December 3, 2015
	67
	 	56,795
	 	December 4, 2015
	68
	 	56,795
	 	December 7, 2015
	69
	 	56,795
	 	December 8, 2015
	70
	 	56,795
	 	December 9, 2015

Annex A - 2

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