Document:

exv10w90

 

Exhibit 10.90

JPMorgan Chase Bank, National Association

P.O. Box 161

60 Victoria Embankment

London EC4Y 0JP

England

	 	 	 
	 

	 	December 14, 2006

To:
Cadence Design Systems, Inc.
 Bldg. 5, MS 5B1

2655 Seely Avenue

San Jose, CA 95134

Attention: Legal Department

Telephone No.: (408) 943-1234

Facsimile No.: (408) 943-0513

Re: Warrants

Reference:           2696912

     The purpose of this Confirmation (this “Confirmation”) is to confirm the terms and conditions
of the Warrants issued by Cadence Design Systems, Inc. a Delaware corporation (“Company”), to
JPMorgan Chase Bank, National Association, London Branch (“Bank”), represented by J.P. Morgan
Securities Inc. (“Agent”), as its agent, on the Trade Date specified below (the “Transaction”).
This Confirmation constitutes a “Confirmation” as referred to in the ISDA Master Agreement
specified below. This Confirmation shall replace any previous letter and serve as the final
documentation for this Transaction.

     The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.,
are incorporated into this Confirmation. In the event of any inconsistency between the Equity
Definitions and this Confirmation, this Confirmation shall govern. This Transaction shall be
deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.

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

1. This Confirmation evidences a complete and binding agreement between Bank and Company as to the
terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement, form a
part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the
“Agreement”) as if Bank and Company had executed an agreement in such form (but without any
Schedule except for the election of the laws of the State of New York as the governing law) on the
Trade Date. In the event of any inconsistency between provisions of that Agreement and this
Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this
Confirmation relates. The parties hereby agree that no Transaction other than the Transaction to
which this Confirmation relates shall be governed by the Agreement.

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

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

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	General Terms:	 	 
	 
	 	 	 	 
	 

	 	Trade Date:
	 	December 14, 2006
	 
	 	 	 	 
	 

	 	Warrants:
	 	Equity call warrants, each giving the holder the right to purchase
one Share at the Strike Price, subject to the Settlement
Terms set forth below. For the purposes of the Equity
Definitions, each reference to a Warrant herein shall be
deemed to be a reference to a Call Option.
	 
	 	 	 	 
	 

	 	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 for such Components 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
	 
	 	 	 	 
	 

	 	Buyer:
	 	Bank
	 
	 	 	 	 
	 

	 	Seller:
	 	Company
	 
	 	 	 	 
	 

	 	Shares:
	 	The common stock of Company, par value USD 0.01 per Share
(Exchange 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 31.50
	 
	 	 	 	 
	 

	 	Premium:
	 	USD 3,537,500
	 
	 	 	 	 
	 

	 	Premium Payment Date:
	 	The Effective Date or such later date as agreed upon by the
parties.
	 
	 	 	 	 
	 

	 	Effective Date:
	 	December 19, 2006
	 
	 	 	 	 
	 

	 	Exchange:
	 	NASDAQ Global Select Market.
	 
	 	 	 	 
	 

	 	Related Exchange(s):
	 	The principal exchange(s) for options contracts or futures
contracts, if any, with respect to the Shares
	 
	 	 	 	 
	Exercise and Valuation:	 	 
	     In respect of any Component:	 	
	 
	 	 	 	 
	 

	 	Expiration Time:
	 	The Valuation Time
	 
	 	 	 	 
	 

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

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	 	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 such
Expiration Date has not occurred pursuant to the preceding
proviso as of the Final Disruption Date, 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) and, notwithstanding anything to the contrary
in this Confirmation or the Definitions, the Relevant Price
for such Expiration Date shall be the prevailing market
value per Share determined by the Calculation Agent in a
commercially reasonable manner. “Final Disruption Date”
means April 22, 2012. Notwithstanding the foregoing and
anything to the contrary in the Equity Definitions, if a
Market Disruption Event occurs on any Expiration Date, the
Calculation Agent may determine that such Expiration Date is
a Disrupted Day only in part, in which case the Calculation
Agent shall make adjustments to the Number of Warrants for
the relevant Component for which such day shall be the
Expiration Date 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. 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
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.
	 
	 	 
	Automatic Exercise:

	 	Applicable; and means that, for each Component, each Warrant
for such Component not previously exercised will be deemed
to be automatically exercised at the Expiration Time on the
Expiration Date for such Component unless Bank 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.
	 
	 	 
	Company’s Telephone Number
and Telex and/or Facsimile
Number
and Contact Details for
purpose
	 	 
	of Giving Notice:

	 	Cadence Design Systems, Inc. 

2655 Seely Avenue, Building 5

San Jose, California 95134

Fax: (408) 944-6855

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	 	 	 	Attention: General Counsel
	 
	 	 	 	 
	Valuation applicable to each Warrant:	 	 
	 
	 	 	 	 
	 

	 	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:
	 	Each Exercise Date.
	 
	 	 	 	 
	Settlement Terms:	 	 
	     In respect of any Component:	 	 
	 
	 	 	 	 
	 

	 	Method of Settlement:
	 	Net Share Settlement
	 
	 	 	 	 
	 

	 	Net Share Settlement:
	 	On each Settlement Date, Company shall deliver to Bank the
Delivery Requirement for such Settlement Date to the
account specified herein, free of payment through the
Clearance System.
	 
	 	 	 	 
	 

	 	Delivery Requirement:
	 	For any Settlement Date, (i) a number of Shares (rounded down to
the nearest whole Share), as calculated by the
Calculation Agent, equal to (A) the Net Share
Settlement Amount for such Settlement Date divided by
(B) the Settlement Price on the Valuation Date in
respect of such Settlement Date and (ii) cash in lieu
of any fractional shares (based on such Settlement
Price).
	 
	 	 	 	 
	 

	 	Net Share Settlement Amount:
	 	For any Settlement Date, an amount
equal to the product of (i) the
Number of Warrants exercised or deemed exercised on the
relevant Exercise Date, (ii) the Strike Price
Differential for the relevant Valuation Date and (iii)
the Warrant Entitlement.
	 
	 	 	 	 
	 

	 	Settlement Price:
	 	For any Valuation Date, the per Share volume-weighted average
price as displayed under the heading “Bloomberg VWAP”
on Bloomberg page <CDNS>.UQ <equity> AQR
(or any successor thereto) in respect of the period
from 9:30 a.m. to 4:00 p.m. (New York City time) on
such Valuation Date (or if such volume-weighted average
price is unavailable, the market value of one Share on
such Valuation Date, as determined by the Calculation
Agent). Notwithstanding anything to the contrary in the
Equity Definitions, if there is a Market Disruption
Event on any Valuation Date, then the Calculation Agent
shall determine the Settlement Price for such Valuation
Date on the basis of its good faith estimate of the
market value for the relevant Shares on such Valuation
Date.
	 
	 	 	 	 
	 

	 	Settlement Date:
	 	For any Exercise Date, the date defined as such in Section 9.4 of
the Equity Definitions, subject to Section 9(n)(i) hereof.
	 
	 	 	 	 
	 

	 	Failure to Deliver:
	 	Inapplicable

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	Other Applicable Provisions:

	 	The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except 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 Seller is the issuer of the Shares) and 9.12
of the Equity Definitions will be applicable, as if
“Physical Settlement” applied to the Transaction.

3. Additional Terms applicable to the Transaction:

	 	 	 	 	 
	Adjustments applicable to the Warrants:	 	 
	     In respect of any Component:	 	 
	 
	 	 	 	 
	     Method of Adjustment:	 	Calculation Agent Adjustment. For avoidance of doubt, in making
any adjustments under the Equity Definitions, the
Calculation Agent may adjust the Strike Price, the Number
of Warrants and the Warrant Entitlement. Notwithstanding
the foregoing, any cash dividends or distributions,
whether or not extraordinary, shall be governed by
Section 9(j) of this Confirmation and not by Section 11.2
of the Equity Definitions.
	 
	 	 	 	 
	Extraordinary Events applicable to the Transaction:
	 
	 	 	 	 
	 

	 	Tender Offer:
	 	Applicable
	 
	 	 	 	 
	 

	 	Consequence of Merger Events
and Tender Offers	 	 
	 
	 	 	 	 
	 

	 	(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 (Calculation Agent
Determination).
	 
	 	 	 	 
	 

	 	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
American 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 and the
Calculation Agent shall make any adjustments it deems

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	 	 	 	necessary  to  the  terms   of the
Transaction, as if Modified Calculation Agent Adjustment were
applicable to such event.
	 
	 	 	 	 
	Additional Disruption Events:	 	 
	 
	 	 	 	 
	 
	 	(a) Change in Law:	 	Applicable
	 
	 	 	 	 
	 
	 	(b) Insolvency Filing:	 	Applicable
	 
	 	 	 	 
	 
	 	(c) Hedging Disruption:	 	Applicable
	 
	 	 	 	 
	 
	 	(d) Increased Cost of Hedging:	 	Applicable
	 
	 	 	 	 
	 
	 	(e) Loss of Stock Borrow:	 	Applicable
	 
	 	 	 	 
	 
	 	     Maximum Stock Loan Rate:	 	1.0%
	 
	 	 	 	 
	 
	 	(f) Increased Cost of Stock Borrow:	 	Applicable
	 
	 	 	 	 
	 
	 	     Initial Stock Loan Rate:	 	0.25%
	 
	 	 	 	 
	 
	 	Hedging Party:	 	Bank for all applicable Additional Disruption Events
	 
	 	 	 	 
	 
	 	Determining Party:	 	Bank for all applicable Additional Disruption Events
	 
	 	 	 	 
	Non-Reliance:	 	Applicable
	 
	 	 	 	 
	Agreements and Acknowledgments
Regarding Hedging Activities:	 	Applicable
	 
	 	 	 	 
	Additional Acknowledgments:	 	Applicable
	 
	 	 	 	 
	4. Calculation Agent:	 	Bank. The Calculation Agent shall, upon request by either party,
provide a written explanation of any calculation or
adjustment made by it hereunder, including, where
applicable, a description of the methodology and data
applied.
	 
	 	 	 	 
	5. Account Details:	 	 

	 	(a)	 	Account for payments to Company:

Cadence Design Systems, Inc.

Account                
               

Wells Fargo Bank

550 California Street — 10th Floor

San Francisco CA 94104

ABA#                
               

Account for delivery of Shares from Company:

Mellon Investor Services

235 Montgomery Street, 23rd Floor

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San Francisco, CA 94104

Cadence Design Systems Book Memo Treasury Reserve Account

Comment: When you are ready to deliver Shares contact Cadence FIRST.

	 	(b)	 	Account for payments to Bank:

JPMorgan
Chase Bank, National Association, NewYork

 ABA:                
               

Favour: JPMorgan Chase Bank, National Association - London 
A/C:                
               

Account for delivery of Shares to Bank:

               
               

6. Offices:

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

The Office of Bank for the Transaction is: New York, Bank is a
Multibranch Party.

7. Notices: For purposes of this Confirmation:

	 	(a)	 	Address for notices or communications to Company:
	 
	 	 	 	Cadence Design Systems, Inc.
 2655 Seely Avenue, Building
5
 San Jose, California 95134

Fax: (408) 944-6855

Attention: General Counsel

	 	(b)	 	Address for notices or communications to Bank:
	 
	 	 	 	JPMorgan Chase Bank, National Association

277 Park Avenue, 11th Floor

New York, NY 10172

Attention: Eric Stefanik

Title: Operations Analyst

EDG Corporate Marketing

Telephone No.: (212) 622-5814

Fax: (212) 622-8534

8. Representations and Warranties of Company

The representations and warranties of Company set forth in Section 1 of the Purchase Agreement
dated as of the Trade Date among Company, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Morgan Stanley & Co. Incorporated, J.P. Morgan Securities Inc. and Deutsche Bank Securities Inc.
(the “Purchase Agreement” ) are true and correct and are hereby deemed to be repeated to Bank as
if set forth herein. Company hereby further represents and warrants to Bank that:

	 	(a)	 	Company has all necessary corporate power and authority to execute, deliver and perform
its obligations in respect of this Transaction; such execution, delivery and performance
have been duly authorized by all necessary corporate action on Company’s part; and
this Confirmation has been duly and validly executed and delivered by Company and
constitutes its valid and binding

7

 

	 	 	 	obligation, enforceable against Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors’ rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement is sought
in a proceeding at law or in equity) and except that rights to indemnification and
contribution hereunder may be limited by federal or state securities laws or public policy
relating thereto.
	 
	 	(b)	 	Neither the execution and delivery of this Confirmation nor the incurrence or performance
of obligations of Company hereunder will conflict with or result in a breach of (i) the
certificate of incorporation or by-laws (or any equivalent documents) of Company, or any
applicable law or regulation, or (ii) any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument to which Company or any of
its subsidiaries is a party or by which Company or any of its subsidiaries is bound or to
which Company or any of its subsidiaries is subject, or constitute a default under, or result
in the creation of any lien under, any such agreement or instrument, or breach or constitute a
default under any agreements and contracts of Company or its significant subsidiaries filed as
exhibits to Company’s Annual Report on Form 10-K for the year ended December 31, 2005,
incorporated by reference in the Offering Memorandum, as updated by any subsequent filings.
	 
	 	(c)	 	No consent, approval, authorization, or order of, or filing with, any governmental agency or
body or any court is required in connection with the execution, delivery or performance by
Company of this Confirmation, except such as have been obtained or made and such as may be
required under the Securities Act of 1933, as amended (the “Securities Act”) or state
securities laws.
	 
	 	(d)	 	Company is not, and after giving effect to the transactions contemplated hereby will not be,
an “investment company” as such term is defined in the Investment Company Act of 1940, as
amended.
	 
	 	(e)	 	The Shares of Company initially issuable upon exercise of the Warrants by the net share
settlement method (the “Warrant Shares”) have been reserved for issuance by all required
corporate action of Company. The Warrant Shares have been duly authorized and, when delivered
as contemplated by the terms of the Warrants following the exercise of the Warrants in
accordance with its terms and conditions, will be validly issued, fully-paid and
non-assessable, and the issuance of the Warrant Shares will not be subject to any preemptive
or similar rights.
	 
	 	(f)	 	Company is an “eligible contract participant” (as
such term is defined in Section 1a(12) of
the Commodity Exchange Act, as amended (the “CEA”)) because one or more of the following is
true:
	 
	 	 	 	Company is a corporation, partnership, proprietorship, organization, trust or other entity
and:

	 	(A)	 	Company has total assets in excess of USD 10,000,000;
	 
	 	(B)	 	the obligations of Company hereunder are guaranteed, or otherwise supported
by a letter of credit or keepwell, support or other agreement, by an entity of the
type described in Section 1a(12)(A)(i) through (iv),
1a(12)(A)(v)(I), 1a(12)(A)(vii)
or 1a(12)(C) of the CEA; or
	 
	 	(C)	 	Company has a net worth in excess of USD 1,000,000 and has entered into this
Agreement in connection with the conduct of Company’s business or to manage the risk
associated with an asset or liability owned or incurred or reasonably likely to be
owned or incurred by Company in the conduct of Company’s business.

8

 

	 	(g)	 	On the Trade Date, (A) none of Company and its officers and directors is aware of
any material
nonpublic information regarding Company or the Shares and (B) all reports and other
documents filed by Company with the Securities and Exchange Commission pursuant to
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.
	 
	 	(h)	 	Without limiting the generality of Section 3(a)(iii) of the Agreement, the Transaction
will not violate Rule 13e 1 or Rule 13e 4 under the Exchange Act.
	 
	 	(i)	 	Company’s 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.
	 
	 	(j)	 	Company understands no obligations of Bank to it hereunder will be entitled to the
benefit of
deposit insurance and that such obligations will not be guaranteed by any affiliate
of Bank or any governmental agency.
	 
	 	(k)	 	Company 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.
	 
	 	(1)	 	Without limiting the generality of Section 13.1 of the Equity Definitions, Company
acknowledges
that Bank is not making any representations or warranties with respect to the
treatment of the Transaction under FASB Statements 128, 133, as amended, 149 or
150, EITF Issue No. 00-19, Issue No. 01-6 or Issue No. 03-6 (or any successor issue
statements) or under FASB’s Liabilities & Equity Project.
	 
	 	(m)	 	Company agrees that, for purposes of Rule 144(d) under the Securities Act, the
holding period of Bank in Shares received hereunder in any Net Share Settlement or in
Shares comprising Share Termination Delivery Units received pursuant to Section 9(m)
hereof shall start on the Premium Payment Date.

9. Other Provisions:

	 	(a)	 	Opinions. Company shall deliver to Bank an opinion of counsel, dated
as of the Effective Date,with respect to the matters set forth in Sections 8(a) through
(e) of this Confirmation.
	 
	 	(b)	 	Limitations on Settlement by Company. Notwithstanding anything herein
or in the Agreement to the contrary, in no event shall Company be required to deliver
Shares in connection with the Transaction in excess of 8,865,243 Shares (the “Capped
Number”). Company represents and warrants (which 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 Company 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”). Company shall not take any action to decrease the number of
Available Shares below the Capped Number. In the event Company shall not have delivered
the full number of Shares that would be deliverable but for this Section 9(b) (the
resulting deficit, the “Deficit Shares”), Company shall be continually obligated to
deliver, from time to time until the full number of Deficit Shares have been delivered
pursuant to this paragraph, Shares when, and to the

9

 

	 	 	 	extent, that (i) Shares are repurchased, acquired or otherwise received by Company or
any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair
value or any other consideration), (ii) 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 (iii) Company additionally authorizes any unissued
Shares that are not reserved for other transactions. Company shall immediately notify Bank
of the occurrence of any of the foregoing events (including the number of Shares subject
to clause (i), (ii) or (iii) and the corresponding number of Shares to be delivered) and
promptly deliver such Shares thereafter.
	 
	 	(c)	 	Right to Extend. Bank may postpone any Exercise Date or any other date of valuation
or delivery with respect to some or all of the relevant Warrants (in which event the
Calculation Agent shall make appropriate adjustments to the Number of Warrants for one or more
Components), if (x) the average daily trading volume of the Shares for the four calendar weeks
immediately preceding the week in which such Exercise date or date of valuation or delivery
occurs is less than 1,505,000 Shares, which, for the avoidance of doubt, shall be subject to
adjustments as a result of Potential Adjustment Events and (y) Bank determines, in its
reasonable discretion, that such extension is reasonably necessary or appropriate to preserve
Bank’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or
to enable Bank to effect purchases of Shares in connection with its hedging, hedge unwind or
settlement activity hereunder in a manner that would, if Bank were Company or an affiliated
purchaser of Company, be reasonably deemed to be in compliance with applicable legal,
regulatory or self-regulatory requirements, or with related policies and procedures applicable
to Bank.
	 
	 	(d)	 	No Manipulation. Company is not entering into this Transaction to create actual or
apparent trading activity in the Shares (or any security convertible into or exchangeable for
the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any
security convertible into or exchangeable for the Shares) or to violate the Exchange Act.
	 
	 	(e)	 	Repurchase Notices. Company shall, on any day on which Company effects any
repurchase of Shares, promptly give Bank a written notice of such repurchase (a “Repurchase
Notice”) on such day if, following such repurchase, the Warrant Equity Percentage as determined
on such day is (i)greater than 6% and (ii) greater by 0.5% than the Warrant Equity Percentage
included in the immediately preceding Repurchase Notice (or, in the case of the first such
Repurchase Notice, greater than the Warrant Equity Percentage as of the date hereof). The
“Warrant Equity Percentage” as of any day is the fraction (A) the numerator of which is the sum
of (x) the Number of Shares hereunder and (y) the Number of Shares for the warrant transaction
(reference no. 2696930) entered into by the parties on the date hereof and (B) the denominator
of which is the number of Shares outstanding on such day. Company agrees to indemnify and
hold harmless Bank and its affiliates and their respective officers, directors, employees,
affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and
against any and all losses (including losses relating to Bank’s hedging activities as a
consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without
limitation, any forbearance from hedging activities or cessation of hedging activities and any
losses in connection therewith with respect to this Transaction), claims, damages, judgments,
liabilities and expenses (including reasonable attorney’s fees), joint or several, which an
Indemnified Person may become subject to, as a result of Company’s failure to provide Bank with
a Repurchase Notice on the day and in the manner specified in this Section 9(e), and to
reimburse, within 30 days, upon written request, each of such Indemnified Persons for any
reasonable legal or other expenses incurred in connection with investigating, preparing for,
providing testimony or other evidence in connection with or defending any of the foregoing.
If any suit, action, proceeding (including any governmental or regulatory investigation), claim
or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person
shall promptly notify Company in writing, and Company, upon request of the Indemnified Person,
shall retain counsel reasonably satisfactory to the Indemnified

10

 

	 	 	 	Person to represent the Indemnified Person and any others Company may designate in
such proceeding and shall pay the fees and expenses of such counsel related to such
proceeding. Company shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, Company agrees to indemnify any Indemnified Person from and
against any loss or liability by reason of such settlement or judgment. Company shall not,
without the prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such Indemnified
Person, unless such settlement includes an unconditional release of such Indemnified Person
from all liability on claims that are the subject matter of such proceeding. If the
indemnification provided for in this paragraph (e) is unavailable to an Indemnified Person
or insufficient in respect of any losses, claims, damages or liabilities referred to
therein, then Company under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities. The remedies provided for in this
paragraph (e) are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any Indemnified Person at law or in equity. The indemnity and
contribution agreements contained in this paragraph (e) shall remain operative and in full
force and effect regardless of the termination of this Transaction.
	 
	 	(f)	 	Board Authorization. Company represents that it is entering into the Transaction,
solely for the purposes stated in the board resolution authorizing this Transaction and in its
public disclosure. Company further represents that there is no internal policy, whether written
or oral, of Company that would prohibit Company from entering into any aspect of this
Transaction, including, but not limited to, the issuance of Shares to be made pursuant hereto.
	 
	 	(g)	 	Transfer or Assignment. Company may not transfer any of its rights or obligations
under this Transaction without the prior written consent of Bank, Bank may transfer or assign
all or any portion of its rights or obligations under this Transaction without consent of
Company. Notwithstanding any other provision in this Confirmation to the contrary requiring or
allowing the Bank to purchase, sell, receive or deliver any Shares or other securities to or
from Company, the Bank may designate any of its affiliates to purchase, sell, receive or
deliver such Shares or other securities and otherwise to perform Bank’s obligations in respect
of this Transaction and any such designee may assume such obligations. The Bank shall be
discharged of its obligations to Company to the extent of any such performance.
	 
	 	(h)	 	Effectiveness. If, on or prior to the Effective Date (or such later date as agreed
upon by the parties), Bank reasonably determines that it is advisable to cancel the
Transaction because of concerns that Bank’s related hedging activities would be reasonably
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.
	 
	 	(i)	 	Equity Rights. Bank 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 Company’s bankruptcy.
	 
	 	(j)	 	Dividends. If at any time during the period from and including the Trade Date, to but
excluding
the Expiration Date, an ex-dividend date for a cash dividend occurs with respect to the
Shares (an “Ex-Dividend Date”) and that dividend is greater than the Regular Dividend on a
per Share basis, then the Calculation Agent will adjust the Strike Price, the Number of
Warrants and the Warrant Entitlement to preserve the fair value of the Warrant to Bank
after taking into account such dividend. “Regular Dividend” shall mean USD 0.00 per Share
per quarter.

11

 

	 	(k)	 	Additional Provisions.
	 
	 	 	 	(i) The first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A)
thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified
as the Method of Adjustment in the related Confirmation of a Share Option Transaction,
then following the announcement or occurrence of any Potential Adjustment Event, the
Calculation Agent will determine whether such Potential Adjustment Event has 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) Section 11.2(e)(vii) of the Equity Definitions is
hereby amended by deleting the words “diluting or concentrative” and replacing them with “material”; and adding the following
words at the end of the sentence “or options on Shares”.
	 
	 	(1)	 	No Collateral; Setoff. Notwithstanding any provision of the Agreement or any other
agreement
between the parties to the contrary, the obligations of Company hereunder are not secured
by any collateral. 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.
	 
	 	(m)	 	Alternative Calculations and Payment on Early Termination
and on Certain Extraordinary Events. If, in respect of this Transaction, an amount is payable by Company to Bank, (i) pursuant
to Section 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of
a Nationalization or Insolvency or a Merger Event, in each case in which the consideration
to be paid to holders of Shares consists solely of cash) or (ii) pursuant to Section
6(d)(ii) of the Agreement (except in the event of an Event of Default in which Company is
the Defaulting Party or a Termination Event in which Company is the Affected Party, other
than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or
(viii) of the Agreement or a Termination Event of the type described in Section 5(b)(i),
(ii), (iii), (iv), (v) or (vi) of the Agreement, in each case resulting from an event or
events outside Company’s control) (a “Payment Obligation”), Company may, in its sole
discretion, satisfy any such Payment Obligation by the Share Termination Alternative (as
defined below) and shall give irrevocable telephonic notice to Bank, confirmed in writing
within one Currency Business Day, no later than 12:00 p.m. New York local time on the
Merger Date, the Announcement Date or the Early Termination Date, as applicable; provided
that if Company does not validly elect to satisfy its Payment Obligation by the Share
Termination Alternative, Bank shall nevertheless have the right, in its sole discretion, to
require Company to satisfy its Payment Obligation by the Share Termination Alternative,
notwithstanding Company’s lack of election. In calculating any amounts under Section 6(e)
of the Agreement, notwithstanding anything to the contrary in the Agreement, (1) separate
amounts shall be calculated as set forth in Section 6(e) with respect to (i) this
Transaction and (ii) all other Transactions, and (2) such separate amounts shall be payable
pursuant to Section 6(d)(ii) of the Agreement, subject to, in the case of clause (l)(i),
the Share Termination Alternative right hereunder.

12

 

	 	 	 	 	 
	 

	 	Share Termination Alternative:
	 	If applicable, Company shall
deliver to Bank the Share Termination Delivery Property on the date when
the Payment Obligation would otherwise be due pursuant
to Section 12.7 or 12.9 of the Equity Definitions or
Section 6(d)(ii) and 6(e) of the Agreement, as
applicable (the “Share Termination Payment Date”),
subject to paragraph (n)(i) below, in satisfaction,
subject to paragraph (n)(ii) below, of the Payment
Obligation in the manner reasonably requested by Bank
free of payment.
	 
	 	 	 	 
	 

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

	 	Share Termination Unit Price:
	 	The value to Bank 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 Company at the time of
notification of the Payment Obligation. In the case of
a Private Placement Settlement of Share Termination
Delivery Units that are Restricted Shares as set forth
in paragraph (n)(i) below, the Share Termination Unit
Price shall be determined by the discounted price
applicable to such Share Termination Delivery Units.
In the case of a Registration Settlement of Share
Termination Delivery Units that are Restricted Shares
(as defined below) as set forth in paragraph (n)(ii)
below, the Share Termination Unit Price shall be the
Settlement Price on the Merger Date, the date of the
occurrence of the Nationalization or Insolvency, the
date of the Share De-listing or the Early Termination
Date, as applicable.
	 
	 	 	 	 
	 

	 	Share Termination Delivery Unit:
	 	In the case of a De-listing, Termination Event or
Event of Default, one Share or, in the case of
Nationalization or Insolvency, a Merger Event or a
Tender Offer, one Share or a unit consisting of the
number or amount of each type of property received by
a holder of one Share (without consideration of any
requirement to pay cash or other consideration in lieu
of fractional amounts of any securities) in such
Nationalization, Insolvency, Merger Event or Tender
Offer, as determined by the Calculation Agent, as the

13

 

	 	 	 	 	 
	 

	 	 	 	case may be. If such Nationalization, insolvency,
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:
	 	Inapplicable
	 
	 	 	 	 
	 

	 	Other applicable provisions:
	 	If Share Termination Alternative is applicable, the
provisions of Sections 9.8, 9.9, 9.10, 9.11
(except 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 Seller is the issuer of the Shares) and
9.12 of the Equity Definitions will be
applicable, as if “Physical Settlement” applied
to such cancellation or termination of the
Transaction, except that all references therein
to “Shares” shall be read as references to “Share
Termination Delivery Units”.

	 	(n)	 	Registration/Private Placement Procedures. If, in the reasonable opinion of Bank,
following any delivery of Shares or Share Termination Delivery Property to Bank hereunder,
such Shares or Share Termination Delivery Property would be in the hands of Bank subject to
any applicable restrictions with respect to any registration or qualification requirement or
prospectus delivery requirement for such Shares or Share Termination Delivery Property
pursuant to any applicable federal or state securities law (including, without limitation,
any such requirement arising under Section 5 of the Securities Act as a result of such Shares
or Share Termination Delivery Property being “restricted securities”, as such term is defined
in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share
Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities
Act) (such Shares or Share Termination Delivery Property, “Restricted Shares”), then delivery
of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at
the election of Company, unless waived by Bank; provided that, in the event such obligation
to deliver Restricted Shares would have arisen from a Net Share Settlement, at the election
of the Company, Company may satisfy such Share delivery obligation by paying Bank on the
relevant Settlement Date an amount in cash equal to the relevant Net Share Settlement Amount.
Notwithstanding anything to the contrary in the Equity Definitions, Company shall notify
Bank, prior to the first Expiration Date, whether (x) it elects to cash settle the Number of
Warrants for all Expiration Dates, if Bank determines the Shares that would be delivered in
the Net Share Settlement of such Number of Warrants would be Restricted Shares and (y) if
cash settlement is not elected, whether a Private Placement Settlement or Registered
Settlement would apply. Such election shall apply to all Expiration Dates and all Settlement
Dates related to Expiration Dates, and the procedures in clause (i) or clause (ii) below
shall apply for all such Restricted Shares delivered in respect of all Expiration Dates on an
aggregate basis commencing on the Settlement Date relating to the first Expiration Date. In
such case, the Calculation Agent shall make reasonable adjustments to settlement terms and
provisions under this Confirmation to reflect a single Private Placement Settlement or
Registered Settlement for such aggregate Restricted Shares delivered hereunder. If Company
elects Share Termination Alternative in accordance with Section 9(m) hereof and Bank
determines in accordance with this paragraph that the Share Termination Delivery Property to
be delivered in such Share Termination Alternative would constitute Restricted Shares, then
Company shall immediately notify Bank whether a

14

 

Private Placement Settlement or Registered Settlement would apply to the delivery of such Share
Termination Delivery Property.

	 	(i)	 	If Company elects to settle the Transaction pursuant to this clause (i) (a “Private
Placement Settlement”), then delivery of Restricted Shares by Company shall be effected in
customary private placement procedures with respect to such Restricted Shares reasonably
acceptable to Bank; provided that Company may not elect a Private Placement Settlement if,
on the date of its election, it has taken, or caused 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 Company to Bank (or any affiliate designated by Bank) of the Restricted Shares
or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for
resales of the Restricted Shares by Bank (or any such affiliate of Bank). The Private
Placement Settlement of such Restricted Shares shall include customary representations,
covenants, blue sky and other governmental filings and/or registrations, indemnities to
Bank, due diligence rights (for Bank or any designated buyer of the Restricted Shares by
Bank), opinions and certificates, and such other documentation as is customary for
private placement agreements, all reasonably acceptable to Bank. In the case of a Private
Placement Settlement, Bank shall determine the appropriate discount to the Share
Termination Unit Price (in the case of settlement of Share Termination Delivery Units
pursuant to paragraph (m) above) or any Settlement Price (in the case of settlement of
Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially
reasonable manner and appropriately adjust the amount of such Restricted Shares to be
delivered to Bank hereunder. Notwithstanding the Agreement or this Confirmation, the date
of delivery of such Restricted Shares shall be the Exchange Business Day following notice
by Bank to Company of such applicable discount and the number of Restricted Shares to be
delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted
Shares shall be due as set forth in the previous sentence and not be due on the Share
Termination Payment Date (in the case of settlement of Share Termination Delivery Units
pursuant to paragraph (m) above) or on the Settlement Date for such Restricted Shares (in
the case of settlement of Shares pursuant to Section 2 above).
	 
	 	 	 	In the event Company shall not have delivered the full number of Restricted Shares
otherwise applicable as a result of either the proviso above or the last sentence of
clause (ii) below relating to the Maximum Amount (such deficit, the “Deficit Restricted
Shares”), Company shall be continually obligated to deliver, from time to time until the
full number of Deficit Restricted Shares have been delivered pursuant to this paragraph,
Restricted Shares when, and to the extent, that (i) Shares are repurchased, acquired or
otherwise received by Company or any of its subsidiaries after the Trade Date (whether or
not in exchange for cash, fair value or any other consideration), (ii) 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 (iii) Company
additionally authorizes any unissued Shares that are not reserved for other transactions.
Company shall immediately notify Bank of the occurrence of any of the foregoing events
(including the number of Shares subject to clause (i), (ii) or (iii) and the
corresponding number of Restricted Shares to be delivered) and promptly deliver such
Restricted Shares thereafter.
	 
	 	(ii)	 	If Company elects to settle the Transaction pursuant to this clause (ii) (a “Registration
Settlement”), then Company shall promptly (but in any event no later than the beginning
of the Resale Period) file and use its reasonable best efforts to make effective under
the Securities Act a registration statement or supplement or amend an outstanding
registration statement in form and substance reasonably satisfactory to Bank, to cover
the

15

 

	 	 	 	resale of such Restricted Shares in accordance with customary resale registration
procedures, including covenants, conditions, representations, underwriting discounts (if
applicable), commissions (if applicable), indemnities due diligence rights, opinions and
certificates, and such other documentation as is customary for equity resale underwriting
agreements, all reasonably acceptable to Bank. If Company shall fail to comply with the
requirements set forth in the immediately preceding sentence, Private Placement
Settlement shall apply. If Bank is satisfied with such procedures and documentation, it
shall sell the Restricted Shares pursuant to such registration statement during a period
(the “Resale Period”) commencing on the Exchange Business Day following delivery of such
Restricted Shares (which, for the avoidance of doubt, shall be (x) the Share Termination
Payment Date in case of settlement of Share Termination Delivery Units pursuant to
paragraph (m) above or (y) the Settlement Date in respect of the first Expiration Date)
and ending on the earliest of (x) the Exchange Business Day on which Bank completes the
sale of all Restricted Shares or, in the case of settlement of Share Termination Delivery
Units, a sufficient number of Restricted Shares so that the realized net proceeds of such
sales exceed the Payment Obligation or the Net Share Settlement Amount, as the case may
be, (y) the date upon which all Restricted Shares have been sold or transferred pursuant
to Rule 144 (or similar provisions then in force) or Rule 145(d)(l) or (2) (or any
similar provision then in force) under the Securities Act and (iii) the date upon which
all Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule
144(k) (or any similar provision then in force) or Rule 145(d)(3) (or any similar
provision then in force) under the Securities Act. If the Payment Obligation or the Net
Share Settlement Amount, as the case may be, exceeds the realized net proceeds from such
resale, Company shall transfer to Bank 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
Restricted Shares (“Make-whole Shares”) in an amount that, based on the Settlement Price
on the last day of the Resale Period (as if such day was the “Valuation Date” for
purposes of computing such Settlement Price), has a dollar value equal to the Additional
Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If
Company elects to pay the Additional Amount in Restricted Shares, the requirements and
provisions for Registration Settlement shall apply. This provision shall be applied
successively until the Additional Amount is equal to zero. For the avoidance of doubt,
Company’s obligation to deliver Make-whole Shares shall apply to both Private Placement
Settlements and Registration Settlements.
	 
	 	(iii)	 	Without limiting the generality of the foregoing, Company agrees that any Restricted Shares
delivered to Bank, as purchaser of such Restricted Shares, (i) may be transferred by and among
Bank and its affiliates and Company shall effect such transfer without any further action by
Bank and (ii) after the minimum “holding period” within the meaning of Rule 144(d) under the
Securities Act has elapsed after any Settlement Date for such Restricted Shares, Company shall
promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends
referring to any such restrictions or requirements from such Restricted Shares upon delivery
by Bank (or such affiliate of Bank) to Company or such transfer agent of seller’s and broker’s
representation letters customarily delivered by Bank in connection with resales of restricted
securities pursuant to Rule 144 under the Securities Act, 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 Bank
(or such affiliate of Bank).

If the Private Placement Settlement or the Registration Settlement shall not be effected as set
forth in clauses (i) or (ii), as applicable, then failure to effect such Private Placement
Settlement or such

16

 

	 	 	 	Registration Settlement shall constitute an Event of Default with respect to which
Company shall be the Defaulting Party.
	 
	 	(o)	 	Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Bank may
not exercise any Warrant hereunder, and Automatic Exercise shall not apply with respect
thereto, to the extent (but only to the extent) that such receipt would result in Bank
directly or indirectly beneficially owning (as such term is defined for purposes of Section
13(d) of the Exchange Act) at any time in excess of 9.0% of the outstanding Shares. Any
purported delivery hereunder shall be void and have no effect to the extent (but only to
the extent) that such delivery would result in Bank directly or indirectly so beneficially
owning in excess of 9.0% of the outstanding Shares. If any delivery owed to Bank hereunder
is not made, in whole or in part, as a result of this provision, Company’s obligation to
make such delivery shall not be extinguished and Company shall make such delivery as
promptly as practicable after, but in no event later than one Exchange Business Day after,
Bank gives notice to Company that such delivery would not result in Bank directly or
indirectly so beneficially owning in excess of 9.0% of the outstanding Shares.
	 
	 	(p)	 	Share Deliveries. Company 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 Bank will not be considered an affiliate under this Section 9(p) 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 two
years from the Premium Payment Date shall be eligible for resale under Rule 144(k) of the
Securities Act and Company 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. Company further agrees, for any delivery of Shares or Share Termination
Delivery Property hereunder at any time after one year from the Premium Payment Date but
within 2 years of the Premium Payment Date, to the extent the holder of this Warrant then
satisfies the holding period and other requirements of Rule 144 of the Securities Act, to
promptly remove, or cause the transfer agent for such Shares or Share Termination Delivery
Property to remove, any legends referring to any such restrictions or requirements from
such Shares or Share Termination Delivery Property. Such Shares or Share Termination
Delivery Property will be de-legended upon delivery by Bank (or such affiliate of Bank) to
Company or such transfer agent of customary seller’s and broker’s representation letters in
connection with resales of restricted securities pursuant to Rule 144 of the Securities
Act, 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 Bank (or such affiliate of Bank).
Company further agrees that any delivery of Shares or Share Termination Delivery Property
prior to the date that is one year from the Premium Payment Date, may be transferred by and
among Bank and its affiliates and Company shall effect such transfer without any further
action by Bank. Notwithstanding anything to the contrary herein, Company 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 Company
herein shall be deemed modified to the extent necessary, in the opinion of outside counsel
of Company, to comply with Rule 144 of the Securities Act, including Rule 144(k) as in
effect at the time of delivery of the relevant Shares or Share Termination Delivery
Property.
	 
	 	(q)	 	Additional Termination Event. If within the period commencing on the Trade
Date and ending on the second anniversary of the Premium Payment Date, Buyer reasonably
determines that it is

17

 

	 	 	 	advisable to terminate a portion of the Transaction so that Buyer’s related hedging
activities will reasonably be deemed to comply with applicable securities laws, rules or
regulations, an Additional Termination Event shall occur in respect of which (1) Company
shall be the sole Affected Party and (2) the Transaction shall be the sole Affected
Transaction.
	 
	 	(r)	 	Securities Contract; Swap Agreement. Each of Bank and Company agrees and acknowledges
that Bank is a “financial participant” and “swap participant” within the meaning of Sections
101(22A) and 101(53C) 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 is a “settlement payment.” as
such term is defined in Section 741(8) 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 is a “transfer,” as such term is
defined in Section 101(54) of the Bankruptcy Code, and (B) that Bank is entitled to the
protections afforded by, among other sections, Section 362(b)(6), 362(b)(17), 546(e),
546(g), 555 and 560 of the Bankruptcy Code.
	 
	 	(s)	 	Disclosure. Effective from the date of commencement of discussions concerning the
Transaction,
Company 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 Company relating to such tax treatment and tax structure.
	 
	 	(t)	 	Governing Law. New York law (without reference to choice of law doctrine).
	 
	 	(u)	 	Waiver of Jury Trial. Each party waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect of any suit, action or
proceeding relating to 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)	 	Quarterly Valuations. Bank hereby agrees, upon request by Company, to cause its
affiliate to provide to Company, within 5 Exchange Business Days after the end of the fiscal
quarter of Company during which Company made such request, a valuation estimate of the fair
value of the Transaction as of Company’s fiscal quarter end.
	 
	 	(w)	 	Role of Agent. Each party agrees and acknowledges that (i) Agent has acted solely as
agent and not as principal with respect to this Transaction and (ii) Agent 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.

18

 

     Please confirm that the foregoing correctly sets forth the terms of our agreement
by executing this Confirmation and returning it
to EDG Confirmation Group, J.P. Morgan
Securities Inc., 277 Part Avenue, 11th Floor, New York, NY
10172-3401, or by fax to (212) 622 8519.

	 	 	 	 	 
	 	Very truly yours,

J.P. Morgan Securities Inc., as agent for

JPMorgan Chase Bank, National Association

 	 
	 	By:  	/s/
David Seaman
 	 
	 	Authorized Signatory 	 
	 	Name: David Seaman 	 
	 

	 	 	 	 
	Accepted and confirmed 

as of the Trade Date:

Cadence Design Systems, Inc. 

 
	By:  	 	/s/ William Porter
 	 
	Authorized Signatory       	 
	Name: WILLIAM PORTER 	 
	 

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

19

 

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.
	 	82,085	 	2/16/2012
	2.
	 	82,085	 	2/17/2012
	3.
	 	82,085	 	2/21/2012
	4.
	 	82,085	 	2/22/2012
	5.
	 	82,085	 	2/23/2012
	6.
	 	82,085	 	2/24/2012
	7.
	 	82,085	 	2/27/2012
	8.
	 	82,085	 	2/28/2012
	9.
	 	82,085	 	2/29/2012
	10.
	 	82,085	 	3/1/2012
	11.
	 	82,085	 	3/2/2012
	12.
	 	82,085	 	3/5/2012
	13.
	 	82,085	 	3/6/2012
	14.
	 	82,085	 	3/7/2012
	15.
	 	82,085	 	3/8/2012
	16.
	 	82,085	 	3/9/2012
	17.
	 	82,085	 	3/12/2012
	18.
	 	82,085	 	3/13/2012
	19.
	 	82,085	 	3/14/2012
	20.
	 	82,085	 	3/15/2012
	21.
	 	82,085	 	3/16/2012
	22.
	 	82,085	 	3/19/2012
	23.
	 	82,085	 	3/20/2012
	24.
	 	82,085	 	3/21/2012
	25.
	 	82,085	 	3/22/2012
	26.
	 	82,085	 	3/23/2012
	27.
	 	82,085	 	3/26/2012
	28.
	 	82,085	 	3/27/2012
	29.
	 	82,085	 	3/28/2012
	30.
	 	82,085	 	3/29/2012
	31.
	 	82,085	 	3/30/2012
	32.
	 	82,085	 	4/2/2012
	33.
	 	82,085	 	4/3/2012
	34.
	 	82,085	 	4/4/2012
	35.
	 	82,085	 	4/5/2012
	36.
	 	82,106	 	4/9/2012

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

20exv10w91

 

Exhibit 10.91

JPMorgan Chase Bank, National Association

P.O. Box 161

60 Victoria Embankment

London EC4Y 0JP

England

December 14, 2006

To: Cadence Design Systems, Inc.

Bldg. 5, MS 5B1

2655 Seely Avenue

San Jose, CA 95134

Attention: Legal Department

Telephone No.: (408) 943-1234

Facsimile No.: (408) 943-0513

Re: Warrants

Reference: 2696930

     The purpose of this Confirmation (this “Confirmation”) is to confirm the terms and conditions
of the Warrants issued by Cadence Design Systems, Inc. a Delaware corporation (“Company”), to
JPMorgan Chase Bank, National Association, London Branch (“Bank”), represented by J.P. Morgan
Securities Inc. (“Agent”), as its agent, on the Trade Date specified below (the “Transaction”).
This Confirmation constitutes a “Confirmation” as referred to in the ISDA Master Agreement
specified below. This Confirmation shall replace any previous letter and serve as the final
documentation for this Transaction.

     The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.,
are incorporated into this Confirmation. In the event of any inconsistency between the Equity
Definitions and this Confirmation, this Confirmation shall govern. This Transaction shall be deemed
to be a Share Option Transaction within the meaning set forth in the Equity Definitions.

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

1. This Confirmation evidences a complete and binding agreement between Bank and Company as to the
terms
of the Transaction to which this Confirmation relates. This Confirmation shall supplement, form a
part of, and be
subject to an agreement in the form of the 2002 ISDA Master Agreement (the “Agreement”) as if Bank
and Company
had executed an agreement in such form (but without any Schedule except for the election of the
laws of the State of
New York as the governing law) on the Trade Date. In the event of any inconsistency between
provisions of that
Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction
to which this
Confirmation relates. The parties hereby agree that no Transaction other than the Transaction to
which this
Confirmation relates shall be governed by the Agreement.

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

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

 

	 	 	 	 	 
	General Terms:	 	 
	 

	 	Trade Date:
	 	December 14, 2006
	 

	 	Warrants:
	 	Equity call warrants, each giving the holder the right to purchase one Share
at the Strike Price, subject to the Settlement Terms set forth below. For
the purposes of the Equity Definitions, each reference to a Warrant herein
shall be deemed to be a reference to a
Call Option.
	 

	 	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 for such Components 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
	 

	 	Buyer:
	 	Bank
	 

	 	Seller:
	 	Company
	 

	 	Shares:
	 	The common stock of Company, par value USD 0.01 per Share (Exchange 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 31.50
	 

	 	Premium:
	 	USD 6,312,500
	 

	 	Premium Payment Date:
	 	The Effective Date
	 

	 	Effective Date:
	 	December 19, 2006
	 

	 	Exchange:
	 	NASDAQ Global Select Market.
	 

	 	Related Exchange(s):
	 	The principal exchange(s) for options contracts or futures
contracts, if any, with respect to the Shares
	Exercise and Valuation:	 	 
	     In respect of any Component:	 	 
	 

	 	Expiration Time:
	 	The Valuation Time
	 

	 	Expiration Dates:
	 	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

2

 

	 	 	 	 	 
	 

	 	 	 	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 such
Expiration Date
has not occurred
pursuant to the
preceding
proviso as of
the Final
Disruption Date,
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)
and,
notwithstanding
anything to the
contrary in this
Confirmation or
the Definitions,
the Relevant
Price for such
Expiration Date
shall be the
prevailing
market value per
Share determined
by the
Calculation
Agent in a
commercially
reasonable
manner. “Final
Disruption Date”
means April 20,
2014.
Notwithstanding
the foregoing
and anything to
the contrary in
the Equity
Definitions, if
a Market
Disruption Event
occurs on any
Expiration Date,
the Calculation
Agent may
determine that
such Expiration
Date is a
Disrupted Day
only in part, in
which case the
Calculation
Agent shall make
adjustments to
the Number of
Warrants for
the relevant
Component for
which such day
shall be the
Expiration Date
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.
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 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.
	 

	 	Automatic Exercise:
	 	Applicable; and means
that, for each Component, each Warrant for such Component not previously
exercised will he deemed to be automatically exercised at the Expiration
Time on the Expiration Date for such Component unless Bank 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.
	 

	 	Company’s Telephone Number
and Telex and/or Facsimile
Number and Contact
Details for purpose of
Giving Notice:	 
	 

	 	 	Cadence Design Systems, Inc.
 2655 Seely
Avenue, Building 5
 San Jose, California 95134
 Fax: (408) 944-6855
 Attention: General Counsel

3

 

	 	 	 	 	 
	Valuation applicable to
each Warrant:	 	 
	 

	 	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:
	 	Each Exercise Date.
	Settlement Terms:	 	 
	     In respect of any Component:	 	 
	 

	 	Method of Settlement:
	 	Net Share Settlement
	 

	 	Net Share Settlement:
	 	On each Settlement Date, Company shall deliver to Bank the
Delivery Requirement for such Settlement Date to the account
specified herein, free of payment through the Clearance System.
	 

	 	Delivery Requirement:
	 	For any Settlement Date, (i) a number of Shares (rounded down to
the nearest whole Share), as calculated by the Calculation Agent,
equal to (A) the Net Share Settlement Amount for such
Settlement Date divided by (B) the Settlement Price on the
Valuation Date in respect of such Settlement Date and (ii) cash in
lieu of any fractional shares (based on such Settlement Price).
	 

	 	Net Share Settlement Amount:
	 	 For any Settlement Date, an amount equal to the product of (i) the
Number of Warrants exercised or deemed exercised on the
relevant Exercise Date, (ii) the Strike Price Differential for the
relevant Valuation Date and (iii) the Warrant Entitlement.
	 

	 	Settlement Price:
	 	For any Valuation Date, the per Share volume-weighted average
price as displayed under the heading “Bloomberg VWAP” on
Bloomberg page <CDNS>.UQ <equity> AQR (or any successor
thereto) in respect of the period from 9:30 a.m. to 4:00 p.m. (New
York City time) on such Valuation Date (or if such volume-weighted average price is unavailable, the market value of one
Share on such Valuation Date, as determined by the Calculation
Agent). Notwithstanding anything to the contrary in the Equity
Definitions, if there is a Market Disruption Event on any
Valuation Date, then the Calculation Agent shall determine the
Settlement Price for such Valuation Date on the basis of its good
faith estimate of the market value for the relevant Shares on such
Valuation Date.

	 

	 	Settlement Date:
	 	
For any Exercise Date, the date defined as such in Section 9.4 of
the Equity Definitions, subject to Section 9(n)(i) hereof.
	 

	 	Failure to Deliver:
	 	Inapplicable
	Other Applicable Provisions:	 	The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except that
the Representation and Agreement contained in Section 9.11 of
the Equity Definitions shall be modified by excluding any

4

 

	 	 	 	 	 
	 

	 	 	 	representations therein relating to restrictions, obligations,
limitations or requirements under applicable securities laws as a result
of the fact that Seller is the issuer of the Shares) and 9.12 of the
Equity Definitions will be applicable, as if “Physical
Settlement” applied to the Transaction.
	3. Additional Terms applicable
to the Transaction:	 	 
	Adjustments applicable
to the Warrants:	 	 
	     In respect of any Component:	 	 
	     Method of Adjustment:	 	Calculation Agent Adjustment. For avoidance of doubt, in making
any adjustments under the Equity Definitions, the Calculation Agent
may adjust the Strike Price, the Number of Warrants and the Warrant
Entitlement. Notwithstanding the foregoing, any cash dividends or
distributions, whether or not extraordinary, shall be governed by
Section 9(j) of this Confirmation and not by Section 11.2 of the
Equity Definitions.
	Extraordinary Events
applicable to the Transaction:	 	 
	 

	 	Tender Offer:
	 	Applicable
	 

	 	Consequence of Merger
Events and
Tender Offers	 	 
	 

	 	(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 (Calculation Agent Determination).
	 

	 	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
American 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
and the Calculation Agent shall make any adjustments it deems
necessary to the terms of the Transaction, as if Modified
Calculation Agent Adjustment were applicable to such event.
	Additional Disruption Events:	 	 

5

 

	 	 	 	 	 
	 

	 	(a) Change in Law:

	 	Applicable
	 

	 	(b) Insolvency Filing:

	 	Applicable
	 

	 	(c) Hedging Disruption:

	 	Applicable
	 

	 	(d) Increased Cost of Hedging:

	 	Applicable
	 

	 	(e) Loss of Stock Borrow:

	 	Applicable
	 

	 	Maximum Stock Loan Rate:

	 	1.0%
	 

	 	(f) Increased Cost of Stock Borrow:

	 	Applicable
	 

	 	Initial Stock Loan Rate:

	 	0.25%
	 

	 	Hedging Party:

	 	Bank for all applicable Additional Disruption Events
	 

	 	Determining Party:

	 	Bank for all applicable Additional Disruption Events
	Non-Reliance:
	 	Applicable
	Agreements and Acknowledgments
Regarding Hedging Activities:
	 	Applicable
	Additional Acknowledgments:
	 	Applicable
	4. Calculation Agent:
	 	Bank. The Calculation Agent shall, upon request by
either party, provide a written explanation of any calculation or adjustment made by it hereunder, including, where
applicable, a description of the methodology and data applied.
	5. Account Details:	 	 

	 	(a)	 	Account for payments to Company:

Cadence Design Systems, Inc.

Account
                      

Wells Fargo Bank

550 California Street — 10th Floor

San Francisco CA 94104

ABA#                         

	 	 	 	Account for delivery of Shares from Company:

Mellon Investor Services

235 Montgomery Street, 23rd Floor

San Francisco, CA 94104

Cadence Design Systems Book Memo Treasury Reserve Account

Comment: When you are ready to deliver Shares contact Cadence FIRST.

6

 

	 	(b)	 	Account for payments to Bank:

JPMorgan Chase Bank, National Association, New York

ABA:
                    

Favour: JPMorgan Chase Bank, National Association — London

A/C:                     

Account for delivery of Shares to Bank:

                    

6. Offices:

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

The Office of Bank for the Transaction is: New York, Bank is a
Multibranch Party.

7. Notices: For purposes of this Confirmation:

	 	(a)	 	Address for notices or communications to Company:

Cadence Design Systems, Inc.

2655 Seely Avenue, Building 5

San Jose, California 95134

Fax: (408) 944-6855

Attention: General Counsel

	 	(b)	 	Address for notices or communications to Bank:

JPMorgan Chase Bank, National Association

277 Park Avenue, 11th Floor

New York, NY 10172

Attention: Eric Stefanik

Title: Operations Analyst

EDG Corporate Marketing

Telephone No.: (212) 622-5814

Fax: (212) 622-8534

8. Representations and Warranties of Company

The representations and warranties of Company set forth in Section 1 of the Purchase Agreement
dated as of the Trade Date among Company, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Morgan Stanley & Co. Incorporated, J.P. Morgan Securities Inc. and Deutsche Bank Securities Inc.
(the “Purchase Agreement” ) are true and correct and are hereby deemed to be repeated to Bank as
if set forth herein. Company hereby further represents and warrants to Bank that:

	 	(a)	 	Company has all necessary corporate power and authority to execute, deliver and perform
its
obligations in respect of this Transaction; such execution, delivery and performance
have been duly authorized by all necessary corporate action on Company’s part; and
this Confirmation has been duly and validly executed and delivered by Company and
constitutes its valid and binding obligation, enforceable against Company in
accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors’ rights
and remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair

7

 

	 	 	 	dealing (regardless of whether enforcement is sought in a proceeding at law or in equity)
and except that rights to indemnification and contribution hereunder may be limited by
federal or state securities laws or public policy relating thereto.

	 	(b)	 	Neither the execution and delivery of this Confirmation nor the incurrence or performance of
obligations of Company hereunder will conflict with or result in a breach of (i) the
certificate of
incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or
regulation, or (ii) any order, writ, injunction or decree of any court or governmental
authority or
agency, or any agreement or instrument to which Company or any of its subsidiaries is a
party or
by which Company or any of its subsidiaries is bound or to which Company or any of its
subsidiaries is subject, or constitute a default under, or result in the creation of any
lien under, any
such agreement or instrument, or breach or constitute a default under any agreements and
contracts of Company or its significant subsidiaries filed as exhibits to Company’s Annual
Report
on Form 10-K for the year ended December 31, 2005, incorporated by reference in the
Offering
Memorandum, as updated by any subsequent filings.
	 
	 	(c)	 	No consent, approval, authorization, or order of, or filing with, any governmental agency or
body
or any court is required in connection with the execution, delivery or performance by
Company of
this Confirmation, except such as have been obtained or made and such as may be required
under
the Securities Act of 1933, as amended (the “Securities Act”) or state securities laws.
	 
	 	(d)	 	Company is not, and after giving effect to the transactions contemplated hereby will not be,
an
“investment company” as such term is defined in the Investment Company Act of 1940, as
amended.
	 
	 	(e)	 	The Shares of Company initially issuable upon exercise of the Warrants by the net share
settlement method (the “Warrant Shares”) have been reserved for issuance by all required
corporate action of Company. The Warrant Shares have been duly authorized and, when
delivered
as contemplated by the terms of the Warrants following the exercise of the Warrants in
accordance
with its terms and conditions, will be validly issued, fully-paid and non-assessable, and
the
issuance of the Warrant Shares will not be subject to any preemptive or similar rights.
	 
	 	(f)	 	Company is an “eligible contract participant” (as
such term is defined in Section 1a(12) of
the
Commodity Exchange Act, as amended (the “CEA”)) because one or more of the following is
true:
	 
	 	 	 	Company is a corporation, partnership, proprietorship, organization, trust or other entity
and:

	 	(A)	 	Company has total assets in excess of USD 10,000,000;
	 
	 	(B)	 	the obligations of Company hereunder are guaranteed, or otherwise supported
by a letter
of credit or keepwell, support or other agreement, by an entity of the type
described in
Section 1a(12)(A)(i) through (iv), 1a(12)(A)(v)(I), 1a(12)(A)(vii) or
1a(12)(C) of
the
CEA; or
	 
	 	(C)	 	Company has a net worth in excess of USD 1,000,000 and has entered into this
Agreement in connection with the conduct of Company’s business or to manage the
risk
associated with an asset or liability owned or incurred or reasonably likely to be
owned or
incurred by Company in the conduct of Company’s business.

	 	(g)	 	On the Trade Date, (A) none of Company and its officers and directors is aware of any
material
nonpublic information regarding Company or the Shares and (B) all reports and other
documents
filed by Company with the Securities and Exchange Commission pursuant to the Exchange Act

8

 

	 	 	 	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.
	 
	 	(h)	 	Without limiting the generality of Section 3(a)(iii) of the Agreement, the Transaction
will not
violate Rule 13e 1 or Rule 13e 4 under the Exchange Act.
	 
	 	(i)	 	Company’s 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.
	 
	 	(j)	 	Company understands no obligations of Bank to it hereunder will be entitled to the
benefit of
deposit insurance and that such obligations will not be guaranteed by any affiliate
of Bank or any governmental agency.
	 
	 	(k)	 	Company 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.
	 
	 	(1)	 	Without limiting the generality of Section 13.1 of the Equity Definitions, Company
acknowledges
that Bank is not making any representations or warranties with respect to the
treatment of the Transaction under FASB Statements 128, 133, as amended, 149 or
150, EITF Issue No. 00-19, Issue No. 01-6 or Issue No. 03-6 (or any successor issue
statements) or under FASB’s Liabilities & Equity Project.
	 
	 	(m)	 	Company agrees that, for purposes of Rule 144(d) under the Securities Act, the
holding period of Bank in Shares received hereunder in any Net Share Settlement or in
Shares comprising Share Termination Delivery Units received pursuant to Section 9(m)
hereof shall start on the Premium Payment Date.

9. Other Provisions:

	 	(a)	 	Opinions. Company shall deliver to Bank an opinion of counsel, dated
as of the Effective Date,
with respect to the matters set forth in Sections 8(a) through (e) of this
Confirmation.
	 
	 	(b)	 	Limitations on Settlement by Company. Notwithstanding anything herein
or in the Agreement to
the contrary, in no event shall Company be required to deliver Shares in connection
with the
Transaction in excess of 8,865,243 Shares (the “Capped Number”). Company
represents and
warrants (which 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 Company 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”). Company shall not take any action to decrease the number
of Available
Shares below the Capped Number. In the event Company shall not have delivered the
full number
of Shares that would be deliverable but for this Section 9(b) (the resulting
deficit, the “Deficit
Shares”), Company shall be continually obligated to deliver, from time to time until
the full
number of Deficit Shares have been delivered pursuant to this paragraph, Shares
when, and to the
extent, that (i) Shares are repurchased, acquired or otherwise received by Company
or any of its
subsidiaries after the Trade Date (whether or not in exchange for cash, fair value
or any other
consideration), (ii) 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

9

 

(iii) Company additionally authorizes any unissued Shares that are not reserved for
other transactions. Company shall immediately notify Bank of the occurrence of any of the
foregoing events (including the number of Shares subject to clause (i), (ii) or (iii) and
the corresponding number of Shares to be delivered) and promptly deliver such Shares
thereafter.

	 	(c)	 	Right to Extend. Bank may postpone any Exercise Date or any other date of valuation or
delivery
with respect to some or all of the relevant Warrants (in which event the Calculation Agent
shall
make appropriate adjustments to the Number of Warrants for one or more Components), if (x)
the
average daily trading volume of the Shares for the four calendar weeks immediately
preceding the
week in which such Exercise date or date of valuation or delivery occurs is less than
1,505,000
Shares, which, for the avoidance of doubt, shall be subject to adjustments as a result of
Potential
Adjustment Events and (y) Bank determines, in its reasonable discretion, that such
extension is
reasonably necessary or appropriate to preserve Bank’s hedging or hedge unwind activity
hereunder in light of existing liquidity conditions or to enable Bank to effect purchases
of Shares
in connection with its hedging, hedge unwind or settlement activity hereunder in a manner
that
would, if Bank were Company or an affiliated purchaser of Company, be reasonably deemed to
be
in compliance with applicable legal, regulatory or self-regulatory requirements, or with
related
policies and procedures applicable to Bank.
	 
	 	(d)	 	No Manipulation. Company is not entering into this Transaction to create actual or
apparent
trading activity in the Shares (or any security convertible into or exchangeable for the
Shares) or to
raise or depress or otherwise manipulate the price of the Shares (or any security
convertible into or
exchangeable for the Shares) or to violate the Exchange Act.
	 
	 	(e)	 	Repurchase Notices. Company shall, on any day on which Company effects any
repurchase of
Shares, promptly give Bank a written notice of such repurchase (a “Repurchase Notice”) on
such
day if, following such repurchase, the Warrant Equity Percentage as determined on such day
is (i)
greater than 6% and (ii) greater by 0.5% than the Warrant Equity Percentage included in the
immediately preceding Repurchase Notice (or, in the case of the first such Repurchase
Notice,
greater than the Warrant Equity Percentage as of the date hereof). The “Warrant Equity
Percentage” as of any day is the fraction (A) the numerator of which is the sum of (x) the
Number
of Shares hereunder and (y) the Number of Shares for the warrant transaction (reference no.
2696912) entered into by the parties on the date hereof and (B) the denominator of which is
the
number of Shares outstanding on such day. Company agrees to indemnify and hold harmless
Bank and its affiliates and their respective officers, directors, employees, affiliates,
advisors,
agents and controlling persons (each, an “Indemnified Person”) from and against any and all
losses (including losses relating to Bank’s hedging activities as a consequence of
becoming, or of
the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance
from
hedging activities or cessation of hedging activities and any losses in connection
therewith with
respect to this Transaction), claims, damages, judgments, liabilities and expenses
(including
reasonable attorney’s fees), joint or several, which an Indemnified Person may become
subject to,
as a result of Company’s failure to provide Bank with a Repurchase Notice on the day and in
the
manner specified in this Section 9(e), and to reimburse, within 30 days, upon written
request, each
of such Indemnified Persons for any reasonable legal or other expenses incurred in
connection
with investigating, preparing for, providing testimony or other evidence in connection with
or
defending any of the foregoing. If any suit, action, proceeding (including any
governmental or
regulatory investigation), claim or demand shall be brought or asserted against the
Indemnified
Person, such Indemnified Person shall promptly notify Company in writing, and Company, upon
request of the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified
Person to represent the Indemnified Person and any others Company may designate in such
proceeding and shall pay the fees and expenses of such counsel related to such proceeding.
Company shall not be liable for any settlement of any proceeding effected without its
written
consent, but if settled with such consent or if there be a final judgment for the
plaintiff, Company

10

 

	 	 	 	agrees to indemnify any Indemnified Person from and against any loss or liability
by reason of such settlement or judgment. Company shall not, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all liability
on claims that are the subject matter of such proceeding. If the indemnification provided
for in this paragraph (e) is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then Company
under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result of such
losses, claims, damages or liabilities. The remedies provided for in this paragraph (e)
are not exclusive and shall not limit any rights or remedies which may otherwise be
available to any Indemnified Person at law or in equity. The indemnity and contribution
agreements contained in this paragraph (e) shall remain operative and in full force and
effect regardless of the termination of this Transaction.

	 	(f)	 	Board Authorization. Company represents that it is entering into the Transaction,
solely for the
purposes stated in the board resolution authorizing this Transaction and in its public
disclosure.
Company further represents that there is no internal policy, whether written or oral, of
Company
that would prohibit Company from entering into any aspect of this Transaction, including,
but not
limited to, the issuance of Shares to be made pursuant hereto.
	 
	 	(g)	 	Transfer or Assignment. Company may not transfer any of its rights or obligations
under this
Transaction without the prior written consent of Bank. Bank may transfer or assign all or
any
portion of its rights or obligations under this Transaction without consent of Company.
Notwithstanding any other provision in this Confirmation to the contrary requiring or
allowing the
Bank to purchase, sell, receive or deliver any Shares or other securities to or from
Company, the
Bank may designate any of its affiliates to purchase, sell, receive or deliver such Shares
or other
securities and otherwise to perform Bank’s obligations in respect of this Transaction and
any such
designee may assume such obligations. The Bank shall be discharged of its obligations to
Company to the extent of any such performance.
	 
	 	(h)	 	Effectiveness. If, on or prior to the Effective Date (or such later date as agreed
upon by the parties), Bank reasonably determines that it is advisable to cancel the
Transaction because of concerns that Bank’s related hedging activities would be reasonably
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.
	 
	 	(i)	 	Equity Rights. Bank 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 Company’s bankruptcy.
	 
	 	(j)	 	Dividends. If at any time during the period from and including the Trade Date, to but
excluding
the Expiration Date, an ex-dividend date for a cash dividend occurs with respect to the
Shares (an “Ex-Dividend Date”) and that dividend is greater than the Regular Dividend on a
per Share basis, then the Calculation Agent will adjust the Strike Price, the Number of
Warrants and the Warrant Entitlement to preserve the fair value of the Warrant to Bank
after taking into account such dividend. “Regular Dividend” shall mean USD 0.00 per Share
per quarter.
	 
	 	(k)	 	Additional Provisions.

11

 

(i) The first sentence of Section 11.2(c) of the Equity Definitions, prior to clause
(A) thereof,
is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified
as the Method of Adjustment in the related Confirmation of a Share Option Transaction,
then following the announcement or occurrence of any Potential Adjustment Event, the
Calculation Agent will determine whether such Potential Adjustment Event has 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) Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the
words “diluting or concentrative” and replacing them with “material”; and adding the
following words at the end of the sentence “or options on Shares”.

	 	(l)	 	No Collateral; Setoff. Notwithstanding any provision of the Agreement or any other
agreement
between the parties to the contrary, the obligations of Company hereunder are not secured
by any collateral. 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.
	 
	 	(m)	 	Alternative_Calculations and Payment on Early Termination and on Certain Extraordinary
Events. If, in respect of this Transaction, an amount is payable by Company to Bank, (i)
pursuant to Section 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions (except in the
event of a Nationalization or Insolvency or a Merger Event, in each case in which the
consideration to be paid to holders of Shares consists solely of cash) or (ii) pursuant to
Section 6(d)(ii) of the Agreement (except in the event of an Event of Default in which Company
is the Defaulting Party or a Termination Event in which Company is the Affected Party, other
than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or
(viii) of the Agreement or a Termination Event of the type described in Section 5(b)(i), (ii),
(iii), (iv), (v) or (vi) of the Agreement, in each case resulting from an event or events
outside Company’s control) (a “Payment Obligation”), Company may, in its sole discretion,
satisfy any such Payment Obligation by the Share Termination Alternative (as defined below)
and shall give irrevocable telephonic notice to Bank, confirmed in writing within one Currency
Business Day, no later than 12:00 p.m. New York local time on the Merger Date, the
Announcement Date or the Early Termination Date, as applicable; provided that if Company does
not validly elect to satisfy its Payment Obligation by the Share Termination Alternative, Bank
shall nevertheless have the right, in its sole discretion, to require Company to satisfy its
Payment Obligation by the Share Termination Alternative, notwithstanding Company’s lack of
election. In calculating any amounts under Section 6(e) of the Agreement, notwithstanding
anything to the contrary in the Agreement, (1) separate amounts shall be calculated as set
forth in Section 6(e) with respect to (i) this Transaction and (ii) all other Transactions,
and (2) such separate amounts shall be payable pursuant to Section 6(d)(ii) of the Agreement,
subject to, in the case of clause (1)(i), the Share Termination Alternative right hereunder.

	 	 	 	 	 
	 

	 	Share Termination Alternative:
	 	If applicable, Company shall deliver to Bank the
Share Termination Delivery Property on the date
when the Payment Obligation would otherwise be
due pursuant to Section 12.7 or 12.9 of the
Equity

12

 

	 	 	 	 	 
	 

	 	 	 	Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable (the “Share Termination
Payment Date”), subject to paragraph (n)(i) below, in satisfaction, subject to paragraph (n)(ii)
below, of the Payment Obligation in the manner reasonably requested by Bank free of payment.
	 

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

	 	Share Termination Unit Price:
	 	The value to Bank 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 Company at the time of notification of the Payment
Obligation. In the case of a Private Placement Settlement of Share Termination Delivery Units that
are Restricted Shares as set forth in paragraph (n)(i) below, the Share Termination Unit Price
shall be determined by the discounted price applicable to such Share Termination Delivery Units.
In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted
Shares (as defined below) as set forth in paragraph (n)(ii) below, the Share Termination Unit
Price shall be the Settlement Price on the Merger Date, the date of the occurrence of the
Nationalization or Insolvency, the date of the Share De-listing or the Early Termination Date, as
applicable.
	 

	 	Share Termination Delivery Unit:
	 	In the case of a De-listing, Termination Event or Event of Default, one Share or, in the case of
Nationalization or Insolvency, a Merger Event or a Tender Offer, one Share or a unit consisting of
the number or amount of each type of property received by a holder of one Share (without
consideration of any requirement to pay cash or other consideration in lieu of fractional amounts
of any securities) in such Nationalization, Insolvency, Merger Event or Tender Offer, as determined
by the Calculation Agent, as the case may be. If such Nationalization, Insolvency, Merger Event or
Tender Offer involves a choice of consideration to be received by holders, such holder

13

 

	 	 	 	 	 
	 

	 	 	 	shall be deemed to have elected to receive the
maximum possible amount of cash.
	 

	 	Failure to Deliver:
	 	Inapplicable
	 

	 	Other applicable provisions:
	 	If Share Termination Alternative is applicable, the
provisions of Sections 9.8, 9.9, 9.10, 9.11
(except 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 Seller is the issuer of the Shares) and 9.12
of the Equity Definitions will be applicable, as
if “Physical Settlement” applied to such
cancellation or termination of the Transaction,
except that all references therein to “Shares”
shall be read as references to “Share Termination
Delivery Units”.

	 	(n)	 	Registration/Private Placement Procedures. If, in the reasonable opinion of Bank,
following any delivery of Shares or Share Termination Delivery Property to Bank hereunder,
such Shares or Share Termination Delivery Property would be in the hands of Bank subject to
any applicable restrictions with respect to any registration or qualification requirement or
prospectus delivery requirement for such Shares or Share Termination Delivery Property
pursuant to any applicable federal or state securities law (including, without limitation, any
such requirement arising under Section 5 of the Securities Act as a result of such Shares or
Share Termination Delivery Property being “restricted securities”, as such term is defined in
Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share
Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities
Act) (such Shares or Share Termination Delivery Property, “Restricted Shares”), then delivery
of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the
election of Company, unless waived by Bank; provided that, in the event such obligation to
deliver Restricted Shares would have arisen from a Net Share Settlement, at the election of
the Company, Company may satisfy such Share delivery obligation by paying Bank on the relevant
Settlement Date an amount in cash equal to the relevant Net Share Settlement Amount.
Notwithstanding anything to the contrary in the Equity Definitions, Company shall notify Bank,
prior to the first Expiration Date, whether (x) it elects to cash settle the Number of
Warrants for all Expiration Dates, if Bank determines the Shares that would be delivered in
the Net Share Settlement of such Number of Warrants would be Restricted Shares and (y) if cash
settlement is not elected, whether a Private Placement Settlement or Registered Settlement
would apply. Such election shall apply to all Expiration Dates and all Settlement Dates
related to Expiration Dates, and the procedures in clause (i) or clause (ii) below shall apply
for all such Restricted Shares delivered in respect of all Expiration Dates on an aggregate
basis commencing on the Settlement Date relating to the first Expiration Date. In such case,
the Calculation Agent shall make reasonable adjustments to settlement terms and provisions
under this Confirmation to reflect a single Private Placement Settlement or Registered
Settlement for such aggregate Restricted Shares delivered hereunder. If Company elects Share
Termination Alternative in accordance with Section 9(m) hereof and Bank determines in
accordance with this paragraph that the Share Termination Delivery Property to be delivered in
such Share Termination Alternative would constitute Restricted Shares, then Company shall
immediately notify Bank whether a Private Placement Settlement or Registered Settlement would
apply to the delivery of such Share Termination Delivery Property.

14

 

	 	(i)	 	If Company elects to settle the Transaction pursuant to this clause (i) (a “Private
Placement Settlement”), then delivery of Restricted Shares by Company shall be effected in
customary private placement procedures with respect to such Restricted Shares reasonably
acceptable to Bank; provided that Company may not elect a Private Placement Settlement if,
on the date of its election, it has taken, or caused 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 Company to Bank (or any affiliate designated by Bank) of the Restricted Shares
or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for
resales of the Restricted Shares by Bank (or any such affiliate of Bank). The Private
Placement Settlement of such Restricted Shares shall include customary representations,
covenants, blue sky and other governmental filings and/or registrations, indemnities to
Bank, due diligence rights (for Bank or any designated buyer of the Restricted Shares by
Bank), opinions and certificates, and such other documentation as is customary for private
placement agreements, all reasonably acceptable to Bank. In the case of a Private
Placement Settlement, Bank shall determine the appropriate discount to the Share
Termination Unit Price (in the case of settlement of Share Termination Delivery Units
pursuant to paragraph (m) above) or any Settlement Price (in the case of settlement of
Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially
reasonable manner and appropriately adjust the amount of such Restricted Shares to be
delivered to Bank hereunder. Notwithstanding the Agreement or this Confirmation, the date
of delivery of such Restricted Shares shall be the Exchange Business Day following notice
by Bank to Company of such applicable discount and the number of Restricted Shares to be
delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted
Shares shall be due as set forth in the previous sentence and not be due on the Share
Termination Payment Date (in the case of settlement of Share Termination Delivery Units
pursuant to paragraph (m) above) or on the Settlement Date for such Restricted Shares (in
the case of settlement of Shares pursuant to Section 2 above).
	 
	 	 	 	In the event Company shall not have delivered the full number of Restricted Shares
otherwise applicable as a result of either the proviso above or the last sentence of
clause (ii) below relating to the Maximum Amount (such deficit, the “Deficit Restricted
Shares”), Company shall be continually obligated to deliver, from time to time until the
full number of Deficit Restricted Shares have been delivered pursuant to this paragraph,
Restricted Shares when, and to the extent, that (i) Shares are repurchased, acquired or
otherwise received by Company or any of its subsidiaries after the Trade Date (whether or
not in exchange for cash, fair value or any other consideration), (ii) 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 (iii) Company
additionally authorizes any unissued Shares that are not reserved for other transactions.
Company shall immediately notify Bank of the occurrence of any of the foregoing events
(including the number of Shares subject to clause (i), (ii) or (iii) and the
corresponding number of Restricted Shares to be delivered) and promptly deliver such
Restricted Shares thereafter.
	 
	 	(ii)	 	If Company elects to settle the Transaction pursuant to this clause (ii) (a “Registration
Settlement”), then Company shall promptly (but in any event no later than the beginning of
the Resale Period) file and use its reasonable best efforts to make effective under the
Securities Act a registration statement or supplement or amend an outstanding registration
statement in form and substance reasonably satisfactory to Bank, to cover the resale of
such Restricted Shares in accordance with customary resale registration procedures,
including covenants, conditions, representations, underwriting discounts (if applicable),
commissions (if applicable), indemnities due diligence rights, opinions and

15

 

	 	 	 	certificates, and such other documentation as is customary for equity resale
underwriting agreements, all reasonably acceptable to Bank. If Company shall fail to
comply with the requirements set forth in the immediately preceding sentence, Private
Placement Settlement shall apply. If Bank is satisfied with such procedures and
documentation, it shall sell the Restricted Shares pursuant to such registration
statement during a period (the “Resale Period”) commencing on the Exchange Business Day
following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be
(x) the Share Termination Payment Date in case of settlement of Share Termination
Delivery Units pursuant to paragraph (m) above or (y) the Settlement Date in respect of
the first Expiration Date) and ending on the earliest of (x) the Exchange Business Day on
which Bank completes the sale of all Restricted Shares or, in the case of settlement of
Share Termination Delivery Units, a sufficient number of Restricted Shares so that the
realized net proceeds of such sales exceed the Payment Obligation or the Net Share
Settlement Amount, as the case may be, (y) the date upon which all Restricted Shares have
been sold or transferred pursuant to Rule 144 (or similar provisions then in force) or
Rule 145(d)(l) or (2) (or any similar provision then in force) under the Securities Act
and (iii) the date upon which all Restricted Shares may be sold or transferred by a
non-affiliate pursuant to Rule 144(k) (or any similar provision then in force) or Rule
145(d)(3) (or any similar provision then in force) under the Securities Act. If the
Payment Obligation or the Net Share Settlement Amount, as the case may be, exceeds the
realized net proceeds from such resale, Company shall transfer to Bank 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 Restricted Shares (“Make-whole Shares”) in an amount that, based
on the Settlement Price on the last day of the Resale Period (as if such day was the
“Valuation Date” for purposes of computing such Settlement Price), has a dollar value
equal to the Additional Amount. The Resale Period shall continue to enable the sale of
the Make-whole Shares. If Company elects to pay the Additional Amount in Restricted
Shares, the requirements and provisions for Registration Settlement shall apply. This
provision shall be applied successively until the Additional Amount is equal to zero. For
the avoidance of doubt, Company’s obligation to deliver Make-whole Shares shall apply to
both Private Placement Settlements and Registration Settlements.
	 
	 	(iii)	 	Without limiting the generality of the foregoing, Company agrees that any Restricted Shares
delivered to Bank, as purchaser of such Restricted Shares, (i) may be transferred by and among
Bank and its affiliates and Company shall effect such transfer without any further action by
Bank and (ii) after the minimum “holding period” within the meaning of Rule 144(d) under the
Securities Act has elapsed after any Settlement Date for such Restricted Shares, Company shall
promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends
referring to any such restrictions or requirements from such Restricted Shares upon delivery
by Bank (or such affiliate of Bank) to Company or such transfer agent of seller’s and broker’s
representation letters customarily delivered by Bank in connection with resales of restricted
securities pursuant to Rule 144 under the Securities Act, 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 Bank
(or such affiliate of Bank).

If the Private Placement Settlement or the Registration Settlement shall not be effected as set
forth in clauses (i) or (ii), as applicable, then failure to effect such Private Placement
Settlement or such Registration Settlement shall constitute an Event of Default with respect to
which Company shall be the Defaulting Party.

16

 

	 	(o)	 	Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Bank
may not exercise any Warrant hereunder, and Automatic Exercise shall not apply with respect
thereto, to the extent (but only to the extent) that such receipt would result in Bank
directly or indirectly beneficially owning (as such term is defined for purposes of Section
13(d) of the Exchange Act) at any time in excess of 9.0% of the outstanding Shares. Any
purported delivery hereunder shall be void and have no effect to the extent (but only to
the extent) that such delivery would result in Bank directly or indirectly so beneficially
owning in excess of 9.0% of the outstanding Shares. If any delivery owed to Bank hereunder
is not made, in whole or in part, as a result of this provision, Company’s obligation to
make such delivery shall not be extinguished and Company shall make such delivery as
promptly as practicable after, but in no event later than one Exchange Business Day after,
Bank gives notice to Company that such delivery would not result in Bank directly or
indirectly so beneficially owning in excess of 9.0% of the outstanding Shares.
	 
	 	(p)	 	Share Deliveries. Company 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 Bank will not be considered an affiliate under this Section 9(p) 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 two
years from the Premium Payment Date shall be eligible for resale under Rule 144(k) of the
Securities Act and Company 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. Company further agrees, for any delivery of Shares or Share Termination Delivery
Property hereunder at any time after one year from the Premium Payment Date but within 2 years
of the Premium Payment Date, to the extent the holder of this Warrant then satisfies the
holding period and other requirements of Rule 144 of the Securities Act, to promptly remove,
or cause the transfer agent for such Shares or Share Termination Delivery Property to remove,
any legends referring to any such restrictions or requirements from such Shares or Share
Termination Delivery Property. Such Shares or Share Termination Delivery Property will be
de-legended upon delivery by Bank (or such affiliate of Bank) to Company or such transfer
agent of customary seller’s and broker’s representation letters in connection with resales of
restricted securities pursuant to Rule 144 of the Securities Act, 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 Bank (or such affiliate of Bank). Company further agrees that any delivery of
Shares or Share Termination Delivery Property prior to the date that is one year from the
Premium Payment Date, may be transferred by and among Bank and its affiliates and Company
shall effect such transfer without any further action by Bank. Notwithstanding anything to the
contrary herein, Company 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 Company herein shall be deemed modified to the extent necessary, in the opinion
of outside counsel of Company, to comply with Rule 144 of the Securities Act, including Rule
144(k) as in effect at the time of delivery of the relevant Shares or Share Termination
Delivery Property.
	 
	 	(q)	 	Additional Termination Event. If within the period commencing on the Trade Date and
ending on the second anniversary of the Premium Payment Date, Buyer reasonably determines
that it is advisable to terminate a portion of the Transaction so that Buyer’s related
hedging activities will reasonably be deemed to comply with applicable securities laws, rules
or regulations, an

17

 

	 	 	 	Additional Termination Event shall occur in respect of which (1) Company shall be the sole
Affected Party and (2) the Transaction shall be the sole Affected Transaction.
	 
	 	(r)	 	Securities Contract: Swap Agreement. Each of Bank and Company agrees and acknowledges that
Bank is a “financial participant” and “swap participant” within the meaning of Sections
101(22A) and 101(53C) 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 is a “settlement payment,” as
such term is defined in Section 741(8) 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 is a “transfer,” as such term is
defined in Section 101(54) of the Bankruptcy Code, and (B) that Bank is entitled to the
protections afforded by, among other sections, Section 362(b)(6), 362(b)(17), 546(e),
546(g), 555 and 560 of the Bankruptcy Code.
	 
	 	(s)	 	Disclosure. Effective from the date of commencement of discussions concerning the
Transaction,
Company 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 Company relating to such tax treatment and tax structure.
	 
	 	(t)	 	Governing Law. New York law (without reference to choice of law doctrine).
	 
	 	(u)	 	Waiver of Jury Trial. Each party waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect of any suit, action or
proceeding relating to 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)	 	Quarterly. Valuations. Bank hereby agrees, upon request by Company, to cause its
affiliate to provide to Company, within 5 Exchange Business Days after the end of the fiscal
quarter of Company during which Company made such request, a valuation estimate of the fair
value of the Transaction as of Company’s fiscal quarter end.
	 
	 	(w)	 	Role of Agent. Each party agrees and acknowledges that (i) Agent has acted solely as
agent and not as principal with respect to this Transaction and (ii) Agent 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.

18

 

     Please confirm that the foregoing correctly sets forth the terms of our agreement by
executing this Confirmation and returning it to EDG Confirmation Group, J.P. Morgan Securities
Inc., 277 Park Avenue, llth Floor, New York, NY 10172-3401, or by fax to (212) 622 8519.

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	J.P. Morgan Securities Inc., as

agent for JPMorgan Chase Bank, National

Association	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	By:
	 	/s/ David Seaman	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Authorized Signatory	 	 
	 	 	 	 	Name: David Seaman	 	 

	 	 	 	 	 
	Accepted and confirmed as of the Trade Date:	 	 
	 
	 	 	 	 
	Cadence Design Systems, Inc.	 	 
	By:

	 	/s/ William Porter	 	 
	 

	 	 	 	 
	Authorized Signatory	 	 
	Name: William Porter	 	 

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

19

 

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.
	 	82,085	 	2/19/2014
	2.
	 	82,085	 	2/20/2014
	3.
	 	82,085	 	2/21/2014
	4.
	 	82,085	 	2/24/2014
	5.
	 	82,085	 	2/25/2014
	6.
	 	82,085	 	2/26/2014
	7.
	 	82,085	 	2/27/2014
	8.
	 	82,085	 	2/28/2014
	9.
	 	82,085	 	3/3/2014
	10.
	 	82,085	 	3/4/2014
	11.
	 	82,085	 	3/5/2014
	12.
	 	82,085	 	3/6/2014
	13.
	 	82,085	 	3/7/2014
	14.
	 	82,085	 	3/10/2014
	15.
	 	82,085	 	3/11/2014
	16.
	 	82,085	 	3/12/2014
	17.
	 	82,085	 	3/13/2014
	18.
	 	82,085	 	3/14/2014
	19.
	 	82,085	 	3/17/2014
	20.
	 	82,085	 	3/18/2014
	21.
	 	82,085	 	3/19/2014
	22.
	 	82,085	 	3/20/2014
	23.
	 	82,085	 	3/21/2014
	24.
	 	82,085	 	3/24/2014
	25.
	 	82,085	 	3/25/2014
	26.
	 	82,085	 	3/26/2014
	27.
	 	82,085	 	3/27/2014
	28.
	 	82,085	 	3/28/2014
	29.
	 	82,085	 	3/31/2014
	30.
	 	82,085	 	4/1/2014
	31.
	 	82,085	 	4/2/2014
	32.
	 	82,085	 	4/3/2014
	33.
	 	82,085	 	4/4/2014
	34.
	 	82,085	 	4/7/2014
	35.
	 	82,085	 	4/8/2014
	36.
	 	82,106	 	4/9/2014

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

20

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