Document:

ex_323104.htm

Exhibit 10.1

 

Execution Version

 

Contingent Value Rights Agreement

 

	This Contingent Value Rights Agreement, dated as of January 7, 2022 (this “Agreement”), is entered into by and among AcelRx Pharmaceuticals, Inc., a Delaware corporation (“Parent”), James Wilkie (the “Stockholder Representative”), solely in his capacity as the representative of the Holders and Computershare Inc., a Delaware corporation (“Computershare”), and its wholly-owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company, collectively as Rights Agent (the “Rights Agent”).

 

 

RECITALS

	Whereas, Parent, AcelRx Intermediate Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (“Merger Sub 1”), AcelRx Consolidation Sub, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Parent (“Merger Sub 2”), Lowell Therapeutics, Inc., a Delaware corporation (the “Company”), and the Stockholder Representative, solely in his capacity as the representative of the Stockholders and the Company Option Holders, have entered into an Agreement and Plan of Merger dated as of November 14, 2021 (as it may be amended or supplemented from time to time pursuant to the terms thereof, the “Merger Agreement”), pursuant to which, at the First Effective Time, Merger Sub 1 will merge with and into Company, with the Company continuing as the Initial Surviving Company and as a direct wholly owned subsidiary of Parent and at the Second Effective Time, the Initial Surviving Company shall merge with and into Merger Sub 2, the separate corporate existence of the Initial Surviving Company shall cease and Merger Sub 2 shall continue as the surviving company, shall remain a wholly owned subsidiary of Parent and shall be referred to herein as the “Surviving Company”. 

 

	Whereas, pursuant to the Merger Agreement, Parent has agreed to provide to the Stockholders the right to receive contingent value rights as hereinafter described in accordance with the terms hereof and the Merger Agreement; and

 

	Whereas, the Rights Agent is willing to act in connection with the issuance, transfer, exchange and payment of such contingent value rights as provided herein.

 

	Now, Therefore, in consideration of the premises and mutual agreements herein, Parent, the Stockholder Representative and the Rights Agent hereby agree as follows:

 

 

ARTICLE I

DEFINITIONS

 

Section 1.1    Definitions. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement. As used in this Agreement, the following terms shall have the following meanings:

 

“Affiliate” of any Person means another Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such first Person.

 

 

 

 

 

“Annual Revenues” means, for any Calendar Year, without duplication, the aggregate net sales of NIYAD and LTX-608 by all Selling Parties, in each case as determined in accordance with GAAP.

 

“Calendar Quarter” means each period of three consecutive months commencing on January 1, April 1, July 1 and October 1 of each calendar year.

 

“Calendar Year” means the period of four consecutive Calendar Quarters beginning on January 1 and ending on December 31 of each calendar year.

 

“Change of Control” means (i) a sale or other disposition of all or substantially all of the assets of either Parent or the Surviving Company on a consolidated basis (other than to any direct or indirect wholly owned subsidiary of Parent), (ii) a merger or consolidation involving either Parent or the Surviving Company in which Parent or the Surviving Company, respectively, is not the surviving entity, and (iii) any other transaction involving either Parent or the Surviving Company in which Parent or the Surviving Company, respectively, is the surviving entity but in which the stockholders of Parent or the Surviving Company, respectively, immediately prior to such transaction own less than fifty percent (50%) of the surviving entity’s voting power immediately after the transaction, other than any equity financing transaction solely related to the continued financing of the operations of Parent and its subsidiaries; provided neither of the Mergers shall be considered a Change of Control.

 

“control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee, personal representative or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by Contract, credit arrangement or otherwise.

 

“CVRs” means the rights of Holders to receive contingent payments of cash or Parent Common Stock pursuant to the Merger Agreement and this Agreement.

 

“CVR Register” has the meaning set forth in Section 2.3(b).

 

“Date of Determination of Value” shall mean, if for Milestone 1, 2, 3 or 4, the day on which Parent receives written notification from the FDA or CMS of the achievement of the subject matter in the respective Milestone, or, if for a revenue milestone, the day before public release of quarterly financials for the respective period. If quarterly financials are not publicly released, then a date no later than 15 days after the end of the respective period as set forth the in the notice from Parent to the Stockholder Representative.

 

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“Diligent Efforts” means, with respect to a task related to a Company Product, using such efforts and resources normally used by Persons of comparable size within the pharmaceutical industry for the development and seeking of regulatory approval for a pharmaceutical product having similar limited market potential as a Company Product at a similar stage of its development or product life, taking into account all relevant factors, including issues of market exclusivity (including patent coverage, regulatory and other exclusivity), product profile, including efficacy, safety, tolerability, methods of administration and convenience, cost of developing, manufacturing and commercializing such product, product labeling (including anticipated product labeling), other product candidates, the competitiveness of alternative products in the marketplace or under development, the launch or sale of a generic or biosimilar product, the regulatory structure involved, the regulatory environment and the expected profitability of the applicable product (including development costs, pricing and reimbursement, cost of goods and all other costs associated with the applicable product), and relevant technical, commercial, legal, scientific medical factors; provided that Diligent Efforts will not require Parent to (i) exercise any effort beyond what it uses for Parent Products or (ii) take any actions that are not commercially reasonable in relation to Parent’s resources, business plan or development of Parent Products.

 

“Event of Default” has the meaning set forth in Section 6.1(a).

 

“FDA” means the United States Food and Drug Administration.

 

“Funds” has the meaning set forth in Section 2.11.

 

“Holder” means a Person in whose name a CVR is registered in the CVR Register at the applicable time.

 

“Indemnification Off-Set Amount” has the meaning set forth in Section 2.6.

 

“Licensee” means any non-Affiliate third party granted a license by, or otherwise acquiring rights from, Parent, its Affiliates (and their respective successors and assigns) to make, have made, use, sell, offer for sale, or import Company Products in any territory worldwide, but shall exclude (i) any third party distributor of Company Products that has no royalty or other payment obligations to any Parent or any of its Affiliates that are calculated based on amounts invoiced or received by such third party for sales of Company Products or (ii) a third party distributor of Company Products that (x) does not take title to Company Products, (y) does not invoice Company Products sales to third party customers and (z) is responsible only for inventory management and distribution with respect to Company Products on behalf of Selling Parties.

 

“Losses” has the meaning set forth in Section 3.2(h).

 

“LTX-608” means the drug product candidate of the name “LTX-608” developed by the Company with an indication other than anticoagulation of the extracorporeal circuit.

 

“Milestone” means each of Milestone 1, Milestone 2, Milestone 3, Milestone 4, Milestone 5, Milestone 6 and Milestone 7.

 

“Milestone 1” means obtaining approval from the FDA, which may be via a PMA or NDA (as defined below), for NIYAD with a label indication for use for patients in the in-patient setting for continuous renal replacement therapy (CRRT).

 

“Milestone 2” means obtaining (i) approval from the FDA, via a PMA or NDA, for NIYAD with a label indication for use for patients undergoing intermittent hemodialysis (IHD) in the outpatient setting and (ii) the receipt of approval from CMS of NIYAD to be included in the End-Stage Renal Dialysis (ESRD) Prospective Payment System (PPS), as a qualified device under the Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES), if approved by the FDA as a device, or the Transitional Drug Add-on Payment Adjustment (TDAPA), if approved by the FDA as a drug.

 

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“Milestone 3” means obtaining the approval by the FDA of a New Drug Application for LTX-608 with a label indication for use for patients with Acute Respiratory Distress Syndrome (ARDS), Disseminated Intravascular Coagulation (DIC), or as an antiviral.

 

“Milestone 4” means obtaining ownership of an issued patent in the United States in favor of Parent or its Affiliates that covers LTX-608, whereby the corresponding patent information is also published in the Orange Book prior to losing exclusivity.

 

“Milestone 5” means achievement of aggregate Annual Revenues by all Selling Parties of at least $12,000,000 during any Calendar Year ending on or before December 31, 2026.

 

“Milestone 6” means achievement of aggregate Annual Revenues by all Selling Parties of at least $25,000,000 during any Calendar Year ending on or before December 31, 2027.

 

“Milestone 7” means achievement of aggregate Annual Revenues by all Selling Parties of at least $100,000,000 during any Calendar Year ending on or before December 31, 2030.

 

“Milestone Amount” means each of Milestone 1 Amount, Milestone 2 Amount, Milestone 3 Amount, Milestone 4 Amount, Milestone 5 Amount, Milestone 6 Amount and Milestone 7 Amount.

 

“Milestone 1 Amount” means, with respect to the achievement of Milestone 1, an amount per CVR equal to the quotient of $3,000,000 divided by the aggregate number of CVRs issued pursuant to the Merger Agreement and this Agreement, without interest, less the Indemnification Off-Set Amount pursuant to Section 2.6.

 

“Milestone 2 Amount” means, with respect to the achievement of Milestone 2, an amount per CVR equal to the quotient of $2,000,000 divided by the aggregate number of CVRs issued pursuant to the Merger Agreement and this Agreement, without interest, less the Indemnification Off-Set Amount pursuant to Section 2.6.

 

“Milestone 3 Amount” means, with respect to the achievement of Milestone 3, an amount per CVR equal to the quotient of $2,000,000 divided by the aggregate number of CVRs issued pursuant to the Merger Agreement and this Agreement, without interest, less the Indemnification Off-Set Amount pursuant to Section 2.6.

 

“Milestone 4 Amount” means, with respect to the achievement of Milestone 4, an amount per CVR equal to the quotient of $2,000,000 divided by the aggregate number of CVRs issued pursuant to the Merger Agreement and this Agreement, without interest, less the Indemnification Off-Set Amount pursuant to Section 2.6.

 

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“Milestone 5 Amount” means, with respect to the achievement of Milestone 5, an amount per CVR equal to the quotient of $3,500,000 divided by the aggregate number of CVRs issued pursuant to the Merger Agreement and this Agreement, without interest, less the Indemnification Off-Set Amount pursuant to Section 2.6.

 

“Milestone 6 Amount” means, with respect to the achievement of Milestone 6, an amount per CVR equal to the quotient of $3,500,000 divided by the aggregate number of CVRs issued pursuant to the Merger Agreement and this Agreement, without interest, less the Indemnification Off-Set Amount pursuant to Section 2.6.

 

“Milestone 7 Amount” means, with respect to the achievement of Milestone 7, an amount per CVR equal to the quotient of $10,000,000 divided by the aggregate number of CVRs issued pursuant to the Merger Agreement and this Agreement, without interest, less the Indemnification Off-Set Amount pursuant to Section 2.6.

 

“Milestone Cash Amount” has the meaning set forth in Section 2.4(a)(i).

 

“Milestone Non-Achievement Certificate” has the meaning set forth in Section 2.4(g).

 

“Milestone Notice” has the meaning set forth in Section 2.4(a)(i).

 

“Milestone Payment Date” has the meaning set forth in Section 2.4(a).

 

“Milestone Stock Amount” has the meaning set forth in Section 2.4(a)(i).

 

“Milestone Stock Price” means: (i) if Parent Common Stock is not publicly traded or quoted on a national securities exchange or automated quotation system, the fair market value as determined in good faith by Parent’s Board of Directors as of the Date of Determination of Value and (ii) if Parent Common Stock is publicly traded or quoted on a national securities exchange or automated quotation system, the arithmetic average of the daily volume weighted average price per share of the Parent Common Stock during the five (5) consecutive full trading days ending on and including the last full trading day immediately prior to the Date of Determination of Value as reported by such national securities exchange.

 

“NDA” means New Drug Application approved via any route.

 

“NIYAD” means the product of the name “NIYAD” developed by the Company intended for use as a regional anticoagulant of the extracorporeal circuit.

 

“Officer’s Certificate” means a certificate signed by the chief executive officer, president, chief financial officer, any vice president, the controller, the treasurer or the secretary, in each case of Parent, in his or her capacity as such an officer, and delivered to the Rights Agent.

 

“Orange Book” means the publication Approved Drug Products with Therapeutic Equivalence Evaluations published by the FDA.

 

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“Parent Product” means any product or Parent Product Candidate that is being researched, tested, developed, commercialized, manufactured, sold or distributed by or on behalf of Parent (whether or not in collaboration with another Person), other than any Company Products.

 

“Parent Product Candidate” means any drug or biological product candidates being researched, developed, tested, labeled, manufactured or stored by Parent.

 

“Parent Share Cap” means, absent stockholder approval under Nasdaq Marketplace Rule 5635, a number of shares of Parent Common Stock (rounded down to the nearest whole share) equal to 19.9% of the total number of shares of Parent Common Stock that are issued and outstanding immediately prior to the First Effective Time; provided that there shall be excluded from the shares of Parent Common Stock issued and outstanding immediately prior to the First Effective Time, any shares of Parent Common Stock that have been issued prior to such First Effective Time and which are aggregable with the issuance of Parent Common Stock pursuant to the Merger Agreement, to determine whether the 19.9% limit has been reached. In the case of stockholder approval under Nasdaq Marketplace Rule 5635, the Parent Share Cap shall be disregarded.

 

“Permitted Transfer” means a transfer of CVRs: (i) upon death of a Holder by will or intestacy; (ii) by instrument to an inter vivos or testamentary trust in which the CVRs are to be passed to beneficiaries upon the death of the trustee; (iii) pursuant to a court order of a court of competent jurisdiction (such as in connection with divorce, bankruptcy or liquidation); or (iv) by operation of law (including by consolidation or merger) or without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity to Persons who control such Person as of the date hereof; provided that any such transferred CVR shall remain subject to the terms and conditions of this Agreement, including Section 2.2.

 

“Person” means any individual, corporation, partnership, limited liability company, estate, trust, association, joint stock company, joint venture, organization or other entity, including any Governmental Entity (or any department, agency, or political subdivision thereof).

 

“PMA” means a Pre-Market Approval Application filed with the FDA.

 

“Reorganization” has the meaning set forth in Section 2.8(a).

 

“Rights Agent” means the Rights Agent named in the first paragraph of this Agreement, until a successor Rights Agent becomes such pursuant to the applicable provisions of this Agreement, and thereafter “Rights Agent” means such successor Rights Agent. Parent shall be solely responsible for all contractual payment obligations to Rights Agent for its services under this Agreement and the Merger Agreement pursuant to a fee schedule or any other agreement to be mutually agreed upon between Rights Agent and Parent.

 

“Selling Party” means, with respect to Annual Revenues, Parent, any of its Affiliates (including the Surviving Company) or any of their respective Licensees and each of their respective successors or assigns.

 

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“Share” means each share of Company Capital Stock outstanding immediately prior to the First Effective Time, except any (i) Cancelled Shares or (ii) Dissenting Shares.

 

“Transfer Agent” has the meaning set forth in Section 2.7(a).

 

“U.S.” means the United States of America and its territories, districts and possessions.

 

Section 1.2    Rules of Construction. When a reference is made in this Agreement to an Article or a Section, such reference shall be to an Article or a Section of this Agreement unless otherwise indicated. The use of “or” is not intended to be exclusive unless expressly indicated otherwise. The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” All references in this Agreement to “$” or dollars shall mean U.S. denominated dollars. The table of contents and headings set forth in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The terms defined in the singular have a comparable meaning when used in the plural, and vice versa. The words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement, and the words “date herein” refer to the date of this Agreement. The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document. All references to “day” or “days” are to calendar days. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded and if the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day.

 

ARTICLE II

CONTINGENT VALUE RIGHTS

 

Section 2.1    CVRs. As provided in the Merger Agreement, effective as of the First Effective Time, (i) each Share of Company Capital Stock (except for Cancelled Shares and Dissenting Shares) shall be converted into the right to receive the Merger Consideration, which includes one CVR, (ii) each Company Option that is converted pursuant to Section 1.6(c) of the Merger Agreement shall be treated in accordance with Section 1.6(c) of the Merger Agreement and (iii) each Company Warrant shall be treated in accordance with Section 1.6(d) of the Merger Agreement. The initial Holders shall be determined pursuant to the terms of the Merger Agreement and this Agreement, and a list of the initial Holders shall be furnished to the Rights Agent by or on behalf of Parent in accordance with Section 4.1 hereof.

 

Section 2.2    Non-transferable. The CVRs may not be directly or indirectly sold, assigned, transferred, pledged, encumbered or in any other manner transferred or disposed of, in whole or in part, other than through a Permitted Transfer, and, in the case of a Permitted Transfer, only in accordance with Section 2.3(c) hereof and in compliance with applicable United States federal and state securities laws and the terms and conditions hereto. Any such sale, assignment, transfer, pledge, encumbrance or disposal of CVRs, in whole or in part, in violation of this Section 2.2, shall be null and void ab initio and of no effect. In addition, each Holder, by virtue of its acceptance of a CVR, shall be deemed to have agreed to not facilitate or recognize any attempt by any beneficial owner of such CVR to sell, assign, transfer, pledge, encumber or in any other manner transfer or dispose of, in whole or in part, directly or indirectly, an interest in such CVR other than through a Permitted Transfer.

 

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Section 2.3    No Certificate; Registration; Registration of Transfer; Change of Address.

 

(a)    The CVRs shall not be evidenced by a certificate or other instrument.

 

(b)    The Rights Agent shall keep a register (the “CVR Register”) for the purpose of identifying the Holders and registering CVRs and transfers of CVRs as herein provided. The Rights Agent shall provide for the registration of CVRs and of transfers of CVRs on its books and records in book-entry form. The Stockholder Representative shall have reasonable access to the CVR Register and the Rights Agent shall provide access to such records in electronic form upon the reasonable written request by the Stockholders Representative. The Holders shall be entitled to request confirmation of their respective CVR interest by submitting a request to the Stockholders Representative.

 

(c)    Subject to the restrictions on transferability set forth in Section 2.2, every request made to transfer a CVR must be in writing and accompanied by a written instrument of transfer and any other customary documentation as the Rights Agent may reasonably request, in form reasonably satisfactory to the Rights Agent pursuant to its guidelines, duly executed by the Holder thereof, the Holder’s attorney duly authorized in writing, the Holder’s personal representative duly authorized in writing, or the Holder’s survivor (with written documentation evidencing such person’s status as the Holder’s survivor), as applicable, and setting forth in reasonable detail the circumstances relating to the transfer. Upon receipt of such written notice, the Rights Agent shall, subject to its reasonable determination that the transfer instrument is in proper form and the transfer otherwise complies with the other terms and conditions of this Agreement (including the provisions of Section 2.2), register the transfer of the CVRs in the CVR Register and notify Parent of the same. Any registration, transfer or assignment of the CVRs shall be without charge to the Holder (other than payment of a sum to the extent necessary to cover any stamp or other Tax or other governmental charge that is imposed in connection with any such registration, transfer or assignment). The Rights Agent shall have no duty or obligation to take any action under any section of this Agreement that requires the payment by a Holder of any such applicable Taxes or charges unless and until the Rights Agent is reasonably satisfied that all such Taxes or charges have been paid or that such Taxes or charges are not applicable. All duly transferred CVRs registered in the CVR Register shall be the valid obligations of Parent and shall entitle the transferee to the same benefits and rights under this Agreement as those held immediately prior to the transfer by the transferor. No transfer of a CVR shall be valid unless and until registered in the CVR Register.

 

(d)    A Holder may make a written request to the Rights Agent to change such Holder’s address of record in the CVR Register. The written request must be duly executed by the Holder. Upon receipt of such written request, the Rights Agent is hereby authorized to, and shall promptly, record the change of address in the CVR Register.

 

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Section 2.4    Payment Procedures.

 

(a)    If any Milestone is achieved as set forth in this Agreement, then, in each case, on a date (a “Milestone Payment Date”) that is within 60 days following the last day of such Calendar Quarter in which such Milestone is achieved:

 

(i)    Parent will deliver to the Rights Agent (A) a written notice (a “Milestone Notice”) indicating (1) the achievement of such Milestone and that the Holders are entitled to receive the applicable Milestone Amount and an Officer’s Certificate certifying the date of such achievement, (2) any letter of instruction reasonably required by the Rights Agent, and (3) Parent’s election, in its sole discretion, as to which portion of such Milestone Amount shall be settled by payment of cash (the “Milestone Cash Amount”) pursuant to Section 2.4(b) or by credit of Parent Common Stock (the “Milestone Stock Amount”) pursuant to Section 2.4(c), and (B) in the event that Parent, in its sole discretion, elects to pay a portion of the Milestone Amount in cash, cash in the aggregate amount of the Milestone Cash Amount. Until the Rights Agent receives such Milestone Notice and corresponding Officer’s Certificate, the Rights Agent may presume conclusively for all purposes that no event has occurred that would require payment of a Milestone Amount.

 

(ii)    Subject to the terms of this Agreement, including Section 2.4(d), each CVR shall entitle the Holder thereof to receive from Parent the number of fully paid and nonassessable shares of Parent Common Stock equal to the applicable Milestone Stock Amount (determined by dividing the applicable Milestone Amount, less the Milestone Cash Amount, by the Milestone Stock Price), together, if applicable, with any Milestone Cash Amount, any cash payable in lieu of fractional shares as provided in Section 2.9 or any dividends or distributions payable as provided in Section 2.10, in each case subject to any applicable withholding Tax.

 

(b)    The Rights Agent shall promptly, and in any event within ten (10) Business Days of receipt of a Milestone Notice, Milestone Cash Amount (if applicable) by wire transfer of immediately available funds, as well as any letter of instruction reasonably required by the Rights Agent, send each Holder at its registered address a copy of such Milestone Notice. If any Milestone Cash Amount is payable to the Holders, then at the time the Rights Agent sends a copy of such Milestone Notice to the Holders, the Rights Agent shall also pay to each Holder, subject to any applicable withholding Tax, the applicable Milestone Cash Amount (the amount of which each Holder is entitled to receive shall be based on the applicable Milestone Cash Amount multiplied by the number of CVRs held by such Holder as reflected in the CVR Register), in accordance with the corresponding letter of instruction (i) by check mailed to the address of such Holder reflected in the CVR Register as of 5:00 p.m. New York City time on the date of the applicable Milestone Notice or (ii) with respect to any such Holder that is due an amount in excess of $10,000 in the aggregate who has provided the Rights Agent wiring instructions in writing as of the close of business on the date of the Milestone Notice, by wire transfer of immediately available funds to the account specified on such instruction.

 

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(c)    Promptly following a Milestone Payment Date, and in any event within ten (10) Business Days of an applicable Milestone Payment Date, subject to any withholding Tax, Parent shall (i) pay the applicable Milestone Stock Amount by crediting (or shall cause its Transfer Agent to credit) the appropriate number of book-entry shares of Parent Common Stock (as determined in accordance with Section 2.4(a)(ii)) to each Holder in the name of such Holder as recorded in the CVR Register, and such book-entry shares of Parent Common Stock shall be deemed to have been issued and any person so named therein shall be deemed to have become a holder of record of such shares of Parent Common Stock as of the applicable Milestone Payment Date, and (ii) deliver to the Rights Agent any cash necessary to be paid to Holders in lieu of fractional shares as provided in Section 2.9 hereof, and the Rights Agent shall deliver to each Holder at his, her or its address appearing on the CVR Register, (x) a written notice specifying the number of shares of Parent Common Stock (if any) paid for each CVR and to whom the shares of Parent Common Stock were issued and the Rights Agent shall promptly record such issuance in the CVR Register and (y) a check reflecting the amount of any cash payable pursuant to Section 2.7(c) or cash in lieu of fractional shares to be provided to such Holder as provided in Section 2.9 hereof and, if applicable, amounts payable pursuant to Section 2.10.

 

(d)    Notwithstanding anything to the contrary herein, in no event shall Parent credit or issue (or have any obligation to credit or issue) pursuant to, or in connection with, the CVRs a number of shares of Parent Common Stock that, together with the shares of Parent Common Stock issuable pursuant to the Merger Agreement (including Holdback Shares) plus any other shares of Parent Common Stock aggregable for purposes of determining whether the Nasdaq Stock Market would require a stockholder vote in connection with any such issuances, that exceeds the Parent Share Cap, unless Parent, in its sole discretion, obtains the approval of its stockholders as required by Nasdaq Marketplace Rules for issuances of shares of Parent Common Stock in excess of the Parent Share Cap; provided that (i) this Section 2.4(d) shall not be deemed to limit any Holder’s right to receive any Milestone Amount in full (it being understood that any portion of a Milestone Amount that would otherwise exceed the Parent Share Cap shall be paid as a Milestone Cash Amount) and (ii) Parent shall use reasonable efforts to issue Parent Shares rather than cash for any Milestone Amounts payable up to an amount equal to the Parent Share Cap.

 

(e)    Notwithstanding any other provisions of this Agreement, any portion of the cash provided by Parent to the Rights Agent as a reserve for purposes of payments to Holders of cash pursuant to Section 2.7(c) or cash in lieu of fractional shares pursuant to Section 2.9 hereof and, if applicable, amounts payable pursuant to Section 2.4(b) or Section 2.10 that remains unclaimed as of the first anniversary of the applicable Milestone Payment Date (including by means of uncashed checks or invalid addresses on the CVR Register) shall be delivered to Parent or its designee (concurrently with notification to the Stockholder Representative) and not disbursed to the Holders, and, thereafter, such Holders shall be entitled to look to Parent (subject to abandoned property, escheat and other similar Laws) only as general creditors thereof with respect to such cash that may be payable.

 

(f)    Neither Parent, the Rights Agent nor any of their Affiliates shall be liable to any Holder for any payments delivered to a public official pursuant to any abandoned property, escheat law or other similar Laws.

 

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(g)    For calculation of all payments to be made in respect of Milestones, any CVRs issuable pursuant to the Merger Agreement but not issued because they are represented by Dissenting Shares shall nevertheless be included in the number of CVRs outstanding and any payments thereon shall be paid to the Parent.

 

(h)    If a Milestone is not achieved in connection with the terms and conditions of this Agreement during the applicable Calendar Year period as defined in each Milestone, then on or before the date that is sixty (60) days after the expiration of each such applicable Calendar Year period, Parent shall deliver to the Rights Agent a written certificate certifying that such Milestone has not occurred, accompanied by a statement setting forth, in reasonable detail, and if applicable, a calculation of Annual Revenues for the applicable period (each, a “Milestone Non-Achievement Certificate”). The Rights Agent shall promptly, and in any event within ten (10) Business Days of receipt of a Milestone Non-Achievement Certificate, send each Holder at its registered address a copy of such Milestone Non-Achievement Certificate, including detail regarding the ability of the Stockholder Representative to dispute or contest such determination of non-achievement of a Milestone pursuant to this Agreement. If the Rights Agent does not receive from the Stockholder Representative a written objection to a Milestone Non-Achievement Certificate, if any, within 180 days of the delivery by the Rights Agent of such Milestone Non-Achievement Certificate to the Holders in accordance with this Section 2.4(g), the Stockholder Representative shall be deemed to have accepted such Milestone Non-Achievement Certificate and Parent and its Affiliates shall have no further obligation with respect to each such Milestone and the applicable Milestone Amount.

 

(i)    All Milestones or a combination of Milestones may be earned in the same Calendar Year, in which case all applicable Milestone Amounts shall be payable. Notwithstanding anything to the contrary in the Merger Agreement or this Agreement, each Milestone Amount is only payable once.

 

Section 2.5    Withholding. Each of Parent, the Rights Agent, the Exchange Agent, the Surviving Company, their respective Affiliates, and any other Person who has any obligation to deduct or withhold from any consideration payable pursuant to this Agreement shall be entitled to deduct and withhold from the amounts otherwise payable pursuant to this Agreement such amounts as are required by any law to be deducted and withheld, as may be reasonably determined by such Person. To the extent that amounts are so withheld and remitted to the appropriate governmental body in accordance with applicable Laws, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

 

Section 2.6    Right to Set-Off. Parent has the right (but not the obligation) to withhold or deduct from, or off-set or set-off against, any and all amounts otherwise payable hereunder to a Holder in order to satisfy the indemnification obligations pursuant to and under Article VIII of the Merger Agreement (such amount off-set or set-off, the “Indemnification Set-Off Amount”).

 

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Section 2.7    Transfer Agent and Parent Common Stock.

 

(a)    Parent will keep a copy of this Agreement on file with the transfer agent for Parent Common Stock (the “Transfer Agent”) and with every subsequent transfer agent for any shares of Parent Common Stock issuable to Holders of the CVRs. Parent will provide or otherwise make available any cash which may be payable as provided in Section 2.7(c), Section 2.9 and Section 2.10 hereof. Parent will furnish such Transfer Agent a copy of all notices of adjustments and certificates related thereto transmitted to each Holder pursuant to Section 2.7(a) hereof.

 

(b)    Parent covenants that all shares of Parent Common Stock which may be issued upon payment of CVRs in connection with the terms and conditions of this Agreement will, upon issue, be validly authorized and issued, fully paid, nonassessable, free of preemptive rights and free from all liens, charges and security interests with respect to the issuance thereof (other than those imposed by applicable securities laws).

 

(c)    Cash-Only Consideration. Notwithstanding anything to the contrary in this Agreement, in no event shall Parent be required to issue any shares of Parent Common Stock to any Person that (A) does not provide a duly completed and executed Accredited Investor Questionnaire establishing that such shares may be issued to such Person in connection with the Mergers and the other Transactions pursuant to an exemption from the registration and prospectus delivery requirements of the Securities Act pursuant to Regulation D and the equivalent state “blue sky” Laws, or (B) in its sole discretion, Parent has determined is an Unaccredited Investor. To the extent any such Person would otherwise have been entitled to be issued shares of Parent Common Stock as consideration or otherwise under this Agreement, Parent shall be entitled (but not required) to pay such amounts in cash, rather than issuing such shares.

 

(d)    The shares of Parent Common Stock issued by Parent pursuant to this Agreement shall be reflected in Parent’s books and records in book entry only with appropriate notations reflecting the following restrictive legend until such Parent Common Stock is registered for resale pursuant to Section 2.7(e):

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED AT ANY TIME UNLESS IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER.”

 

(e)    Parent shall use reasonable efforts to, within 45 calendar days of any issuance or crediting of Parent Common Stock under this Agreement, file a registration statement on Form S-3 (or other appropriate form if Parent is not then S-3 eligible) (including any amendments or supplements, the “Registration Statement”) providing for the resale of all such issued Parent Common Stock. Parent shall use reasonable efforts to cause such Registration Statement to be declared effective as soon as practicable following the initial filing of such Registration Statement, subject to any comments from the SEC.)

 

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(f)    As a condition to its obligations under Section 2.7(e) of this Agreement, Parent may require each Holder of Registrable Securities as to which any registration is being effected to (A) furnish Parent with such information regarding such Person that is necessary to satisfy the disclosure requirements relating to the registration and the distribution of such securities under the Securities Act and the rules and regulations promulgated thereunder as Parent may from time to time reasonably request in writing, including the properly completed and executed Accredited Investor Questionnaire and (B) promptly notify Parent in writing of any changes in the information set forth in the applicable Registration Statement after it is prepared regarding the Holder of Registrable Securities; provided, that any delay in providing or failing to provide such information by any Holder of Registrable Securities shall not delay, eliminate or condition Parent’s obligations under Section 2.7(e) with respect to any other Holder of Registrable Securities. The Registration Statement and Prospectus shall only include the Registrable Securities of all Accredited Investors for whom Parent has received properly completed Accredited Investor Questionnaire on or before the Closing Date. For the purposes of this Section 2.7, a “Holder of Registrable Securities” refers solely to an Accredited Investor that is a holder of Registrable Securities as of or following the Closing Date.

 

Section 2.8    Adjustment of CVRs.

 

(a)    In case of any capital reorganization, other than any capital reorganization that does not result in any reclassification of the outstanding shares of Parent Common Stock into shares of other stock or other securities or property (collectively any such actions being hereinafter referred to as “Reorganizations”) or any Change of Control, appropriate adjustment shall be made in the application of the provisions herein set forth with respect to the rights and interests of Holders so that the provisions set forth herein shall thereafter be applicable, as nearly as possible, in relation to any such shares or other securities, property or cash thereafter deliverable upon payment of CVRs.

 

(b)    Whenever an adjustment is made to the terms of the CVRs pursuant to this Section 2.8, Parent will deliver to the Rights Agent a notice of such Reorganization or Change of Control within five (5) Business Days of the closing of such Reorganization or Change of Control, setting forth in reasonable detail the terms of such Reorganization or Change of Control and any adjustments made pursuant to this Section 2.8. Parent shall cause the Rights Agent, on behalf of and at the expense of Parent, within ten (10) Business Days after notification is received by the Rights Agent of such adjustment, to mail by first class mail, postage prepaid, to each Holder a notice of such adjustment(s) and shall deliver to the Rights Agent a written certificate of the Chief Financial Officer of Parent, setting forth in reasonable detail (i) the terms of such adjustment(s), (ii) a brief statement of the facts requiring such adjustment(s) and (iii) the computation by which such adjustment(s) was made. Where appropriate, such notice by Parent may be given in advance and included as a part of the notice to the Holders required under the other provisions of this Section 2.8(b).

 

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(c)    The Rights Agent shall promptly, and in any event within ten (10) Business Days of receipt of such a notice, send each Holder a copy of such notice in accordance with Section 7.2.

 

(d)    The Rights Agent has no duty to determine when an adjustment under this Section 2.8 should be made, how it should be made or what it should be. The Rights Agent makes no representation as to the validity or value of any securities or assets issuable upon payment of CVRs. The Rights Agent shall not be responsible for Parent’s failure to comply with this Section 2.8.

 

(e)    For purpose of this Section 2.8, the term “shares of Parent Common Stock” means (i) shares of the class of stock designated as Common Stock, par value $0.001 per share, of Parent as of the date of this Agreement, and (ii) shares of any other class of stock resulting from successive changes or reclassification of such shares consisting solely of changes in par value, or from par value to no par value, or from no par value to par value. In the event that at any time, as a result of an adjustment made pursuant to this Section 2.8, the Holders of CVRs shall become entitled to receive any securities other than, or in addition to, shares of Parent Common Stock, thereafter the number or amount of such other securities so issuable upon payment of each CVR shall be subject to terms as nearly equivalent as practicable to the provisions with respect to the shares of Parent Common Stock issuable hereunder.

 

(f)    This Agreement shall not restrict Parent’s or any successor’s ability to sell, transfer or license the Company Products to any Person; provided, that such Person assumes Parent’s obligations, duties and covenants under this Agreement in which case the obligation to issue Parent Common Stock set forth herein shall be assumed by such Person and the equity issuable hereunder shall be the equity of such Person or Affiliate thereof; provided, further, that in the event that none of the chief executive officer, chief financial officer or chief marketing officer of Parent remain employees of or consultants to the successor entity more than one year after a Change of Control or sale of the Company Products to another Person, then the obligation to issue equity of such Person shall thereafter be replaced with cash issued by such Person.

 

Section 2.9    No Fractional Shares. Parent shall not be required to issue fractional shares of Parent Common Stock upon payment of CVRs, and no certificates or scrip for any such fractional shares shall be issued. If more than one CVR shall be payable at the same time with respect to the same Holder, the number of full shares of Parent Common Stock which shall be issuable upon the payment thereof shall be computed on the basis of the aggregate number of shares of Parent Common Stock issuable upon the payment of such CVRs. If any fraction of a share of Parent Common Stock would, except for the provisions of this Section 2.9, be issuable on the payment of any CVRs, Parent shall pay in cash to the Holder thereof the dollar amount (rounded to the nearest whole cent, with numbers ending with .5 or more being rounded up to the nearest whole cent), without interest, determined by multiplying such fraction by the Milestone Stock Price.

 

Section 2.10    Dividends or Other Distributions. No dividend or other distribution declared with respect to Parent Common Stock with a record date prior to the applicable Milestone Payment Date shall be paid to Holders of CVRs. To the extent any shares of Parent Common Stock are issued to Holders pursuant to Section 2.4(a)(ii), there shall be paid to such Holders the amount of dividends or other distributions, without interest, declared with a record date after the applicable Milestone Payment Date.

 

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Section 2.11    Holding of Funds. All funds received by Computershare under this Agreement that are to be distributed or applied by Computershare in the performance of services hereunder (the “Funds”) shall be held by Computershare as agent for Parent and deposited in one or more bank accounts to be maintained by Computershare in its name as agent for Parent. Until paid pursuant to the terms of this Agreement, Computershare will hold the Funds through such accounts in: deposit accounts of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment grade by S&P (LT Local Issuer Credit Rating), Moody’s (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by Bloomberg Finance L.P.). Computershare shall have no responsibility or liability for any diminution of the Funds that may result from any deposit made by Computershare in accordance with this paragraph, including any losses resulting from a default by any bank, financial institution or other third party; provided that in the event the Funds are diminished below the level required for Computershare to make cash payments as required under this Agreement, including any such diminishment as a result of investment losses, Parent shall promptly transfer additional cash to Computershare in an amount equal to such deficiency. Computershare may from time to time receive interest, dividends or other earnings in connection with such deposits. Computershare shall not be obligated to pay such interest, dividends or earnings to Parent or any Holder or any other Person.

 

Section 2.12    No Voting, Dividends or Interest; No Equity or Ownership Interest.

 

(a)    Nothing contained in this Agreement shall be construed as conferring upon any Holder, by virtue of being a Holder of a CVR, the right to receive dividends other than as provided in Section 2.10, or the right to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of Parent or any or any other matter, or any other rights of any kind or nature whatsoever as a stockholder of Parent, either at law or in equity.

 

(b)    The CVRs shall not represent any equity or ownership interest in Parent or in any constituent company to the Mergers or any of their respective Subsidiaries or Affiliates. The rights of a Holder in respect of the CVRs are limited to those expressed in this Agreement and the Merger Agreement.

 

(c)    Notwithstanding anything herein or in the Merger Agreement to the contrary, none of Parent, the Surviving Company or any of their respective Subsidiaries or Representatives shall have any liability, responsibility or obligation of any kind to any Holder in their capacity as such on any basis (including in contract, tort, under federal or state securities law or otherwise) with respect to, arising out of, or relating to, this Agreement or the CVRs, except to the extent this Agreement expressly requires the payment of any Milestone Amount to the Holders and except to the extent otherwise expressly provided for in this Agreement

 

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Section 2.13    Ability to Abandon CVR. A Holder may at any time, at such Holder’s option, abandon all of such Holder’s remaining rights in a CVR by transferring such CVR to Parent or any of its Affiliates without consideration therefor. Such Holder shall notify the Stockholder Representative of such abandonment by providing written notice with respect thereto, which notice shall include the name of such Holder and the number of CVRs such Holder is entitled to and abandoning at such time. The Stockholder Representative shall notify Parent and the Rights Agent of such abandonment. Nothing in this Agreement shall prohibit Parent or any of its Affiliates from offering to acquire or acquiring any CVRs for consideration from the Holders, in private transactions or otherwise, in its sole discretion. Any CVRs acquired by Parent or any of its Affiliates shall be automatically deemed extinguished and no longer outstanding for purposes of Article V and Article VI and any Holder from whom the Parent or any of its Affiliates acquired such CVRs shall have no rights hereunder with respect to such CVRs.

 

ARTICLE III

THE RIGHTS AGENT

 

Section 3.1    Certain Duties and Responsibilities. Parent hereby appoints the Rights Agent to act as rights agent for Parent in accordance with the express terms and conditions set forth in this Agreement (and no implied terms and conditions), and the Rights Agent hereby accepts such appointment. The Rights Agent shall not have any liability for any actions taken, suffered or omitted to be taken in connection with this Agreement and the exercise and performance of its duties hereunder, except for fraud, gross negligence, bad faith or intentional misconduct (each as determined by a final non-appealable judgement of a court of competent jurisdiction) on the part of the Rights Agent.

 

Section 3.2    Certain Rights of the Rights Agent. The Rights Agent undertakes to perform such duties and only such duties as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Rights Agent. In addition:

 

(a)    the Rights Agent may rely and shall be protected and held harmless by Parent in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order or other paper or document believed by it in the absence of bad faith to be genuine and to have been signed or presented by the proper party or parties;

 

(b)    whenever the Rights Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Rights Agent may rely upon an Officer’s Certificate, which certificate shall be full authorization and protection to the Rights Agent, and the Rights Agent shall, in the absence of fraud, gross negligence, bad faith or intentional misconduct (each as determined by a final non-appealable judgement of a court of competent jurisdiction) on its part, incur no liability and be held harmless by Parent for or in respect of any action taken, suffered or omitted to be taken by it under the provisions of this Agreement in reliance upon such certificate;

 

(c)    the Rights Agent may engage and consult with counsel of its selection and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection and shall be held harmless by Parent in respect of any action taken, suffered or omitted by it hereunder in the absence of bad faith and in reliance thereon;

 

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(d)    the permissive rights of the Rights Agent to do things enumerated in this Agreement shall not be construed as a duty;

 

(e)    the Rights Agent shall not be required to give any note or surety in respect of the execution of such powers or otherwise in respect of the premises;

 

(f)    the Rights Agent shall not be liable for or by reason of, and shall be held harmless by Parent with respect to any of the statements of fact or recitals contained in this Agreement or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by Parent only;

 

(g)    the Rights Agent shall have no liability and shall be held harmless by Parent in respect of the validity of this Agreement or the execution and delivery hereof (except the due authorization, execution and delivery hereof by the Rights Agent and the enforceability of this Agreement against the Rights Agent assuming the due execution and delivery hereof by Parent); nor shall it be responsible for any breach by Parent of any covenant or condition contained in this Agreement;

 

(h)    the Parent agrees to indemnify the Rights Agent for, and hold the Rights Agent harmless against, any loss, liability, damage, judgement, fine, penalty, claim, suits or expense (“Losses”) for any action taken, suffered or omitted to be taken by the Rights Agent arising out of or in connection with Rights Agent’s duties under this Agreement, including the reasonable out-of-pocket costs and expenses of counsel in defending Rights Agent against any Losses, unless such losses have been determined by a final non-appealable judgement of a court of competent jurisdiction to be a result of fraud, gross negligence, bad faith or intentional misconduct on the part of the Rights Agent;

 

(i)    the Parent agrees (i) to pay the fees of the Rights Agent in connection with the Rights Agent’s performance of its obligations hereunder, as set forth on a mutually agreed upon fee schedule executed by the Parent and the Rights Agent on or prior to the date hereof, and (ii) to reimburse the Rights Agent within ten (10) days after written demand for all reasonable and documented, out-of-pocket expenses and other disbursements incurred in the preparation, delivery, negotiation, amendment, administration and execution of this Agreement and the exercise and performance of its duties hereunder, including all Taxes (other than income, receipt, franchise or similar Taxes) and charges;

 

(j)    anything to the contrary notwithstanding, in no event shall the Rights Agent, (i)  be liable for any special, punitive or indirect, consequential or incidental loss or damage of any kind whatsoever (including but not limited to lost profits) arising out of any act or failure to act hereunder and (ii) the aggregate liability of the Rights Agent arising in connection with this Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, the amounts paid or payable (but not including any reimbursed costs) hereunder by Parent to the Rights Agent as fees and charges during the twelve (12) months immediately preceding the event for which recovery from the Rights Agent is being sought;

 

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(k)    no provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it;

 

(l)    the Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to receive notice thereof hereunder, and the Rights Agent shall be fully protected and shall incur no liability for failing to take action in connection therewith, in each case, unless and until such notice has been given in accordance with Section 7.1;

 

(m)    the Rights Agent shall neither be responsible for, nor chargeable with, knowledge of, nor have any requirements to comply with, the terms and conditions of the Merger Agreement, nor shall the Rights Agent be required to determine if any Person has complied with the Merger Agreement, nor shall any additional obligations of the Rights Agent be inferred from the terms of the Merger Agreement even though reference thereto may be made in this Agreement;

 

(n)    the Rights Agent may perform any and all of its duties (i) itself (through its directors, officers, or employees) or (ii) through its agents, representatives, attorneys, custodians and/or nominees and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such agents, representatives, attorneys, custodians and/or nominees, absent their gross negligence, bad faith or willful or intentional misconduct (each as determined by a final non-appealable judgment of a court of competent jurisdiction) in the selection and continued employment thereof;

 

(o)    the recitals or statements of fact contained herein shall be taken as statements of Parent (other than the Rights Agent's representations, warranties and statements under this Agreement), and the Rights Agent assumes no responsibility for their correctness nor shall it be required to verify the same (other than the Rights Agent's representations, warranties and statements under this Agreement). The Rights Agent shall be under no responsibility for the validity or sufficiency of this Agreement with respect to any other party hereto or the execution and delivery hereof (except the due execution hereof by the Rights Agent), nor shall it be responsible for any breach by Parent or any other Person of any covenant or condition contained in this Agreement or any CVR. The Rights Agent shall not have any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or to make any demand upon the Parent, or any other Person; and

 

(p)    the provisions of this Section 3.2 shall survive the termination of this Agreement and the resignation, replacement or removal of the Rights Agent.

 

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Section 3.3    Resignation and Removal; Appointment of Successor.

 

(a)    The Rights Agent may resign at any time by giving written notice thereof to Parent specifying a date when such resignation shall take effect, which notice shall be sent at least sixty (60) days prior to the date so specified. Parent has the right to remove the Rights Agent at any time by specifying a date when such removal shall take effect. Notice of such removal shall be given by Parent to the Rights Agent, which notice shall be sent at least sixty (60) days prior to the date so specified.

 

(b)    If the Rights Agent provides notice of its intent to resign, is removed or becomes incapable of acting, Parent shall, as soon as is reasonably practicable, appoint a qualified successor Rights Agent who shall be a stock transfer agent of national reputation or the corporate trust department of a commercial bank. Notwithstanding the foregoing, if Parent shall fail to make such appointment within a period of sixty (60) days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent, then the incumbent Rights Agent may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. The successor Rights Agent so appointed shall, forthwith upon its acceptance of such appointment in accordance with Section 3.4, become the successor Rights Agent.

 

(c)    Parent shall give notice of each resignation and each removal of a Rights Agent and each appointment of a successor Rights Agent by mailing written notice of such event to the Stockholder Representative. Each notice shall include the name and address of the successor Rights Agent. If Parent fails to send such notice within ten (10) Business Days after acceptance of appointment by a successor Rights Agent, the successor Rights Agent shall cause the notice to be transmitted at the expense of Parent. Failure to give any notice provided for in this Section 3.3, however, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

 

(d)    Notwithstanding anything else in this Section 3.3, unless consented to in writing by the Stockholder Representative, Parent shall not appoint as a successor Rights Agent any Person that is not a stock transfer agent of national reputation or the corporate trust department of an international commercial bank.

 

Section 3.4    Acceptance of Appointment by Successor. Every successor Rights Agent appointed hereunder shall, at or prior to such appointment, execute, acknowledge and deliver to Parent and to the retiring Rights Agent an instrument accepting such appointment and a counterpart of this Agreement, and thereupon such successor Rights Agent, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Rights Agent. On request of Parent or the successor Rights Agent, the retiring Rights Agent shall execute and deliver an instrument transferring to the successor Rights Agent all the rights, powers, trusts and duties of the retiring Rights Agent.

 

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ARTICLE IV

COVENANTS

 

Section 4.1    List of Holders. Parent shall furnish or cause to be furnished to the Rights Agent, in such form as received from Parent’s Transfer Agent, the names and addresses of the Holders within ten (10) days of the First Effective Time. Until such list of Holders is furnished to the Rights Agent, the Rights Agent shall have no duties, responsibilities or obligations with respect to such Holders. The Rights Agent shall reflect such names and addresses on the CVR Register and confirm the write up of the CVR Register and list of initial Holders to Parent promptly thereafter and in any event, within seven (7) calendar days of the receipt of such names and addresses from Parent.

 

Section 4.2    Further Assurances. Parent agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered, all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement.

 

Section 4.3    Diligent Efforts. Commencing upon the Closing Date and continuing until the earlier of December 31, 2030 or the achievement of all Milestones, Parent shall, and shall cause the Surviving Company to, use Diligent Efforts to achieve the Milestones; provided, however that with respect to Milestone 3, Milestone 4 or the development, marketing or sale of LTX-608, Parent shall not be obligated, and shall not be obligated to cause the Surviving Company, to use Diligent Efforts. For the avoidance of doubt, Parent is not obligated to prioritize the achievement of a Milestone over any Parent Product or take any action that would or would reasonably be expected to adversely affect any Parent Product or take any action that is not commercially reasonable as determined by Parent in its sole discretion.

 

Section 4.4    Audit Rights. Until one year following the earlier of December 31, 2030 or the achievement of all Milestones, upon reasonable advance written notice from the Stockholder Representative, Parent shall permit an independent certified public accounting firm of nationally recognized standing selected by such Stockholder Representative and reasonably acceptable to Parent (the “Independent Accountant”) to have access at reasonable times during normal business hours to the books and records of Parent and its Affiliates as may be reasonably necessary to evaluate and verify Parent’s calculation of Annual Revenues hereunder; provided that (x) such Stockholder Representative (and the Independent Accountant) enter into customary confidentiality agreements reasonably satisfactory to Parent with respect to the confidential information of Parent or its Affiliates to be furnished pursuant to this Section 4.4 and (y) such access does not unreasonably interfere with the conduct of the business of Parent or any of its Affiliates. The fees charged by such accounting firm shall be borne by the Stockholder Representative, unless the audit reveals an underpayment of 5% or more, in which case the fees shall be borne by Parent. The Independent Accountant shall provide Parent with a copy of all disclosures made to the Stockholder Representative. The audit rights set forth in this Section 4.4 may not be exercised by the Stockholder Representative more than once in any given twelve (12)-month period.

 

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Section 4.5    Stockholder Representative.

 

(a)    To facilitate the administration of the transactions contemplated by this Agreement and any other actions required or permitted to be taken by the Stockholder Representative under this Agreement, each Holder, by virtue of the execution and delivery of a Joinder (as applicable), and the adoption of this Agreement, and approval of the Transactions, including the Mergers, hereby agrees to appoint, authorize and empower James Wilkie as its agent and attorney-in-fact, with full power of substitution: (i) as the Stockholder Representative for and on behalf of the Holder to give and receive notices and communications in respect of this Agreement, to authorize payment to any Holder, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, to assert, negotiate, enter into settlements and compromises of, any claims or any disputes, in each case relating to this Agreement or the Transactions, and to take all other actions that are either (x) necessary or appropriate in the judgment of the Stockholder Representative for the accomplishment of the foregoing or (y) specifically mandated by the terms of this Agreement; (ii) to make all decisions and determinations and to act (or not act) and execute, deliver and receive all agreements, documents, instruments and consents on behalf of and as agent for each Holder at any time in connection with, and that may be necessary or appropriate to accomplish the intent and implement the provisions of this Agreement and to facilitate the consummation of the transactions contemplated hereby, including without limitation for purposes of (x) negotiating and settling, on behalf of the Holders, any dispute that arises under this Agreement after the First Effective Time and (y) negotiating and settling matters with respect to the amounts to be paid to the Holders pursuant to this Agreement; and (iii) to take any and all additional action as is contemplated to be taken by or on its behalf or by the Stockholder Representative by the terms of this Agreement. All such actions shall be deemed to be facts ascertainable outside this Agreement and shall be binding on the Holders. Such agency may be changed by the Holders from time to time upon not less than thirty (30) days prior written notice to Parent; provided, however, that the Stockholder Representative may not be removed unless holders of a majority interest of the CVRs agree to such removal and to the identity of the substituted agent. Notwithstanding the foregoing, in the event of a resignation of the Stockholder Representative or other vacancy in the position of Stockholder Representative, such vacancy may be filled by the holders of a majority in interest of the CVRs. No bond shall be required of the Stockholder Representative.

 

(b)    Notices or communications to or from the Stockholder Representative shall constitute notice to or from the Holders.

 

(c)    The Stockholder Representative shall not be liable for any act done or omitted hereunder as Stockholder Representative while acting in good faith and in the exercise of reasonable judgment. The Holders shall indemnify the Stockholder Representative and hold the Stockholder Representative harmless against any and all Losses arising out of or in connection with the acceptance or administration of the Stockholder Representative’s duties hereunder, including the reasonable fees and expenses of any legal counsel, financial advisors, auditors or other agents retained by the Stockholder Representative. Any decision, act, consent or instruction of the Stockholder Representative in connection with this Agreement, including an amendment, extension or waiver of this Agreement pursuant to Section 5.1 or Section 6.1(b), shall constitute a decision of all the Holders and shall be final, binding and conclusive upon each Holder, and no Holder shall have the right to object, dissent, protest or otherwise contest the same. Parent may rely upon any such decision, act, consent or instruction of the Stockholder Representative as being the decision, act, consent or instruction of all the Holders. Parent is hereby relieved from any liability to any Person for any acts done by them in accordance with such decision, act, consent or instruction of the Stockholder Representative.

 

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(d)    Parent and its Affiliates shall be entitled to rely conclusively on the decisions, acts, consents, waivers and instructions of the Stockholder Representative as to any determination relating to the transactions contemplated by this Agreement as being the decision, act, consent, waiver or instruction of every Holder, and any other actions required or permitted to be taken by the Stockholder Representative under this Agreement. No Person shall have any cause of action against Parent, its Affiliates, or any of their respective directors, officers, employees or agents or for any action taken by Parent in reliance upon any decision, act, consent, waiver or instruction of the Stockholder Representative; and Parent and its Affiliates are each hereby relieved from any liability to any Person for any acts done by it in accordance with such decision, act, consent, waiver or instruction of the Stockholder Representative.

 

(e)    No Holder shall have any cause of action against the Stockholder Representative for any action taken, decision made or instruction given by the Stockholder Representative under this Agreement in its capacity as such, except for fraud or intentional breach of this Agreement by the Stockholder Representative.

 

(f)    The Holders recognize and intend that the power of attorney granted in this Section 4.5 is coupled with an interest and is irrevocable and will survive the death, incapacity, dissolution, liquidation or winding up of each of the Holders.

 

(g)    Notwithstanding anything to the contrary contained in this Agreement: (i) Parent, its Affiliates and the Rights Agent will be entitled to deal exclusively with the Stockholder Representative on all matters relating to this Agreement and (ii) Parent, its Affiliates and the Rights Agent will be entitled to rely conclusively (without further evidence of any kind whatsoever) on any document executed or purported to be executed on behalf of any Holder by the Stockholder Representative and on any other action taken or purported to be taken on behalf of any Holder by the Stockholder Representative as fully binding upon such Holder and none of Parent, its Affiliates and the Rights Agent will be liable to any Holder for any act taken or omitted by Parent, its Affiliates and the Rights Agent in such reliance. The provisions of this Section 4.5 are independent and severable, are irrevocable and coupled with an interest, and shall be enforceable notwithstanding any rights or remedies that Parent or any Holder may have in connection with the transactions contemplated by this Agreement.

 

ARTICLE V

AMENDMENTS

 

Section 5.1    Amendments without Consent of Holders.

 

(a)    Without the consent of any Holders or the Stockholder Representative, Parent, at any time and from time to time, may enter into one or more amendments hereto, for any of the following purposes:

 

(i)    to evidence the succession of another person to Parent and the assumption by any such successor of the covenants of Parent herein; provided that such succession and assumption is in accordance with the terms of this Agreement;

 

(ii)    to evidence the succession of another Person as a successor Rights Agent and the assumption by any such successor of the covenants and obligations of the Rights Agent herein; provided that such succession and assumption is in accordance with the terms of this Agreement;

 

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(iii)    to add to the covenants of Parent such further covenants, restrictions, conditions or provisions as Parent shall consider to be for the protection of the Holders; provided that, in each case, such provisions do not adversely affect the interests of the Holders;

 

(iv)    to cure any ambiguity, to correct or supplement any provision herein that may be defective or inconsistent with any other provision herein or in the Merger Agreement, or to make any other provisions with respect to matters or questions arising under this Agreement; provided that, in each case, such provisions do not adversely affect the interests of the Holders;

 

(v)    as may be necessary or appropriate to ensure that the CVRs are not subject to registration under the Securities Act, the Exchange Act or any applicable state securities or “blue sky” laws;

 

(vi)    to evidence the assignment of this Agreement by Parent as provided in Section 7.3; or

 

(vii)    as may be necessary or appropriate to ensure that the Surviving Company complies with applicable Law.

 

In addition to the foregoing, upon the request of Parent, the Rights Agent hereby agrees to enter into one or more amendments hereto to evidence the succession of another person as a successor Rights Agent in accordance with the terms of this Agreement and the assumption by any successor of the covenants and obligations of such Rights Agent herein, without modification of such covenants or obligations other than as permitted by this Section 5.1.

 

(b)    Without the consent of any Holders, Parent and the Rights Agent, at any time and from time to time, may enter into one or more amendments hereto to reduce the number of CVRs, in the event any Holder agrees to renounce such Holder’s rights under this Agreement in accordance with Section 7.4 or to abandon or transfer CVRs to Parent pursuant to Section 2.13.

 

(c)    Promptly after the execution by Parent and the Rights Agent of any amendment pursuant to the provisions of this Section 5.1, Parent shall mail (or cause the Rights Agent to mail) a notice to the Stockholder Representative, setting forth such amendment.

 

Section 5.2    Amendments with Consent of the Stockholder Representative.

 

(a)    Subject to Section 5.1 (which amendments pursuant to Section 5.1 may be made without the consent of any Holder), with the written consent of the Stockholder Representative, Parent and the Rights Agent may enter into one or more amendments hereto for the purpose of adding, eliminating or changing any provisions of this Agreement, even if such addition, elimination or change is adverse to the interest of the Holders.

 

23

 

 

(b)    Promptly after the execution by Parent and the Rights Agent of any amendment pursuant to the provisions of this Section 5.2, Parent shall mail (or cause the Rights Agent to mail) a notice thereof to the Stockholder Representative, setting forth such amendment.

 

Section 5.3    Execution of Amendments. Prior to executing any amendment permitted by this Article V, the Rights Agent shall be entitled to receive, and shall be fully protected in relying upon, an opinion of counsel selected by Parent and reasonably acceptable to Rights Agent stating that the execution of such amendment is authorized or permitted by this Agreement. The Rights Agent may, but is not obligated to, enter into nay such amendment that affects the Rights Agent’s own rights, immunities, privileges, covenants or duties under this Agreement. Each amendment of this Agreement shall be evidenced by a writing signed by the Rights Agent and the Parent.

 

Section 5.4    Effect of Amendments. Upon the execution of any amendment under this Article V, this Agreement shall be modified in accordance therewith, such amendment shall form a part of this Agreement for all purposes and every Holder shall be bound thereby.

 

ARTICLE VI

REMEDIES OF THE HOLDERS

 

Section 6.1    Event of Default.

 

(a)    “Event of Default” with respect to the CVRs, means the following events which shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of Legal Requirements, pursuant to any judgment, decree or order of any court or any order, rule or regulation of any governmental body or otherwise): (i) default in the payment by Parent pursuant to the terms of this Agreement of all or any part of a Milestone Amount after a period of thirty (30) Business Days after the Milestone Amount shall have become due and payable and (ii) material default in the performance, or breach in any material respect, of any other covenant of Parent hereunder, and continuance of such default or breach for a period of sixty (60) days after a written notice specifying such default or breach and requiring it to be remedied is given, which written notice states that it is a “Notice of Default” hereunder and is sent by registered, certified or electronic mail to Parent and the Rights Agent by the Stockholder Representative.

 

(b)    If an Event of Default described above occurs and is continuing (and has not been cured or waived), then, and in each and every such case, the Stockholder Representative by notice in writing to Parent and the Rights Agent, may, in its discretion, commence a suit to protect the rights of the Holders, including to obtain payment for any amounts then due and payable.

 

Section 6.2    Suits by Holders. Except for the rights of the Rights Agent set forth herein, the Stockholder Representative will have the sole and exclusive right, on behalf of all Holders, by virtue of or under any provision of this Agreement, to institute any action or proceeding with respect to this Agreement, and no individual Holder or other group of Holders will be entitled to exercise such rights. Notwithstanding the foregoing, (a) the right of any Holder of any CVR to receive payment of the amounts that a Milestone Notice indicates are payable in respect of such CVR on or after the applicable due date, or to institute any action or proceeding for the enforcement of any such payment on or after such due date, shall not be impaired or affected without the consent of such Holder and (b) in the event of an insolvency proceeding of Parent, individual Holders shall be entitled to assert claims in such insolvency proceeding and take related actions in pursuit of such claims with respect to any payment that may be claimed by or on behalf of Parent or by any creditor of Parent.

 

24

 

 

ARTICLE VII

OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 7.1    Notices to the Rights Agent and Parent. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, by registered or certified mail (postage prepaid, return receipt requested) or by electronic mail (so long as confirmation of transmission is electronically or mechanically generated and kept on file by the sending party) to the respective parties hereto at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 7.1):

 

If to the Rights Agent, to it at:

 

Computershare Inc.

Computershare Trust Company, N.A.

150 Royall Street

Canton, MA 02021

Attention: Client Services

Facsimile: (781) 575-4210

 

If to Parent, to it at:

 

AcelRx Pharmaceuticals, Inc.

25821 Industrial Boulevard, Suite 400

Hayward, California 94545

Attention: General Counsel

Phone: 650.216.3500

Email: legal@acelrx.com

 

with a copy (which shall not constitute notice) to:

 

Shearman & Sterling LLP

New York, NY 10022-6069

Attention: Robert Masella

Email: robert.masella@shearman.com

 

25

 

 

If to the Stockholder Representative, to it at:

 

Burns & Levinson LLP

125 High Street

Boston, MA 02110

Attention: Gil Breiman

Email to: gbreiman@burnslev.com

 

The Rights Agent, Parent or Stockholder Representative may specify a different address, or email address by giving notice in accordance with this Section 7.1.

 

Section 7.2    Notice to Holders. Where this Agreement provides for notice to Holders, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at the Holder’s address as it appears in the CVR Register, not later than the latest date, and not earlier than the earliest date, if any, prescribed for the giving of such notice. Neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders.

 

Section 7.3    Successors and Assigns. Parent may assign, in its sole discretion and without the consent of any other Person, any or all of its rights, interests and obligations hereunder to any Affiliate or any acquiror of the Company Products; provided that each such assignee agrees to assume and be bound by all of the terms and conditions of this Agreement, provided, however, that in the event that none of the chief executive officer, chief financial officer or chief marketing officer of Parent remain employees of or consultants to the successor entity upon more than one year after a Change of Control or sale of Surviving Company assets including the Company Products, then thereafter the obligation to issue equity of such Person shall be replaced with cash issued by such Person. This Agreement will be binding upon, inure to the benefit of and be enforceable by Parent’s successors and each assignee. This Agreement shall not restrict Parent’s or any successor’s ability to merge or consolidate or enter into or consummate any Change of Control or sale of Surviving Company assets including the Company Products; provided, that in the event of a Change of Control or sale of Surviving Company assets including the Company Products, Parent or the Surviving Company, as applicable, shall cause the acquirer to assume Parent’s obligations, duties and covenants under this Agreement, in which case the obligation to issue Parent Common Stock set forth herein shall be assumed for sale by the ultimate parent company or an Affiliate in such Change of Control and the equity issuable hereunder shall be the equity of such new Person. Notwithstanding the foregoing, any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the stock transfer or other shareholder services business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions of the Agreement. The purchase of all or substantially all of the Rights Agent’s assets employed in the performance of transfer agent activities shall be deemed a merger or consolidation for purposes of this Section 7.3. Except as otherwise permitted herein, Parent, the Stockholder Representative, or the Rights Agent may not assign this Agreement or any CVR or rights related thereto without the prior written consent of the other party; provided that the prior written consent of Parent with respect to any request for assignment by the Rights Agent will not be unreasonably withheld. Any attempted assignment of this Agreement or any such rights in violation of this Section 7.3 shall be void and of no effect.

 

26

 

 

Section 7.4    No Third Party Beneficiaries. Nothing in this Agreement, express or implied, shall give to any Person (other than the Rights Agent and its permitted successors and assigns, the Stockholder Representative and its permitted successors and assigns, Parent, Parent’s permitted successors and assignees, and the Holders and the Holders’ successors and assigns pursuant to Permitted Transfers, each of whom is intended to be, and is, a third party beneficiary hereunder) any benefit or any legal or equitable right, remedy or claim under this Agreement or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the Rights Agent and its permitted successors and assigns, the Stockholder Representative and its permitted successors and assigns, Parent, Parent’s permitted successors and assignees, and the Holders and the Holders’ successors and assigns pursuant to Permitted Transfers. The rights hereunder of Holders and their successors and assigns pursuant to Permitted Transfers are limited to those expressly provided in this Agreement. Notwithstanding anything to the contrary contained herein, any Holder or Holder’s successor or assign pursuant to a Permitted Transfer may at any time agree to renounce, in whole or in part, whether or not for consideration, its rights under this Agreement by written notice to the Rights Agent and Parent, which notice, if given, shall be irrevocable, and Parent may, in its sole discretion, at any time offer consideration to Holders in exchange for their agreement to irrevocably renounce their rights, in whole or in part, hereunder.

 

Section 7.5    Governing Law; Jurisdiction. This Agreement, the CVRs and all actions arising out of herewith and therewith shall be governed by and construed in accordance with the laws of the State of Delaware (regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof).

 

Section 7.6    Exclusive Jurisdiction. The parties hereto agree that any action seeking to enforce any provision of, or based on any matter arising out of or in connection with this Agreement, including the CVRs, shall be brought and determined exclusively in the Delaware Court of Chancery or, if the Court of Chancery lacks jurisdiction over such dispute, then the state or federal courts of applicable jurisdiction located in Wilmington, Delaware. The parties hereto hereby (i) irrevocably submit to the exclusive personal jurisdiction of such courts for the purpose of any action arising out of or relating to this Agreement, including the CVRs, brought by any party hereto, (ii) agree that all claims in respect of such action or proceeding shall be heard and determined exclusively in such courts, and (iii) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject to the personal jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the CVRs may not be enforced in or by any of the above-named courts.

 

27

 

 

Section 7.7    Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

Section 7.8    Severability. In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement shall continue in full force and effect and the application of such provision to other Persons or circumstances shall be interpreted so as reasonably to effect the intent of the parties. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision. If any excluded provision, or the application thereof, shall materially and adversely affect the rights, immunities, liabilities, duties, responsibilities or obligations of the Rights Agent, the Rights Agent shall be entitled to resign immediately upon written notice to the Parent.

 

Section 7.9    Termination. This Agreement shall be terminated and of no force or effect, the parties hereto shall have no liability hereunder (other than with respect to monies due and payable by Parent to Rights Agent), and no payments shall be required to be made, or stock to be credited, upon the earlier to occur of (a) the payment in full of the Milestone Amounts, if any, by (i) Parent crediting (or causing its Transfer Agent to credit) the full amount of shares of Parent Common Stock reflecting each Milestone Stock Amount and/or Milestone Cash Amount to each Holder in the name of such Holder as recorded in the CVR Register or (ii) the mailing by the Rights Agent to the address of each Holder as reflected in the CVR Register the full amount of each Milestone Cash Amount and the potential cash payments in lieu of fractional shares, in each case, as required to be credited or paid, as applicable, under the terms of this Agreement, (b) December 31, 2030, if Milestone 7 has not been achieved on or prior to such date, and (c) the termination of the Merger Agreement in accordance with its terms. Notwithstanding the foregoing, no such termination shall affect any rights or obligations accrued prior to the effective date of such termination or Sections 2.4(e), 2.4(f), 3.2, 7.4, 7.5, 7.6, 7.7, 7.8, 7.10, 7.11, 7.12 or this Section 7.9, which shall survive the termination of this Agreement, or the resignation, replacement or removal of the Rights Agent.

 

Section 7.10    Entire Agreement. As it relates to the Rights Agent, (i) this Agreement alone constitutes the entire agreement of the parties hereto and supersedes all contemporaneous and prior agreements and understandings, both written and oral, among or between any of the parties hereto, with respect to the subject matter hereof, and (ii) if and to the extent that any provision of this Agreement is inconsistent or conflicts with the Merger Agreement, this Agreement shall govern and be controlling. For all other purposes, this Agreement and the Merger Agreement constitutes the entire agreement of the parties hereto and supersedes all contemporaneous and prior agreements and understandings, both written and oral, among or between any of the parties hereto, with respect to the subject matter hereof.

 

Section 7.11    Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. The exchange of a fully executed Agreement (in counterparts or otherwise) by PDF shall be sufficient to bind the parties hereto to the terms and conditions of this Agreement.

 

28

 

 

Section 7.12    No Fiduciary Obligations. Each of Parent, the Rights Agent and Stockholder Representative acknowledges and agrees that Parent, the Rights Agents and their respective Affiliates and officers, directors and controlling Persons do not owe any fiduciary duties to any Persons with respect to the CVRs.

 

Section 7.13    Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent will not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.

 

Section 7.14    Confidentiality. Except as expressly provided herein, the Rights Agent and Parent agree that all books, records, information and data pertaining to the business of the other party which are exchanged or received pursuant to the negotiation or the carrying out of this Agreement including the fees for services (the “Confidential Information”) shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required by law, including, without limitation, pursuant to subpoenas from state or federal government authorities (e.g., in divorce and criminal actions); provided, however, that, (a) each party may disclose relevant aspects of the other party’s confidential information to its officers, affiliates, agents, subcontractors and employees to the extent reasonably necessary to perform its duties and obligations under this Agreement and such disclosure is not prohibited by applicable law and (b) in the event that Parent is required by applicable law or legal process to disclose any Confidential Information, Parent shall, before making such disclosure, use commercially reasonable efforts to notify the Rights Agent of such requirements to afford the Rights Agent the opportunity to seek a protective order or other remedy.

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

29

 

 

 

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf by its duly authorized officers as of the day and year first above written.

 

	
			 

				
			ACELRX PHARMACEUTICALS, INC. 

				
			 

			
	 	 	 
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Raffi Asadorian

				
			 

			
	
			 

				
			 

				
			Name: Raffi Asadorian 

				
			 

			
	
			 

				
			 

				
			Title: Chief Financial Officer 

				
			 

			

 

 

	
			 

				
			COMPUTERSHARE INC., 

				
			 

			
	 	COMPUTERSHARE TRUST COMPANY, N.A.,	 
	 	AS RIGHTS AGENT, On behalf of both entities	 
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Collin Ekeogu

				
			 

			
	
			 

				
			 

				
			Name: Collin Ekeogu 

				
			 

			
	
			 

				
			 

				
			Title: Manager, Corporate Actions 

				
			 

			

 

 

	
			 

				
			Stockholder Representative 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ James Wilkie

				
			 

			
	
			 

				
			 

				
			Name: James Wilkie 

				
			 

			
	
			 

				
			 

				
			Title: Stockholder Representative 

				
			 

			

 

 

[Signature Page to Contingent Value Rights Agreement]EX-10.1

 Exhibit 10.1 
  

			
	To:	  	Humana Inc.
		  	500 West Main Street
		  	Louisville, Kentucky 40202
		
	From:	  	Mizuho Markets Americas LLC
		  	c/o Mizuho Securities USA LLC, as agent
		  	1271 Avenue of the Americas
		  	New York, NY 10020
		
	Re:	  	Accelerated Stock Repurchases

 This master confirmation (this “Master Confirmation”), dated as of January 11, 2022, is
intended to set forth certain terms and provisions of certain Transactions (each, a “Transaction”) entered into from time to time between Mizuho Markets Americas LLC (“MMA”) (with Mizuho Securities USA LLC
(“MSUSA”) acting as agent) (“Dealer”) and Humana Inc. (“Counterparty”). This Master Confirmation, taken alone, is neither a commitment by either party to enter into any Transaction nor evidence of a
Transaction. The additional terms of any particular Transaction shall be set forth in a Supplemental Confirmation in the form of Schedule A hereto (a “Supplemental Confirmation”), which shall reference this Master
Confirmation and supplement, form a part of, and be subject to this Master Confirmation. This Master Confirmation and each Supplemental Confirmation together shall constitute a “Confirmation” as referred to in the Agreement specified
below. MMA is acting as principal in its capacity as Dealer hereunder and MSUSA, its affiliate, is acting as agent for MMA, in MMA’s capacity as Dealer hereunder, and Counterparty hereunder (in such capacity, “Agent”). This
Master Confirmation and related Supplemental Confirmation is a confirmation for purposes of Rule 10b-10 promulgated under the Exchange Act (as defined below). MMA is not a member of the Securities Investor
Protection Corporation. 
 The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc. (“ISDA”), are incorporated into this Master Confirmation. This Master Confirmation and each Supplemental
Confirmation evidence a complete binding agreement between Counterparty and Dealer as to the subject matter and terms of each Transaction to which this Master Confirmation and such Supplemental Confirmation relate and shall supersede all prior or
contemporaneous written or oral communications with respect thereto. 
 This Master Confirmation and each Supplemental Confirmation
supplement, form a part of, and are subject to an agreement in the form of the ISDA 2002 Master Agreement (the “Agreement”) as if Dealer and Counterparty had executed the Agreement on the date of this Master Confirmation (but
without any Schedule except for (i) “Multiple Transaction Payment Netting” shall not apply for the purpose of Section 2(c) of the Agreement, (ii) the replacement of both instances of the word “first” in the third line
of Section 5(a)(i) of the Agreement with the word “second”, (iii) the insertion of “, absent manifest error” immediately before the period at the end of the last sentence of Section 6(d)(i) of the Agreement,
(iv) the election that the “Cross Default” provisions of Section 5(a)(vi) of the Agreement shall apply to Dealer and Counterparty, with a “Threshold Amount” equal to 3% of stockholders’ equity applicable to each
party; provided that (A) the words “, or becoming capable at such time of being declared,” shall be deleted from such Section 5(a)(vi); (B) the following sentence shall be added to the end of such Section 5(a)(vi):
“Notwithstanding the foregoing, an Event of Default shall not occur under either (1) or (2) above if (i) the event or condition referred to in (1) or the failure to pay referred to in (2) is caused by an error or omission of
an administrative or operational nature, (ii) funds were available to such party to enable it to make the relevant payment when due and (iii) such payment is made within two Local Business Days of such party’s receipt of written
notice of its failure to pay;” and (C) the term “Specified Indebtedness” shall have the meaning set forth in Section 14 of the Agreement, except that such term shall not include obligations in respect of deposits received in
the ordinary course of a party’s banking business, and (v) the replacement of “15” with “30” in Sections 5(a)(vii)(4)(B) and (7) of the Agreement). 

The Transactions shall be the sole Transactions under the Agreement. If there exists any Master Agreement in a form published by ISDA between
Dealer and Counterparty or any confirmation or other agreement between Dealer and Counterparty pursuant to which such a Master Agreement is deemed to exist between Dealer and Counterparty (each such ISDA Master Agreement, confirmation and other
agreement, an “Other Agreement”), then notwithstanding anything to the contrary in any other Agreement, the Transactions shall not be considered or deemed to be Transactions under, or otherwise governed by, such Other Agreement.

  
 1 

 All provisions contained or incorporated by reference in the Agreement shall govern this
Master Confirmation and each Supplemental Confirmation except as expressly modified herein or in the related Supplemental Confirmation. 

If, in relation to any Transaction to which this Master Confirmation and a Supplemental Confirmation relate, there is any inconsistency
between the Agreement, this Master Confirmation, such Supplemental Confirmation and the Equity Definitions, the following will prevail for purposes of such Transaction in the order of precedence indicated: (i) such Supplemental Confirmation;
(ii) this Master Confirmation; (iii) the Agreement and (iv) the Equity Definitions. 
 1. Each Transaction constitutes a Share Forward
Transaction for the purposes of the Equity Definitions. Set forth below are the terms and conditions that, together with the terms and conditions set forth in the Supplemental Confirmation relating to any Transaction, shall govern such Transaction.

 General Terms: 
  

			
	 Trade Date:
	  	For each Transaction, as set forth in the related Supplemental Confirmation.
		
	 Buyer:
	  	Counterparty.
		
	 Seller:
	  	Dealer.
		
	 Shares:
	  	Common stock, par value $0.16 2/3 per share, of Counterparty (Ticker: HUM).
		
	 Exchange:
	  	The New York Stock Exchange.
		
	 Related Exchange(s):
	  	All Exchanges; provided that Section 1.26 of the Equity Definitions shall be amended to add the words “United States” before the word “exchange” in the tenth line of such Section.
		
	 Prepayment\Variable Obligation:
	  	Applicable.
		
	 Prepayment Amount:
	  	For each Transaction, as set forth in the related Supplemental Confirmation.
		
	 Prepayment Date:
	  	For each Transaction, as set forth in the related Supplemental Confirmation.
		
	Valuation:	  	
		
	 VWAP Price:
	  	For any Exchange Business Day, as determined by the Calculation Agent based on the 10b-18 volume weighted average price per Share for the regular trading session (including any extensions
thereof) on such Exchange Business Day (without regard to pre-open or after hours trading outside of such regular trading session for such Exchange Business Day), as published by Bloomberg at 4:15 p.m. New
York time (or 15 minutes following the end of any extension of the regular trading session) on such Exchange Business Day, on Bloomberg page “HUM<Equity> AQR SEC” (or any successor thereto), or if such price is not so reported on
such Exchange Business Day for any reason or is, in the Calculation Agent’s determination, erroneous, such VWAP Price shall be as determined by the Calculation Agent. For purposes of calculating the VWAP Price, the Calculation Agent will
include only those trades that are reported during the period of time during which Counterparty could purchase its own shares under Rule 10b-18(b)(2) and are effected pursuant to the conditions of Rule 10b-18(b)(3), each under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (such trades, “Rule 10b-18 eligible
transactions”).

  
 2 

			
		
	 Forward Price:
	  	The average of the VWAP Prices for the Calculation Dates in the Calculation Period, subject to “Valuation Disruption” below.
		
	 Forward Price Adjustment Amount:
	  	For each Transaction, as set forth in the related Supplemental Confirmation.
		
	 Calculation Period:
	  	The period from and including the Calculation Period Start Date to and including the Termination Date.
		
	 Calculation Period Start Date:
	  	For each Transaction, as set forth in the related Supplemental Confirmation.
		
	 Termination Date:
	  	The Scheduled Termination Date; provided that Dealer shall have the right to designate any Calculation Date on or after the First Acceleration Date to be the Termination Date (the “Accelerated Termination
Date”) by delivering notice to Counterparty of any such designation prior to 8:00 p.m. New York City time on the first Calculation Date following such Accelerated Termination Date (the “Accelerated Termination Notice
Date”).
		
	 Calculation Dates:
	  	For each Transaction, as set forth in the related Supplemental Confirmation.
		
	 Scheduled Termination Date:
	  	For each Transaction, as set forth in the related Supplemental Confirmation, subject to postponement as provided in “Valuation Disruption” below.
		
	 First Acceleration Date:
	  	For each Transaction, as set forth in the related Supplemental Confirmation.
		
	 Valuation Disruption:
	  	The definition of “Market Disruption Event” in 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” and inserting the words “on any
Scheduled Trading Day during the Calculation Period or Settlement Valuation Period” after the word “material,” in the third line thereof.
		
		  	Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line
thereof.

  
 3 

			
		  	Notwithstanding anything to the contrary in the Equity Definitions, to the extent that a Disrupted Day occurs (i) on a Scheduled Trading Day that is a Calculation Date for such Transaction, the Calculation Agent may, in its
good faith and commercially reasonable discretion, postpone the Scheduled Termination Date to the next Calculation Date, or (ii) in the Settlement Valuation Period, the Calculation Agent may extend the Settlement Valuation Period by up to one
Calculation Date for each Disrupted Day. If any such Disrupted Day is a Disrupted Day because of a Market Disruption Event (or a deemed Market Disruption Event as provided herein), the Calculation Agent shall determine whether (i) such
Disrupted Day is a Disrupted Day in full, in which case the VWAP Price for such Disrupted Day shall not be included for purposes of determining the Forward Price or the Settlement Price, as the case may be, or (ii) such Disrupted Day is a
Disrupted Day only in part, in which case the VWAP Price for such Disrupted Day shall be determined by the Calculation Agent based on Rule 10b-18 eligible transactions in the Shares on such Disrupted Day
effected before the relevant Market Disruption Event occurred and/or after the relevant Market Disruption Event ended, and the weighting of the VWAP Price for the relevant Calculation Dates during the Calculation Period or the Settlement Valuation
Period, as the case may be, shall be adjusted by the Calculation Agent for purposes of determining the Forward Price or the Settlement Price, as the case may be, with such adjustments based on the duration of any Market Disruption Event and the
volume, historical trading patterns and price of the Shares. Any Exchange Business Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be an Exchange Business Day; if a
closure of the Exchange prior to its normal close of trading on any Exchange Business Day is scheduled following the date hereof, then such Exchange Business Day shall be deemed to be a Disrupted Day in full.
		
		  	If a Disrupted Day occurs on a Scheduled Trading Day scheduled to be a Calculation Date during the Calculation Period or the Settlement Valuation Period, as the case may be, and each of the five immediately following Calculation
Dates is a Disrupted Day, then the Calculation Agent, in its good faith and commercially reasonable discretion, may deem such fifth scheduled Calculation Date to be an Exchange Business Day that is not a Disrupted Day and determine the VWAP Price
for such fifth scheduled Calculation Date using its good faith estimate of the value of the Shares on such fifth scheduled Calculation Date based on the volume, historical trading patterns and price of the Shares.
		
		  	The Calculation Agent shall notify the parties of the occurrence of any Disrupted Day as promptly as practicable, and shall use good faith efforts to notify the parties of any determination pursuant to these Valuation Disruption
provisions no later than the Exchange Business Day immediately following the last consecutive affected Calculation Date.
		
	Settlement Terms:	  	
		
	 Settlement Procedures:
	  	If the Number of Shares to be Delivered is positive, Physical Settlement shall be applicable; provided that Dealer does not, and shall not, make the agreement or the representations set forth in Section 9.11 of the
Equity Definitions related to the restrictions, obligations, limitations or requirements under applicable securities laws with respect to any Shares delivered by Dealer to Counterparty under any Transaction arising as a result of Counterparty being
the issuer of such Shares. If the Number of Shares to be Delivered is negative, then the Counterparty Settlement Provisions in Annex A hereto shall apply.

  
 4 

			
	 Number of Shares to be Delivered:
	  	A number of Shares equal to (x)(a) the Prepayment Amount divided by (b) the Divisor Amount minus (y) the number of Initial Shares.
		
	 Divisor Amount:
	  	The greater of (i) the Forward Price minus the Forward Price Adjustment Amount and (ii) $1.00.
		
	 Excess Dividend

Amount:
	  	For the avoidance of doubt, all references to the Excess Dividend Amount shall be deleted from Section 9.2(a)(iii) of the Equity Definitions.
		
	 Settlement Date:
	  	If the Number of Shares to be Delivered is positive, the date that is one Settlement Cycle immediately following the Termination Date; provided that with respect to any Accelerated Termination Date, the date shall be the date
that falls one Settlement Cycle following the Accelerated Termination Notice Date.
		
	 Settlement Currency:
	  	USD.
		
	 Initial Share Delivery:
	  	Dealer shall deliver a number of Shares equal to the Initial Shares to Counterparty on the Initial Share Delivery Date in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date deemed to be
a “Settlement Date” for purposes of such Section 9.4.
		
	 Initial Share Delivery Date:
	  	For each Transaction, as set forth in the related Supplemental Confirmation.
		
	 Initial Shares:
	  	For each Transaction, as set forth in the related Supplemental Confirmation.
		
	Share Adjustments:	  	
		
	 Potential Adjustment Event:
	  	Notwithstanding anything to the contrary in Section 11.2(e) of the Equity Definitions, (i) an Extraordinary Dividend shall not constitute a Potential Adjustment Event and (ii) none of the Transactions pursuant to this
Master Confirmation, any Other Specified Repurchase Agreement nor any Permitted OMR Transaction (each as defined below) shall constitute a Potential Adjustment Event.
		
		  	It shall constitute an additional Potential Adjustment Event if the Scheduled Termination Date for any Transaction is postponed pursuant to “Valuation Disruption” above, in which case the Calculation Agent shall adjust any
relevant terms of any such Transaction as necessary to account for the economic effect on any Transaction of such postponement; provided that the Calculation Agent shall not change the designation of any Calculation
Date.

  
 5 

			
		
	 Extraordinary Dividend:
	  	For any calendar quarter, any dividend or distribution on the Shares with an ex-dividend date occurring during such calendar quarter (other than any dividend or distribution of the type
described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity Definitions) (a “Dividend”) the amount or value of which (as determined by the Calculation Agent), when aggregated with the amount or value (as
determined by the Calculation Agent) of any and all previous Dividends with ex-dividend dates occurring in the same calendar quarter, exceeds the Ordinary Dividend Amount.
		
	 Ordinary Dividend Amount:
	  	For each Transaction, as set forth in the related Supplemental Confirmation.
		
	 Method of Adjustment:
	  	Calculation Agent Adjustment.
		
	 Agreement Regarding Dividends:
	  	Notwithstanding any other provision of this Master Confirmation, the Definitions or the Agreement to the contrary, in calculating any adjustment pursuant to Article 11 of the Equity Definitions or any amount payable in respect of
any termination or cancellation of the Transaction pursuant to Article 12 of the Equity Definitions or Section 6 of the Agreement, the Calculation Agent shall not take into account changes to any dividends since the Trade Date. For the
avoidance of doubt, if an Early Termination Date occurs in respect of the Transaction, the amount payable pursuant to Section 6 of the Agreement in respect of such Early Termination Date shall be determined without regard to the difference
between actual dividends declared (including Extraordinary Dividends) and expected dividends as of the Trade Date.
		
	 Scheduled Ex-Dividend Dates:
	  	For each Transaction for each calendar quarter, as set forth in the related Supplemental Confirmation.
		
	Extraordinary Events:	  	
		
	 Consequences of Merger Events:
	  	
		
	 (a) Share-for-Share:
	  	Modified Calculation Agent Adjustment.
		
	 (b) Share-for-Other:
	  	Cancellation and Payment.
		
	 (c) Share-for-Combined:
	  	Component Adjustment.
		
	 Tender Offer:
	  	Applicable; provided that (i) Section 12.1(d) of the Equity Definitions shall be amended by replacing “10%” in the third line thereof with “25%”.
		
	 Consequences of Tender Offers:
	  	
		
	 (a) Share-for-Share:
	  	Modified Calculation Agent Adjustment.
		
	 (b) Share-for-Other:
	  	Modified Calculation Agent Adjustment.
		
	 (c) Share-for-Combined:
	  	Modified Calculation Agent Adjustment.

 Nationalization, 

  
 6 

			
	 Insolvency or Delisting:
	  	Cancellation and Payment; provided that 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, NYSE MKT, 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 be deemed to be the Exchange.
		
	Additional Disruption Events:	  	
		
	 Change in Law:
	  	Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public
announcement of, the formal or informal interpretation” and (ii) replacing the word “Shares” where it appears in clause (X) thereof with the words “Hedge Position”; provided further that
Section 12.9(a)(ii) of the Equity Definitions is hereby amended by replacing the parenthetical beginning after the word “regulation” in the second line thereof with the words “(including, for the avoidance of doubt and without
limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute)”.
		
	 Failure to Deliver:
	  	Applicable.
		
	 Insolvency Filing:
	  	Applicable.
		
	 Hedging Disruption:
	  	Not Applicable.
		
	 Increased Cost of Hedging:
	  	Not Applicable.
		
	 Loss of Stock Borrow:
	  	Applicable.
		
	         Maximum Stock Loan Rate:
	  	200 basis points per annum.
		
	 Increased Cost of Stock Borrow:
	  	Applicable.
		
	         Initial Stock Loan Rate:
	  	50 basis points per annum.
		
	 Hedging Party:
	  	Dealer or an affiliate of Dealer that is involved in the hedging of the Transaction for all applicable Additional Disruption Events; provided that when making any determination or calculation as the “Hedging Party,”
Dealer shall act in good faith and in a commercially reasonable manner and shall promptly provide Counterparty with a written explanation describing in reasonable detail any determination or calculation made by it (including any quotations, market
data or information from internal sources used in making such determinations, but without disclosing its proprietary models or other information that it determines in good faith is likely to be proprietary or subject to contractual, legal or
regulatory obligations to not disclose such information).

  
 7 

			
		
	 Determining Party:
	  	Dealer for all applicable Extraordinary Events and Additional Disruption Events; provided that when making any determination or calculation as the “Determining Party,” Dealer shall act in good faith and in a
commercially reasonable manner and shall promptly provide Counterparty with a written explanation describing in reasonable detail any determination or calculation made by it (including any quotations, market data or information from internal sources
used in making such determinations, but without disclosing its proprietary models or other information that it determines in good faith is likely to be proprietary or subject to contractual, legal or regulatory obligations to not disclose such
information).
		
	 Additional Termination Event(s):
	  	Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, any Transaction would be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity
Definitions, an Additional Termination Event (with such terminated Transaction(s) (or portions thereof) being the Affected Transaction(s) and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8
and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to such Affected Transaction(s).
		
		  	The declaration by the Issuer of:
		
		  	 (i) any Extraordinary Dividend, the ex-dividend date for which occurs or is
scheduled to occur during the Relevant Dividend Period, and/or

		
		  	 (ii) any Dividend that is not an Extraordinary Dividend, if the ex-dividend date
for such Dividend for any calendar quarter occurring (in whole or in part) during the Relevant Dividend Period will be prior to the Scheduled Ex-Dividend Date for such calendar quarter,

 
 shall in each case constitute an Additional Termination Event, with Counterparty as the
sole Affected Party and all Transactions hereunder as the Affected Transactions.

		
	 Relevant Dividend Period:
	  	The period from and including the Calculation Period Start Date to and including the Relevant Dividend Period End Date.
		
	 Relevant Dividend Period End Date:
	  	If the Number of Shares to be Delivered is negative, the last day of the Settlement Valuation Period; otherwise, the Termination Date.
		
	 Non-Reliance/Agreements and Acknowledgments Regarding Hedging
Activities/Additional Acknowledgments:
	  	Applicable.
		
	 Hedging Adjustments:
	  	For the avoidance of doubt, whenever Dealer, the Determining Party, the Hedging Party or the Calculation Agent is permitted or required to make an adjustment or a determination of any amount pursuant to the terms of this Master
Confirmation, the Equity Definitions or the Agreement to take into account the effect of any event, Dealer, the Determining Party, the Hedging Party or the Calculation Agent, as the case may be, shall make such adjustment or determination by
reference to the effect of such event on the Hedging Party, assuming that the Hedging Party maintains a commercially reasonable Hedge Position.

  
 8 

			
	No Transfer; Designation:	  	The rights and duties under this Master Confirmation may not be assigned or transferred by either party hereto without the prior written consent of the other party hereto; provided, however, that Dealer may designate
any of its Affiliates to purchase, sell, receive or deliver any Shares or other securities and otherwise to perform Dealer’s obligations in respect of any Transaction hereunder and any such designee may assume such obligations without the
written consent of Counterparty, but only if (i) Counterparty would not, at the time and as a result of such designation, be required to pay (including a payment in kind) at such time or on any later date an amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) of the Agreement (except in respect of interest under Section 9(h) of the Agreement) greater than the amount in respect of which Counterparty would have been required to pay to Dealer absent such
designation; (ii) Counterparty would not, at the time and as a result of such designation, receive a payment (including a payment in kind) which at such time or on any later date an amount had been withheld or deducted, on account of a Tax
under Section 2(d)(i) of the Agreement (except in respect of interest under Section 9(h) of the Agreement), in excess of that which Dealer would have been required to so withhold or deduct absent such designation, unless such designee
would be required to make additional payments pursuant to Section 2(d)(i)(4) of the Agreement in an amount equal to such excess; (iii) Counterparty would not, at the time and as a result of such designation, reasonably be expected to
otherwise suffer material adverse tax consequences therefrom at such time or on any later date; (iv) immediately upon giving effect to such designation, no Event of Default, no Potential Event of Default and no Termination Event will have
occurred as a result thereof; (v) Dealer shall have caused such designee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Counterparty to permit Counterparty to determine that the
results described in (i) above would not occur; (vi) such designee is a “dealer” within the meaning of Section 1.1001-4(b)(1) of the United States Treasury Regulations; and
(vii) Counterparty would not, at the time and as a result of such designation, reasonably be expected to be required to become subject to any registration or other qualification requirement under applicable law to which it would not otherwise
have been subject absent such designation. Dealer shall be discharged of its obligations to Counterparty solely to the extent of any such performance. For the avoidance of doubt, Dealer hereby acknowledges that notwithstanding any such designation
and assumption hereunder, to the extent any of Dealer’s obligations in respect of any Transaction are not timely completed by its designee in accordance with the Agreement, Dealer shall be obligated to continue to perform or to cause any other
of its designees designated in accordance with the first sentence of this paragraph to so perform in respect of such obligations. For the avoidance of doubt, except to the extent modified by the above in this paragraph with respect to any
Transaction governed by this Master Confirmation and any Supplemental Confirmation, the provisions of Section 7 of the Agreement shall remain in effect.

  
 9 

			
	 Tax Representations and Tax Form Deliverables:
	  	 For purposes of Section 3(f) of the Agreement, Counterparty represents that it is a “U.S. person” (as that term is used in
Sections 1.1441-1(c)(2) and 1.1441-4(a)(3)(ii) of the United States Treasury Regulations) for U.S. federal income tax purposes.

 
 For purposes of Section 3(f) of the Agreement, Dealer represents that it is a U.S.
limited liability company organized under the laws of the State of Delaware. For U.S. Federal income tax purposes, it is a Disregarded Entity of Mizuho Americas LLC, a limited liability company organized under the laws of the State of Delaware. For
U.S. Federal income tax purposes, Mizuho Americas LLC has elected to be classified as a corporation.
  

For purposes of Sections 4(a)(i) and (ii) of the Agreement, Dealer agrees to deliver to Counterparty, and Counterparty agrees to deliver to Dealer, a
correct, complete (in a manner reasonably satisfactory to the other party) and executed United States Internal Revenue Service Form W-9 (or successor thereto) (i) promptly upon execution of this Master
Confirmation, (ii) promptly upon reasonable demand by the other party and (iii) promptly upon learning that any such from previously provided by the other party has become obsolete or incorrect.

		
	 Dealer Payment Instructions:
	  	Bank: The Bank of New York Mellon
		  	SWIFT: IRVTUS3N
		  	Bank Routing: 021000018
		  	Acct Name: Mizuho Markets Americas LLC
		  	Acct No.: 8901498653
		
	 Dealer Delivery Instructions:
	  	To be provided by Dealer.
		
	 Dealer’s Contact Details for Purpose of Giving Notice:
	  	 Mizuho Securities USA LLC
 1271 Avenue of the
Americas
 New York, NY 10020
 Attention: Mariano Gaut, Managing
Director
 Telephone: (212) 205-7608

Email: Mariano.gaut@mizuhogroup.com
  

With a copy to:
  

Mizuho Markets Americas LLC
 c/o Mizuho Securities USA LLC

1271 Avenue of the Americas
 New York, NY 10020

Attention: US Equity Derivatives Notices
 Telephone: (646) 949-9531
 Email: Derivs-EQNoticesUS@mizuhogroup.com

		
	 Counterparty’s Contact Details for Purpose of Giving Notice:
	  	 Humana Inc.
 500 W. Main Street

Louisville, KY 40202
 Attention: Alan J. Bailey

Vice President and Treasurer
 Telephone: 502-580-1112
 Facsimile: 502-580-4089
 E-mail:
abailey@humana.com.

  
 10 

			
		  	 With a copy to:
  

Humana Inc.
 500 W. Main Street, 21st Floor

Louisville, KY 40202
 Attention: Joseph M. Ruschell

Associate Vice President, Assistant General Counsel & Corporate Secretary

Telephone: 502-580-1769

E-mail: jruschell1@humana.com

 Notwithstanding anything to the contrary contained herein (including, without limitation, Section 29 below), with respect
to any notice or other communication given hereunder that is given by e-mail, the parties hereby agree that the burden of proving receipt will be on the sender and will not be met by a copy of the sent message
generated by the sender’s computer or other transmission device unless that copy is accompanied by (x) a copy of a delivery receipt message from the recipient’s computer or other end point device or (y) a recording or other
reasonable evidence (including a contemporaneous written record) that a responsible employee of the recipient telephonically or otherwise orally confirmed the recipient’s receipt of the sender’s
e-mail. With respect to clause (x) above, the parties agree that if return receipt is requested, the receiving party shall promptly acknowledge receipt. 

Unless otherwise expressly provided in a Supplemental Confirmation with respect to the corresponding Transaction, no notice or other communication (other than
an e-mail notice or other communication from Dealer to Counterparty designating an Accelerated Termination Date) pursuant to Section 5, 6 or 13(c) of the Agreement given by telephone, facsimile
transmission, electronic messaging system or e-mail will be effective for any purpose under this Master Confirmation. For the avoidance of doubt, the mere inclusion of a telephone or facsimile number in this
Master Confirmation or in a Supplemental Confirmation will not constitute an agreement that any notice or other communication may be given telephonically or via facsimile transmission. 

2. Calculation Agent. Dealer; provided that if an Event of Default described in Section 5(a)(vii) of the Agreement with respect to which
Dealer is the Defaulting Party has occurred and is continuing, Counterparty may designate a nationally or internationally recognized third party dealer with expertise in
over-the-counter corporate equity derivatives (other than any such dealer that is party to any Other Specified Repurchase Agreement or any affiliate of such dealer) to
act as substitute Calculation Agent for so long as such Event of Default is continuing. The costs of such third party dealer shall be borne equally by the parties. Following any adjustment, determination or calculation by the Calculation Agent or
the Determining Party hereunder, upon a request by Counterparty, the Calculation Agent or the Determining Party, as the case may be, will provide to Counterparty within three (3) Exchange Business Days following receipt of such request, a
report (in a commonly used file format for the storage and manipulation of financial data but without disclosing any proprietary models of the Calculation Agent or other information that it determines in good faith is or is likely to be proprietary
or subject to contractual, legal or regulatory obligations not to disclose such information) displaying in reasonable detail the basis for such determination, adjustment or calculation, as the case may be. Whenever the Calculation Agent is required
or permitted to exercise discretion in any way, it will do so in good faith and in a commercially reasonable manner. Notwithstanding anything to the contrary in the Equity Definitions, this Master Confirmation or any Supplemental Confirmation, the
Calculation Agent and the Determining Party shall not change the dates identified as Calculation Dates in the relevant Supplemental Confirmation for any Transaction. 

3. Additional Mutual Representations and Covenants of Each Party. In addition to the representations and covenants in the Agreement, each party, as
applicable, represents and covenants to the other party that: 
 (a) Eligible Contract Participant. It is an “eligible contract
participant”, as defined in the U.S. Commodity Exchange Act (as amended), and is entering into each Transaction hereunder as principal (and not as agent or in any other capacity, fiduciary or otherwise) and not for the benefit of any third
party. 
 (b) Accredited Investor. Each party acknowledges that the offer and sale of each Transaction to it is intended to be exempt
from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(a)(2) thereof. Accordingly, each party represents to the other that (i) it has the financial ability to bear the
economic risk of its investment in each Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined under Regulation D under the Securities Act and (iii) the
disposition of each Transaction is restricted under this Master Confirmation, the Securities Act and state securities laws. 

  
 11 

 (c) Material Nonpublic Information. Dealer hereby represents and covenants to
Counterparty that it has implemented policies and procedures, taking into consideration the nature of its business, reasonably designed to prevent individuals making investment decisions related to any Transaction from having access to material
nonpublic information regarding Issuer that may be in possession of other individuals at Dealer. 
 (d) No Recourse to Third Parties.
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 any Transaction. 

(e) Rule 10b-18. With respect to purchases of Shares by Dealer in connection with any
Transaction during the Calculation Period for such Transaction (other than any purchases made by Dealer in connection with dynamic hedge adjustments of Dealer’s exposure to any Transaction as a result of any equity optionality contained in such
Transaction, including, for the avoidance of doubt, timing optionality), Dealer will use good faith, commercially reasonable efforts to effect such purchases (i) only on the Calculation Dates and (ii) in a manner so that, if such purchases
were made by Counterparty, they would meet the requirements of Rule 10b-18(b)(2), (3) and (4), and effect calculations in respect thereof, taking into account any applicable Securities and Exchange Commission no-action letters as appropriate and subject to any delays between the execution and reporting of a trade of the Shares on the Exchange and other circumstances beyond Dealer’s control. Notwithstanding the
foregoing, Dealer shall not be responsible for any failure to comply with Rule 10b-18(b)(3) that would not have resulted if (i) a bid that was actually entered or deemed to be entered by or on behalf of
Counterparty (other than as provided in the Supplemental Confirmation for such Transaction) had instead been an “independent bid” for purposes of Rule 10b-18(b)(3), or (ii) a transaction that
was actually executed or deemed to be executed by or on behalf of Counterparty (other than as provided in the Supplemental Confirmation for such Transaction) had instead been an “independent transaction” within the meaning of Rule 10b-18(b)(3). 
 4. Additional Representations and Covenants of Counterparty. In addition to the representations and
covenants in the Agreement, Counterparty represents and covenants to Dealer that: 
 (a) As of the Trade Date of a Transaction, Counterparty
will not be engaged in an “issuer tender offer” as such term is defined in Rule 13e-4 under the Exchange Act, nor is it aware of any third party tender offer with respect to the Shares within the
meaning of Rule 13e-1 under the Exchange Act. 
 (b) It is not entering into such Transaction
(i) on the basis of, and is not aware of, any material nonpublic information with respect to the Shares, (ii) in anticipation of, in connection with, or to facilitate, a distribution of its securities, a self tender offer or a third-party
tender offer or (iii) 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). 
 (c) Each Transaction is being entered into pursuant to a publicly disclosed Share buy-back program and its Board of Directors has approved the use of derivatives to effect the Share buy-back program. 

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

(e) As of (i) the date hereof and (ii) the Trade Date for each Transaction hereunder, Counterparty is in compliance in all material
respects with its reporting obligations under the Exchange Act and its most recent Annual Report on Form 10-K, together with all reports subsequently filed by it pursuant to the Exchange Act, taken together
and as amended and supplemented to the date of this representation, do not, as of their respective filing dates, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were made, not misleading. 

  
 12 

 (f) Counterparty shall report each Transaction as required under the Exchange Act and the
rules and regulations thereunder. 
 (g) The Shares are not, and Counterparty will not cause the Shares to be, subject to a “restricted
period” (as defined in Regulation M promulgated under the Exchange Act) at any time during any Regulation M Period (as defined below) for any Transaction unless Counterparty has provided written notice to Dealer of such restricted period not
later than the Scheduled Trading Day immediately preceding the first day of such “restricted period”; Counterparty acknowledges that any such notice may cause a Disrupted Day to occur pursuant to Section 5 below; accordingly,
Counterparty acknowledges that its delivery of such notice must comply with the standards set forth in Section 6 below; “Regulation M Period” means, for any Transaction, (i) the Relevant Period (as defined below) and
(ii) the Settlement Valuation Period, if any, for such Transaction. “Relevant Period” means, for any Transaction, the period commencing on the Calculation Period Start Date for such Transaction and ending on the earlier of
(i) the Scheduled Termination Date and (ii) the Additional Relevant Day (as specified in the related Supplemental Confirmation) for such Transaction, or such earlier day as elected by Dealer and communicated to Counterparty on such day
(or, if later, the First Acceleration Date without regard to any acceleration thereof pursuant to “Special Provisions for Acquisition Transaction Announcements” below). 

(h) As of the Trade Date and the Prepayment Date for each Transaction, Counterparty is not “insolvent” (as such term is defined under
Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code), as amended (the “Bankruptcy Code”)) and Counterparty would be able to purchase a number of Shares with a value equal to the Prepayment Amount in
compliance with the laws of the jurisdiction of Counterparty’s incorporation. 
 (i) Counterparty is not and, after giving effect to any
Transaction, will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. 

(j) Counterparty has not and will not enter into agreements with respect to the Shares similar to the Transactions described herein where the
relevant calculation or valuation dates in any initial hedge period, calculation period, relevant period or settlement valuation period (each however defined) in any such other transaction will coincide at any time (including as a result of
extensions in such initial hedge period, calculation period, relevant period or settlement valuation period as provided in the relevant agreements) with the Calculation Dates in any Relevant Period or, if applicable, any Settlement Valuation Period
under this Master Confirmation, except for the avoidance of doubt pursuant to an Other Specified Repurchase Agreement. In the event that any relevant calculation or valuation dates in any initial hedge period, relevant period, calculation period or
settlement valuation period in any other similar transaction with respect to the Shares coincides with any Calculation Dates in any Relevant Period or, if applicable, Settlement Valuation Period under this Master Confirmation as a result of any
postponement of the Scheduled Termination Date or extension of the Settlement Valuation Period pursuant to “Valuation Disruption” above, Counterparty shall promptly amend such transaction to avoid any such overlap. For the avoidance of
doubt, nothing in this Section 4(j) shall prohibit or apply to the Permitted Purchases (as defined below). 
 (k) Counterparty
understands that no obligations of Dealer to it hereunder will be entitled to the benefit of deposit insurance and that such obligations will not be guaranteed by any affiliate of Dealer or any governmental agency. 

5. Regulatory Disruption. In the event that Dealer concludes, in its good faith, commercially reasonable discretion based on the advice of counsel, that
it is appropriate with respect to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer
(provided that any such requirements, policies or procedures are generally applicable to transactions of this nature and related to compliance with applicable law for Dealer and applied hereto in a
non-discriminatory manner and in a consistent manner to similarly affected transactions generally)), for it to refrain from or decrease any market activity on any Scheduled Trading Day or Days in order to
establish, maintain or unwind commercially reasonable Hedge Positions during the Calculation Period or, if applicable, the Settlement Valuation Period, Dealer may by written notice to Counterparty elect to deem that a Market Disruption Event has
occurred and will be continuing on such Scheduled Trading Day or Days; provided that if such deemed Market Disruption Event is deemed to have occurred solely in response to such policies or procedures, such Scheduled Trading Day or Days will
each be a Disrupted Day in full. Dealer shall promptly notify Counterparty upon exercising its rights pursuant to this provision and shall subsequently notify Counterparty in writing on the Scheduled Trading Day Dealer reasonably believes in good
faith and upon the advice of counsel that it may resume its market activity. 

  
 13 

 6. 10b5-1 Plan. Counterparty represents and covenants to
Dealer that: 
 (a) Counterparty is entering into this Master Confirmation and each Transaction hereunder in good faith and not as part of a
plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) or any other antifraud or anti-manipulation provisions of
the federal or applicable state securities laws and that it has not entered into or altered and will not enter into or alter any corresponding or hedging transaction or position with respect to the Shares. For the avoidance of doubt, neither the
entry into any Other Specified Repurchase Agreement nor any Permitted OMR Transactions shall fall within the ambit of the previous sentence. Counterparty acknowledges that it is the intent of the parties that each Transaction entered into under this
Master Confirmation comply with the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 and each Transaction entered into under this Master Confirmation shall be interpreted to comply with the
requirements of Rule 10b5-1(c). “Other Specified Repurchase Agreement” means, for any Transaction, any similar and substantially contemporaneous transaction or transactions entered into
between Counterparty and one or more dealers other than Dealer, each of which other transactions shall have terms substantially identical to the terms of such Transaction, except for pricing terms and calculation dates that do not coincide with any
Calculation Dates hereunder. 
 (b) Counterparty will not seek to control or influence Dealer’s decision to make any “purchases or
sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under any Transaction, including, without limitation, Dealer’s decision to enter into any hedging transactions. Counterparty represents that
it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Master Confirmation and each Supplemental Confirmation under Rule 10b5-1. 

(c) Counterparty acknowledges and agrees that any amendment, modification, waiver or termination of this Master Confirmation or the relevant
Supplemental Confirmation must be effected in accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c). Without limiting the generality of the
foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment, modification
or waiver shall be made at any time at which Counterparty or any officer, director, manager or similar person of Counterparty is aware of any material non-public information regarding Counterparty or the
Shares. 
 7. Counterparty Purchases. Counterparty (or any of its “affiliated purchasers” as defined in Rule
10b-18 under the Exchange Act (“Rule 10b-18”)) shall not, without the prior written consent of Dealer, directly or indirectly purchase any Shares
(including by means of a derivative instrument), listed contracts on the Shares or securities that are convertible into, or exchangeable or exercisable for Shares (including, without limitation, any “Rule
10b-18 purchases” of blocks (as defined in Rule 10b-18)) on any Calculation Date during any Relevant Period or, if applicable, Settlement Valuation Period, except
through Dealer or pursuant to the Permitted OMR Transactions. 
 Notwithstanding the immediately preceding paragraph or anything herein to
the contrary, Counterparty may purchase Shares (i) on any Calculation Date pursuant to any Rule 10b5-1 or Rule 10b-18 repurchase plan entered into with Dealer or an
Affiliate of Dealer (each, a “Dealer Permitted OMR Transaction”), so long as, on any Calculation Date, purchases under all Dealer Permitted OMR Transactions do not in the aggregate exceed the Designated OMR Threshold specified in
the Supplemental Confirmation for such Transaction on such Calculation Date, and (ii) on any Exchange Business Day other than a Calculation Date pursuant to any Rule 10b5-1 or Rule 10b-18 repurchase plan entered into with a counterparty to any Other Specified Repurchase Agreement (each, a “Counterparty Permitted OMR Transaction” and, together with any Dealer Permitted OMR
Transaction, a “Permitted OMR Transaction”), so long as, on such Exchange Business Day, purchases under all Counterparty Permitted OMR Transactions do not in the aggregate exceed the Designated OMR Threshold specified in the
Supplemental Confirmation for such Transaction on such Exchange Business Day. In addition, the preceding paragraph shall not limit (w) Counterparty’s purchases of Shares that do not constitute “Rule
10b-18 purchases” as defined in Rule 10b-18(a)(13), (x) Counterparty’s purchases of Shares pursuant to employee incentive plans in connection with related
equity transactions, or the granting of Shares or options to “affiliated purchasers” (as defined in Rule 10b-18) or the ability of such affiliated purchasers to acquire such Shares or options, in
connection with Counterparty’s compensation policies for directors, officers and employees, (y) withholding of Shares to cover amounts payable (including tax liabilities and/or payment of exercise price) in respect of the exercise of
employee stock options or the vesting of restricted stock or stock units and (z) privately negotiated (off-market) transactions by Counterparty, not involving any derivative instrument, to purchase Shares
from existing holders of Shares in transactions that do not result in, or relate to, purchases of Shares in the public market by such existing holders in connection with such transactions. Purchases of Shares that are permitted by this paragraph are
referred to herein as the “Permitted Purchases”. 

  
 14 

 8. Special Provisions for Merger Transactions. Notwithstanding anything to the contrary herein or in
the Equity Definitions: 
 (a) Counterparty agrees that it: 

(i) will not during the period commencing on the Trade Date through the end of the Relevant Period or, if applicable, the
Settlement Valuation Period for any Transaction make, or, to the extent within its control, permit to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction (as defined below) or potential
Merger Transaction (a “Public Announcement”) unless such Public Announcement is made prior to the opening or after the close of the regular trading session on the Exchange for the Shares, except to the extent required by any law
applicable to Counterparty; 
 (ii) shall promptly (but in any event prior to the next opening of the regular trading session
on the Exchange) notify Dealer following any such Public Announcement that such Public Announcement has been made; and 

(iii) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide Dealer
with written notice specifying (i) Counterparty’s average daily “Rule 10b-18 purchases” (as defined in Rule 10b-18) during the three full calendar
months immediately preceding the date of such Public Announcement that were not effected through Dealer or its affiliates and (ii) the number of Shares purchased pursuant to the proviso in Rule
10b-18(b)(4) under the Exchange Act for the three full calendar months preceding the date of such Public Announcement. Such written notice shall be deemed to be a certification by Counterparty to Dealer that
such information is true and correct. In addition, Counterparty shall promptly notify Dealer of the earlier to occur of the completion of the relevant Merger Transaction and the completion of the vote by target shareholders. 

(b) Counterparty acknowledges that a Public Announcement may cause the terms of any Transaction to be adjusted or such Transaction to be
terminated; accordingly, Counterparty acknowledges that in making any Public Announcement, it must comply with the standards set forth in Section 6 above. 

(c) Upon the occurrence of any Public Announcement (whether made by Counterparty or a third party), Dealer in good faith and in its
commercially reasonable discretion may (i) make commercially reasonable adjustments to the terms of any Transaction to account for the economic effect on the Transaction of such Merger Transaction, including, without limitation, the Scheduled
Termination Date or the Forward Price Adjustment Amount, and/or suspend the Calculation Period and/or any Settlement Valuation Period, but excluding changing the designation of any Calculation Date (such adjustments to be limited to account for
changes in the price of the Shares and volatility, stock loan rate and liquidity relevant to the Shares or to such Transaction), or (ii) if Dealer determines that no adjustment that it could make under clause (i) would produce a
commercially reasonable result, treat the occurrence of such Public Announcement as an Additional Termination Event with Counterparty as the sole Affected Party and the Transactions hereunder as the Affected Transactions and with the amount under
Section 6(e) of the Agreement determined taking into account the fact that the Calculation Period or Settlement Valuation Period, as the case may be, had fewer Scheduled Trading Days than originally anticipated. 

“Merger Transaction” means any merger, acquisition or similar transaction involving a recapitalization as referred to in Rule 10b-18(a)(13)(iv) under the Exchange Act. 

  
 15 

 9. Special Provisions for Acquisition Transaction Announcements. (a) If an
Acquisition Transaction Announcement (as defined below) occurs on or prior to the Settlement Date for any Transaction, then the Calculation Agent shall make such adjustments to the exercise, settlement, payment or other terms of such Transaction as
the Calculation Agent determines appropriate, at such time or at multiple times as the Calculation Agent deems appropriate (without duplication), to account for the economic effect on such Transaction of such Acquisition Transaction Announcement
(which adjustments shall solely account for changes in volatility, expected dividends, stock loan rate, value of any commercially reasonable Hedge Positions in connection with the Transaction and liquidity relevant to the Shares or to such
Transaction). For the avoidance of doubt, announcements as used in the definition of “Acquisition Transaction Announcement” refer only to any public announcement by Counterparty or any of its subsidiaries. 

(b) “Acquisition Transaction Announcement” means (i) the announcement of an Acquisition Transaction by Counterparty or
any of its subsidiaries that is reasonably likely to be completed (provided that for such purposes, in determining whether such Acquisition Transaction is reasonably likely to be completed, the Calculation Agent shall take into account the effect of
such announcement on the market price of the Shares or options on the Shares and, if such effect is material, shall deem such Acquisition Transaction to be reasonably likely to be completed), (ii) an announcement that Counterparty or any of its
subsidiaries has entered into an agreement or a letter of intent designed to result in an Acquisition Transaction, by Counterparty or any of its subsidiaries or any other party that is a party to such agreement or letter of intent, (iii) the
announcement by Counterparty of the intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that include, an Acquisition Transaction, (iv) any other announcement by Counterparty or any of its
subsidiaries that in the judgment of the Calculation Agent is reasonably likely to result in an Acquisition Transaction (provided that for such purposes the Calculation Agent may take into account the effect of such announcement on the market
price of the Shares or options on the Shares) or (v) any announcement of any material change or amendment to any previous Acquisition Transaction Announcement (including any announcement of the abandonment of any such previously announced
Acquisition Transaction, agreement, letter of intent, or intention). 
 (c) “Acquisition Transaction” means (i) any
Merger Event (for purposes of this definition the definition of Merger Event shall be read with the references therein to “100%” being replaced by “35%” and to “50%” by “65%” and without reference to the
clause beginning immediately following the definition of Reverse Merger therein to the end of such definition), Tender Offer or Merger Transaction or any other transaction involving the merger of Counterparty with or into any third party,
(ii) the sale or transfer of all or substantially all of the assets of Counterparty, (iii) a recapitalization, reclassification, binding share exchange or other similar transaction with respect to Counterparty, and (iv) any
acquisition, lease, exchange, transfer, disposition (including by way of spin-off or distribution) of assets (including any capital stock or other ownership interests in subsidiaries) or other similar event by
Counterparty or any of its subsidiaries where the aggregate consideration transferable or receivable by or to Counterparty or its subsidiaries exceeds 35% of the market capitalization of Counterparty. 

10. Acknowledgments. 
 (a) The parties
hereto intend for: 
 (i) each Transaction to be a “securities contract” as defined in Section 741(7) of the
Bankruptcy Code and 12 U.S.C. Section 1821(e)(8)(D)(ii), a “swap agreement” as defined in Section 101(53B) of the Bankruptcy Code and 12 U.S.C. Section 1821(e)(8)(D)(vi) and a “forward contract” as defined in
Section 101(25) of the Bankruptcy Code and 12 U.S.C. Section 1821(e)(8)(D)(iv), and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 362(b)(27), 362(o), 546(e), 546(g),
546(j), 555, 556, 560 and 561 of the Bankruptcy Code; 
 (ii) the Agreement to be a “master netting agreement” as
defined in Section 101(38A) of the Bankruptcy Code and a “netting contract” as such term is used in 12 U.S.C. § 1821(e)(13)(C)(ii); 

(iii) a party’s right to liquidate, terminate or accelerate any Transaction, net out or offset termination values or
payment amounts, and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of
any Transaction to constitute a “contractual right” (as defined in the Bankruptcy Code); 

  
 16 

 (iv) all payments for, under or in connection with each Transaction, all
payments for the Shares (including, for the avoidance of doubt, payment of the Prepayment Amount) and the transfer of such Shares to constitute “settlement payments” and “transfers” (as defined in the Bankruptcy Code); 

(v) each of the parties hereto to be a “financial participant” within the meaning of Section 101(22A) of the
Bankruptcy Code; and 
 (vi) the Agreement (including this Master Confirmation and each Transaction hereunder) constitutes a
“qualified financial contract” as such term is defined in Section 11(e)(8)(D) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)) and (vii) a Non-defaulting Party’s rights
under Sections 5 and 6 of the Agreement constitute rights of the kind referred to in 12 U.S.C. Section 1821(e)(8)(A) and 12 U.S.C. Section 5390(c)(8)(A). 

(b) Counterparty acknowledges that: 

(i) during the term of any Transaction, Dealer and its affiliates may buy or sell Shares or other securities or buy or sell
options or futures contracts or enter into swaps or other derivative securities in order to establish, adjust or unwind its Hedge Position with respect to such Transaction; 

(ii) Dealer and its affiliates may also be active in the market for the Shares and derivatives linked to the Shares other than
in connection with hedging activities in relation to any Transaction, including acting as agent or as principal and for its own account or on behalf of customers; 

(iii) Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in
Counterparty’s securities shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Forward Price and the VWAP Price; 

(iv) any market activities of Dealer and its affiliates with respect to the Shares may affect the market price and volatility
of the Shares, as well as the Forward Price and VWAP Price, each in a manner that may be adverse to Counterparty; and 
 (v)
each Transaction is a derivatives transaction in which it has granted Dealer an option; Dealer may purchase shares for its own account at an average price that may be greater than, or less than, the price paid by Counterparty under the terms of the
related Transaction. 
 (c) Counterparty: 

(i) is an “institutional account” as defined in FINRA Rule 4512(c); 

(ii) is capable of evaluating investment risks independently, both in general and with regard to all transactions and
investment strategies involving a security or securities, and will exercise independent judgment in evaluating the recommendations of Dealer or its associated persons, unless it has otherwise notified Dealer in writing; and 

(iii) will notify Dealer if any of the statements contained in clause (i) or (ii) of this Section 10(c) ceases to be
true. 
 11. Credit Support Documents. The parties hereto acknowledge that no Transaction hereunder is secured by any collateral that would otherwise
secure the obligations of Counterparty herein or pursuant to the Agreement. 
 12. No Set-off. Obligations
under the Agreement shall not be subject to any Set-off by either party against any obligations of the other party or of that other party’s affiliates.
“Set-off” means set-off, offset, combination of accounts, right of retention or withholding or similar right or requirement to which the relevant payer
of an amount is entitled or subject (whether arising under the Agreement, another contract, applicable law or otherwise) that is exercised by, or imposed on, such payer. 

  
 17 

 13. Delivery of Shares. Notwithstanding anything to the contrary herein, Dealer may, by prior notice
to Counterparty, satisfy its obligation to deliver any Shares or other securities on any date due (an “Original Delivery Date”) by making separate deliveries of Shares or such securities, as the case may be, at more than one time on
or prior to such Original Delivery Date, so long as the aggregate number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered on such Original Delivery Date. 

14. Early Termination. In the event that (a) an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs
or is designated with respect to any Transaction or (b) any Transaction is cancelled or terminated upon the occurrence of an Extraordinary Event (except as a result of a Nationalization, an Insolvency or a Merger Event in which the
consideration or proceeds to be paid to holders of Shares consists solely of cash), if either party would owe any amount to the other party pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Amount”),
then, in lieu of any payment of such Payment Amount, Counterparty may, no later than the Early Termination Date or the date on which such Transaction is terminated, elect to deliver or for Dealer to deliver, as the case may be, to the other party a
number of Shares (or, in the case of a Merger Event, a number of units, each comprising the number or amount of the securities or property that a hypothetical holder of one Share would receive in such Merger Event (each such unit, an
“Alternative Delivery Unit” and, the securities or property comprising such unit, “Alternative Delivery Property”)) with a value equal to the Payment Amount, as determined by the Calculation Agent (and the parties
agree that, in making such determination of value, the Calculation Agent may take into account a number of factors, including the market price of the Shares or Alternative Delivery Property on the date of early termination and, if such delivery is
made by Dealer, the prices at which Dealer purchases Shares or Alternative Delivery Property on any Calculation Date in good faith and in a commercially reasonable manner to fulfill its delivery obligations under this Section 14);
provided that in determining the composition of any Alternative Delivery Unit, if the relevant Merger Event 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; provided further that Counterparty may make such election only if Counterparty represents to Dealer in writing on the date it notifies Dealer of such election that, as of such date, Counterparty is not aware of
any material non-public information concerning the Shares and is making such election in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws. If such delivery is
made by Counterparty, paragraphs 2 through 7 of Annex A hereto shall apply as if such delivery were a settlement of the Transaction to which Net Share Settlement applied, the Cash Settlement Payment Date were the Early Termination Date and
the Forward Cash Settlement Amount were zero (0) minus the Payment Amount owed by Counterparty. 
 15. Calculations and Payment Date upon Early
Termination. The parties acknowledge and agree that in calculating a Close-out Amount pursuant to Section 6 of the Agreement Dealer may (but need not) determine losses and gains without reference to
actual losses and gains incurred or realized but based on expected losses and gains assuming a commercially reasonable (including without limitation with regard to reasonable legal and regulatory guidelines and taking into account the existence and
size, at such time, of any Other Specified Repurchase Agreements) risk bid were used to determine loss or gain to avoid awaiting the delay associated with closing out any commercially reasonable hedge or related trading position in a commercially
reasonable manner prior to or sooner following the designation of an Early Termination Date. Notwithstanding anything to the contrary in Section 6(d)(ii) of the Agreement, all amounts calculated as being due in respect of an Early Termination
Date in respect of a Transaction under Section 6(e) of the Agreement will be payable on the day that notice of the amount payable is effective; provided that if Counterparty elects to receive Shares or Alternative Delivery Property in
accordance with Section 14 above, such Shares or Alternative Delivery Property shall be delivered on a date selected by Dealer as promptly as practicable. 

16. Maximum Share Delivery. Notwithstanding anything to the contrary in this Master Confirmation, in no event shall Dealer be required to deliver any
Shares in respect of any Transaction in excess of the Maximum Number of Shares set forth in the Supplemental Confirmation for such Transaction. 
  

  
 18 

 17. Automatic Termination Provisions. Notwithstanding anything to the contrary in Section 6 of
the Agreement, if a Termination Price is specified in any Supplemental Confirmation, then an Additional Termination Event with Counterparty as the sole Affected Party and the Transaction to which such Supplemental Confirmation relates as the
Affected Transaction will automatically occur without any notice or action by Dealer or Counterparty if, on three consecutive Exchange Business Days, the price of the Shares on the Exchange at any time during the regular trading session (including
any extensions thereof) of the Exchange (without regard to pre-open or after hours trading outside of such regular trading session for each such Exchange Business Day) falls below such Termination Price, and
the Exchange Business Day following such third consecutive Exchange Business Day will be the “Early Termination Date” for purposes of the Agreement. 

18. Delivery of Cash. For the avoidance of doubt, nothing in this Master Confirmation shall be interpreted as requiring Counterparty to deliver cash in
respect of the settlement of the Transactions contemplated by this Master Confirmation following payment by Counterparty of the relevant Prepayment Amount, except in circumstances where the required cash settlement thereof is permitted for
classification of the contract as equity by ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, as in effect on the relevant Trade Date (including, without limitation, where
Counterparty so elects to deliver cash or fails timely to elect to deliver Shares or Alternative Delivery Property in respect of the settlement of such Transactions). 

19. Claim in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transactions
that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy. 
 20. Tax. The parties agree that
“Indemnifiable Tax” as defined in Section 14 of the Agreement shall not include (i) any tax imposed or collected pursuant to Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended (the
“Code”), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to
any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (a “FATCA Withholding Tax”) or (ii) any tax imposed on amounts treated as dividends from sources within the United
States under Section 871(m) of the Code (or the United States Treasury Regulations or other guidance issued thereunder). For the avoidance of doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by
applicable law for the purposes of Section 2(d) of the Agreement. 
 21. U.S. QFC Provisions. The terms of the ISDA 2018 U.S. Resolution Stay
Protocol, as published by ISDA on July 31, 2018 (the “Protocol”), are incorporated into and form a part of the Agreement, and for such purposes the Agreement shall be deemed a Protocol Covered Agreement, Dealer shall be deemed
a Regulated Entity and Counterparty shall be deemed an Adhering Party. Terms used in this paragraph without definition have the meanings assigned to them under the Protocol. 

22. Governing Law. The Agreement, this Master Confirmation, each Supplemental Confirmation and all matters arising in connection with the Agreement,
this Master Confirmation and each Supplemental Confirmation shall be governed by, and construed and enforced in accordance with, the laws of the State of New York (without reference to its choice of laws doctrine other than Title 14 of Article 5 of
the New York General Obligations Law (the “General Obligations Law”)). 
 23. Offices. 

(a) The Office of Dealer for each Transaction is: New York. 

(b) The Office of Counterparty for each Transaction is: Not Applicable. Counterparty is not a Multibranch Party. 

24. General Obligations Law of New York. With respect to each Transaction, (i) this Master Confirmation, together with the related Supplemental
Confirmation, is a “qualified financial contract”, as such term is defined in Section 5-701(b)(2) of the General Obligations Law; and (ii) this Master Confirmation, together with the
related Supplemental Confirmation, constitutes a prior “written contract” as set forth in Section 5-701(b)(1)(b) of the General Obligations Law, and each party hereto intends and agrees to be
bound by this Master Confirmation and the related Supplemental Confirmation. 

  
 19 

 25. Submission to Jurisdiction. Section 13(b) of the Agreement is deleted in its entirety and
replaced by the following: 
 “Each party hereby irrevocably and unconditionally submits for itself and its property in any suit, legal
action or proceeding relating to this Agreement and/or any Transaction, or for recognition and enforcement of any judgment in respect thereof (each, “Proceedings”), to the exclusive jurisdiction of the Supreme Court of the State of
New York, sitting in New York County, the courts of the United States of America for the Southern District of New York and appellate courts from any thereof. Nothing in the Master Confirmation, any Supplemental Confirmation or this Agreement
precludes either party from bringing Proceedings in any other jurisdiction if (A) the courts of the State of New York or the United States of America for the Southern District of New York lack jurisdiction over the parties or the subject matter
of the Proceedings or declines to accept the Proceedings on the grounds of lacking such jurisdiction; (B) the Proceedings are commenced by a party for the purpose of enforcing against the other party’s property, assets or estate any
decision or judgment rendered by any court in which Proceedings may be brought as provided hereunder; (C) the Proceedings are commenced to appeal any such court’s decision or judgment to any higher court with competent appellate
jurisdiction over that court’s decisions or judgments if that higher court is located outside the State of New York or Borough of Manhattan, such as a federal court of appeals or the U.S. Supreme Court; or (D) any suit, action or
proceeding has been commenced in another jurisdiction by or against the other party or against its property, assets or estate and, in order to exercise or protect its rights, interests or remedies under this Agreement, the Master Confirmation or any
Supplemental Confirmation, the party (1) joins, files a claim, or takes any other action, in any such suit, action or proceeding, or (2) otherwise commences any Proceeding in that other jurisdiction as the result of that other suit, action
or proceeding having commenced in that other jurisdiction.” 
 26. Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING RELATING TO THE AGREEMENT, THIS MASTER CONFIRMATION, EACH SUPPLEMENTAL CONFIRMATION, THE TRANSACTIONS HEREUNDER AND ALL MATTERS ARISING IN
CONNECTION HEREWITH AND THEREWITH. 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 THE TRANSACTIONS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS PROVIDED HEREIN.

 27. Counterparts. This Master Confirmation may be executed and delivered in any number of counterparts (including by
e-mail transmission of an attached counterpart in pdf (portable document format)), all of which shall constitute one and the same instrument, and any party hereto may execute this Master Confirmation by
signing and delivering one or more counterparts. 
 28. CARES Act. Counterparty represents that it and any of its wholly-owned subsidiaries has not
applied, and throughout the term of any Transaction shall not apply, for a loan, loan guarantee, direct loan (as that term is defined in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”)) or other investment,
or to receive any financial assistance or relief (howsoever defined) under any program or facility that (a) is established under applicable law (whether in existence as of the Trade Date for such Transaction or subsequently enacted, adopted or
amended), including without limitation the CARES Act and the Federal Reserve Act, as amended, and (b) requires under applicable law (or any regulation, guidance, interpretation or other pronouncement thereunder), as a condition of such loan,
loan guarantee, direct loan (as that term is defined in the CARES Act), investment, financial assistance or relief, that Counterparty agree, attest, certify or warrant that it has not, as of the date specified in such condition, repurchased, or will
not repurchase, any equity security of Counterparty, and that it has not, as of the date specified in such condition, made a capital distribution or will not make a capital distribution. Counterparty further represents that the Prepayment Amount for
any Transaction is not being paid, in whole or in part, directly or indirectly, with funds received under or pursuant to any program or facility, including the U.S. Small Business Administration’s “Paycheck Protection Program”, that
(a) is established under applicable law (whether in existence as of the Trade Date for such Transaction or subsequently enacted, adopted or amended), including without limitation the CARES Act and the Federal Reserve Act, as amended, and
(b) requires under such applicable law (or any regulation, guidance, interpretation or other pronouncement of a governmental authority with jurisdiction for such program or facility) that such funds be used for specified or enumerated purposes
that do not include the purchase of Shares pursuant to any Transaction (either by specific reference thereto or by general reference to transactions with the attributes thereof in all relevant respects).

  
 20 

 29. Electronic Delivery. This Master Confirmation and any Supplemental Confirmation hereunder may be
executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Master Confirmation and any Supplemental Confirmation hereunder by signing and delivering one or more
counterparts. Counterparts may be delivered via e-mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and
Records Act or other applicable law, e.g., DocuSign and AdobeSign (any such signature, an “Electronic Signature”)) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered
and be valid and effective for all purposes. The words “execution,” “signed,” “signature” and words of like import in the Agreement, this Master Confirmation, any Supplemental Confirmation hereunder or in any other
certificate, agreement or document related thereto shall include any Electronic Signature, except to the extent electronic notices are expressly prohibited thereunder. Notwithstanding anything to the contrary in the Agreement, either party may
deliver to the other party a notice relating to any Event of Default or Termination Event by e-mail. 
 30.
Additional Provisions. 
 (i) MSUSA received or will receive other remuneration from MMA in relation to this
Confirmation and each Transaction hereunder. The amount and source of such other remuneration will be furnished upon written request. 

(ii) Counterparty understands and agrees that MSUSA will act as agent for both parties with respect to each Transaction and has
no obligation, by way of issuance, endorsement, guarantee or otherwise with respect to the performance of either party under any Transaction. MSUSA shall have no responsibility or personal liability to Counterparty arising from any failure by MMA to
pay or perform any obligations hereunder or to monitor or enforce compliance by MMA or Counterparty with any obligation hereunder, including, without limitation, any obligations to maintain collateral. MSUSA is so acting solely in its capacity as
agent for Counterparty and MMA pursuant to instructions from Counterparty and MMA. Each of MMA and Counterparty agrees to proceed solely against the other to collect or recover any securities or monies owing to it in connection with or as a result
of a Transaction. In no event, however, shall Counterparty be responsible hereunder for any fees or expenses of MSUSA, nor shall it have any liability to MSUSA. 

(iii) Notwithstanding any provisions of the Agreement, all communications relating to each Transaction or the Agreement shall
be transmitted exclusively through MSUSA at the address provided in the section heading Dealer’s Contact Details for Purpose of Giving Notice above. 

(iv) MMA hereby provides notice that the Securities Investor Protection Act of 1970 does not protect Counterparty and MMA is
not a member of the Securities Investor Protection Corporation. 

  
 21 

 Counterparty hereby agrees (a) to check this Master Confirmation carefully and immediately upon receipt
so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Counterparty with respect
to any particular Transaction to which this Master Confirmation relates, by manually signing this Master Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately
returning an executed copy to Dealer. 
  

			
	Yours faithfully,
	
	MIZUHO MARKETS AMERICAS LLC
		
	By:	 	 /s/ Adam Hopkins

	Name: Adam Hopkins
	Title: Authorized Signatory
	
	MIZUHO SECURITIES USA LLC, acting solely as Agent in connection with this Confirmation
		
	By:	 	 /s/ Mariano Gaut

	Name: Mariano Gaut
	Title: Authorized Signatory

 [Signature page to the Master Confirmation] 

			
	Agreed and Accepted By:
	
	HUMANA INC.
		
	By:	 	 /s/ Alan J. Bailey

	Name: Alan J. Bailey
	Title: Vice President and Treasurer

 [Signature page to the Master Confirmation] 

 SCHEDULE A 

SUPPLEMENTAL CONFIRMATION 
  

			
	To:	  	Humana Inc.
		  	500 West Main Street
		  	Louisville, Kentucky 40202
		
	From:	  	Mizuho Markets Americas LLC
		  	c/o Mizuho Securities USA LLC, as agent
		  	1271 Avenue of the Americas
		  	New York, NY 10020
		
	Subject:	  	Accelerated Stock Buyback
		
	Ref. No:	  	[Insert Reference No.]
		
	Date:	  	[                 ]

 The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the Transaction
entered into between Mizuho Markets Americas LLC (“MMA”) (with Mizuho Securities USA LLC (“MSUSA”) acting as agent) (“Dealer”) and Humana Inc. (“Counterparty”) (together, the
“Contracting Parties”) on the Trade Date specified below. This Supplemental Confirmation is a binding contract between Dealer and Counterparty as of the relevant Trade Date for the Transaction referenced below. MMA is acting as
principal in its capacity as Dealer hereunder and MSUSA, its affiliate, is acting as agent for MMA, in its capacity as Dealer hereunder, and Counterparty hereunder. This Confirmation is a confirmation for purposes of Rule 10b-10 promulgated under the Exchange Act (as defined below). MMA is not a member of the Securities Investor Protection Corporation. 

1. This Supplemental Confirmation supplements, forms part of, and is subject to the Master Confirmation dated as of January 11, 2022 (the “Master
Confirmation”) between the Contracting Parties, as amended and supplemented from time to time. All provisions contained in the Master Confirmation govern this Supplemental Confirmation except as expressly modified below. 

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

 

					
	Trade Date:	  	[__________]
		
	Forward Price Adjustment	  	
	Amount:	  	USD [                ]
		
	Calculation Period Start Date:	  	[                ]
		
	Calculation Dates:1	  	Any date that is (i) both an Exchange Business Day and is set forth below and (ii) every other Scheduled Trading Day following the last Calculation Date set forth below, subject to the limitations set forth in
“Valuation Disruption” in the Master Confirmation.

  

					
	[insert date]	  	[insert date]	  	[insert date]
	 	  	 	  	 
	 	  	 	  	 

  

	1 	 NTD: If Company elects to use a single dealer, the Calculation Dates will be “Each Scheduled
Trading Day in the Calculation Period or the Settlement Valuation Period, as the case may be, subject to the limitations set forth in “Valuation Disruption” in the Master Confirmation.” 

  
 A-1 

 
			
	Scheduled Termination Date:	  	[             ]
		
	First Acceleration Date:	  	[             ]
		
	Prepayment Amount:	  	USD [             ]
		
	Prepayment Date:	  	[_______], 2022
		
	Initial Shares:	  	[             ] Shares; provided that if, in connection with the Transaction, Dealer is unable, after using good faith, commercially reasonable efforts, to borrow or
otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that Dealer
is able to so borrow or otherwise acquire; provided that if (i) the Initial Shares are reduced as provided in the preceding proviso, then Dealer shall use good faith, commercially reasonable efforts to borrow or otherwise acquire an
additional number of Shares equal to the shortfall in the Initial Shares delivered on the Initial Share Delivery Date and shall deliver such additional Shares as promptly as practicable, and all Shares so delivered shall be considered Initial
Shares, and (ii) if fewer than [____] Initial Shares are so delivered in the aggregate on or prior to the second Exchange Business Day following the Initial Share Delivery Date, then (A) the Prepayment Amount shall be reduced by an amount
equal to (x)(I) [____] minus (II) the aggregate number of Initial Shares so delivered on or prior to such second Exchange Business Day multiplied by (y) USD [______] divided by (z) [______], and (B) Dealer shall return
to Counterparty on such second Exchange Business Day the amount by which the Prepayment Amount is so reduced.
		
	Initial Share Delivery Date:	  	[_________], 2022
		
	Maximum Number of Shares:	  	[             ]2
		
	Ordinary Dividend Amount:	  	 [_________]

		
	Scheduled Ex Dividend Dates:	  	[_________], 2022

  

	2 	 To be 10% of the shares outstanding (5% per bank if 2 banks). 

  
 A-2 

 
			
	Termination Price:	  	USD [             ]3
		
	Additional Relevant Day:	  	The Exchange Business Day immediately following the Calculation Period.
		
	Designated OMR Threshold:	  	[__]% of the ADTV (as defined in Rule 10b-18(a)(1)).

 3. Counterparty represents to Dealer that neither it nor any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) of it has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full
calendar weeks immediately preceding the Trade Date or (ii) during the calendar week in which the Trade Date occurs. 
 4. This Supplemental
Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Supplemental Confirmation by signing and delivering one or more counterparts. 

 

	3 	 To be 33% of the closing price on Trade Date. 

  
 A-3 

 Counterparty hereby agrees (a) to check this Supplemental Confirmation carefully and immediately upon
receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Counterparty with
respect to the Transaction to which this Supplemental Confirmation relates, by manually signing this Supplemental Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and
immediately returning an executed copy to Dealer. 
  

			
	Yours sincerely,
	
	MIZUHO MARKETS AMERICAS LLC
	
	
	By:	 	              

	Title: Authorized Signatory
	
	MIZUHO SECURITIES USA LLC, acting solely as Agent in connection with this Confirmation
		
	By:	 	              

		 	Authorized Signatory

  
 [Signature Page to the
Supplemental Confirmation] 

			
	Agreed and Accepted By:
	
	HUMANA INC.
		
	By:	 	          

		 	Name:
		 	Title:

  
 [Signature Page to the
Supplemental Confirmation] 

 ANNEX A 

COUNTERPARTY SETTLEMENT PROVISIONS 
 1. The
following Counterparty Settlement Provisions shall apply to the extent indicated under the Master Confirmation: 
  

					
			
	      	 	Settlement Currency:	  	USD.
			
		 	Settlement Method Election:	  	Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the word “Physical” in the sixth line thereof and replacing it with the words “Net Share” and
(ii) the Electing Party may make a settlement method election only if the Electing Party represents to Dealer in writing on the date it notifies Dealer of its election that, as of such date, the Electing Party is not aware of any material non-public information concerning the Shares and is electing the settlement method in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws.
			
		 	Electing Party:	  	Counterparty.
			
		 	Settlement Method Election Date:	  	The earlier of (i) the Scheduled Termination Date and (ii) the second Exchange Business Day immediately following the Accelerated Termination Date (in which case the election under Section 7.1 of the Equity
Definitions shall be made no later than 10 minutes prior to the open of trading on the Exchange on such second Exchange Business Day), as the case may be.
			
		 	Default Settlement Method:	  	Cash Settlement.
			
		 	Forward Cash Settlement Amount:	  	The Number of Shares to be Delivered multiplied by the Settlement Price.
			
		 	Settlement Price:	  	The average of the VWAP Prices for the Calculation Dates in the Settlement Valuation Period, subject to Valuation Disruption as specified in the Master Confirmation.
			
		 	Settlement Valuation Period:	  	A number of Calculation Dates required for Dealer to unwind a commercially reasonable Hedge Position, beginning on the Calculation Date immediately following the earlier of (i) the Scheduled Termination Date or (ii) the
Calculation Date immediately following the Termination Date. Dealer shall notify Counterparty of the last Calculation Date of the Settlement Valuation Period on or prior to the Exchange Business Day immediately following such last Calculation
Date.
			
		 	Cash Settlement:	  	If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.
			
		 	Cash Settlement Payment Date:	  	The date one Settlement Cycle following the last day of the Settlement Valuation Period.
			
		 	Net Share Settlement Procedures:	  	If Net Share Settlement is applicable, Net Share Settlement shall be made in accordance with paragraphs 2 through 7 below.

  
 Annex A – 1 

 2. Net Share Settlement shall be made by delivery on the Cash Settlement Payment Date of a number of Shares
satisfying the conditions set forth in paragraph 3 below (the “Registered Settlement Shares”), or a number of Shares not satisfying such conditions (the “Unregistered Settlement Shares”), in either case with a value
equal to the absolute value of the Forward Cash Settlement Amount, with such Shares’ value determined by the Calculation Agent (which value shall, in the case of Unregistered Settlement Shares, take into account a customary, commercially
reasonable illiquidity discount), in each case as determined by the Calculation Agent. 
 3. Counterparty may only deliver Registered Settlement Shares
pursuant to paragraph 2 above if: 
 (a) a registration statement covering public resale of the Registered Settlement Shares by Dealer (the
“Registration Statement”) shall have been filed with the Securities and Exchange Commission under the Securities Act and been declared or otherwise become effective on or prior to the date of delivery, and no stop order shall be in
effect with respect to the Registration Statement; a printed prospectus relating to the Registered Settlement Shares (including any prospectus supplement thereto, the “Prospectus”) shall have been delivered to Dealer, in such
quantities as Dealer shall reasonably have requested, on or prior to the date of delivery; 
 (b) the form and content of the Registration
Statement and the Prospectus (including, without limitation, any sections describing the plan of distribution) shall be reasonably satisfactory to Dealer; 

(c) as of or prior to the date of delivery, Dealer and its agents shall have been afforded a reasonable opportunity to conduct a due diligence
investigation with respect to Counterparty customary in scope for underwritten offerings of equity securities by issuers of comparable size to Counterparty and in the same industry as Counterparty and the results of such investigation are
satisfactory to Dealer, in its good faith discretion, subject to customary confidentiality undertakings on the part of such party; and 
 (d)
as of the date of delivery, an agreement (the “Underwriting Agreement”) shall have been entered into with Dealer in connection with the public resale of the Registered Settlement Shares by Dealer substantially similar to
underwriting agreements customary for underwritten offerings of equity securities by issuers of comparable size to Counterparty and in the same industry as Counterparty, in form and substance reasonably satisfactory to Dealer, which Underwriting
Agreement shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, Dealer
and its affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters. 
 4. If
Counterparty delivers Unregistered Settlement Shares pursuant to paragraph 2 above: 
 (a) all Unregistered Settlement Shares shall be
delivered to Dealer (or any affiliate of Dealer designated by Dealer) pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof; 

(b) as of or prior to the date of delivery, Dealer and any potential purchaser of any such shares from Dealer (or any affiliate of Dealer
designated by Dealer) identified by Dealer shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for private placements of equity securities by issuers of
comparable size to Counterparty and in the same industry as Counterparty (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information
reasonably requested by them), subject to customary confidentiality undertakings on the part of such party; 
 (c) as of the date of
delivery, Counterparty shall enter into an agreement (a “Private Placement Agreement”) with Dealer (or any affiliate of Dealer designated by Dealer) in connection with the private placement of such shares by Counterparty to
Dealer (or any such affiliate) and the private resale of such shares by Dealer (or any such affiliate), substantially similar to private placement purchase agreements customary for private placements of equity securities by issuers of comparable
size to Counterparty and in the same industry as Counterparty, in form and substance commercially reasonably satisfactory to Dealer, which Private Placement Agreement shall include, without limitation, provisions substantially similar to those
contained in such private placement purchase agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, Dealer and its affiliates and the provision of customary opinions,
accountants’ comfort letters and lawyers’ negative assurance letters, and shall provide for the payment by Counterparty of all commercially reasonable out of pocket fees and expenses in connection with such resale, including all
commercially reasonable fees and actual, documented out-of-pocket commercially reasonable expenses of outside counsel for Dealer, and shall contain customary
representations, warranties, covenants and agreements of Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales; and 

(d) in connection with the private placement of such shares by Counterparty to Dealer (or any such affiliate) and the private resale of such
shares by Dealer (or any such affiliate), Counterparty shall, if so requested by Dealer, prepare, in cooperation with Dealer, a private placement memorandum in form and substance reasonably satisfactory to Dealer. 

  
 Sch. A – 2 

 5. Dealer, itself or through an affiliate (the “Selling Agent”) or any underwriter(s), will
sell, in a commercially reasonable manner, all, or such lesser portion as may be required hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares and any Makewhole Shares (as defined below) (together, the “Settlement
Shares”) delivered by Counterparty to Dealer pursuant to paragraph 6 below commencing on the Cash Settlement Payment Date and continuing until the date on which the aggregate Net Proceeds (as such term is defined below) of such sales, as
determined by Dealer in good faith and in a commercially reasonable manner, is equal to the absolute value of the Forward Cash Settlement Amount (such date, the “Final Resale Date”). If Counterparty is prohibited by law or by
contract from disclosing all material information known to Counterparty with respect to Counterparty and the Shares to any potential purchasers of such Settlement Shares, then the sale of such Settlement Shares shall not be required to commence or
may be suspended until Counterparty is able to so disclose such information; provided that (x) Counterparty shall, no later than the date that is five months following the Cash Settlement Payment Date, disclose all such information to
potential purchasers of such Settlement Shares reasonably identified by Dealer and (y) during the pendency of such period, interest shall accrue on the absolute value of the Forward Cash Settlement Amount at the rate of interest for
Counterparty’s long term, unsecured and unsubordinated indebtedness, as determined by the Calculation Agent. If the proceeds of any sale(s) made by Dealer, the Selling Agent or any underwriter(s), net of any commercially reasonable fees and
commissions (including, without limitation, underwriting or placement fees) customary for similar transactions under the circumstances at the time of the offering, together with commercially reasonable carrying charges and expenses incurred in
connection with the offer and sale of the Shares (including, but without limitation to, the covering of any over-allotment or short position (syndicate or otherwise)) (the “Net Proceeds”) exceed the absolute value of the Forward
Cash Settlement Amount, Dealer will refund, in USD, such excess to Counterparty on the date that is three (3) Currency Business Days following the Final Resale Date, and, if any portion of the Settlement Shares remains unsold, Dealer shall
return to Counterparty on that date such unsold Shares. 
 6. If the Calculation Agent determines that the Net Proceeds received from the sale of the
Registered Settlement Shares or Unregistered Settlement Shares or any Makewhole Shares, if any, pursuant to this paragraph 6 are less than the absolute value of the Forward Cash Settlement Amount (the amount in USD by which the Net Proceeds are less
than the absolute value of the Forward Cash Settlement Amount being the “Shortfall” and the date on which such determination is made, the “Deficiency Determination Date”), Counterparty shall on the Calculation Date
next succeeding the Deficiency Determination Date (the “Makewhole Notice Date”) deliver to Dealer, through the Selling Agent, a notice of Counterparty’s election that Counterparty shall either (i) pay an amount in cash
equal to the Shortfall on the day that is two (2) Currency Business Days after the Makewhole Notice Date, or (ii) deliver additional Shares. If Counterparty elects to deliver to Dealer additional Shares, then Counterparty shall deliver
additional Shares in compliance with the terms and conditions of paragraph 3 or paragraph 4 above, as the case may be (the “Makewhole Shares”), on the second Clearance System Business Day which is also a Calculation Date following
the Makewhole Notice Date in such number as the Calculation Agent reasonably believes would have a market value on that Calculation Date equal to the Shortfall. Such Makewhole Shares shall be sold by Dealer in accordance with the provisions above;
provided that if the sum of the Net Proceeds from the sale of the originally delivered Shares and the Net Proceeds from the sale of any Makewhole Shares is less than the absolute value of the Forward Cash Settlement Amount then Counterparty
shall, at its election, either make such cash payment or deliver to Dealer further Makewhole Shares until such Shortfall has been reduced to zero. 

  
 Sch. A – 3 

 7. Notwithstanding the foregoing, in no event shall the aggregate number of Settlement Shares and Makewhole
Shares be greater than the Reserved Shares minus the amount of any Shares actually delivered by Counterparty under any other Transaction(s) under this Master Confirmation (the result of such calculation, the “Capped Number”).
Counterparty represents (which shall be deemed to be repeated on each day that a Transaction is outstanding) that the Capped Number is equal to or less than the number of Shares determined according to the following formula: 

A – B 
  

					
	                                    	 	Where    	  	A = the number of authorized but unissued shares of Counterparty that are not reserved for future issuance on the date of the determination of the Capped Number; and
			
		 		  	B = the maximum number of Shares required to be delivered to third parties if Counterparty elected Net Share Settlement of all transactions in the Shares (other than Transactions in the Shares under this Master Confirmation) with
all third parties that are then currently outstanding and unexercised.

 “Reserved Shares” means initially, _________ Shares. The Reserved Shares may be increased or
decreased in a Supplemental Confirmation. 

  
 Sch. A – 4

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