Document:

exv10w3

Exhibit 10.3

	 	 	 

	 

	 	Barclays Bank PLC, 5
	 

	 	The North Colonnade
	 

	 	Canary Wharf, London E144BB
	 

	 	Facsimile:+44(20)77736461
	 

	 	Telephone: +44 (20) 777
	 

	 	 36810
	 
	 	 
	 

	 	c/o Barclays Capital Inc.
	 

	 	as Agent for Barclays Bank PLC
	 

	 	745 Seventh Ave
	 

	 	New York, NY 10166
	 

	 	Telephone: +1 212 412 4000

	 	 	 

	DATE:

	 	March 29, 2011
	 
	TO:

	 	InterDigital, Inc.
	ATTENTION:

	 	Scott McQuilkin
	TELEPHONE:

	 	(+1) 610-878-1850
	FACSIMILE:

	 	(+1) 610-878-7844
	 
	 	 
	FROM:

	 	Barclays Capital Inc., acting as Agent for Barclays Bank PLC
	ATTENTION:

	 	Paul Robinson
	TELEPHONE:

	 	(+1) 212-526-0111
	FACSIMILE:

	 	(+1) 917-522-0458
	 
	SUBJECT:

	 	Warrant Transaction

The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions
of the Transaction entered into between Barclays Bank PLC (“Barclays”), through its agent Barclays
Capital Inc. (the “Agent”), and InterDigital, Inc. (“Counterparty”) on the Trade Date specified
below (the “Transaction”). This Confirmation constitutes a “Confirmation” as referred to in the
Master Agreement specified below. Barclays is regulated by the Financial Services Authority.
Barclays Bank PLC is not a member of the Securities Investor Protection Corporation (“SIPC”).

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.,
are incorporated into this Confirmation. In the event of any inconsistency between the Equity
Definitions and this Confirmation, this Confirmation shall govern. For purposes of the Equity
Definitions, the Transaction shall be deemed to be a Share Option Transaction, and each reference
herein to a Warrant shall be deemed to be a reference to a Call or an Option, as context requires.

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

1. This Confirmation evidences a complete and binding agreement between Barclays and Counterparty
as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a

1

 

part of, and be subject to, an agreement in the form of the ISDA 1992 Master Agreement
(Multicurrency — Cross Border) as if Barclays and Counterparty had executed an agreement (the
“Agreement”) in such form (without any Schedule but with the “Cross-Default” provisions of Section
5(a)(vi) applicable to Counterparty with (x) a “Threshold Amount” of $15,000,000 and (y) the phrase
“or becoming capable at such time of being declared” deleted from clause (1) of such Section
5(a)(vi), and with such other elections set forth in this Confirmation) on the Trade Date. In the
event of any inconsistency between provisions of the Agreement and this Confirmation, this
Confirmation will prevail for the purpose of the Transaction. The parties hereby agree that no
Transaction other than the Transaction to which this Confirmation relates shall be governed by the
Agreement.

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

	 	 	 

	General Terms:
	 	 
	 
	 	 
	Trade Date:

	 	March 29, 2011.
	 
	 	 
	Components:

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

	 	European.
	 
	 	 
	Warrant Type:

	 	Call.
	 
	 	 
	Seller:

	 	Counterparty.
	 
	 	 
	Buyer:

	 	Barclays.
	 
	 	 
	Shares:

	 	The common stock, par value USD0.01 per share,
of Counterparty (Ticker symbol “IDCC”).
	 
	 	 
	Number of Warrants:

	 	For each Component of the Transaction, as
provided in Schedule B to this Confirmation.
	 
	 	 
	Warrant Entitlement:

	 	One Share per Warrant.
	 
	 	 
	Strike Price:

	 	As provided in Schedule A to this Confirmation.
	 
	 	 
	Premium:

	 	As provided in
Schedule A to this Confirmation.
	 
	 	 
	Premium Payment Date:

	 	April 4, 2011
	 
	 	 
	Exchange:

	 	The NASDAQ Global Select Market
	 
	 	 
	Related Exchange(s):

	 	All Exchanges.
	 
	 	 
	Calculation Agent:

	 	Barclays. All determinations made by the
Calculation Agent shall be made in good faith
and in a commercially reasonable manner.
Following any determination or calculation by
the Calculation Agent hereunder, upon a written
request by Counterparty, the Calculation Agent
will provide to Counterparty by e-mail to the
e-mail address provided by Counterparty in such
written request a report (in a commonly used
file format for the storage and manipulation of
financial data) displaying in reasonable detail
such determination or calculation, including,
where applicable, a description of the
methodology and data applied, it being
understood that the Calculation Agent shall not
be obligated to disclose any proprietary models
used by it for such determination or
calculation.

2

 

	 	 	 

	Procedures for Exercise:
	 	 
	 
	 	 
	In respect of any Component
	 	 
	 
	 	 
	Expiration Time:

	 	The Valuation Time.
	 
	 	 
	Expiration Date(s):

	 	As provided in Schedule B to this Confirmation
(or, if such date is not a Scheduled Trading
Day, the next following Scheduled Trading Day
that is not already an Expiration Date for
another Component); provided that if that date
is a Disrupted Day, the Expiration Date for such
Component shall be the first succeeding
Scheduled Trading Day that is not a Disrupted
Day and is not or is not deemed to be an
Expiration Date in respect of any other
Component of the Transaction hereunder; and
provided further that if the Expiration Date has
not occurred pursuant to the preceding proviso
as of the Final Disruption Date, the Calculation
Agent shall have the right to elect, in its sole
discretion, that the Final Disruption Date shall
be the Expiration Date (irrespective of whether
such date is a Disrupted Day or an Expiration
Date in respect of any other Component for the
Transaction) and the Settlement Price for the
Final Disruption Date shall be determined by the
Calculation Agent in a commercially reasonable
manner. Notwithstanding the foregoing and
anything to the contrary in the Equity
Definitions, if a Market Disruption Event occurs
on any Expiration Date, (i) the Calculation
Agent may determine that such Expiration Date is
a Disrupted Day only in part, in which case the
Calculation Agent shall make adjustments to the
number of Warrants for the relevant Component
for which such day shall be the Expiration Date
and shall designate the Scheduled Trading Day
determined in the manner described in the
immediately preceding sentence as the Expiration
Date for the remaining Warrants for such
Component and (ii) the Settlement Price for such
Disrupted Day may be adjusted by the Calculation
Agent as appropriate on the basis of the nature
and duration of the relevant Market Disruption
Event. Any day on which the Exchange is
scheduled as of the Trade Date to close prior to
its normal closing time shall be considered a
Disrupted Day in whole. Section 6.6 of the
Equity Definitions shall not apply to any
Valuation Date occurring on an Expiration Date.
	 
	 	 
	Final Disruption Date:

	 	As provided in Schedule A to this Confirmation.
	 
	 	 
	Automatic Exercise:

	 	Applicable; provided that Section 3.4(a) of the
Equity Definitions shall apply as if Cash
Settlement applied.
	 
	 	 
	Market Disruption Event:

	 	Section 6.3(a) of the Equity Definitions shall
be amended by deleting the words “at any time
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 replacing them
with the words “at any time during the regular
trading session on the Exchange, without regard
to after hours or any other trading outside of
the regular trading session hours”, by amending
and restating clause (a)(iii) thereof in its
entirety to read as follows: “(iii) an Early
Closure that the Calculation Agent

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	 	determines is
material” and by adding the words “, (iv) a
Regulatory Disruption or (v) a Liquidity Event”
after clause (a)(iii) as restated above.

	 
	 	 
	

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

	 	A “Regulatory Disruption” shall occur if
Barclays determines in its reasonable discretion
that it is appropriate in light of legal,
regulatory or self-regulatory requirements or
related policies or procedures for Barclays to
refrain from all or any part of the market
activity in which it would otherwise engage in
connection with the Transaction.
	 
	 	 
	Liquidity Event:

	 	A “Liquidity Event” shall occur if on any day
the trading volume or liquidity of trading in
the Shares is materially reduced from levels
prevailing on the Trade Date and the Calculation
Agent determines in its commercially reasonable
discretion that as a result it would be
appropriate to treat such day as a Disrupted Day
or a partially Disrupted Day.
	 
	 	 
	Disrupted Day:

	 	The definition of “Disrupted Day” in Section 6.4
of the Equity Definitions shall be amended by
adding the following sentence after the first
sentence: “A Scheduled Trading Day on which a
Related Exchange fails to open during its
regular trading session will not be a Disrupted
Day if the Calculation Agent determines that
such failure will not have a material impact on
Barclays’s ability to unwind any hedging
transactions related to the Transaction.”
	 
	 	 
	Valuation:
	 	 
	 
	 	 
	In respect of any Component
	 	 
	 
	 	 
	Valuation Time:

	 	Scheduled Closing Time; provided that if the
principal trading session is extended, the
Calculation Agent shall determine the Valuation
Time in its reasonable discretion.
	 
	 	 
	Valuation Date:

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

	 	Net Share Settlement.
	 
	 	 
	Net Share Settlement:

	 	On each Settlement Date, Counterparty shall
deliver to Barclays a number of Shares equal to
the Net Share Amount for such Settlement Date to
the account specified by Barclays, and cash in
lieu of any fractional shares valued at the
Settlement Price for the Valuation Date
corresponding to such Settlement Date. If, in
the good faith reasonable judgment of Barclays,
the Shares deliverable hereunder would not be
immediately freely transferable by Barclays
under Rule 144 (or any successor provision,
collectively, “Rule 144”) under the U.S.
Securities Act of 1933, as amended (the
“Securities Act”), then Barclays may elect to
either (x) accept delivery of such Shares
notwithstanding the fact that such Shares are
not freely transferable by Barclays under Rule
144 or (y) require that such delivery take place
pursuant to paragraph 5(l) below.

4

 

	 	 	 

	Net Share Amount:

	 	The Option Cash Settlement Amount divided by the
Settlement Price, each determined as if Cash
Settlement applied.
	 
	 	 
	Settlement Price:

	 	On any Valuation Date, the per Share
volume-weighted average price as displayed under
the heading “Bloomberg VWAP” on Bloomberg page
“IDCC <equity> AQR” (or any successor
thereto) in respect of the period from the
scheduled opening time of the Exchange to the
Scheduled Closing Time on such Valuation Date
(or if such volume-weighted average price is
unavailable or is manifestly incorrect, the
market value of one Share on such Valuation
Date, as determined by the Calculation Agent).
	 
	 	 
	Settlement Date(s):

	 	As determined in reference to Section 9.4 of the
Equity Definitions, subject to paragraph 5(j)(i)
hereof.
	 
	 	 
	Other Provisions Applicable to Net Share
Settlement:

	 	The provisions of Sections 9.1(c), 9.4 (except
that “Settlement Date” shall be as defined
above, unless a Settlement Disruption Event
prevents delivery of such Shares on that date),
9.8, 9.9, 9.11(as modified herein), 9.12 and
10.5 of the Equity Definitions will be
applicable, as if “Physical Settlement” applied
to the Transaction.
	 
	 	 
	Representation and Agreement:

	 	Notwithstanding Section 9.11 of the Equity
Definitions, the parties acknowledge that any
Shares delivered to Barclays may be, upon
delivery, subject to restrictions and
limitations arising from Counterparty’s status
as issuer of the Shares under applicable
securities laws as a result of the fact that
Counterparty is the issuer of the Shares.
	 
	 	 
	Dividends:
	 	 
	 
	 	 
	Dividend Adjustments:

	 	If at any time during the period from but
excluding the Trade Date, to and including the
final Expiration Date an ex-dividend date for a
cash dividend occurs with respect to the Shares
and that dividend differs from the Regular
Dividend on a per Share basis, then the
Calculation Agent may adjust the Strike Price,
the Number of Warrants and/or the Warrant
Entitlement to extent appropriate preserve the
fair value of the Warrants to Dealer after
giving effect to such dividend.
	 
	 	 
	Regular Dividend:

	 	USD0.10 per Share per regular quarterly dividend
period of the Issuer.
	 
	 	 
	Adjustments:
	 	 
	 
	 	 
	Method of Adjustment:

	 	Calculation Agent Adjustment; provided that the
Equity Definitions shall be amended by replacing
the words “diluting or concentrative” in
Sections 11.2(a), 11.2(c) (in two instances) and
11.2(e)(vii) with the word “material” and by
adding the words “or the Transaction” after the
words “theoretical value of the relevant Shares”
in Section 11.2(a), 11.2(c) and 11.2(e)(vii);
provided, further that adjustments may be made
to account for changes in volatility, expected
dividends, stock loan rate and liquidity
relative to the relevant Shares.

5

 

	 	 	 

	Extraordinary Events:
	 	 
	 
	 	 
	New Shares:

	 	Section 12.1(i) of the Equity Definitions is
hereby amended by deleting the text in clause
(i) in its entirety and replacing it with the
phrase “publicly quoted, traded or listed on any
of the New York Stock Exchange, the NASDAQ
Global Select Market or the NASDAQ Global Market
(or their respective successors)”.
	 
	 	 
	Share-for-Share:

	 	The definition of “Share-for-Share” set forth in
Section 12.1(f) of the Equity Definitions is
hereby amended by the deletion of the
parenthetical in clause (i) thereof.
	 
	 	 
	Consequence of Merger Events:
	 	 
	 
	 	 
	Merger Event:

	 	Applicable; provided that if an event occurs
that constitutes both a Merger Event under
Section 12.1(b) of the Equity Definitions and
Additional Termination Event under paragraph
5(f)(i) of this Confirmation, Barclays may
elect, in its commercially reasonable judgment,
whether the provisions of Section 12.2 of the
Equity Definitions or paragraph 5(f)(i) will
apply.
	 
	 	 
	Share-for-Share:

	 	Modified Calculation Agent Adjustment.
	 
	 	 
	Share-for-Other:

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

	 	Cancellation and Payment (Calculation Agent
Determination); provided that Barclays may elect
Component Adjustment.
	 
	 	 
	Consequence of Tender Offers:
	 	 
	 
	 	 
	Tender Offer:

	 	Applicable; provided that if an event occurs
that constitutes both a Tender Offer under
Section 12.1(d) of the Equity Definitions and
Additional Termination Event under paragraph
5(f)(i) of this Confirmation, Barclays may
elect, in its commercially reasonable judgment,
whether the provisions of Section 12.3 of the
Equity Definitions or paragraph 5(f)(i) will
apply.
	 
	 	 
	Share-for-Share:

	 	Modified Calculation Agent Adjustment.
	 
	 	 
	Share-for-Other:

	 	Modified Calculation Agent Adjustment.
	 
	 	 
	Share-for-Combined:

	 	Modified Calculation Agent Adjustment.
	 
	 	 
	Modified Calculation Agent Adjustment:

	 	For greater certainty, the definition of
“Modified Calculation Agent Adjustment” in
Sections 12.2 and 12.3 of the Equity Definitions
shall be amended by (i) adding the following
italicized language after the stipulated
parenthetical provision: “(including adjustments
to account for changes in volatility, expected
dividends, stock loan rate or liquidity relevant
to the Shares or to the Transaction) from the
Announcement Date or the Determination Date, as
applicable, to the Merger Date (Section 12.2) or
Tender Offer Date (Section 12.3).” and (ii)
deleting the phrase “expected dividends,” from
such stipulated parenthetical provision.
	 
	Announcement Date:

	 	The definition of “Announcement Date” in Section
12.1 of the Equity Definitions shall be amended
by (i) replacing the word “leads to the” in the
third and the fifth lines thereof with the words
”, if completed, would lead to a”, (ii)
replacing the words “voting shares” in the fifth
line thereof with the word

6

 

	 	 	 

	 

	 	“Shares”, (iii)
inserting the words “by any entity” after the
word “announcement” in the second and the fourth
lines thereof, (iv) inserting the words “or to
explore the possibility of engaging in” after
the words “engage in” in the second line thereto
and (v) inserting the words “or to explore the
possibility of purchasing or otherwise
obtaining” after the word “obtain” in the fourth
line thereto.
	 
	 	 
	Announcement Event:

	 	If an Announcement Event has occurred, the
Calculation Agent shall have the right to
determine the economic effect of the
Announcement Event on the theoretical value of
the Transaction (including without limitation
any change in volatility, stock loan rate or
liquidity relevant to the Shares or to the
Transaction) (i) at a time that it deems
appropriate, from the Announcement Date to the
date of such determination (the “Determination
Date”), and (ii) on the Valuation Date, from the
Announcement Date or the Determination Date, as
applicable, to the Valuation Date. If any such
economic effect is material, the Calculation
Agent will adjust the terms of the Transaction
to reflect such economic effect. “Announcement
Event” shall mean the occurrence of the
Announcement Date of a Merger Event or Tender
Offer or potential Merger Event or potential
Tender Offer.
	 
	 	 
	Composition of Combined Consideration:

	 	Not Applicable; provided that, notwithstanding
Sections 12.5(b) and 12.1(f) of the Equity
Definitions, to the extent that the composition
of the consideration for the relevant Shares
pursuant to a Tender Offer or Merger Event could
be elected by an actual holder of the Shares,
the Calculation Agent will, in its sole
discretion, determine such composition.
	 
	 	 
	Nationalization, Insolvency or Delisting:

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

	 	Applicable; provided that Section 12.9(a)(ii) of
the Equity Definitions is hereby amended by (i)
replacing the phrase “the interpretation” in the
third line thereof with the phrase “, or public
announcement of, the formal or informal
interpretation” and (ii) by replacing the word
“Shares” where it appears in clause (X) thereof
with the words “Hedge Position”; and provided
further that Barclays shall not adjust the terms
of the Transaction for a Change in Law referred
to in clause (Y) of Section 12.9(a)(ii) of the
Equity Definitions except to the extent it is
exercising its right to terminate or adjust
transactions as a result of a “Change in Law”
event with respect to other similarly situated
customers.

7

 

	 	 	 

	 

	 	The parties agree that, for the avoidance of
doubt, for purposes of Section 12.9(a)(ii) of
the Equity Definitions, “any applicable law or
regulation” shall include the Dodd-Frank Wall
Street Reform and Consumer Protection Act of
2010, any rules and regulations promulgated
thereunder and any similar law or regulation,
and the consequences specified in Section
12.9(b)(i) of the Equity Definitions (as
modified below) shall apply to any Change in Law
arising from any such act, rule or regulation.
	 
	 	 
	Failure to Deliver:

	 	Not Applicable.
	 
	 	 
	Insolvency Filing:

	 	Applicable.
	 
	 	 
	Hedging Disruption:

	 	Applicable; provided that
	 
	 	 
	 

	 	(i) Section 12.9(a)(v) of the Equity Definitions
is hereby modified by inserting the following
three sentences at the end of such Section:
	 
	 

	 	“Such inability described in phrases (A) or (B)
above shall not constitute a “Hedging
Disruption” unless (x) such inability does not
result from factors particular to Hedging Party
(such as Hedging Party’s creditworthiness or
financial position, or particular actions or
transactions undertaken by the Hedging Party
unrelated to the hedging of the Transaction) and
(y) such inability will result in continued
performance by the Hedging Party under the
Transaction being commercially unreasonable or
commercially impracticable. For the avoidance
of doubt, the term “equity price risk” shall be
deemed to include, but shall not be limited to,
stock price and volatility risk. And, for the
further avoidance of doubt, any such
transactions or assets referred to in phrases
(A) or (B) above must be available on
commercially reasonable pricing terms.”
	 
	 	 
	 

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

	 	Applicable; provided that Sections 12.9(a)(vii)
and 12.9(b)(iv) of the Equity Definitions are
amended by deleting the words “at a rate equal
to or less than the Maximum Stock Loan Rate” and
replacing it with the words “at a Borrow Cost
equal to or less than the Maximum Stock Loan
Rate”.
	 
	 	 
	Borrow Cost:

	 	The cost to borrow the relevant Shares that
would be incurred by a third party market
participant borrowing such Shares, as determined
by the Calculation Agent on the relevant date of
determination. Such costs shall include (a) the
spread below FED-FUNDS that would be earned on
collateral posted in connection with such
borrowed Shares, net of any costs or fees, and
(b) any stock loan borrow fee that would be
payable for such Shares, expressed as fixed rate
per annum.
	 
	 	 
	Maximum Stock Loan Rate:

	 	200 basis points
	 
	 	 
	Increased Cost of Stock Borrow:

	 	Applicable; provided that (a) Section
12.9(a)(viii) of the Equity Definitions shall be
amended by deleting “rate to borrow Shares” and
replacing it with “Borrow Cost” and (b)

8

 

	 	 	 

	 

	 	Section
12.9(b)(v) of the Equity Definitions shall be
amended by (i) adding the word “or” immediately
before the phrase “(B)”, (ii) deleting
subsection (C) in its entirety, (iii) replacing
“either party” in the penultimate sentence with
“the Hedging Party”, and (iv) replacing the word
“rate” in clauses (X) and (Y) of the final
sentence therein with the words “Borrow Cost”.
	 
	 	 
	Initial Stock Loan Rate:

	 	25 basis points, as adjusted by the Calculation
Agent to reflect any subsequent Price Adjustment
due to an Increased Cost of Stock Borrow.
	 
	 	 
	FED FUNDS:

	 	“FED FUNDS” means, for any day, the rate set
forth for such day opposite the caption “Federal
funds”, as such rate is displayed on the page
“FedsOpen <Index> <GO>” on the
BLOOMBERG Professional Service, or any successor
page; provided that if no rate appears for any
day on such page, the rate for the immediately
preceding day for which a rate does so appear
shall be used for such day.
	 
	 	 
	Hedging Party:

	 	Barclays or an affiliate of Barclays that is
involved in the hedging of the Transaction for
all applicable Additional Disruption Events.
	 
	 	 
	Determining Party:

	 	Barclays for all applicable Extraordinary Events.
	 
	 	 
	Acknowledgments:
	 	 
	 
	 	 
	Non-Reliance:

	 	Applicable.
	 
	 	 
	Agreements and Acknowledgments Regarding
Hedging Activities:

	 	Applicable.
	 
	 	 
	Additional Acknowledgments:

	 	Applicable.

 

			
	3.	 	Mutual Representations, Warranties and Agreements.

Each of Barclays and Counterparty represents and warrants to, and agrees with, the other party
that:

	 	(a)	 	Commodity Exchange Act. It is an “eligible contract participant” within the
meaning of Section 1a(12) of the U.S. Commodity Exchange Act, as amended (the “CEA”).
The Transaction has been subject to individual negotiation by the parties. The
Transaction has not been executed or traded on a “trading facility” as defined in
Section 1a(33) of the CEA.
	 
	 	(b)	 	Securities Act. It is a “qualified institutional buyer” as defined in Rule
144A under the Securities Act, or an “accredited investor” as defined in Section
2(a)(15)(ii) of the Securities Act.
	 
	 	(c)	 	ERISA. The assets used in the Transaction (1) are not assets of any “plan” (as
such term is defined in Section 4975 of the U.S. Internal Revenue Code (the “Code”))
subject to Section 4975 of the Code or any “employee benefit plan” (as such term is
defined in Section 3(3) of the U.S. Employee Retirement Income Security Act of 1974, as
amended (“ERISA”)) subject to Title I of ERISA, and (2) do not constitute “plan assets”
within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section
2510-3-101.

4. Representations, Warranties and Agreements of Counterparty.

In addition to the representations and warranties in the Agreement and those contained elsewhere
herein, Counterparty further represents, warrants and agrees that:

9

 

	 	(a)	 	the representations and warranties of Counterparty set forth in Section 2 of
the Purchase Agreement, dated as of the Trade Date between Counterparty and Barclays
Capital Inc. (the “Purchase Agreement”), are true and correct and are hereby deemed to
be repeated to Barclays as if set forth herein;
	 
	 	(b)	 	the Shares of Counterparty initially issuable upon exercise of the Warrant (the
“Warrant Shares”) have been reserved for issuance by all required corporate action of
Counterparty. The Warrant Shares have been duly authorized and, when delivered as
contemplated by the terms of the Warrant following the exercise of the Warrant in
accordance with the terms and conditions of the Warrant, will be validly issued,
fully-paid and non-assessable, and the issuance of the Warrant Shares will not be
subject to any pre-emptive or similar rights;
	 
	 	(c)	 	Counterparty shall promptly provide written notice to Barclays upon obtaining
knowledge of the occurrence of any event that would constitute an Event of Default, a
Potential Event of Default, a Potential Adjustment Event, a Merger Event or any other
Extraordinary Event; provided, however, that should Counterparty be in possession of
material non-public information regarding Counterparty, Counterparty shall not
communicate such information to Barclays;
	 
	 	(d)	 	(A) Counterparty is acting for its own account, and it has made its own
independent decisions to enter into the Transaction and as to whether the Transaction
is appropriate or proper for it based upon its own judgment and upon advice from such
advisers as it has deemed necessary, (B) Counterparty is not relying on any
communication (written or oral) of Barclays or any of its affiliates as investment
advice or as a recommendation to enter into the Transaction (it being understood that
information and explanations related to the terms and conditions of the Transaction
shall not be considered investment advice or a recommendation to enter into the
Transaction) and (C) no communication (written or oral) received from Barclays or any
of its affiliates shall be deemed to be an assurance or guarantee as to the expected
results of the Transaction;
	 
	 	(e)	 	Counterparty is entering into the Transaction, solely for the purposes stated
in the board resolution authorizing the Transaction and in its public disclosure, and
there is no internal policy, whether written or oral, of Counterparty that would
prohibit Counterparty from entering into any aspect of the Transaction, including, but
not limited to, the issuance of Shares to be made pursuant hereto;
	 
	 	(f)	 	Counterparty is not as of the Trade Date and as of the date on which
Counterparty delivers any Termination Delivery Units, and shall not be after giving
effect to the transactions contemplated hereby, “insolvent” (as such term is defined in
Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the
“Bankruptcy Code”));
	 
	 	(g)	 	Counterparty understands, agrees and acknowledges that Barclays has no
obligation or intention to register the Transaction under the Securities Act, any state
securities law or other applicable federal securities law;
	 
	 	(h)	 	each of Counterparty’s filings under the Securities Act, the Exchange Act, or
other applicable securities laws that are required to be filed have been filed and
that, as of the respective dates thereof and as of the date of this representation,
such filings when considered as a whole (with the more recent such filings deemed to
amend inconsistent statements contained in any earlier such filings) do not contain any
misstatement of a material fact or any omission of a material fact required to be
stated therein or necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading;
	 
	 	(i)	 	On the Trade Date and as of the date of on which Counterparty delivers any
Termination Delivery Units, Counterparty is not in possession of any material
non-public information regarding the Issuer or the Shares. “Material” information for
these purposes is any

10

 

	 	 	 	information to which an investor would reasonably attach importance in reaching a
decision to buy, sell or hold any securities of the Issuer.
	 
	 	(j)	 	Counterparty is not, and after giving effect to the transactions contemplated
hereby will not be, required to register as an “investment company” as such term is
defined in the Investment Company Act of 1940, as amended;
	 
	 	(k)	 	Counterparty understands, agrees and acknowledges that no obligations of
Barclays to it hereunder shall be entitled to the benefit of deposit insurance and that
such obligations shall not be guaranteed by any affiliate of Barclays or any
governmental agency;
	 
	 	(l)	 	without limiting the generality of Section 13.1 of the Equity Definitions,
Counterparty acknowledges that Barclays is not making any representations or warranties
with respect to the treatment of the Transaction under any accounting standards
including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging,
ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and
Hedging — Contracts in Entity’s Own Equity (or any successor issue statements) or
under FASB’s Liabilities & Equity Project;
	 
	 	(m)	 	Counterparty is not entering into the Transaction for the purpose of (i)
creating actual or apparent trading activity in the Shares (or any security convertible
into or exchangeable for the Shares) or (ii) raising or depressing or otherwise
manipulating the price of the Shares (or any security convertible into or exchangeable
for the Shares) or otherwise in violation of the Exchange Act;
	 
	 	(n)	 	Counterparty shall deliver to Barclays an opinion of counsel, dated as of the
Premium Payment Date and reasonably acceptable to Barclays in form and substance, with
respect to the matters set forth in Section 3(a) of the Agreement and paragraph 4(b) of
this Confirmation, containing customary exceptions, assumptions and qualifications, in
each case reasonably acceptable to Barclays;
	 
	 	(o)	 	Counterparty has not entered into any obligation that would contractually limit
it from effecting Net Share Settlement under the Transaction and it agrees not to enter
into any such obligation during the term of the Transaction;
	 
	 	(p)	 	(x)(A) On the Trade Date, the Shares or securities that are convertible into,
or exchangeable or exercisable for Shares, are not, and shall not be, subject to a
“restricted period,” as such term is defined in Regulation M under the Exchange Act
(“Regulation M”) other than the distribution of the convertible notes subject to the
Purchase Agreement and (B) Counterparty shall not engage in any “distribution,” as such
term is defined in Regulation M, other than a distribution meeting the requirements of
the exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M until the
second Exchange Business Day immediately following the Trade Date, and (y)(A) during
the period starting on the first Expiration Date and ending on the last Expiration Date
(the “Settlement Period”), the Shares or securities that are convertible into, or
exchangeable or exercisable for Shares, are not, and shall not be, subject to a
“restricted period,” as defined in Regulation M and (B) Counterparty shall not engage
in any “distribution,” as such term is defined in Regulation M, other than a
distribution meeting the requirements of the exceptions set forth in sections
101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business Day
immediately following the Settlement Period;
	 
	 	(q)	 	During the Settlement Period and on any other Exercise Date, neither
Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule
10b-18 of the Exchange Act (“Rule 10b-18”)) shall directly or indirectly (including,
without limitation, by means of any cash-settled or other derivative instrument)
purchase, offer to purchase, place any bid or limit order that would effect a purchase
of, or commence any tender offer relating to, any Shares (or an equivalent interest,
including a unit of beneficial interest in a trust or limited partnership or a
depository

11

 

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

5. Other Provisions:

	 	(a)	 	Method of Delivery. Whenever delivery of funds or other assets is required
hereunder by or to Counterparty, such delivery shall be effected through Agent. In
addition, all notices, demands and communications of any kind relating to the
Transaction between Barclays and Counterparty shall be transmitted exclusively through
Agent.
	 
	 	(b)	 	Repurchase Notices. Counterparty shall, on any day on which Counterparty
effects any repurchase of Shares, promptly give Barclays a written notice of such
repurchase (a “Repurchase Notice”) on such day if following such repurchase, the
Warrant Equity Percentage as determined on such day is (i) equal to or greater than 9%
or (ii) greater by 0.5% than the Warrant Equity Percentage included in the immediately
preceding Repurchase Notice (or, in the case of the first such Repurchase Notice,
greater than the Warrant Equity Percentage as of the Trade Date). The “Warrant Equity
Percentage” as of any day is the fraction (A) the numerator of which is the product of
(x) the sum of the Number of Warrants in the aggregate and the Number of Warrants in
the aggregate underlying any Additional Warrant Transaction between Counterparty and
Barclays and (y) the Option Entitlement in respect of the Transaction and (B) the
denominator of which is the number of Shares outstanding on such day. Counterparty
agrees to indemnify and hold harmless Barclays and its affiliates and their respective
officers, directors, employees, affiliates, advisors, agents and controlling persons
(each, an “Indemnified Person”) from and against any and all losses (including losses
relating to Barclays’ hedging activities as a consequence of becoming, or of the risk
of becoming, a Section 16 “insider”, including without limitation, any forbearance from
hedging activities or cessation of hedging activities and any losses in connection
therewith with respect to the Transaction), claims, damages, judgments, liabilities and
expenses (including reasonable attorney’s fees), joint or several, which an Indemnified
Person may become subject to, as a result of Counterparty’s failure to provide Barclays
with a Repurchase Notice on the day and in the manner specified in this paragraph, and
to reimburse, within 30 days, upon written request, each of such Indemnified Persons
for any reasonable legal or other expenses incurred in connection with investigating,
preparing for, providing testimony or other evidence in connection with or defending
any of the foregoing. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against the
Indemnified Person in respect of the foregoing, such Indemnified Person shall

12

 

	 	 	 	promptly notify Counterparty in writing, and Counterparty, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person and any others Counterparty may designate
in such proceeding and shall pay the fees and expenses of such counsel related to
such proceeding. Counterparty shall not be liable for any settlement of any
proceeding contemplated by this paragraph that is effected without its written
consent, but if settled with such consent or if there be a final judgment for the
plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. Counterparty shall
not, without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding contemplated by this paragraph
that is in respect of which any Indemnified Person is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding on terms
reasonably satisfactory to such Indemnified Person. If the indemnification provided
for in this paragraph is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
Counterparty hereunder, in lieu of indemnifying such Indemnified Person thereunder,
shall contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities. The remedies provided for in
this paragraph are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any Indemnified Person at law or in equity. The
indemnity and contribution agreements contained in this paragraph shall remain
operative and in full force and effect regardless of the termination of the
Transaction.
	 
	 	(c)	 	Transfer or Assignment. Counterparty may not transfer or assign any of its
rights or obligations under the Transaction without the prior written consent of
Barclays. Notwithstanding any provision of the Agreement to the contrary, upon written
notice to Counterparty, Barclays may, subject to applicable law, freely transfer and
assign all of its rights and obligations under the Transaction without the consent of
Counterparty to any third party. If at any time at which (1) the Equity Percentage
exceeds 9.0% or (2) Barclays, Barclays Group (as defined below) or any person whose
ownership position would be aggregated with that of Barclays or Barclays Group
(Barclays, Barclays Group or any such person, a “Barclays Person”) under any state or
federal bank holding company or banking laws, or other federal, state or local
regulations or regulatory orders applicable to ownership of Shares (“Applicable Laws”),
owns, beneficially owns, constructively owns, controls, holds the power to vote or
otherwise meets a relevant definition of ownership in excess of a number of Shares
equal to (x) the number of Shares that would give rise to reporting or registration
obligations or other requirements (including obtaining prior approval by a state or
federal regulator) of a Barclays Person under Applicable Laws and with respect to which
such requirements have not been met or the relevant approval has not been received
minus (y) 1.0% of the number of Shares outstanding on the date of determination (either
such condition described in clause (1) or (2), an “Excess Ownership Position”) and
Barclays is unable, after commercially reasonable efforts, to effect a transfer or
assignment on pricing terms and within a time period reasonably acceptable to it of all
or a portion of the Transaction such that an Excess Ownership Position no longer
exists, Barclays may designate any Scheduled Trading Day as an Early Termination Date
with respect to a portion (the “Terminated Portion”) of the Transaction, such that an
Excess Ownership Position no longer exists. In the event that Barclays so designates
an Early Termination Date with respect to a portion of the Transaction, a payment shall
be made pursuant to Section 6 of the Agreement as if (x) an Early Termination Date had
been designated in respect of a Transaction having terms identical to the Transaction
and a Number of Warrants equal to the Terminated Portion, (y) Counterparty shall be the
sole Affected Party with respect to such partial termination and (z) such Transaction
shall be the only Terminated Transaction (and, for the avoidance of doubt, the
provisions of paragraph 5(i) shall apply to any amount that is payable by Barclays to
Counterparty pursuant to this sentence). The “Equity Percentage” as of any day is the
fraction, expressed as a percentage, (A) the numerator of which is the number of Shares
that Barclays and any of its affiliates

13

 

	 	 	 	subject to aggregation with Barclays, for purposes of the “beneficial ownership”
test under Section 13 of the Exchange Act, and all persons who may form a “group”
(within the meaning of Rule 13d-5(b)(1) under the Exchange Act) with Barclays
(“Barclays Group”), beneficially own (within the meaning of Section 13 of the
Exchange Act) on such day and (B) the denominator of which is the number of Shares
outstanding on such day. Notwithstanding any other provision in this Confirmation to
the contrary requiring or allowing Barclays to purchase, sell, receive or deliver
any Shares or other securities to or from Counterparty, Barclays may designate any
of its affiliates to purchase, sell, receive or deliver such Shares or other
securities and otherwise to perform Barclays’ obligations in respect of the
Transaction and any such designee may assume such obligations. Barclays shall be
discharged of its obligations to Counterparty to the extent of any such performance.
	 
	 	(d)	 	Role of Agent. Each of Barclays and Counterparty acknowledges to and agrees
with the other party hereto and to and with the Agent that (i) the Agent is acting as
agent for Barclays under the Transaction pursuant to instructions from such party, (ii)
the Agent is not a principal or party to the Transaction, and may transfer its rights
and obligations with respect to the Transaction, (iii) the Agent shall have no
responsibility, obligation or liability, by way of issuance, guaranty, endorsement or
otherwise in any manner with respect to the performance of either party under the
Transaction, (iv) Barclays and the Agent have not given, and Counterparty is not
relying (for purposes of making any investment decision or otherwise) upon, any
statements, opinions or representations (whether written or oral) of Barclays or the
Agent, other than the representations expressly set forth in this Confirmation or the
Agreement, and (v) each party agrees to proceed solely against the other party, and not
the Agent, to collect or recover any money or securities owed to it in connection with
the Transaction. Each party hereto acknowledges and agrees that the Agent is an
intended third party beneficiary hereunder. Counterparty acknowledges that the Agent
is an affiliate of Barclays.
	 
	 	(e)	 	Regulatory Provisions. The time of dealing for the Transaction will be
confirmed by Barclays upon written request by Counterparty. The Agent will furnish to
Counterparty upon written request a statement as to the source and amount of any
remuneration received or to be received by the Agent in connection with the
Transaction.
	 
	 	(f)	 	Additional Termination Events. The occurrence of any of the following shall
constitute an Additional Termination Event with respect to which (1) Counterparty shall
be the sole Affected Party and (2) the Transaction shall be the sole Affected
Transaction; provided that with respect to any of the following Additional Termination
Events, Barclays may choose to treat part of the Transaction as the sole Affected
Transaction, and, upon termination of the Affected Transaction, a Transaction with a
Number of Warrants equal to the unaffected number of Warrants shall be treated for all
purposes as the Transaction, which shall remain in full force and effect and, for the
avoidance of doubt, shall be subject to all relevant provisions and adjustments as
applicable (including pursuant to the provisions under “Extraordinary Events”):

	 	(i)	 	Barclays reasonably determines that it is advisable to
terminate all or a portion of the Transaction (the “Affected Portion”) so that
Barclays’ related hedging activities with respect thereto will comply with
applicable securities laws, rules or regulations or generally applicable
related policies and procedures of Barclays applied to the Transaction in a
non-discriminatory manner (whether or not such requirements, policies or
procedures are imposed by law or have been voluntarily adopted by Barclays);
provided that Barclays shall treat only the Affected Portion of the Transaction
as the Affected Transaction (it being understood that the Affected Portion may
be 100%);
	 
	 	(ii)	 	the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
“person” becomes the “beneficial

14

 

	 		 	owner” (as these terms are defined in Rule 13d-3 and Rule 13d-5 under the
Exchange Act), directly or indirectly, of more than 50% of Counterparty’s
capital stock that is at the time entitled to vote by the holder thereof in
the election of Counterparty’s board of directors (or comparable body);
	 
	 	(iii)	 	the first day on which a majority of the members of
Counterparty’s board of directors are not continuing directors. “Continuing
directors” means, as of any date of determination, any member of the board of
directors of Counterparty who: (a) was a member of the board of directors on
the Premium Payment Date; or (b) was nominated for election or elected to the
board of directors with the approval of a majority of the continuing directors
who were members of the board at the time of the new director’s nomination or
election;
	 
	 	(iv)	 	the adoption of a plan relating to Counterparty’s liquidation
or dissolution; or
	 
	 	(v)	 	(A) the consolidation, merger or binding share exchange of
Counterparty with or into any other person, other than: (a) any transaction
that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Counterparty’s capital stock; or (b) any
merger primarily for the purpose of changing Counterparty’s jurisdiction of
incorporation and resulting in a reclassification, conversion or exchange of
outstanding shares of common stock solely into shares of common stock of the
surviving entity; provided such shares are or will immediately be
listed for trading on the NASDAQ Global Market, the NASDAQ Global Select Market
or the New York Stock Exchange (or any of their respective successors) or (B)
the sale, lease, transfer, conveyance or other disposition, in one or a series
of related transactions, of all or substantially all of Counterparty’s assets
and those of Counterparty’s subsidiaries taken as a whole to any “person” (as
this term is used in Section 13(d)(3) of the Exchange Act).

	 	 	 	Notwithstanding the foregoing, a transaction or event described in clause (ii)
through (v) above shall not constitute an Additional Termination Event if, in
connection with such transaction or event, or as a result therefrom, a transaction
described in clause (ii) or (v) above occurs and at least 90% of the consideration
paid for Counterparty’s common stock (excluding cash payments for fractional shares
and cash payments made pursuant to dissenters’ appraisal rights) consists of shares
of common stock traded on any of the New York Stock Exchange, the NASDAQ Global
Market or the NASDAQ Global Select Market (or any of their respective successors)
(or will be so traded or quoted immediately following the completion of the merger
or consolidation or such other transaction).
	 
	 	(g)	 	No Collateral. Notwithstanding any provision of this Confirmation, the
Agreement, Equity Definitions or any other agreement between the parties to the
contrary, the obligations of Counterparty under the Transaction are not secured by any
collateral.
	 
	 	(h)	 	Netting and Setoff. Obligations under the Transaction shall not be netted,
recouped or set off (including pursuant to Section 6 of the Agreement) against any
other obligations of the parties, whether arising under the Agreement, this
Confirmation, under any other agreement between the parties hereto, by operation of law
or otherwise, and no other obligations of the parties shall be netted, recouped or set
off (including pursuant to Section 6 of the Agreement) against obligations under the
Transaction, whether arising under the Agreement, this Confirmation, under any other
agreement between the parties hereto, by operation of law or otherwise, and each party
hereby waives any such right of setoff, netting or recoupment provided that both
parties agree that subparagraph (ii) of Section 2(c) of the Agreement shall
apply to the Transaction.

15

 

	 	(i)	 	Alternative Calculations and Counterparty Payment on Early Termination and on
Certain Extraordinary Events. If Counterparty owes Barclays any amount in connection
with the Transaction (i) pursuant to Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the
Equity Definitions (except in the case of an Extraordinary Event in which the
consideration or proceeds to be paid to holders of Shares as a result of such event
consists solely of cash) or (ii) pursuant to Section 6(d)(ii) of the Agreement (except
in the case of an Event of Default in which Counterparty is the Defaulting Party or a
Termination Event in which Counterparty is the Affected Party, other than (x) an Event
of Default of the type described in Section 5(a)(iii), (v), (vi) or (vii) of the
Agreement or (y) a Termination Event of the type described in Section 5(b)(i), (ii),
(iii), (iv), (v) or (vi) of the Agreement that in the case of either (x) or (y)
resulted from an event or events outside Counterparty’s control) (a “Payment
Obligation”), Counterparty shall have the right, in its sole discretion, to satisfy any
such Payment Obligation by delivery of Termination Delivery Units (as defined below) by
giving irrevocable telephonic notice to Barclays, confirmed in writing within one
Scheduled Trading Day, no later than noon New York time on the Early Termination Date
or other date the Transaction is cancelled or terminated, as applicable, where such
notice shall include a representation and warranty from Counterparty that it is not, as
of the date of the telephonic notice and the date of such written notice, aware of any
material non-public information concerning itself or the shares (where “material” shall
have the meaning set forth in paragraph 5(n) below) (“Notice of Counterparty
Termination Delivery”). Within a commercially reasonable period of time following
receipt of a Notice of Counterparty Termination Delivery, Counterparty shall deliver to
Barclays a number of Termination Delivery Units having a fair market value (net of any
brokerage and underwriting commissions and fees, including any customary private
placement fees) equal to the amount of such Payment Obligation (such number of
Termination Delivery Units to be delivered to be determined by the Calculation Agent as
the number of whole Termination Delivery Units that could be sold over a commercially
reasonable period of time to generate proceeds equal to the cash equivalent of such
Payment Obligation). In addition, if, in the good faith reasonable judgment of
Barclays, for any reason, the Termination Delivery Units deliverable pursuant to this
paragraph would not be immediately freely transferable by Barclays under Rule 144, then
Barclays may elect either to (x) accept delivery of such Termination Delivery Units
notwithstanding any restriction on transfer or (y) require that such delivery take
place pursuant to paragraph 5(l) below. If the provisions set forth in this paragraph
are applicable, the provisions of Sections 9.9, 9.10, 9.11 (modified as described
above) and 9.12 of the Equity Definitions shall be applicable, except that all
references to “Shares” shall be read as references to “Termination Delivery Units.”
“Termination Delivery Units” means in the case of a Termination Event, Event of Default
or Delisting, one Share or, in the case of Nationalization, Insolvency, Tender Offer or
Merger Event, a unit consisting of the number or amount of each type of property
received by a holder of one Share (without consideration of any requirement to pay cash
or other consideration in lieu of fractional amounts of any securities) in such
Nationalization, Insolvency, Tender Offer or Merger Event; provided that if such
Nationalization, Insolvency, Tender Offer or 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.
	 
	 	(j)	 	Registration/Private Placement Procedures. If, in the reasonable opinion of
Barclays, following any delivery of Shares or Termination Delivery Units to Barclays
hereunder, such Shares or Termination Delivery Units would be in the hands of Barclays
subject to any applicable restrictions with respect to any registration or
qualification requirement or prospectus delivery requirement for such Shares or
Termination Delivery Units pursuant to any applicable federal or state securities law
(including, without limitation, any such requirement arising under Section 5 of the
Securities Act as a result of such Shares or Termination Delivery Units being
“restricted securities”, as such term is defined in Rule 144 under the Securities Act,
or as a result of the sale of such Shares or Termination Delivery Units) (such Shares
or Termination Delivery Units, “Restricted Shares”), then delivery of such Restricted
Shares shall be effected pursuant to either clause (i) or (ii) below at the election of
Counterparty, unless waived by Barclays. Notwithstanding the foregoing, solely in
respect of any Daily

16

 

	 	 	 	Number of Warrants exercised or deemed exercised on any Expiration Date,
Counterparty shall elect, prior to the first Settlement Date for the first
Expiration Date, a Private Placement Settlement (as defined below) or Registered
Settlement (as defined below) for all deliveries of Restricted Shares for all such
Expiration Dates which election shall be applicable to all Settlement Dates for such
Warrants and the procedures in clause (i) or clause (ii) below shall apply for all
such delivered Restricted Shares on an aggregate basis commencing after the final
Settlement Date for such Warrants. The Calculation Agent shall make reasonable
adjustments to settlement terms and provisions under this Confirmation to reflect a
single Private Placement or Registered Settlement for such aggregate Restricted
Shares delivered hereunder.

	 	(i)	 	If Counterparty elects to settle the
Transaction pursuant to this clause (i) (a “Private Placement
Settlement”), then delivery of Restricted Shares by Counterparty shall
be effected in customary private placement procedures with respect to
such Restricted Shares reasonably acceptable to Barclays; provided that
Counterparty may not elect a Private Placement Settlement if, on the
date of its election, it has taken, or caused to be taken, any action
that would make unavailable either the exemption pursuant to Section
4(2) of the Securities Act for the sale by Counterparty to Barclays (or
any affiliate designated by Barclays) of the Restricted Shares or the
exemption pursuant to Section 4(1) or Section 4(3) of the Securities
Act for resales of the Restricted Shares by Barclays (or any such
affiliate of Barclays). The Private Placement Settlement of such
Restricted Shares shall include customary representations, covenants,
blue sky and other governmental filings and/or registrations,
indemnities to Barclays, due diligence rights (for Barclays or any
designated buyer of the Restricted Shares by Barclays), opinions and
certificates, and such other documentation as is customary for private
placement agreements, all reasonably acceptable to Barclays. In the
case of a Private Placement Settlement, Barclays shall determine the
appropriate discount (in the case of settlement of Termination Delivery
Units pursuant to paragraph 5(i) above) or any Settlement Price (in the
case of settlement of Shares pursuant to Section 2 above) applicable to
such Restricted Shares in a commercially reasonable manner and
appropriately adjust the number of such Restricted Shares to be
delivered to Barclays hereunder. Notwithstanding the Agreement or this
Confirmation, the date of delivery of such Restricted Shares shall be
the Scheduled Trading Day following notice by Barclays to Counterparty,
of such applicable discount and the number of Restricted Shares to be
delivered pursuant to this clause (i). For the avoidance of doubt,
delivery of Restricted Shares shall be due as set forth in the previous
sentence and not be due on the date described in paragraph 5(i) (in the
case of settlement of Termination Delivery Units) or on the Settlement
Date (in the case of settlement in Shares pursuant to Section 2 above).
	 
	 	(ii)	 	If Counterparty elects to settle the
Transaction pursuant to this clause (ii) (a “Registration Settlement”),
then Counterparty shall promptly (but in any event no later than the
beginning of the Resale Period (as defined below)) file and use its
reasonable best efforts to make effective under the Securities Act a
registration statement or supplement or amend an outstanding
registration statement in form and substance reasonably satisfactory to
Barclays, to cover the resale of such Restricted Shares (and any
Make-whole Shares) in accordance with customary resale registration
procedures, including covenants, conditions, representations,
underwriting discounts (if applicable), commissions (if applicable),
indemnities, due diligence rights, opinions and certificates, and such
other documentation as is customary for equity resale underwriting
agreements, all reasonably acceptable to Barclays. If Barclays, in its
sole reasonable discretion, is not satisfied with such

17

 

	 	 	 	procedures and documentation Private Placement Settlement shall
apply. If Barclays is satisfied with such procedures and
documentation, it shall sell the Restricted Shares pursuant to such
registration statement during a period (the “Resale Period”)
commencing on the Exchange Business Day following delivery of such
Restricted Shares (and any Make-whole Shares) and ending on the
earliest of (i) the Exchange Business Day on which Barclays
completes the sale of all Restricted Shares or, in the case of
settlement of Termination Delivery Units, a sufficient number of
Restricted Shares so that the realized net proceeds of such sales
exceed the Payment Obligation (as defined above) and (ii) the date
upon which all Restricted Shares have been sold or transferred
pursuant to Rule 144 (or similar provisions then in force) or Rule
145(d)(1) or (2) (or any similar provision then in force) under the
Securities Act.
	 
	 	(iii)	 	If (ii) above is applicable and the Net Share
Settlement Amount or the Payment Obligation, as applicable, exceeds the
realized net proceeds from such resale, or if (i) above is applicable
and the Freely Tradeable Value (as defined below) of the Net Share
Settlement Amount or the Payment Obligation (in each case as adjusted
pursuant to (i) above), as applicable, exceeds the realized net
proceeds from such resale, Counterparty shall transfer to Barclays by
the open of the regular trading session on the Exchange on the Exchange
Trading Day immediately following the last day of the Resale Period the
amount of such excess (the “Additional Amount”), at Counterparty’s
option, either in cash or in a number of Shares (“Make-whole Shares”;
provided that the aggregate number of Shares and Make-whole Shares
delivered shall not exceed the Maximum Amount) that, based on the
Settlement Price on the last day of the Resale Period (as if such day
was the “Valuation Date” for purposes of computing such Settlement
Price), has a value equal to the Additional Amount. The Resale Period
shall continue to enable the sale of the Make-whole Shares. If
Counterparty elects to pay the Additional Amount in Make-whole Shares,
the requirements and provisions for either Private Placement Settlement
or Registration Settlement shall apply to such payment. This provision
shall be applied successively until the Additional Amount is equal to
zero, subject to paragraph 5(n) below. “Freely Tradeable Value” means
the value of the number of Shares delivered to Barclays which such
Shares would have if they were freely tradeable (without prospectus
delivery) upon receipt by Barclays, as determined by the Calculation
Agent by commercially reasonable means.
	 
	 	(iv)	 	Without limiting the generality of the
foregoing, Counterparty agrees that any Restricted Shares delivered to
Barclays, as purchaser of such Restricted Shares, (A) may be
transferred by and among Barclays and its affiliates and Counterparty
shall effect such transfer without any further action by Barclays and
(B) after the minimum “holding period” within the meaning of Rule
144(d) under the Securities Act has elapsed after any settlement date
for such Restricted Shares, Counterparty shall promptly remove, or
cause the transfer agent for such Restricted Shares to remove, any
legends referring to any such restrictions or requirements from such
Restricted Shares upon delivery by Barclays (or such affiliate of
Barclays) to Counterparty or such transfer agent of seller’s and
broker’s representation letters customarily delivered by Barclays in
connection with resales of restricted securities pursuant to Rule 144
under the Securities Act, without any further requirement for the
delivery of any certificate, consent, agreement, opinion of counsel,
notice or any other document, any transfer tax stamps or payment of any
other amount or any other action by Barclays (or such affiliate of
Barclays).

18

 

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

	 	(k)	 	Limit on Beneficial Ownership. Notwithstanding any other provisions hereof,
Barclays may not exercise any Warrant hereunder, Automatic Exercise shall not apply
with respect thereto, and no delivery hereunder (including pursuant to paragraphs 5(j),
(m) or (n)) shall be made, to the extent (but only to the extent) that, the receipt of
any Shares upon such exercise or delivery, after taking into account any Shares
deliverable to Barclays under any Additional Warrant Transaction Confirmation between
Counterparty and Barclays would result in the existence of an Excess Ownership
Position. Any purported delivery hereunder shall be void and have no effect to the
extent (but only to the extent) that such delivery would result in the existence of an
Excess Ownership Position. If any delivery owed to Barclays hereunder is not made, in
whole or in part, as a result of this provision, Counterparty’s obligation to make such
delivery and Barclay’s right to exercise a Warrant shall not be extinguished and
Counterparty shall make such delivery as promptly as practicable after, but in no event
later than one Scheduled Trading Day after, Barclays gives notice to Counterparty that,
such exercise or delivery would not result in the existence of an Excess Ownership
Position.
	 
	 	(l)	 	Share Deliveries. Counterparty acknowledges and agrees that, to the extent
that Barclays is not then an affiliate, as such term is used in Rule 144 under the
Securities Act, of Counterparty and has not been such an affiliate of Counterparty for
90 days (it being understood that Barclays shall not be considered such an affiliate of
Counterparty solely by reason of its receipt of or right to receive Shares pursuant to
the Transaction), and otherwise satisfies all holding period and other requirements of
Rule 144 under the Securities Act applicable to it, any Shares or Termination Delivery
Units delivered hereunder at any time after 1 year from the Premium Payment Date shall
be eligible for resale under Rule 144 under the Securities Act, and Counterparty agrees
to promptly remove, or cause the transfer agent for such Shares or Termination Delivery
Units to remove, any legends referring to any restrictions on resale under the
Securities Act from the certificates representing such Shares or Termination Delivery
Units. Counterparty further agrees that with respect to any Shares or Termination
Delivery Units delivered hereunder at any time after 6 months from the Premium Payment
Date but prior to 1 year from the Premium Payment Date, to the extent that Counterparty
then satisfies the current information requirement of Rule 144 under the Securities
Act, Counterparty shall promptly remove, or cause the transfer agent for such Shares or
Termination Delivery Units to remove, any legends referring to any such restrictions or
requirements from the certificates representing such Shares or Termination Delivery
Units upon delivery by Barclays to Counterparty or such transfer agent of customary
seller’s and broker’s representation letters in connection with resales of such Shares
or Termination Delivery Units pursuant to Rule 144 under the Securities Act, without
any further requirement for the delivery of any certificate, consent, agreement,
opinion of counsel, notice or any other document, any transfer tax stamps or payment of
any other amount or any other action by Barclays. Counterparty further agrees and
acknowledges that Barclays shall run a holding period under Rule 144 under the
Securities Act with respect to the Warrants and/or any Shares or Termination Delivery
Units delivered hereunder notwithstanding the existence of any other transaction or
transactions between Counterparty and Barclays relating to the Shares. Counterparty
further agrees that Shares or Termination Delivery Units delivered hereunder prior to
the date that is 6 months from the Premium Payment Date may be freely transferred by
Barclays to its affiliates, and Counterparty shall effect such transfer without any
further action by Barclays. Notwithstanding anything to the contrary herein,
Counterparty agrees that any delivery of Shares or Termination Delivery Units shall be
effected by book-entry transfer through the facilities of the Clearance System if, at
the time of such delivery, the certificates representing such Shares or Termination
Delivery Units would not contain any restrictive legend as described above.
Notwithstanding anything to the contrary herein, to the extent the provisions

19

 

	 		 	of Rule 144 under the Securities Act or any successor rule are amended, or the
applicable interpretation thereof by the Securities and Exchange Commission or any
court changes after the Trade Date, including without limitation to lengthen or
shorten the holding periods, the agreements of Counterparty herein shall be deemed
modified to the extent necessary, in the opinion of outside counsel of Counterparty,
to comply with Rule 144 under the Securities Act, including Rule 144, as in effect
at the time of delivery of the relevant Shares or Termination Delivery Units.
	 
	 	(m)	 	Maximum Share Delivery. Notwithstanding any other provision of this
Confirmation or the Agreement, in no event will Counterparty be required to deliver
more than 7,000,000 Shares (the “Maximum Amount”) in the aggregate to Barclays in
connection with the Transaction, subject to the provisions below regarding Deficit
Shares. In the event Counterparty shall not have delivered the full number of Shares
otherwise due in connection with the Transaction (whether upon any scheduled settlement
of the Transaction, any Private Placement Settlement or otherwise) as a result of the
first sentence of this paragraph relating to the Maximum Amount (such deficit, the
“Deficit Shares”), Counterparty shall be continually obligated to deliver, from time to
time until the full number of Deficit Shares have been delivered pursuant to this
paragraph, Shares when, and to the extent, that (i) Shares are repurchased, acquired or
otherwise received by Counterparty or any of its subsidiaries after the Trade Date
(whether or not in exchange for cash, fair value or any other consideration), (ii)
authorized and unissued Shares reserved for issuance in respect of other transactions
prior to such date which prior to the relevant delivery date become no longer so
reserved and (iii) Counterparty additionally authorizes any unissued Shares that are
not reserved for other transactions. Counterparty shall immediately notify Barclays of
the occurrence of any of the foregoing events (including the aggregate number of Shares
subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be
delivered) and promptly deliver of such aggregate number of Shares thereafter.
	 
	 	(n)	 	Tax Disclosure. Notwithstanding anything to the contrary herein, in the Equity
Definitions or in the Agreement, and notwithstanding any express or implied claims of
exclusivity or proprietary rights, the parties (and each of their employees,
representatives or other agents) are authorized to disclose to any and all persons,
beginning immediately upon commencement of their discussions and without limitation of
any kind, the tax treatment and tax structure of the Transaction, and all materials of
any kind (including opinions or other tax analyses) that are provided by either party
to the other relating to such tax treatment and tax structure.
	 
	 	(o)	 	Status of Claims in Bankruptcy. Barclays acknowledges and agrees that this
Confirmation is not intended to convey to Barclays rights with respect to the
Transaction that are senior to the claims of common stockholders in any U.S. bankruptcy
proceedings of Counterparty; provided that nothing herein shall limit or shall be
deemed to limit Barclays’ right to pursue remedies in the event of a breach by
Counterparty of its obligations and agreements with respect to the Transaction;
provided, further, that nothing herein shall limit or shall be deemed to limit
Barclays’ rights in respect of any transactions other than the Transaction.
	 
	 	(p)	 	Securities Contract; Swap Agreement. The parties hereto agree and acknowledge
that Barclays is a “financial institution,” “swap participant” and “financial
participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of the
Bankruptcy Code. The parties hereto further agree and acknowledge (A) that this
Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7)
of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in
connection herewith is a “termination value,” “payment amount” or “other transfer
obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement
payment” or a “transfer” within the meaning of Section 546 of the Bankruptcy Code, and
(ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy
Code, with respect to which each payment and delivery hereunder or in connection
herewith is a “termination value,” a “payment amount” or “other transfer obligation”
within the meaning of Section 362 of the Bankruptcy Code and a “transfer” within the
meaning of Section 546 of the Bankruptcy Code, and (B) that Barclays is entitled to the

20

 

	 	 	 	protections afforded by, among other sections, Section 362(b)(6), 362(b)(17),
362(b)(27), 362(o), 546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the
Bankruptcy Code.
	 
	 	(q)	 	Right to Extend. Barclays may postpone any potential Expiration Date or
postpone or extend any other date of valuation or delivery with respect to some or all
of the relevant Warrants (in which event the Calculation Agent shall make appropriate
adjustments to the Net Share Amount for such Expiration Date), if Barclays determines,
in its reasonable discretion, that such postponement or extension is reasonably
necessary or appropriate to preserve Barclays’ or its affiliate’s hedging or hedge
unwind activity hereunder in light of existing liquidity conditions or to enable
Barclays or its affiliate to effect purchases or sale of Shares in connection with its
hedging, hedge unwind or settlement activity hereunder in a manner that would, if
Barclays or such affiliate were Issuer or an affiliated purchaser of Issuer, be in
compliance with applicable legal, regulatory or self-regulatory requirements, or with
related policies and procedures applicable to Barclays and/or such affiliate.
	 
	 	(r)	 	Payments on Early Termination. The parties hereto agree that for the
Transaction, for the purposes of Section 6(e) of the Agreement, Second Method and Loss
will apply.
	 
	 	(s)	 	Illegality. The parties agree that for the avoidance of doubt, for purposes of
Section 5(b)(i) of the Agreement, “any applicable law” shall include the Dodd-Frank
Wall Street Reform and Consumer Protection Act of 2010, any rules and regulations
promulgated thereunder and any similar law or regulation, without regard to Section 739
of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar
legal certainty provision in any legislation enacted, or rule or regulation
promulgated, on or after the Trade Date, and the consequences specified in the
Agreement, including without limitation, the consequences specified in Section 6 of the
Agreement, shall apply to any Illegality arising from any such act, rule or regulation.
	 
	 	(t)	 	Governing Law. The law of the State of New York (without reference to choice
of law doctrine).
	 
	 	(u)	 	Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION
OR PROCEEDING RELATING TO THE TRANSACTION. EACH PARTY (I) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH A SUIT, ACTION OR
PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE
OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THE TRANSACTION, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS PROVIDED HEREIN.
	 
	 	(v)	 	Tax Matters. The parties hereto agree that for the Transaction “Indemnifiable
Tax” shall not include any Tax imposed pursuant to section 1471 or 1472 of the Code.

6. Account Details:

	 	(a)	 	Account for payments to Counterparty:
	 
	 	 	 	InterDigital, Inc.
	 
	 	 	 	ABA:
	 
	 	 	 	Acct:
	 
	 	 	 	Acct No.:

21

 

	 	(b)	 	Account for payments to Barclays:
	 
	 	 	 	Bank: 
	 
	 	 	 	ABA# 
	 
	 	 	 	BIC: 
	 
	 	 	 	Acct:
	 
	 	 	 	Beneficiary: 
	 
	 	 	 	Ref: 
	 
	 	 	 	Account for delivery of Shares to Barclays:
	 
	 	 	 	Bank:
	 
	 	 	 	ABA# 
	 
	 	 	 	BIC: 
	 
	 	 	 	Acct:
	 
	 	 	 	Beneficiary:
	 
	 	 	 	Ref: 

7. Offices:

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

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

8. Notices:

For purposes of this Confirmation:

	 	(a)	 	Address for notices or communications to Counterparty:
	 
	 	 	 	InterDigital, Inc.
	 
	 		 	781 Third Avenue
	 
	 	 	 	King of Prussia, Pennsylvania 19406
	 
	 	 	 	Attention: Scott McQuilkin
	 
	 	 	 	Telephone: (+1) 610-878-1850
	 
	 	 	 	Facsimile: (+1) 610-878-7844

	 	(b)	 	Address for notices or communications to Barclays:
	 
	 	 	 	Barclays Capital Inc.
	 
	 		 	745 Seventh Ave.
	 
	 	 	 	New York, NY 10019
	 
	 	 	 	Attention: General Counsel
	 
	 	 	 	Telephone: (+1) 212-412-4000
	 
	 	 	 	Facsimile: (+1) 212-412-7519
	 
	 	 	 	with a copy to:
	 
	 	 	 	Barclays Capital Inc.
	 
	 		 	745 Seventh Ave.
	 
	 	 	 	New York, NY 10019
	 
	 	 	 	Attn: Paul Robinson
	 
	 	 	 	Telephone: (+1) 212-526-0111
	 
	 	 	 	Facsimile: (+1) 917-522-0458

22

 

	 
	 	 	 	and
	 
	 	 	 	Barclays Bank PLC, 5 The North Colonnade
	 
	 	 	 	Canary Wharf, London E14 4BB
	 
	 	 	 	Facsimile: 44(20) 777 36461
	 
	 	 	 	Phone: 44(20) 777 36810

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

THE SECURITIES REPRESENTED BY THE CONFIRMATION HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER UNITED
STATES FEDERAL OR STATE SECURITIES LAWS; SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF APPROPRIATE REGISTRATION UNDER SUCH SECURITIES LAWS OR EXCEPT IN A TRANSACTION
EXEMPT FROM OR NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF SUCH SECURITIES LAWS.

23

 

Counterparty hereby agrees to check this Confirmation and to confirm that the foregoing
correctly sets forth the terms of the Transaction by signing in the space provided below and
returning to Barclays a facsimile of the fully-executed Confirmation to Barclays at (+1)
917-522-0458. Originals shall be provided for your execution upon your request.

	 	 	 	 
	Very truly yours,

BARCLAYS CAPITAL INC.

acting solely as Agent in connection with the Transaction

 	 
	By:  	/s/  Adam Lawlor
 	 
	 	Name:  	Adam Lawlor 	 
	 	Title:  	Authorised Signatory 	 

	 	 	 	 
	

Accepted and confirmed as of the Trade Date:

INTERDIGITAL, INC.

 	 
	By:  	/s/  Scott A. McQuilkin
 	 
	 	Name:  	Scott A. McQuilkin 	 
	 	Title:  	Chief Financial Officer 	 

24

 

SCHEDULE A

For purposes of the Transaction, the following terms shall have the following values/meanings:

	 	 	 

	1. Strike Price:

	 	USD66.3528
	 
	2. Premium:

	 	USD27,600,000.00
	 
	3. Final Disruption Date:

	 	August 31, 2016

25

 

	 
	SCHEDULE B

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

	 	 	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date

26exv10w4

Exhibit 10.4

	 	 	 

	 

	 	Barclays Bank PLC, 5
	 

	 	The North Colonnade
	 

	 	Canary Wharf, London E14 4BB
	 

	 	Facsimile:  +44(20)77736461
	 

	 	Telephone: +44 (20) 777 36810
	 
	 	 
	 

	 	c/o Barclays Capital Inc.
	 

	 	as Agent for Barclays Bank PLC
	 

	 	745 Seventh Ave
	 

	 	New York, NY 10166
	 

	 	Telephone: +1 212 412 4000

	 	 	 

	DATE:

	 	March 30, 2011
	 
	 	 
	TO:

	 	InterDigital, Inc.
	ATTENTION:

	 	Scott McQuilkin
	TELEPHONE:

	 	(+1) 610-878-1850
	FACSIMILE:

	 	(+1) 610-878-7844
	 
	 	 
	FROM:

	 	Barclays Capital Inc., acting as Agent for Barclays Bank PLC
	ATTENTION:

	 	Paul Robinson
	TELEPHONE:

	 	(+1) 212-526-0111
	FACSIMILE:

	 	(+1) 917-522-0458
	 
	 	 
	SUBJECT:

	 	Additional Warrant Transaction

The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions
of the Transaction entered into between Barclays Bank PLC (“Barclays”), through its agent Barclays
Capital Inc. (the “Agent”), and InterDigital, Inc. (“Counterparty”) on the Trade Date specified
below (the “Transaction”). This Confirmation constitutes a “Confirmation” as referred to in the
Master Agreement specified below. Barclays is regulated by the Financial Services Authority.
Barclays Bank PLC is not a member of the Securities Investor Protection Corporation (“SIPC”).

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.,
are incorporated into this Confirmation. In the event of any inconsistency between the Equity
Definitions and this Confirmation, this Confirmation shall govern. For purposes of the Equity
Definitions, the Transaction shall be deemed to be a Share Option Transaction, and each reference
herein to a Warrant shall be deemed to be a reference to a Call or an Option, as context requires.

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

1. This Confirmation evidences a complete and binding agreement between Barclays and Counterparty
as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to, an agreement in the form of the ISDA 1992 Master
Agreement (Multicurrency — Cross Border) as if Barclays and Counterparty had executed an agreement
(the “Agreement”) in such form (without any Schedule but

1

 

with the “Cross-Default” provisions of Section 5(a)(vi) applicable to Counterparty with (x) a
“Threshold Amount” of $15,000,000 and (y) the phrase “or becoming capable at such time of being
declared” deleted from clause (1) of such Section 5(a)(vi), and with such other elections set forth
in this Confirmation) on the Trade Date. In the event of any inconsistency between provisions of
the Agreement and this Confirmation, this Confirmation will prevail for the purpose of the
Transaction. The parties hereby agree that no Transaction other than the Transaction to which this
Confirmation relates shall be governed by the Agreement.

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

	 	 	 

	General Terms:
	 	 
	 
	 	 
	Trade Date:

	 	March 30, 2011.
	 
	 	 
	Components:

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

	 	European.
	 
	 	 
	Warrant Type:

	 	Call.
	 
	 	 
	Seller:

	 	Counterparty.
	 
	 	 
	Buyer:

	 	Barclays.
	 
	 	 
	Shares:

	 	The common stock, par value USD0.01 per share,
of Counterparty (Ticker symbol “IDCC”).
	 
	 	 
	Number of Warrants:

	 	For each Component of the Transaction, as
provided in Schedule B to this Confirmation.
	 
	 	 
	Warrant Entitlement:

	 	One Share per Warrant.
	 
	 	 
	Strike Price:

	 	As provided in Schedule A to this Confirmation.
	 
	 	 
	Premium:

	 	As provided in Schedule A to this Confirmation.
	 
	 	 
	Premium Payment Date:

	 	April 4, 2011
	 
	 	 
	Exchange:

	 	The NASDAQ Global Select Market
	 
	 	 
	Related Exchange(s):

	 	All Exchanges.
	 
	 	 
	Calculation Agent:

	 	Barclays. All determinations made by the
Calculation Agent shall be made in good faith
and in a commercially reasonable manner.
Following any determination or calculation by
the Calculation Agent hereunder, upon a written
request by Counterparty, the Calculation Agent
will provide to Counterparty by e-mail to the
e-mail address provided by Counterparty in such
written request a report (in a commonly used
file format for the storage and manipulation of
financial data) displaying in reasonable detail
such determination or calculation, including,
where applicable, a description of the
methodology and data applied, it being
understood that the Calculation Agent shall not
be obligated to disclose any proprietary models
used by it for such determination or
calculation.

2

 

	 	 	 

	Procedures for Exercise:
	 	 
	 
	 	 
	In respect of any Component
	 	 
	 
	 	 
	Expiration Time:

	 	The Valuation Time.
	 
	 	 
	Expiration Date(s):

	 	As provided in Schedule B to this Confirmation
(or, if such date is not a Scheduled Trading
Day, the next following Scheduled Trading Day
that is not already an Expiration Date for
another Component); provided that if that date
is a Disrupted Day, the Expiration Date for such
Component shall be the first succeeding
Scheduled Trading Day that is not a Disrupted
Day and is not or is not deemed to be an
Expiration Date in respect of any other
Component of the Transaction hereunder; and
provided further that if the Expiration Date has
not occurred pursuant to the preceding proviso
as of the Final Disruption Date, the Calculation
Agent shall have the right to elect, in its sole
discretion, that the Final Disruption Date shall
be the Expiration Date (irrespective of whether
such date is a Disrupted Day or an Expiration
Date in respect of any other Component for the
Transaction) and the Settlement Price for the
Final Disruption Date shall be determined by the
Calculation Agent in a commercially reasonable
manner. Notwithstanding the foregoing and
anything to the contrary in the Equity
Definitions, if a Market Disruption Event occurs
on any Expiration Date, (i) the Calculation
Agent may determine that such Expiration Date is
a Disrupted Day only in part, in which case the
Calculation Agent shall make adjustments to the
number of Warrants for the relevant Component
for which such day shall be the Expiration Date
and shall designate the Scheduled Trading Day
determined in the manner described in the
immediately preceding sentence as the Expiration
Date for the remaining Warrants for such
Component and (ii) the Settlement Price for such
Disrupted Day may be adjusted by the Calculation
Agent as appropriate on the basis of the nature
and duration of the relevant Market Disruption
Event. Any day on which the Exchange is
scheduled as of the Trade Date to close prior to
its normal closing time shall be considered a
Disrupted Day in whole. Section 6.6 of the
Equity Definitions shall not apply to any
Valuation Date occurring on an Expiration Date.
	 
	 	 
	Final Disruption Date:

	 	As provided in Schedule A to this Confirmation.
	 
	 	 
	Automatic Exercise:

	 	Applicable; provided that Section 3.4(a) of the
Equity Definitions shall apply as if Cash
Settlement applied.
	 
	 	 
	Market Disruption Event:

	 	Section 6.3(a) of the Equity Definitions shall
be amended by deleting the words “at any time
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 replacing them
with the words “at any time during the regular
trading session on the Exchange, without regard
to after hours or any other trading outside of
the regular trading session hours”, by amending
and restating clause (a)(iii) thereof in its
entirety to read as follows: “(iii) an Early
Closure that the Calculation Agent determines is
material” and by adding the words “, (iv) a
Regulatory Disruption or (v) a Liquidity Event”
after clause (a)(iii) as restated above.

3

 

	 	 	 

	 

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

	 	A “Regulatory Disruption” shall occur if
Barclays determines in its reasonable discretion
that it is appropriate in light of legal,
regulatory or self-regulatory requirements or
related policies or procedures for Barclays to
refrain from all or any part of the market
activity in which it would otherwise engage in
connection with the Transaction.
	 
	 	 
	Liquidity Event:

	 	A “Liquidity Event” shall occur if on any day
the trading volume or liquidity of trading in
the Shares is materially reduced from levels
prevailing on the Trade Date and the Calculation
Agent determines in its commercially reasonable
discretion that as a result it would be
appropriate to treat such day as a Disrupted Day
or a partially Disrupted Day.
	 
	 	 
	Disrupted Day:

	 	The definition of “Disrupted Day” in Section 6.4
of the Equity Definitions shall be amended by
adding the following sentence after the first
sentence: “A Scheduled Trading Day on which a
Related Exchange fails to open during its
regular trading session will not be a Disrupted
Day if the Calculation Agent determines that
such failure will not have a material impact on
Barclays’s ability to unwind any hedging
transactions related to the Transaction.”
	 
	 	 
	Valuation:
	 	 
	 
	 	 
	In respect of any Component
	 	 
	 
	 	 
	Valuation Time:

	 	Scheduled Closing Time; provided that if the
principal trading session is extended, the
Calculation Agent shall determine the Valuation
Time in its reasonable discretion.
	 
	 	 
	Valuation Date:

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

	 	Net Share Settlement.
	 
	 	 
	Net Share Settlement:

	 	On each Settlement Date, Counterparty shall
deliver to Barclays a number of Shares equal to
the Net Share Amount for such Settlement Date to
the account specified by Barclays, and cash in
lieu of any fractional shares valued at the
Settlement Price for the Valuation Date
corresponding to such Settlement Date. If, in
the good faith reasonable judgment of Barclays,
the Shares deliverable hereunder would not be
immediately freely transferable by Barclays
under Rule 144 (or any successor provision,
collectively, “Rule 144”) under the U.S.
Securities Act of 1933, as amended (the
“Securities Act”), then Barclays may elect to
either (x) accept delivery of such Shares
notwithstanding the fact that such Shares are
not freely transferable by Barclays under Rule
144 or (y) require that such delivery take place
pursuant to paragraph 5(l) below.
	 
	 	 
	Net Share Amount:

	 	The Option Cash Settlement Amount divided by the Settlement Price, each determined as if Cash Settlement applied.

4

 

	 	 	 

	Settlement Price:

	 	On any Valuation Date, the per Share
volume-weighted average price as displayed under
the heading “Bloomberg VWAP” on Bloomberg page
“IDCC <equity> AQR” (or any successor
thereto) in respect of the period from the
scheduled opening time of the Exchange to the
Scheduled Closing Time on such Valuation Date
(or if such volume-weighted average price is
unavailable or is manifestly incorrect, the
market value of one Share on such Valuation
Date, as determined by the Calculation Agent).
	 
	 	 
	Settlement Date(s):

	 	As determined in reference to Section 9.4 of the
Equity Definitions, subject to paragraph 5(j)(i)
hereof.
	 
	 	 
	Other Provisions Applicable to Net Share
Settlement:

	 	The provisions of Sections 9.1(c), 9.4 (except
that “Settlement Date” shall be as defined
above, unless a Settlement Disruption Event
prevents delivery of such Shares on that date),
9.8, 9.9, 9.11(as modified herein), 9.12 and
10.5 of the Equity Definitions will be
applicable, as if “Physical Settlement” applied
to the Transaction.
	 
	 	 
	Representation and Agreement:

	 	Notwithstanding Section 9.11 of the Equity
Definitions, the parties acknowledge that any
Shares delivered to Barclays may be, upon
delivery, subject to restrictions and
limitations arising from Counterparty’s status
as issuer of the Shares under applicable
securities laws as a result of the fact that
Counterparty is the issuer of the Shares.
	 
	 	 
	Dividends:
	 	 
	 
	 	 
	Dividend Adjustments:

	 	If at any time during the period from but
excluding the Trade Date, to and including the
final Expiration Date an ex-dividend date for a
cash dividend occurs with respect to the Shares
and that dividend differs from the Regular
Dividend on a per Share basis, then the
Calculation Agent may adjust the Strike Price,
the Number of Warrants and/or the Warrant
Entitlement to extent appropriate preserve the
fair value of the Warrants to Dealer after
giving effect to such dividend.
	 
	 	 
	Regular Dividend:

	 	USD0.10 per Share per regular quarterly dividend
period of the Issuer.
	 
	 	 
	Adjustments:
	 	 
	 
	 	 
	Method of Adjustment:

	 	Calculation Agent Adjustment; provided that the
Equity Definitions shall be amended by replacing
the words “diluting or concentrative” in
Sections 11.2(a), 11.2(c) (in two instances) and
11.2(e)(vii) with the word “material” and by
adding the words “or the Transaction” after the
words “theoretical value of the relevant Shares”
in Section 11.2(a), 11.2(c) and 11.2(e)(vii);
provided, further that adjustments may be made
to account for changes in volatility, expected
dividends, stock loan rate and liquidity
relative to the relevant Shares.

5

 

	 	 	 

	Extraordinary Events:
	 	 
	 
	 	 
	New Shares:

	 	Section 12.1(i) of the Equity Definitions is
hereby amended by deleting the text in clause
(i) in its entirety and replacing it with the
phrase “publicly quoted, traded or listed on any
of the New York Stock Exchange, the NASDAQ
Global Select Market or the NASDAQ Global Market
(or their respective successors)”.
	 
	 	 
	Share-for-Share:

	 	The definition of “Share-for-Share” set forth in
Section 12.1(f) of the Equity Definitions is
hereby amended by the deletion of the
parenthetical in clause (i) thereof.
	 
	 	 
	Consequence of Merger Events:
	 	 
	 
	 	 
	Merger Event:

	 	Applicable; provided that if an event occurs
that constitutes both a Merger Event under
Section 12.1(b) of the Equity Definitions and
Additional Termination Event under paragraph
5(f)(i) of this Confirmation, Barclays may
elect, in its commercially reasonable judgment,
whether the provisions of Section 12.2 of the
Equity Definitions or paragraph 5(f)(i) will
apply.
	 
	 	 
	     Share-for-Share:

	 	Modified Calculation Agent Adjustment.
	 
	 	 
	     Share-for-Other:

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

	 	Cancellation and Payment (Calculation Agent
Determination); provided that Barclays may elect
Component Adjustment.
	 
	 	 
	Consequence of Tender Offers:
	 	 
	 
	 	 
	Tender Offer:

	 	Applicable; provided that if an event occurs
that constitutes both a Tender Offer under
Section 12.1(d) of the Equity Definitions and
Additional Termination Event under paragraph
5(f)(i) of this Confirmation, Barclays may
elect, in its commercially reasonable judgment,
whether the provisions of Section 12.3 of the
Equity Definitions or paragraph 5(f)(i) will
apply.
	 
	 	 
	     Share-for-Share:

	 	Modified Calculation Agent Adjustment.
	 
	 	 
	     Share-for-Other:

	 	Modified Calculation Agent Adjustment.
	 
	 	 
	     Share-for-Combined:

	 	Modified Calculation Agent Adjustment.
	 
	 	 
	Modified Calculation Agent Adjustment:

	 	For greater certainty, the definition of
“Modified Calculation Agent Adjustment” in
Sections 12.2 and 12.3 of the Equity Definitions
shall be amended by (i) adding the following
italicized language after the stipulated
parenthetical provision: “(including adjustments
to account for changes in volatility, expected
dividends, stock loan rate or liquidity relevant
to the Shares or to the Transaction) from the
Announcement Date or the Determination Date, as
applicable, to the Merger Date (Section 12.2) or
Tender Offer Date (Section 12.3).” and (ii)
deleting the phrase “expected dividends,” from
such stipulated parenthetical provision.
	 
	 	 
	Announcement Date:

	 	The definition of “Announcement Date” in Section
12.1 of the Equity Definitions shall be amended
by (i) replacing the word “leads to the” in the
third and the fifth lines thereof with the words
“, if completed, would lead to a”, (ii)
replacing the words “voting shares” in the fifth
line thereof with the word

6

 

	 	 	 

	 

	 	“Shares”, (iii)
inserting the words “by any entity” after the
word “announcement” in the second and the fourth
lines thereof, (iv) inserting the words “or to
explore the possibility of engaging in” after
the words “engage in” in the second line thereto
and (v) inserting the words “or to explore the
possibility of purchasing or otherwise
obtaining” after the word “obtain” in the fourth
line thereto.
	 
	 	 
	Announcement Event:

	 	If an Announcement Event has occurred, the
Calculation Agent shall have the right to
determine the economic effect of the
Announcement Event on the theoretical value of
the Transaction (including without limitation
any change in volatility, stock loan rate or
liquidity relevant to the Shares or to the
Transaction) (i) at a time that it deems
appropriate, from the Announcement Date to the
date of such determination (the “Determination
Date”), and (ii) on the Valuation Date, from the
Announcement Date or the Determination Date, as
applicable, to the Valuation Date. If any such
economic effect is material, the Calculation
Agent will adjust the terms of the Transaction
to reflect such economic effect. “Announcement
Event” shall mean the occurrence of the
Announcement Date of a Merger Event or Tender
Offer or potential Merger Event or potential
Tender Offer.
	 
	 	 
	Composition of Combined Consideration:

	 	Not Applicable; provided that, notwithstanding
Sections 12.5(b) and 12.1(f) of the Equity
Definitions, to the extent that the composition
of the consideration for the relevant Shares
pursuant to a Tender Offer or Merger Event could
be elected by an actual holder of the Shares,
the Calculation Agent will, in its sole
discretion, determine such composition.
	 
	 	 
	Nationalization, Insolvency or Delisting:

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

	 	Applicable; provided that Section 12.9(a)(ii) of
the Equity Definitions is hereby amended by (i)
replacing the phrase “the interpretation” in the
third line thereof with the phrase “, or public
announcement of, the formal or informal
interpretation” and (ii) by replacing the word
“Shares” where it appears in clause (X) thereof
with the words “Hedge Position”; and provided
further that Barclays shall not adjust the terms
of the Transaction for a Change in Law referred
to in clause (Y) of Section 12.9(a)(ii) of the
Equity Definitions except to the extent it is
exercising its right to terminate or adjust
transactions as a result of a “Change in Law”
event with respect to other similarly situated
customers.

7

 

	 	 	 

	 

	 	The parties agree that, for the avoidance of
doubt, for purposes of Section 12.9(a)(ii) of
the Equity Definitions, “any applicable law or
regulation” shall include the Dodd-Frank Wall
Street Reform and Consumer Protection Act of
2010, any rules and regulations promulgated
thereunder and any similar law or regulation,
and the consequences specified in Section
12.9(b)(i) of the Equity Definitions (as
modified below) shall apply to any Change in Law
arising from any such act, rule or regulation.
	 
	 	 
	     Failure to Deliver:

	 	Not Applicable.
	 
	 	 
	     Insolvency Filing:

	 	Applicable.
	 
	 	 
	     Hedging Disruption:

	 	Applicable; provided that
	 
	 	 
	 

	 	(i) Section 12.9(a)(v) of the Equity Definitions
is hereby modified by inserting the following
three sentences at the end of such Section:
	 
	 

	 	“Such inability described in phrases (A) or (B)
above shall not constitute a “Hedging
Disruption” unless (x) such inability does not
result from factors particular to Hedging Party
(such as Hedging Party’s creditworthiness or
financial position, or particular actions or
transactions undertaken by the Hedging Party
unrelated to the hedging of the Transaction) and
(y) such inability will result in continued
performance by the Hedging Party under the
Transaction being commercially unreasonable or
commercially impracticable. For the avoidance
of doubt, the term “equity price risk” shall be
deemed to include, but shall not be limited to,
stock price and volatility risk. And, for the
further avoidance of doubt, any such
transactions or assets referred to in phrases
(A) or (B) above must be available on
commercially reasonable pricing terms.”

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

	 	Applicable; provided that Sections 12.9(a)(vii)
and 12.9(b)(iv) of the Equity Definitions are
amended by deleting the words “at a rate equal
to or less than the Maximum Stock Loan Rate” and
replacing it with the words “at a Borrow Cost
equal to or less than the Maximum Stock Loan
Rate”.
	 
	 	 
	     Borrow Cost:

	 	The cost to borrow the relevant Shares that
would be incurred by a third party market
participant borrowing such Shares, as determined
by the Calculation Agent on the relevant date of
determination. Such costs shall include (a) the
spread below FED-FUNDS that would be earned on
collateral posted in connection with such
borrowed Shares, net of any costs or fees, and
(b) any stock loan borrow fee that would be
payable for such Shares, expressed as fixed rate
per annum.
	 
	 	 
	     Maximum Stock Loan Rate:

	 	200 basis points
	 
	 	 
	     Increased Cost of Stock Borrow:

	 	Applicable; provided that (a) Section
12.9(a)(viii) of the Equity Definitions shall be
amended by deleting “rate to borrow Shares” and
replacing it with “Borrow Cost” and (b)

8

 

	 	 	 

	 

	 	Section
12.9(b)(v) of the Equity Definitions shall be
amended by (i) adding the word “or” immediately
before the phrase “(B)”, (ii) deleting
subsection (C) in its entirety, (iii) replacing
“either party” in the penultimate sentence with
“the Hedging Party”, and (iv) replacing the word
“rate” in clauses (X) and (Y) of the final
sentence therein with the words “Borrow Cost”.
	 
	 	 
	     Initial Stock Loan Rate:

	 	25 basis points, as adjusted by the Calculation
Agent to reflect any subsequent Price Adjustment
due to an Increased Cost of Stock Borrow.
	 
	 	 
	     FED FUNDS:

	 	“FED FUNDS” means, for any day, the rate set
forth for such day opposite the caption “Federal
funds”, as such rate is displayed on the page
“FedsOpen <Index> <GO>” on the
BLOOMBERG Professional Service, or any successor
page; provided that if no rate appears for any
day on such page, the rate for the immediately
preceding day for which a rate does so appear
shall be used for such day.
	 
	 	 
	     Hedging Party:

	 	Barclays or an affiliate of Barclays that is
involved in the hedging of the Transaction for
all applicable Additional Disruption Events.
	 
	 	 
	Determining Party:

	 	Barclays for all applicable Extraordinary Events.
	 
	 	 
	Acknowledgments:
	 	 
	 
	 	 
	Non-Reliance:

	 	Applicable.
	 
	 	 
	Agreements and Acknowledgments Regarding
Hedging Activities:

	 	Applicable.
	 
	 	 
	Additional Acknowledgments:

	 	Applicable.

	3.	 	Mutual Representations, Warranties and Agreements.

Each of Barclays and Counterparty represents and warrants to, and agrees with, the other party
that:

	 	(a)	 	Commodity Exchange Act. It is an “eligible contract participant” within the
meaning of Section 1a(12) of the U.S. Commodity Exchange Act, as amended (the “CEA”).
The Transaction has been subject to individual negotiation by the parties. The
Transaction has not been executed or traded on a “trading facility” as defined in
Section 1a(33) of the CEA.
	 
	 	(b)	 	Securities Act. It is a “qualified institutional buyer” as defined in Rule
144A under the Securities Act, or an “accredited investor” as defined in Section
2(a)(15)(ii) of the Securities Act.
	 
	 	(c)	 	ERISA. The assets used in the Transaction (1) are not assets of any “plan” (as
such term is defined in Section 4975 of the U.S. Internal Revenue Code (the “Code”))
subject to Section 4975 of the Code or any “employee benefit plan” (as such term is
defined in Section 3(3) of the U.S. Employee Retirement Income Security Act of 1974, as
amended (“ERISA”)) subject to Title I of ERISA, and (2) do not constitute “plan assets”
within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section
2510-3-101.

	4.	 	Representations, Warranties and Agreements of Counterparty.

In addition to the representations and warranties in the Agreement and those contained elsewhere
herein, Counterparty further represents, warrants and agrees that:

9

 

	 	(a)	 	the representations and warranties of Counterparty set forth in Section 2 of
the Purchase Agreement, dated as of March 29, 2011 between Counterparty and Barclays
Capital Inc. (the “Purchase Agreement”), are true and correct and are hereby deemed to
be repeated to Barclays as if set forth herein;
	 
	 	(b)	 	the Shares of Counterparty initially issuable upon exercise of the Warrant (the
“Warrant Shares”) have been reserved for issuance by all required corporate action of
Counterparty. The Warrant Shares have been duly authorized and, when delivered as
contemplated by the terms of the Warrant following the exercise of the Warrant in
accordance with the terms and conditions of the Warrant, will be validly issued,
fully-paid and non-assessable, and the issuance of the Warrant Shares will not be
subject to any pre-emptive or similar rights;
	 
	 	(c)	 	Counterparty shall promptly provide written notice to Barclays upon obtaining
knowledge of the occurrence of any event that would constitute an Event of Default, a
Potential Event of Default, a Potential Adjustment Event, a Merger Event or any other
Extraordinary Event; provided, however, that should Counterparty be in possession of
material non-public information regarding Counterparty, Counterparty shall not
communicate such information to Barclays;
	 
	 	(d)	 	(A) Counterparty is acting for its own account, and it has made its own
independent decisions to enter into the Transaction and as to whether the Transaction
is appropriate or proper for it based upon its own judgment and upon advice from such
advisers as it has deemed necessary, (B) Counterparty is not relying on any
communication (written or oral) of Barclays or any of its affiliates as investment
advice or as a recommendation to enter into the Transaction (it being understood that
information and explanations related to the terms and conditions of the Transaction
shall not be considered investment advice or a recommendation to enter into the
Transaction) and (C) no communication (written or oral) received from Barclays or any
of its affiliates shall be deemed to be an assurance or guarantee as to the expected
results of the Transaction;
	 
	 	(e)	 	Counterparty is entering into the Transaction, solely for the purposes stated
in the board resolution authorizing the Transaction and in its public disclosure, and
there is no internal policy, whether written or oral, of Counterparty that would
prohibit Counterparty from entering into any aspect of the Transaction, including, but
not limited to, the issuance of Shares to be made pursuant hereto;
	 
	 	(f)	 	Counterparty is not as of the Trade Date and as of the date on which
Counterparty delivers any Termination Delivery Units, and shall not be after giving
effect to the transactions contemplated hereby, “insolvent” (as such term is defined in
Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the
“Bankruptcy Code”));
	 
	 	(g)	 	Counterparty understands, agrees and acknowledges that Barclays has no
obligation or intention to register the Transaction under the Securities Act, any state
securities law or other applicable federal securities law;
	 
	 	(h)	 	each of Counterparty’s filings under the Securities Act, the Exchange Act, or
other applicable securities laws that are required to be filed have been filed and
that, as of the respective dates thereof and as of the date of this representation,
such filings when considered as a whole (with the more recent such filings deemed to
amend inconsistent statements contained in any earlier such filings) do not contain any
misstatement of a material fact or any omission of a material fact required to be
stated therein or necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading;
	 
	 	(i)	 	On the Trade Date and as of the date of on which Counterparty delivers any
Termination Delivery Units, Counterparty is not in possession of any material
non-public information regarding the Issuer or the Shares. “Material” information for
these purposes is any information to which an investor would reasonably attach
importance in reaching a decision to buy, sell or hold any securities of the Issuer.

10

 

	 	(j)	 	Counterparty is not, and after giving effect to the transactions contemplated
hereby will not be, required to register as an “investment company” as such term is
defined in the Investment Company Act of 1940, as amended;
	 
	 	(k)	 	Counterparty understands, agrees and acknowledges that no obligations of
Barclays to it hereunder shall be entitled to the benefit of deposit insurance and that
such obligations shall not be guaranteed by any affiliate of Barclays or any
governmental agency;
	 
	 	(l)	 	without limiting the generality of Section 13.1 of the Equity Definitions,
Counterparty acknowledges that Barclays is not making any representations or warranties
with respect to the treatment of the Transaction under any accounting standards
including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging,
ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and
Hedging — Contracts in Entity’s Own Equity (or any successor issue statements) or
under FASB’s Liabilities & Equity Project;
	 
	 	(m)	 	Counterparty is not entering into the Transaction for the purpose of (i)
creating actual or apparent trading activity in the Shares (or any security convertible
into or exchangeable for the Shares) or (ii) raising or depressing or otherwise
manipulating the price of the Shares (or any security convertible into or exchangeable
for the Shares) or otherwise in violation of the Exchange Act;
	 
	 	(n)	 	Counterparty shall deliver to Barclays an opinion of counsel, dated as of the
Premium Payment Date and reasonably acceptable to Barclays in form and substance, with
respect to the matters set forth in Section 3(a) of the Agreement and paragraph 4(b) of
this Confirmation, containing customary exceptions, assumptions and qualifications, in
each case reasonably acceptable to Barclays;
	 
	 	(o)	 	Counterparty has not entered into any obligation that would contractually limit
it from effecting Net Share Settlement under the Transaction and it agrees not to enter
into any such obligation during the term of the Transaction;
	 
	 	(p)	 	(x)(A) On the Trade Date, the Shares or securities that are convertible into,
or exchangeable or exercisable for Shares, are not, and shall not be, subject to a
“restricted period,” as such term is defined in Regulation M under the Exchange Act
(“Regulation M”) other than the distribution of the convertible notes subject to the
Purchase Agreement and (B) Counterparty shall not engage in any “distribution,” as such
term is defined in Regulation M, other than a distribution meeting the requirements of
the exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M until the
second Exchange Business Day immediately following the Trade Date, and (y)(A) during
the period starting on the first Expiration Date and ending on the last Expiration Date
(the “Settlement Period”), the Shares or securities that are convertible into, or
exchangeable or exercisable for Shares, are not, and shall not be, subject to a
“restricted period,” as defined in Regulation M and (B) Counterparty shall not engage
in any “distribution,” as such term is defined in Regulation M, other than a
distribution meeting the requirements of the exceptions set forth in sections
101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business Day
immediately following the Settlement Period;
	 
	 	(q)	 	During the Settlement Period and on any other Exercise Date, neither
Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule
10b-18 of the Exchange Act (“Rule 10b-18”)) shall directly or indirectly (including,
without limitation, by means of any cash-settled or other derivative instrument)
purchase, offer to purchase, place any bid or limit order that would effect a purchase
of, or commence any tender offer relating to, any Shares (or an equivalent interest,
including a unit of beneficial interest in a trust or limited partnership or a
depository share) or any security convertible into or exchangeable or exercisable for
Shares, except through Barclays; and
	 
	 	(r)	 	Counterparty agrees that it (A) will not during the Settlement Period make, or
permit to be made (to the extent it is in Counterparty’s reasonable control), any
public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger
Transaction or potential Merger Transaction unless such public announcement is made
prior to the opening or after the close of the regular

11

 

	 	 	 	trading session on the Exchange for the Shares; (B) shall promptly (but in any event
prior to the next opening of the regular trading session on the Exchange) notify
Barclays following any such announcement that such announcement has been made; and
(C) shall promptly (but in any event prior to the next opening of the regular
trading session on the Exchange) provide Barclays 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 announcement date
that were not effected through Barclays or its affiliates and (ii) the number of
Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act
for the three full calendar months preceding the announcement date. Such written
notice shall be deemed to be a certification by Counterparty to Barclays that such
information is true and correct. In addition, Counterparty shall promptly notify
Barclays of the earlier to occur of the completion of such transaction and the
completion of the vote by target shareholders. “Merger Transaction” means any
merger, acquisition or similar transaction involving a recapitalization as
contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act.

	5.	 	Other Provisions:

	 	(a)	 	Method of Delivery. Whenever delivery of funds or other assets is required
hereunder by or to Counterparty, such delivery shall be effected through Agent. In
addition, all notices, demands and communications of any kind relating to the
Transaction between Barclays and Counterparty shall be transmitted exclusively through
Agent.
	 
	 	(b)	 	Repurchase Notices. Counterparty shall, on any day on which Counterparty
effects any repurchase of Shares, promptly give Barclays a written notice of such
repurchase (a “Repurchase Notice”) on such day if following such repurchase, the
Warrant Equity Percentage as determined on such day is (i) equal to or greater than 9%
or (ii) greater by 0.5% than the Warrant Equity Percentage included in the immediately
preceding Repurchase Notice (or, in the case of the first such Repurchase Notice,
greater than the Warrant Equity Percentage as of the Trade Date). The “Warrant Equity
Percentage” as of any day is the fraction (A) the numerator of which is the product of
(x) the sum of the Number of Warrants in the aggregate and the Number of Warrants in
the aggregate underlying the Warrant Transaction Confirmation letter agreement dated
March 29, 2011 between Barclays and Counterparty (the “Initial Warrant Confirmation”)
and (y) the Option Entitlement in respect of the Transaction and (B) the denominator of
which is the number of Shares outstanding on such day. Counterparty agrees to
indemnify and hold harmless Barclays and its affiliates and their respective officers,
directors, employees, affiliates, advisors, agents and controlling persons (each, an
“Indemnified Person”) from and against any and all losses (including losses relating to
Barclays’ hedging activities as a consequence of becoming, or of the risk of becoming,
a Section 16 “insider”, including without limitation, any forbearance from hedging
activities or cessation of hedging activities and any losses in connection therewith
with respect to the Transaction), claims, damages, judgments, liabilities and expenses
(including reasonable attorney’s fees), joint or several, which an Indemnified Person
may become subject to, as a result of Counterparty’s failure to provide Barclays with a
Repurchase Notice on the day and in the manner specified in this paragraph, and to
reimburse, within 30 days, upon written request, each of such Indemnified Persons for
any reasonable legal or other expenses incurred in connection with investigating,
preparing for, providing testimony or other evidence in connection with or defending
any of the foregoing. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against the
Indemnified Person in respect of the foregoing, such Indemnified Person shall promptly
notify Counterparty in writing, and Counterparty, upon request of the Indemnified
Person, shall retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others Counterparty may designate in such
proceeding and shall pay the fees and expenses of such counsel related to such
proceeding. Counterparty shall not be liable for any settlement of any proceeding
contemplated by this paragraph that is effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
Counterparty agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Counterparty shall not, without the
prior written consent of the

12

 

	 	 	 	Indemnified Person, effect any settlement of any pending or threatened proceeding
contemplated by this paragraph that is in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of such
Indemnified Person from all liability on claims that are the subject matter of such
proceeding on terms reasonably satisfactory to such Indemnified Person. If the
indemnification provided for in this paragraph is unavailable to an Indemnified
Person or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then Counterparty hereunder, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or liabilities.
The remedies provided for in this paragraph are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any Indemnified Person at
law or in equity. The indemnity and contribution agreements contained in this
paragraph shall remain operative and in full force and effect regardless of the
termination of the Transaction.
	 
	 	(c)	 	Transfer or Assignment. Counterparty may not transfer or assign any of its
rights or obligations under the Transaction without the prior written consent of
Barclays. Notwithstanding any provision of the Agreement to the contrary, upon written
notice to Counterparty, Barclays may, subject to applicable law, freely transfer and
assign all of its rights and obligations under the Transaction without the consent of
Counterparty to any third party. If at any time at which (1) the Equity Percentage
exceeds 9.0% or (2) Barclays, Barclays Group (as defined below) or any person whose
ownership position would be aggregated with that of Barclays or Barclays Group
(Barclays, Barclays Group or any such person, a “Barclays Person”) under any state or
federal bank holding company or banking laws, or other federal, state or local
regulations or regulatory orders applicable to ownership of Shares (“Applicable Laws”),
owns, beneficially owns, constructively owns, controls, holds the power to vote or
otherwise meets a relevant definition of ownership in excess of a number of Shares
equal to (x) the number of Shares that would give rise to reporting or registration
obligations or other requirements (including obtaining prior approval by a state or
federal regulator) of a Barclays Person under Applicable Laws and with respect to which
such requirements have not been met or the relevant approval has not been received
minus (y) 1.0% of the number of Shares outstanding on the date of determination (either
such condition described in clause (1) or (2), an “Excess Ownership Position”) and
Barclays is unable, after commercially reasonable efforts, to effect a transfer or
assignment on pricing terms and within a time period reasonably acceptable to it of all
or a portion of the Transaction such that an Excess Ownership Position no longer
exists, Barclays may designate any Scheduled Trading Day as an Early Termination Date
with respect to a portion (the “Terminated Portion”) of the Transaction, such that an
Excess Ownership Position no longer exists. In the event that Barclays so designates
an Early Termination Date with respect to a portion of the Transaction, a payment shall
be made pursuant to Section 6 of the Agreement as if (x) an Early Termination Date had
been designated in respect of a Transaction having terms identical to the Transaction
and a Number of Warrants equal to the Terminated Portion, (y) Counterparty shall be the
sole Affected Party with respect to such partial termination and (z) such Transaction
shall be the only Terminated Transaction (and, for the avoidance of doubt, the
provisions of paragraph 5(i) shall apply to any amount that is payable by Barclays to
Counterparty pursuant to this sentence). The “Equity Percentage” as of any day is the
fraction, expressed as a percentage, (A) the numerator of which is the number of Shares
that Barclays and any of its affiliates subject to aggregation with Barclays, for
purposes of the “beneficial ownership” test under Section 13 of the Exchange Act, and
all persons who may form a “group” (within the meaning of Rule 13d-5(b)(1) under the
Exchange Act) with Barclays (“Barclays Group”), beneficially own (within the meaning of
Section 13 of the Exchange Act) on such day and (B) the denominator of which is the
number of Shares outstanding on such day. Notwithstanding any other provision in this
Confirmation to the contrary requiring or allowing Barclays to purchase, sell, receive
or deliver any Shares or other securities to or from Counterparty, Barclays may
designate any of its affiliates to purchase, sell, receive or deliver such Shares or
other securities and otherwise to perform Barclays’ obligations in respect of the
Transaction and any such designee may assume such obligations. Barclays shall be
discharged of its obligations to Counterparty to the extent of any such performance.

13

 

	 	(d)	 	Role of Agent. Each of Barclays and Counterparty acknowledges to and agrees
with the other party hereto and to and with the Agent that (i) the Agent is acting as
agent for Barclays under the Transaction pursuant to instructions from such party, (ii)
the Agent is not a principal or party to the Transaction, and may transfer its rights
and obligations with respect to the Transaction, (iii) the Agent shall have no
responsibility, obligation or liability, by way of issuance, guaranty, endorsement or
otherwise in any manner with respect to the performance of either party under the
Transaction, (iv) Barclays and the Agent have not given, and Counterparty is not
relying (for purposes of making any investment decision or otherwise) upon, any
statements, opinions or representations (whether written or oral) of Barclays or the
Agent, other than the representations expressly set forth in this Confirmation or the
Agreement, and (v) each party agrees to proceed solely against the other party, and not
the Agent, to collect or recover any money or securities owed to it in connection with
the Transaction. Each party hereto acknowledges and agrees that the Agent is an
intended third party beneficiary hereunder. Counterparty acknowledges that the Agent
is an affiliate of Barclays.
	 
	 	(e)	 	Regulatory Provisions. The time of dealing for the Transaction will be
confirmed by Barclays upon written request by Counterparty. The Agent will furnish to
Counterparty upon written request a statement as to the source and amount of any
remuneration received or to be received by the Agent in connection with the
Transaction.
	 
	 	(f)	 	Additional Termination Events. The occurrence of any of the following shall
constitute an Additional Termination Event with respect to which (1) Counterparty shall
be the sole Affected Party and (2) the Transaction shall be the sole Affected
Transaction; provided that with respect to any of the following Additional Termination
Events, Barclays may choose to treat part of the Transaction as the sole Affected
Transaction, and, upon termination of the Affected Transaction, a Transaction with a
Number of Warrants equal to the unaffected number of Warrants shall be treated for all
purposes as the Transaction, which shall remain in full force and effect and, for the
avoidance of doubt, shall be subject to all relevant provisions and adjustments as
applicable (including pursuant to the provisions under “Extraordinary Events”):

	 	(i)	 	Barclays reasonably determines that it is advisable to
terminate all or a portion of the Transaction (the “Affected Portion”) so that
Barclays’ related hedging activities with respect thereto will comply with
applicable securities laws, rules or regulations or generally applicable
related policies and procedures of Barclays applied to the Transaction in a
non-discriminatory manner (whether or not such requirements, policies or
procedures are imposed by law or have been voluntarily adopted by Barclays);
provided that Barclays shall treat only the Affected Portion of the Transaction
as the Affected Transaction (it being understood that the Affected Portion may
be 100%);
	 
	 	(ii)	 	the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
“person” becomes the “beneficial owner” (as these terms are defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more
than 50% of Counterparty’s capital stock that is at the time entitled to vote
by the holder thereof in the election of Counterparty’s board of directors (or
comparable body);
	 
	 	(iii)	 	the first day on which a majority of the members of
Counterparty’s board of directors are not continuing directors. “Continuing
directors” means, as of any date of determination, any member of the board of
directors of Counterparty who: (a) was a member of the board of directors on
the Premium Payment Date; or (b) was nominated for election or elected to the
board of directors with the approval of a majority of the continuing directors
who were members of the board at the time of the new director’s nomination or
election;
	 
	 	(iv)	 	the adoption of a plan relating to Counterparty’s liquidation
or dissolution; or

14

 

	 	(v)	 	(A) the consolidation, merger or binding share exchange of
Counterparty with or into any other person, other than: (a) any transaction
that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Counterparty’s capital stock; or (b) any
merger primarily for the purpose of changing Counterparty’s jurisdiction of
incorporation and resulting in a reclassification, conversion or exchange of
outstanding shares of common stock solely into shares of common stock of the
surviving entity; provided such shares are or will immediately be
listed for trading on the NASDAQ Global Market, the NASDAQ Global Select Market
or the New York Stock Exchange (or any of their respective successors) or (B)
the sale, lease, transfer, conveyance or other disposition, in one or a series
of related transactions, of all or substantially all of Counterparty’s assets
and those of Counterparty’s subsidiaries taken as a whole to any “person” (as
this term is used in Section 13(d)(3) of the Exchange Act).

	 	 	 	Notwithstanding the foregoing, a transaction or event described in clause (ii)
through (v) above shall not constitute an Additional Termination Event if, in
connection with such transaction or event, or as a result therefrom, a transaction
described in clause (ii) or (v) above occurs and at least 90% of the consideration
paid for Counterparty’s common stock (excluding cash payments for fractional shares
and cash payments made pursuant to dissenters’ appraisal rights) consists of shares
of common stock traded on any of the New York Stock Exchange, the NASDAQ Global
Market or the NASDAQ Global Select Market (or any of their respective successors)
(or will be so traded or quoted immediately following the completion of the merger
or consolidation or such other transaction).
	 
	 	(g)	 	No Collateral. Notwithstanding any provision of this Confirmation, the
Agreement, Equity Definitions or any other agreement between the parties to the
contrary, the obligations of Counterparty under the Transaction are not secured by any
collateral.
	 
	 	(h)	 	Netting and Setoff. Obligations under the Transaction shall not be netted,
recouped or set off (including pursuant to Section 6 of the Agreement) against any
other obligations of the parties, whether arising under the Agreement, this
Confirmation, under any other agreement between the parties hereto, by operation of law
or otherwise, and no other obligations of the parties shall be netted, recouped or set
off (including pursuant to Section 6 of the Agreement) against obligations under the
Transaction, whether arising under the Agreement, this Confirmation, under any other
agreement between the parties hereto, by operation of law or otherwise, and each party
hereby waives any such right of setoff, netting or recoupment provided that both
parties agree that subparagraph (ii) of Section 2(c) of the Agreement shall
apply to the Transaction.
	 
	 	(i)	 	Alternative Calculations and Counterparty Payment on Early Termination and on
Certain Extraordinary Events. If Counterparty owes Barclays any amount in connection
with the Transaction (i) pursuant to Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the
Equity Definitions (except in the case of an Extraordinary Event in which the
consideration or proceeds to be paid to holders of Shares as a result of such event
consists solely of cash) or (ii) pursuant to Section 6(d)(ii) of the Agreement (except
in the case of an Event of Default in which Counterparty is the Defaulting Party or a
Termination Event in which Counterparty is the Affected Party, other than (x) an Event
of Default of the type described in Section 5(a)(iii), (v), (vi) or (vii) of the
Agreement or (y) a Termination Event of the type described in Section 5(b)(i), (ii),
(iii), (iv), (v) or (vi) of the Agreement that in the case of either (x) or (y)
resulted from an event or events outside Counterparty’s control) (a “Payment
Obligation”), Counterparty shall have the right, in its sole discretion, to satisfy any
such Payment Obligation by delivery of Termination Delivery Units (as defined below) by
giving irrevocable telephonic notice to Barclays, confirmed in writing within one
Scheduled Trading Day, no later than noon New York time on the Early Termination Date
or other date the Transaction is cancelled or terminated, as applicable, where such
notice shall include a representation and warranty from Counterparty that it is not, as
of the date of the telephonic notice and the date of such written notice, aware of any
material non-public information concerning itself or the shares (where “material” shall
have the meaning set forth in paragraph 5(n) below) (“Notice of Counterparty
Termination Delivery”). Within a

15

 

	 	 	 	commercially reasonable period of time following receipt of a Notice of Counterparty
Termination Delivery, Counterparty shall deliver to Barclays a number of Termination
Delivery Units having a fair market value (net of any brokerage and underwriting
commissions and fees, including any customary private placement fees) equal to the
amount of such Payment Obligation (such number of Termination Delivery Units to be
delivered to be determined by the Calculation Agent as the number of whole Termination
Delivery Units that could be sold over a commercially reasonable period of time to
generate proceeds equal to the cash equivalent of such Payment Obligation). In
addition, if, in the good faith reasonable judgment of Barclays, for any reason, the
Termination Delivery Units deliverable pursuant to this paragraph would not be
immediately freely transferable by Barclays under Rule 144, then Barclays may elect
either to (x) accept delivery of such Termination Delivery Units notwithstanding any
restriction on transfer or (y) require that such delivery take place pursuant to
paragraph 5(l) below. If the provisions set forth in this paragraph are applicable,
the provisions of Sections 9.9, 9.10, 9.11 (modified as described above) and 9.12 of
the Equity Definitions shall be applicable, except that all references to “Shares”
shall be read as references to “Termination Delivery Units.” “Termination Delivery
Units” means in the case of a Termination Event, Event of Default or Delisting, one
Share or, in the case of Nationalization, Insolvency, Tender Offer or Merger Event, a
unit consisting of the number or amount of each type of property received by a holder
of one Share (without consideration of any requirement to pay cash or other
consideration in lieu of fractional amounts of any securities) in such Nationalization,
Insolvency, Tender Offer or Merger Event; provided that if such Nationalization,
Insolvency, Tender Offer or 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.
	 
	 	(j)	 	Registration/Private Placement Procedures. If, in the reasonable opinion of
Barclays, following any delivery of Shares or Termination Delivery Units to Barclays
hereunder, such Shares or Termination Delivery Units would be in the hands of Barclays
subject to any applicable restrictions with respect to any registration or
qualification requirement or prospectus delivery requirement for such Shares or
Termination Delivery Units pursuant to any applicable federal or state securities law
(including, without limitation, any such requirement arising under Section 5 of the
Securities Act as a result of such Shares or Termination Delivery Units being
“restricted securities”, as such term is defined in Rule 144 under the Securities Act,
or as a result of the sale of such Shares or Termination Delivery Units) (such Shares
or Termination Delivery Units, “Restricted Shares”), then delivery of such Restricted
Shares shall be effected pursuant to either clause (i) or (ii) below at the election of
Counterparty, unless waived by Barclays. Notwithstanding the foregoing, solely in
respect of any Daily Number of Warrants exercised or deemed exercised on any Expiration
Date, Counterparty shall elect, prior to the first Settlement Date for the first
Expiration Date, a Private Placement Settlement (as defined below) or Registered
Settlement (as defined below) for all deliveries of Restricted Shares for all such
Expiration Dates which election shall be applicable to all Settlement Dates for such
Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such
delivered Restricted Shares on an aggregate basis commencing after the final Settlement
Date for such Warrants. The Calculation Agent shall make reasonable adjustments to
settlement terms and provisions under this Confirmation to reflect a single Private
Placement or Registered Settlement for such aggregate Restricted Shares delivered
hereunder.

	 	(i)	 	If Counterparty elects to settle the
Transaction pursuant to this clause (i) (a “Private Placement
Settlement”), then delivery of Restricted Shares by Counterparty shall
be effected in customary private placement procedures with respect to
such Restricted Shares reasonably acceptable to Barclays; provided that
Counterparty may not elect a Private Placement Settlement if, on the
date of its election, it has taken, or caused to be taken, any action
that would make unavailable either the exemption pursuant to Section
4(2) of the Securities Act for the sale by Counterparty to Barclays (or
any affiliate designated by Barclays) of the Restricted Shares or the
exemption pursuant to Section 4(1) or Section 4(3) of the Securities
Act for resales of the Restricted Shares by Barclays (or any

16

 

	 	 	 	such affiliate of Barclays). The Private Placement Settlement of such
Restricted
Shares shall include customary representations, covenants, blue sky
and other governmental filings and/or registrations, indemnities to
Barclays, due diligence rights (for Barclays or any designated buyer
of the Restricted Shares by Barclays), opinions and certificates, and
such other documentation as is customary for private placement
agreements, all reasonably acceptable to Barclays. In the case of a
Private Placement Settlement, Barclays shall determine the
appropriate discount (in the case of settlement of Termination
Delivery Units pursuant to paragraph 5(i) above) or any Settlement
Price (in the case of settlement of Shares pursuant to Section 2
above) applicable to such Restricted Shares in a commercially
reasonable manner and appropriately adjust the number of such
Restricted Shares to be delivered to Barclays hereunder.
Notwithstanding the Agreement or this Confirmation, the date of
delivery of such Restricted Shares shall be the Scheduled Trading Day
following notice by Barclays to Counterparty, of such applicable
discount and the number of Restricted Shares to be delivered pursuant
to this clause (i). For the avoidance of doubt, delivery of
Restricted Shares shall be due as set forth in the previous sentence
and not be due on the date described in paragraph 5(i) (in the case
of settlement of Termination Delivery Units) or on the Settlement
Date (in the case of settlement in Shares pursuant to Section 2
above).
	 
	 	(ii)	 	If Counterparty elects to settle the
Transaction pursuant to this clause (ii) (a “Registration Settlement”),
then Counterparty shall promptly (but in any event no later than the
beginning of the Resale Period (as defined below)) file and use its
reasonable best efforts to make effective under the Securities Act a
registration statement or supplement or amend an outstanding
registration statement in form and substance reasonably satisfactory to
Barclays, to cover the resale of such Restricted Shares (and any
Make-whole Shares) in accordance with customary resale registration
procedures, including covenants, conditions, representations,
underwriting discounts (if applicable), commissions (if applicable),
indemnities, due diligence rights, opinions and certificates, and such
other documentation as is customary for equity resale underwriting
agreements, all reasonably acceptable to Barclays. If Barclays, in its
sole reasonable discretion, is not satisfied with such procedures and
documentation Private Placement Settlement shall apply. If Barclays is
satisfied with such procedures and documentation, it shall sell the
Restricted Shares pursuant to such registration statement during a
period (the “Resale Period”) commencing on the Exchange Business Day
following delivery of such Restricted Shares (and any Make-whole
Shares) and ending on the earliest of (i) the Exchange Business Day on
which Barclays completes the sale of all Restricted Shares or, in the
case of settlement of Termination Delivery Units, a sufficient number
of Restricted Shares so that the realized net proceeds of such sales
exceed the Payment Obligation (as defined above) and (ii) the date upon
which all Restricted Shares have been sold or transferred pursuant to
Rule 144 (or similar provisions then in force) or Rule 145(d)(1) or (2)
(or any similar provision then in force) under the Securities Act.
	 
	 	(iii)	 	If (ii) above is applicable and the Net Share
Settlement Amount or the Payment Obligation, as applicable, exceeds the
realized net proceeds from such resale, or if (i) above is applicable
and the Freely Tradeable Value (as defined below) of the Net Share
Settlement Amount or the Payment Obligation (in each case as adjusted
pursuant to (i) above), as applicable, exceeds the realized net
proceeds from such resale, Counterparty shall transfer to Barclays by
the open of the regular trading session on the Exchange on the Exchange
Trading Day immediately following the last day of the Resale Period the
amount of such excess (the “Additional Amount”), at Counterparty’s
option, either in cash or

17

 

	 	 	 	in a number of Shares (“Make-whole Shares”;
provided that the aggregate
number of Shares and Make-whole Shares delivered shall not exceed the
Maximum Amount) that, based on the Settlement Price on the last day
of the Resale Period (as if such day was the “Valuation Date” for
purposes of computing such Settlement Price), has a value equal to
the Additional Amount. The Resale Period shall continue to enable
the sale of the Make-whole Shares. If Counterparty elects to pay the
Additional Amount in Make-whole Shares, the requirements and
provisions for either Private Placement Settlement or Registration
Settlement shall apply to such payment. This provision shall be
applied successively until the Additional Amount is equal to zero,
subject to paragraph 5(n) below. “Freely Tradeable Value” means the
value of the number of Shares delivered to Barclays which such Shares
would have if they were freely tradeable (without prospectus
delivery) upon receipt by Barclays, as determined by the Calculation
Agent by commercially reasonable means.
	 
	 	(iv)	 	Without limiting the generality of the
foregoing, Counterparty agrees that any Restricted Shares delivered to
Barclays, as purchaser of such Restricted Shares, (A) may be
transferred by and among Barclays and its affiliates and Counterparty
shall effect such transfer without any further action by Barclays and
(B) after the minimum “holding period” within the meaning of Rule
144(d) under the Securities Act has elapsed after any settlement date
for such Restricted Shares, Counterparty shall promptly remove, or
cause the transfer agent for such Restricted Shares to remove, any
legends referring to any such restrictions or requirements from such
Restricted Shares upon delivery by Barclays (or such affiliate of
Barclays) to Counterparty or such transfer agent of seller’s and
broker’s representation letters customarily delivered by Barclays in
connection with resales of restricted securities pursuant to Rule 144
under the Securities Act, without any further requirement for the
delivery of any certificate, consent, agreement, opinion of counsel,
notice or any other document, any transfer tax stamps or payment of any
other amount or any other action by Barclays (or such affiliate of
Barclays).
	 
	 	 	 	If the Private Placement Settlement or the Registration Settlement
shall not be effected as set forth in clauses (i), (ii) or (iii), as
applicable, then failure to effect such Private Placement Settlement
or such Registration Settlement shall constitute an Event of Default
with respect to which Counterparty shall be the Defaulting Party.

	 	(k)	 	Limit on Beneficial Ownership. Notwithstanding any other provisions hereof,
Barclays may not exercise any Warrant hereunder, Automatic Exercise shall not apply
with respect thereto, and no delivery hereunder (including pursuant to paragraphs 5(j),
(m) or (n)) shall be made, to the extent (but only to the extent) that, the receipt of
any Shares upon such exercise or delivery, after taking into account any Shares
deliverable to Barclays under the Initial Warrant Confirmation would result in the
existence of an Excess Ownership Position. Any purported delivery hereunder shall be
void and have no effect to the extent (but only to the extent) that such delivery would
result in the existence of an Excess Ownership Position. If any delivery owed to
Barclays hereunder is not made, in whole or in part, as a result of this provision,
Counterparty’s obligation to make such delivery and Barclay’s right to exercise a
Warrant shall not be extinguished and Counterparty shall make such delivery as promptly
as practicable after, but in no event later than one Scheduled Trading Day after,
Barclays gives notice to Counterparty that, such exercise or delivery would not result
in the existence of an Excess Ownership Position.
	 
	 	(l)	 	Share Deliveries. Counterparty acknowledges and agrees that, to the extent
that Barclays is not then an affiliate, as such term is used in Rule 144 under the
Securities Act, of Counterparty and has not been such an affiliate of Counterparty for
90 days (it being understood that Barclays shall not be considered such an affiliate of
Counterparty solely by reason of its receipt of or right to

18

 

	 	 	 	receive Shares pursuant to
the Transaction), and otherwise satisfies all holding period and other
requirements of Rule 144 under the Securities Act applicable to it, any Shares or
Termination Delivery Units delivered hereunder at any time after 1 year from the
Premium Payment Date shall be eligible for resale under Rule 144 under the
Securities Act, and Counterparty agrees to promptly remove, or cause the transfer
agent for such Shares or Termination Delivery Units to remove, any legends referring
to any restrictions on resale under the Securities Act from the certificates
representing such Shares or Termination Delivery Units. Counterparty further agrees
that with respect to any Shares or Termination Delivery Units delivered hereunder at
any time after 6 months from the Premium Payment Date but prior to 1 year from the
Premium Payment Date, to the extent that Counterparty then satisfies the current
information requirement of Rule 144 under the Securities Act, Counterparty shall
promptly remove, or cause the transfer agent for such Shares or Termination Delivery
Units to remove, any legends referring to any such restrictions or requirements from
the certificates representing such Shares or Termination Delivery Units upon
delivery by Barclays to Counterparty or such transfer agent of customary seller’s
and broker’s representation letters in connection with resales of such Shares or
Termination Delivery Units pursuant to Rule 144 under the Securities Act, without
any further requirement for the delivery of any certificate, consent, agreement,
opinion of counsel, notice or any other document, any transfer tax stamps or payment
of any other amount or any other action by Barclays. Counterparty further agrees
and acknowledges that Barclays shall run a holding period under Rule 144 under the
Securities Act with respect to the Warrants and/or any Shares or Termination
Delivery Units delivered hereunder notwithstanding the existence of any other
transaction or transactions between Counterparty and Barclays relating to the
Shares. Counterparty further agrees that Shares or Termination Delivery Units
delivered hereunder prior to the date that is 6 months from the Premium Payment Date
may be freely transferred by Barclays to its affiliates, and Counterparty shall
effect such transfer without any further action by Barclays. Notwithstanding
anything to the contrary herein, Counterparty agrees that any delivery of Shares or
Termination Delivery Units shall be effected by book-entry transfer through the
facilities of the Clearance System if, at the time of such delivery, the
certificates representing such Shares or Termination Delivery Units would not
contain any restrictive legend as described above. Notwithstanding anything to the
contrary herein, to the extent the provisions of Rule 144 under the Securities Act
or any successor rule are amended, or the applicable interpretation thereof by the
Securities and Exchange Commission or any court changes after the Trade Date,
including without limitation to lengthen or shorten the holding periods, the
agreements of Counterparty herein shall be deemed modified to the extent necessary,
in the opinion of outside counsel of Counterparty, to comply with Rule 144 under the
Securities Act, including Rule 144, as in effect at the time of delivery of the
relevant Shares or Termination Delivery Units.
	 
	 	(m)	 	Maximum Share Delivery. Notwithstanding any other provision of this
Confirmation or the Agreement, in no event will Counterparty be required to deliver
more than 1,050,000 Shares (the “Maximum Amount”) in the aggregate to Barclays in
connection with the Transaction, subject to the provisions below regarding Deficit
Shares. In the event Counterparty shall not have delivered the full number of Shares
otherwise due in connection with the Transaction (whether upon any scheduled settlement
of the Transaction, any Private Placement Settlement or otherwise) as a result of the
first sentence of this paragraph relating to the Maximum Amount (such deficit, the
“Deficit Shares”), Counterparty shall be continually obligated to deliver, from time to
time until the full number of Deficit Shares have been delivered pursuant to this
paragraph, Shares when, and to the extent, that (i) Shares are repurchased, acquired or
otherwise received by Counterparty or any of its subsidiaries after the Trade Date
(whether or not in exchange for cash, fair value or any other consideration), (ii)
authorized and unissued Shares reserved for issuance in respect of other transactions
prior to such date which prior to the relevant delivery date become no longer so
reserved and (iii) Counterparty additionally authorizes any unissued Shares that are
not reserved for other transactions. Counterparty shall immediately notify Barclays of
the occurrence of any of the foregoing events (including the aggregate number of Shares
subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be
delivered) and promptly deliver of such aggregate number of Shares thereafter.

19

 

	 	(n)	 	Tax Disclosure. Notwithstanding anything to the contrary herein, in the Equity
Definitions or in the Agreement, and notwithstanding any express or implied claims of
exclusivity or proprietary rights, the parties (and each of their employees,
representatives or other agents) are authorized to disclose to any and all persons,
beginning immediately upon commencement of their discussions and without limitation of
any kind, the tax treatment and tax structure of the Transaction, and all materials of
any kind (including opinions or other tax analyses) that are provided by either party
to the other relating to such tax treatment and tax structure.
	 
	 	(o)	 	Status of Claims in Bankruptcy. Barclays acknowledges and agrees that this
Confirmation is not intended to convey to Barclays rights with respect to the
Transaction that are senior to the claims of common stockholders in any U.S. bankruptcy
proceedings of Counterparty; provided that nothing herein shall limit or shall be
deemed to limit Barclays’ right to pursue remedies in the event of a breach by
Counterparty of its obligations and agreements with respect to the Transaction;
provided, further, that nothing herein shall limit or shall be deemed to limit
Barclays’ rights in respect of any transactions other than the Transaction.
	 
	 	(p)	 	Securities Contract; Swap Agreement. The parties hereto agree and acknowledge
that Barclays is a “financial institution,” “swap participant” and “financial
participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of the
Bankruptcy Code. The parties hereto further agree and acknowledge (A) that this
Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7)
of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in
connection herewith is a “termination value,” “payment amount” or “other transfer
obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement
payment” or a “transfer” within the meaning of Section 546 of the Bankruptcy Code, and
(ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy
Code, with respect to which each payment and delivery hereunder or in connection
herewith is a “termination value,” a “payment amount” or “other transfer obligation”
within the meaning of Section 362 of the Bankruptcy Code and a “transfer” within the
meaning of Section 546 of the Bankruptcy Code, and (B) that Barclays is entitled to the
protections afforded by, among other sections, Section 362(b)(6), 362(b)(17),
362(b)(27), 362(o), 546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the
Bankruptcy Code.
	 
	 	(q)	 	Right to Extend. Barclays may postpone any potential Expiration Date or
postpone or extend any other date of valuation or delivery with respect to some or all
of the relevant Warrants (in which event the Calculation Agent shall make appropriate
adjustments to the Net Share Amount for such Expiration Date), if Barclays determines,
in its reasonable discretion, that such postponement or extension is reasonably
necessary or appropriate to preserve Barclays’ or its affiliate’s hedging or hedge
unwind activity hereunder in light of existing liquidity conditions or to enable
Barclays or its affiliate to effect purchases or sale of Shares in connection with its
hedging, hedge unwind or settlement activity hereunder in a manner that would, if
Barclays or such affiliate were Issuer or an affiliated purchaser of Issuer, be in
compliance with applicable legal, regulatory or self-regulatory requirements, or with
related policies and procedures applicable to Barclays and/or such affiliate.
	 
	 	(r)	 	Payments on Early Termination. The parties hereto agree that for the
Transaction, for the purposes of Section 6(e) of the Agreement, Second Method and Loss
will apply.
	 
	 	(s)	 	Illegality. The parties agree that for the avoidance of doubt, for purposes of
Section 5(b)(i) of the Agreement, “any applicable law” shall include the Dodd-Frank
Wall Street Reform and Consumer Protection Act of 2010, any rules and regulations
promulgated thereunder and any similar law or regulation, without regard to Section 739
of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar
legal certainty provision in any legislation enacted, or rule or regulation
promulgated, on or after the Trade Date, and the consequences specified in the
Agreement, including without limitation, the consequences specified in Section 6 of the
Agreement, shall apply to any Illegality arising from any such act, rule or regulation.
	 
	 	(t)	 	Governing Law. The law of the State of New York (without reference to choice
of law doctrine).

20

 

	 	(u)	 	Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION
OR PROCEEDING RELATING TO THE TRANSACTION. EACH PARTY (I) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH A SUIT, ACTION OR
PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE
OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THE TRANSACTION, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS PROVIDED HEREIN.
	 
	 	(v)	 	Tax Matters. The parties hereto agree that for the Transaction “Indemnifiable
Tax” shall not include any Tax imposed pursuant to section 1471 or 1472 of the Code.

	6.	 	Account Details:

	 	(a)	 	Account for payments to Counterparty:
	 
	 	 	 	InterDigital, Inc.
ABA:

Acct:

Acct No.:
	 
	 	(b)	 	Account for payments to Barclays:
	 
	 	 	 	Bank: 

ABA# 

BIC: 

Acct:

Beneficiary:

Ref: 
	 
	 	 	 	Account for delivery of Shares to Barclays:
	 
	 	 	 	Bank:

ABA# 

BIC: 

Acct:

Beneficiary: 

Ref: 

	7.	 	Offices:

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

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

	8.	 	Notices:

For purposes of this Confirmation:

	 	(a)	 	Address for notices or communications to Counterparty:
	 
	 	 	 	InterDigital, Inc.

21

 

	 		 	781 Third Avenue

King of Prussia, Pennsylvania 19406

Attention: Scott McQuilkin

Telephone: (+1) 610-878-1850

Facsimile: (+1) 610-878-7844
	 
	 	(b)	 	Address for notices or communications to Barclays:
	 
	 	 	 	Barclays Capital Inc.

745 Seventh Ave.

New York, NY 10019

Attention: General Counsel

Telephone: (+1) 212-412-4000

Facsimile: (+1) 212-412-7519
	 
	 	 	 	with a copy to:
	 
	 	 	 	Barclays Capital Inc.

745 Seventh Ave.

New York, NY 10019

Attn: Paul Robinson

Telephone: (+1) 212-526-0111

Facsimile: (+1) 917-522-0458
	 
	 	 	 	and
	 
	 	 	 	Barclays Bank PLC, 5 The North Colonnade

Canary Wharf, London E14 4BB

Facsimile: 44(20) 777 36461

Phone: 44(20) 777 36810

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

THE SECURITIES REPRESENTED BY THE CONFIRMATION HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER UNITED
STATES FEDERAL OR STATE SECURITIES LAWS; SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF APPROPRIATE REGISTRATION UNDER SUCH SECURITIES LAWS OR EXCEPT IN A TRANSACTION
EXEMPT FROM OR NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF SUCH SECURITIES LAWS.

22

 

Counterparty hereby agrees to check this Confirmation and to confirm that the foregoing
correctly sets forth the terms of the Transaction by signing in the space provided below and
returning to Barclays a facsimile of the fully-executed Confirmation to Barclays at (+1)
917-522-0458. Originals shall be provided for your execution upon your request.

	 	 	 	 	 
	Very truly yours,

BARCLAYS CAPITAL INC.

acting solely as Agent in connection with the Transaction

 	 
	By:  	/s/  Adam Lawlor
 	 
	 	Name:  	Adam Lawlor 	 
	 	Title:  	Authorised Signatory 	 
	 
	Accepted and confirmed as of the Trade Date:

INTERDIGITAL, INC.

 	 
	By:  	/s/  Scott A. McQuilkin
 	 
	 	Name:  	Scott A. McQuilkin 	 
	 	Title:  	Chief Financial Officer 	 

[Signature Page to Additional Warrant Confirmation]

 

 

SCHEDULE A

For purposes of the Transaction, the following terms shall have the following values/meanings:

	 	 	 	 	 

	1.

	 	Strike Price:
	 	USD66.3528
	 	 	 	 	 
	2.

	 	Premium:
	 	USD4,140,000.00
	 	 	 	 	 
	3.

	 	Final Disruption Date:
	 	August 31, 2016

24

 

SCHEDULE B

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

	 	 	 	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date

25

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