|
DATE:
|
[__________], 2026
|
|
TO:
|
Atlas Energy Solutions Inc.
|
|
5918 W. Courtyard Drive, Suite 500
|
|
|
Austin, Texas 78730
|
|
|
FROM:
|
[Insert Dealer Name]
|
|
SUBJECT:
|
[Base][Additional] Call Option Transaction
|
|
Trade Date:
|
[__________], 2026
|
|
|
Effective Date:
|
The Premium Payment Date (it being understood, for the avoidance of doubt, that Section 9(u) of this Confirmation shall be effective as of the Trade Date).
|
|
|
Option Style:
|
“Modified American”, as described opposite the caption “Procedures for Exercise” below.
|
|
|
Option Type:
|
Call
|
|
|
Buyer:
|
Counterparty
|
|
|
Seller:
|
Dealer
|
|
|
Shares:
|
The common stock of Counterparty, USD 0.01 par value per share (Exchange symbol “AESI”).
|
|
|
Number of Options:
|
[_______]10. For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised or deemed exercised by Counterparty. In no event will the
Number of Options be less than zero.
|
|
Applicable Percentage:
|
[__]11%
|
|
|
Option Entitlement:
|
A number equal to the product of the Applicable Percentage and [______].12
|
|
|
Strike Price:
|
USD [______]
|
|
|
Cap Price:
|
USD [______]
|
|
|
Premium:
|
USD [______]
|
|
|
Premium Payment Date:
|
[__________], 2026
|
|
|
Exchange:
|
The New York Stock Exchange
|
|
|
Related Exchange(s):
|
All Exchanges
|
|
|
Excluded Provisions:
|
Section 14.04(h) and Section 14.03 of the Indenture.
|
|
Conversion Date:
|
With respect to any conversion of a Convertible Note (other than any conversion of Convertible Notes with a “Conversion Date” (as such term is defined in the Indenture) occurring
prior to the Free Convertibility Date (any such conversion, an “Early Conversion”), which conversion shall be subject to the provisions set forth in Section 9(h)(i)), the
date on which the “Holder” (as such term is defined in the Indenture) of such Convertible Note satisfies all of the requirements for conversion thereof as set forth in Section 14.02(b) of the Indenture; provided that if Counterparty has not delivered to Dealer a related Notice of Exercise, then in no event shall a Conversion Date be deemed to occur hereunder (and no Option shall be exercised or deemed to
be exercised hereunder) with respect to any surrender of a Convertible Note for conversion in respect of which Counterparty has elected to designate a financial institution for exchange in lieu of conversion of such Convertible Note pursuant
to Section 14.12 of the Indenture.
|
|
|
Free Convertibility Date:
|
January 15, 2031
|
|
|
Expiration Time:
|
The Valuation Time
|
|
|
Expiration Date:
|
April 15, 2031, subject to earlier exercise.
|
|
|
Multiple Exercise:
|
Applicable, as described opposite the captions “Automatic Exercise” and “Automatic Exercise of Remaining Repayment Options After Free Convertibility Date” below.
|
|
Automatic Exercise:
|
Notwithstanding Section 3.4 of the Equity Definitions, on each Conversion Date occurring on or after the Free Convertibility Date, in respect of which a “Notice of Conversion”
(as such term is defined in the Indenture) that is effective as to Counterparty has been delivered by the relevant converting “Holder” (as such term is defined in the Indenture), a number of Options equal to [(i)] the number of Convertible
Notes in denominations of USD 1,000 as to which such Conversion Date has occurred[, minus (ii) the number of Options that are or are deemed to be automatically
exercised on such Conversion Date under the Base Call Option Transaction Confirmation letter agreement dated [__________], 2026 between Dealer and Counterparty (the “Base Call
Option Confirmation”),]13 shall be deemed to be automatically exercised; provided that such Options shall be exercised or deemed exercised only if
Counterparty has provided a Notice of Exercise to Dealer in accordance with “Notice of Exercise” below.
|
|
|
Notwithstanding the foregoing, in no event shall the aggregate number of Options that are exercised or deemed exercised hereunder exceed the Number of Options.
|
||
|
Automatic Exercise of Remaining
Repayment Options After Free
Convertibility Date:
|
Notwithstanding anything herein or in Section 3.4 of the Equity Definitions to the contrary, unless Counterparty notifies Dealer in writing prior to 5:00 p.m. (New York City
time) on the Scheduled Valid Day immediately preceding the Expiration Date that it does not wish automatic exercise to occur with respect to any Remaining Repayment Options (as defined below), a number of Options equal to the lesser of (a)
the Number of Options (after giving effect to the provisions opposite the caption “Automatic Exercise” above) as of 9:00 a.m. (New York City time) on the Expiration Date and (b) the Remaining Repayment Options [minus the number of “Remaining Options” (as defined in the Base Call Option Confirmation)]14 (such lesser number, the “Remaining Options”) will be deemed to be automatically exercised as if (i) a number of Convertible Notes (in denominations of USD 1,000 principal amount) equal to such number of Remaining Options were outstanding under the
Indenture and were converted with a “Conversion Date” (as defined in the Indenture) occurring on or after the Free Convertibility Date and (ii) the Notice of Final Settlement Method, if any, applied to such Convertible Notes; provided that no such automatic exercise pursuant to this paragraph will occur if the Relevant Price for each Valid Day during the Settlement Averaging Period is less than
or equal to the Strike Price. “Remaining Repayment Options” shall mean the excess of (I) the number of Options corresponding to the aggregate number of Convertible Notes
(in denominations of USD 1,000 principal amount) that were subject to Repayment Events (as defined in Section 9(h)(ii) below) (other than Repayment Events that result directly from a “Fundamental Change” (as defined in the Indenture) or an
“Optional Redemption” (as defined in the Indenture)) (“Repurchase Events”) during the term of the Transaction over (II) the aggregate number of Repayment Options (as
defined below) that were terminated hereunder pursuant to Section 9(h)(ii) relating to Repurchase Events during the term of the Transaction [plus the aggregate number of
“Repayment Options” (as defined in the Base Call Option Confirmation) terminated under the Base Call Option Confirmation relating to “Repurchase Events” (as defined therein) during the term of the “Transaction” under the Base Call Option
Confirmation]15. Counterparty shall notify Dealer in writing of the number of Remaining Repayment Options before 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the Expiration Date.
|
|
Notice of Exercise:
|
Notwithstanding anything to the contrary in the Equity Definitions or opposite the caption “Automatic Exercise” above, but subject to “Automatic Exercise of Remaining Repayment
Options After Free Convertibility Date” above, in order to exercise any Options, Counterparty must notify Dealer in writing on or prior to 5:00 p.m. (New York City time) on the second Scheduled Valid Day immediately preceding the Expiration
Date of the number of such Options; provided that, notwithstanding the foregoing, such notice (and the related exercise of Options hereunder) shall be effective if
given after the applicable notice deadline specified above but prior to 5:00 p.m. (New York City time) on the fifth Exchange Business Day following such notice deadline, in which event the Calculation Agent shall have the right to adjust
Dealer’s delivery obligation hereunder and the Settlement Date in good faith and in a commercially reasonable manner, with respect to the exercise of such Options, as appropriate to reflect the additional commercially reasonable costs and
losses (limited to losses as a result of hedging mismatches and market losses) and expenses incurred by Dealer or any of its affiliates in connection with its hedging activities as a result of its not having received such notice prior to such
notice deadline (it being understood that the adjusted delivery obligation described in the preceding proviso can never be less than zero and can never require any payment by Counterparty); provided further that, if the Relevant Settlement Method for such Options is (x) Net Share Settlement and the Specified Cash Amount is not USD 1,000, (y) Cash Settlement or (z) Combination Settlement, Dealer
shall have received a separate written notice (the “Notice of Final Settlement Method”) on or prior to 5:00 p.m. (New York City time) on the Scheduled Valid Day
immediately preceding the Free Convertibility Date specifying (1) the Relevant Settlement Method for such Options and (2) if the settlement method for the related Convertible Notes is not “Settlement in Shares” or “Settlement in Cash” (each
as defined below), the fixed amount of cash per Convertible Note that Counterparty has elected to pay to “Holders” (as such term is defined in the Indenture) of the related Convertible Notes (the “Specified Cash Amount”). Counterparty acknowledges its responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder, in respect of any election of a settlement method with respect to the Convertible Notes. For the avoidance of
doubt, if the relevant “Conversion Date” (as such term is defined in the Indenture) for any Convertible Notes occurs prior to the Free Convertibility Date, no Options shall be subject to exercise in connection with such Early Conversion, and
such conversion shall be subject to the provisions set forth in Section 9(h)(i).
|
|
Valuation Time:
|
At the close of trading of the regular trading session on the Exchange; provided that if the principal
trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion.
|
|
|
Market Disruption Event:
|
Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following:
|
|
|
“‘Market Disruption Event’ means, in respect of a Share, (i) a failure by the primary U.S. national or regional securities exchange or market on which the Shares are listed or
admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m. (New York City time) on any Scheduled Valid Day for the Shares for more than one half-hour period in the
aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Shares or in any options contracts or
futures contracts relating to the Shares.”
|
|
Settlement Method:
|
For any Option, Net Share Settlement; provided that if the Relevant Settlement Method set forth below
for such Option is not Net Share Settlement, then the Settlement Method for such Option shall be such Relevant Settlement Method, but only if Counterparty shall have notified Dealer of the Relevant Settlement Method in the Notice of Final
Settlement Method for such Option.
|
|
|
Relevant Settlement Method:
|
In respect of any Option:
|
|
|
(i) if Counterparty has elected (or is deemed to have elected) to settle its conversion obligations in respect of the related Convertible Note (A) entirely in Shares pursuant to
Section 14.02(a)(iv)(A) of the Indenture (together with cash in lieu of fractional Shares) (such settlement method, “Settlement in Shares”), (B) in a combination of cash
and Shares pursuant to Section 14.02(a)(iv)(C) of the Indenture with a Specified Cash Amount less than USD 1,000 (such settlement method, “Low Cash Combination Settlement”)
or (C) in a combination of cash and Shares pursuant to Section 14.02(a)(iv)(C) of the Indenture with a Specified Cash Amount equal to USD 1,000, then, in each case, the Relevant Settlement Method for such Option shall be Net Share Settlement;
|
|
(ii) if Counterparty has elected to settle its conversion obligations in respect of the related Convertible Note in a combination of cash and Shares pursuant to Section
14.02(a)(iv)(C) of the Indenture with a Specified Cash Amount greater than USD 1,000, then the Relevant Settlement Method for such Option shall be Combination Settlement; and
|
||
|
(iii) if Counterparty has elected to settle its conversion obligations in respect of the related Convertible Note entirely in cash pursuant to Section 14.02(a)(iv)(B) of the
Indenture (such settlement method, “Settlement in Cash”), then the Relevant Settlement Method for such Option shall be Cash Settlement.
|
||
|
Net Share Settlement:
|
If Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on the relevant Settlement Date for each such
Option, a number of Shares (the “Net Share Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for each such Option, of (i)
(a) the Daily Option Value for such Valid Day, divided by (b) the Relevant Price on such Valid Day, divided
by (ii) the number of Valid Days in the Settlement Averaging Period; provided that in no event shall the Net Share Settlement Amount for any Option exceed a
number of Shares equal to the Applicable Limit for such Option, divided by the Applicable Limit Price on the Settlement Date for such Option.
|
|
|
Dealer will pay cash in lieu of delivering any fractional Shares to be delivered with respect to any Net Share Settlement Amount valued at the Relevant Price for the last Valid
Day of the Settlement Averaging Period.
|
||
|
Combination Settlement:
|
If Combination Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will pay or deliver, as the case may be, to Counterparty, on the relevant
Settlement Date for each such Option:
|
|
|
(i) an amount of cash (the “Combination Settlement Cash Amount”) equal to the sum, for each Valid Day
during the Settlement Averaging Period for such Option, of (A) an amount (the “Daily Combination Settlement Cash Amount”) equal to the lesser of (1) the product of (x)
the Applicable Percentage and (y) the Specified Cash Amount, minus USD 1,000 and (2) the Daily Option Value, divided by (B) the number of Valid Days in the Settlement Averaging Period; provided that if the calculation in clause (A) above results in zero or a
negative number for any Valid Day, the Daily Combination Settlement Cash Amount for such Valid Day shall be deemed to be zero; and
|
|
(ii) a number of Shares (the “Combination Settlement Share Amount”) equal to the sum, for each Valid Day
during the Settlement Averaging Period for such Option, of a number of Shares for such Valid Day (the “Daily Combination Settlement Share Amount”) equal to (A) (1) the
Daily Option Value on such Valid Day minus the Daily Combination Settlement Cash Amount for such Valid Day, divided by (2) the Relevant Price on such Valid Day, divided by (B) the number of Valid Days in the Settlement Averaging Period; provided that if the calculation in sub-clause (A)(1) above results in zero or a negative number for any Valid Day, the Daily Combination Settlement Share Amount for such
Valid Day shall be deemed to be zero; provided that in no event shall the sum of (x) the Combination Settlement Cash Amount for any Option and (y) the Combination
Settlement Share Amount for such Option, multiplied by the Applicable Limit Price on the Settlement Date for such Option exceed the Applicable Limit for such Option.
|
||
|
Dealer will pay cash in lieu of delivering any fractional Shares to be delivered with respect to any Combination Settlement Share Amount valued at the Relevant Price for the last
Valid Day of the Settlement Averaging Period.
|
||
|
Cash Settlement:
|
If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the
relevant Settlement Date for each such Option, an amount of cash (the “Cash Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging
Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period; provided that, in no event shall the Cash Settlement Amount exceed the Applicable Limit for such Option.
|
|
|
Daily Option Value:
|
For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied by (ii)
(A) the lesser of the Relevant Price on such Valid Day and the Cap Price, minus (B) the Strike Price on such Valid Day; provided that if the calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be less
than zero.
|
|
|
Applicable Limit:
|
For any Option, an amount of cash equal to the Applicable Percentage multiplied by the excess of (i) the
aggregate of (A) the amount of cash, if any, paid to the “Holder” (as defined in the Indenture) of the related Convertible Note upon conversion of such Convertible Note and (B) the number of Shares, if any, delivered to the “Holder” (as
defined in the Indenture) of the related Convertible Note upon conversion of such Convertible Note, multiplied by the Applicable Limit Price on the Settlement Date for
such Option, over (ii) USD 1,000. Counterparty shall notify Dealer (which notice may, for the avoidance of doubt, be by e-mail) of such amount of cash, if any, and number of Shares, if any, prior to the Settlement Date.
|
|
|
Applicable Limit Price:
|
On any day, the opening price as displayed under the heading “Op” on Bloomberg page AESI <equity> (or any successor thereto).
|
|
Potential Adjustment Events:
|
Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event” means an occurrence of any event or condition, as set forth in any Dilution Adjustment
Provision, that would result in an adjustment under the Indenture to the “Conversion Rate” or the composition of a “unit of Reference Property” or to any “Last Reported Sale Price,” “Daily VWAP,” “Daily Conversion Value” or “Daily Settlement
Amount” (each such term as defined in the Indenture). For the avoidance of doubt, Dealer shall not have any delivery or payment obligation hereunder and no adjustment shall be made to the terms of the Transaction, on account of (x) any
distribution of cash, property or securities by Counterparty to “Holders” (as defined in the Indenture) of the Convertible Notes (upon conversion or otherwise) or (y) any other transaction in which “Holders” (as such term is defined in the
Indenture) of the Convertible Notes are entitled to participate, in each case, in lieu of an adjustment under the Indenture of the type referred to in the immediately preceding sentence (including, without limitation, pursuant to the fourth
sentence of the first paragraph of Section 14.04(c) of the Indenture or the fourth sentence of Section 14.04(d) of the Indenture).
|
|
|
Method of Adjustment:
|
Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the Calculation Agent acting in a
commercially reasonable manner shall make an adjustment corresponding to the adjustment to be made pursuant to the Indenture to any one or more of the Strike Price, Number of Options, Option Entitlement, Relevant Price or other applicable
price with respect to the Shares and/or composition of the “Shares” hereunder.
|
|
|
Notwithstanding the foregoing and “Consequences of Merger Events / Tender Offers” below:
|
| (i) |
if the Calculation Agent, acting in good faith and a commercially reasonable manner, disagrees with any adjustment to the Convertible Notes that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation, pursuant to Section 14.05 of the Indenture, Section 14.07 of the Indenture or any supplemental indenture entered into thereunder or in connection with any proportional adjustment or the determination of the fair value of any securities, property, rights or other assets), then in each such case, the Calculation Agent will determine an adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement, Relevant Price or other applicable price with respect to the Shares and/or composition of the “Shares” hereunder in a commercially reasonable manner; provided that, notwithstanding the foregoing, if any Potential Adjustment Event occurs during the Settlement Averaging Period but no adjustment was made to any Convertible Note under the Indenture because the relevant “Holder” (as such term is defined in the Indenture) was deemed to be a record owner of the underlying Shares on the related “Conversion Date” (as such term is defined in the Indenture), then the Calculation Agent shall make an adjustment, as determined by it, to the terms hereof in order to account for such Potential Adjustment Event in a commercially reasonable manner; |
| (ii) | in connection with any Potential Adjustment Event as a result of an event or condition set forth in Section 14.04(b) of the Indenture or Section 14.04(c) of the Indenture where, in either case, the period for determining “Y” (as such term is used in Section 14.04(b) of the Indenture) or “SP0” (as such term is used in Section 14.04(c) of the Indenture), as the case may be, begins before Counterparty has publicly announced the event or condition giving rise to such Potential Adjustment Event, then the Calculation Agent shall have the right to adjust any variable relevant to the exercise, settlement or payment for the Transaction as appropriate to reflect the costs (including, but not limited to, hedging mismatches and market losses) and expenses incurred by Dealer in connection with its hedging activities as a result of such event or condition not having been publicly announced prior to the beginning of such period; and | |
| (iii) |
if any Potential Adjustment Event is declared and (a) the event or condition giving rise to such Potential Adjustment Event is subsequently amended, modified, cancelled or abandoned, (b) the
“Conversion Rate” (as defined in the Indenture) is otherwise not adjusted at the time or in the manner contemplated by the relevant Dilution Adjustment Provision based on such declaration or (c) the “Conversion Rate” (as defined in the
Indenture) is adjusted as a result of such Potential Adjustment Event and subsequently re-adjusted (each of clauses (a), (b) and (c), a “Potential Adjustment Event
Change”) then, in each case, the Calculation Agent shall have the right to adjust any variable relevant to the exercise, settlement or payment for the Transaction as appropriate to reflect the costs (including, but not limited to,
hedging mismatches and market losses) and expenses incurred by Dealer in connection with its hedging activities as a result of such Potential Adjustment Event Change.
|
|
Dilution Adjustment Provisions:
|
Sections 14.04(a), (b), (c), (d) and (e) and Section 14.05 of the Indenture.
|
|
Merger Events:
|
Applicable; provided that notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event”
means the occurrence of any event or condition set forth in the definition of “Share Exchange Event” in Section 14.07(a) of the Indenture.
|
|
|
Tender Offers:
|
Applicable; provided that notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer”
means the occurrence of any event or condition set forth in Section 14.04(e) of the Indenture.
|
|
|
Consequences of Merger Events/
Tender Offers:
|
Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer that is required under the terms of the Indenture
to result in an adjustment to the terms of the Convertible Notes, the Calculation Agent shall make a corresponding adjustment to any one or more of the nature of the Shares, Strike Price, Number of Options and Option Entitlement, in each
case, to the extent an analogous adjustment would be made pursuant to the Indenture in connection with such Merger Event or Tender Offer, or to the definitions of “Exchange”, “Relevant Price” and “Settlement Averaging Period” in this
Confirmation and any other variable relevant to the exercise, settlement or payment for the Transaction, subject to the second paragraph under “Method of Adjustment”; provided
that any such adjustment shall be made without regard to any adjustment to the “Conversion Rate” (as defined in the Indenture) pursuant to any Excluded Provision. Notwithstanding the foregoing, if, with respect to a Merger Event or a
Tender Offer, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation or is not organized under the laws of the United States, any State
thereof or the District of Columbia or (ii) the Counterparty to the Transaction following such Merger Event or Tender Offer will not be a corporation or will not be either (A) the Issuer following such Merger Event or Tender Offer or (B) a
wholly owned subsidiary of the Issuer (1) that is a corporation organized under the laws of the United States, any State thereof or the District of Columbia, (2) whose obligations under the Transaction are fully and unconditionally guaranteed
by the Issuer, (3) with respect to which the Calculation Agent determines that treating such wholly owned subsidiary as the Counterparty will not have a material adverse effect on Dealer’s rights or obligations hereunder, Dealer’s hedging
activities, or the costs or expenses of engaging in any of the foregoing and (4) with respect to which Dealer determines, in its reasonable discretion, that treating such wholly owned subsidiary as the Counterparty will be in compliance with
applicable legal, regulatory or self-regulatory requirements, and with related policies and procedures, applicable to Dealer, then, in either case, an Additional Termination Event may apply at Dealer’s sole reasonable election with respect to
which the Transaction is the sole Affected Transaction and Counterparty is the sole Affected Party, and Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement and to determine the
amount payable pursuant to Section 6(e) of the Agreement; provided that Dealer shall use good faith efforts to consult with Counterparty on a non-binding basis prior to
terminating the Transaction pursuant to this sentence (it being understood that Dealer may condition such consultation on Counterparty making the representation in Section 8(f) hereof in writing as of the relevant date and Dealer shall not be
obligated to consult with Counterparty if such consultation would have an adverse impact on Dealer under the Transaction) unless Dealer reasonably determines that it is impracticable or inappropriate to preserve the Transaction. For the
avoidance of doubt, the foregoing provisions will apply regardless of whether any Merger Event or Tender Offer gives rise to an Early Conversion.
|
|
Consequences of Announcement Events:
|
Modified Calculation Agent Adjustment as set forth in Section 12.3(d) of the Equity Definitions; provided
that, in respect of an Announcement Event, (v) references to “Tender Offer” shall be replaced by references to “Announcement Event” and references to “Tender Offer Date” shall be replaced by references to “date of such Announcement Event”,
(w) the phrase “exercise, settlement, payment or any other terms of the Transaction (including, without limitation, the spread)” shall be replaced with the phrase “Cap Price (provided
that in no event shall the Cap Price be less than the Strike Price)”, (x) the words “whether within a commercially reasonable period of time (as determined by the Calculation Agent) prior to or after the Announcement Event” shall be inserted
prior to the word “which” in the seventh line, (y) the text beginning “Cancellation…” in the 11th line thereof through the end of the paragraph shall be deleted and replaced with “such event shall constitute an Additional Termination Event
with respect to which the Transaction is the sole Affected Transaction and Counterparty is the sole Affected Party, and Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement and to
determine the amount payable pursuant to Section 6(e) of the Agreement” and (z) for the avoidance of doubt, the Calculation Agent shall determine whether the relevant Announcement Event has had a material economic effect on the Transaction
(and, if so, shall adjust the Cap Price accordingly to account for such economic effect in a commercially reasonable manner) on one or more occasions on or after the date of the Announcement Event up to, and including, the Expiration Date,
any Early Termination Date and/or any other date of cancellation, it being understood that any adjustment in respect of an Announcement Event shall take into account any earlier adjustment relating to the same Announcement Event. An
Announcement Event shall be an “Extraordinary Event” for purposes of the Equity Definitions, to which Article 12 of the Equity Definitions is applicable.
|
|
Announcement Event:
|
(i) The public announcement by Issuer, any affiliate or agent of Issuer, any Valid Third Party Entity or any agent or affiliate of a Valid Third Party Entity (each, a “Relevant Entity”) of (x) any transaction or event that, if completed, would constitute a Merger Event or Tender Offer, (y) any potential acquisition or disposition by Issuer
and/or its subsidiaries where the aggregate consideration exceeds 35% of the market capitalization of Issuer as of the date of such announcement (an “Acquisition Transaction”)
or (z) the intention to enter into a Merger Event or Tender Offer or an Acquisition Transaction, (ii) the public announcement by Issuer of an intention to solicit or enter into, or to explore strategic alternatives or other similar
undertaking that may include, a Merger Event or Tender Offer or an Acquisition Transaction or (iii) any subsequent public announcement by a Relevant Entity of a change to a transaction or intention that is the subject of an announcement of
the type described in clause (i) or (ii) of this sentence (including, without limitation, a new announcement by a Relevant Entity relating to such a transaction or intention or the announcement of a withdrawal from, or the abandonment or
discontinuation of, such a transaction or intention), as determined by the Calculation Agent. For the avoidance of doubt, the occurrence of an Announcement Event with respect to any transaction or intention shall not preclude the occurrence
of a later Announcement Event with respect to such transaction or intention. For purposes of this definition of “Announcement Event,” (A) “Merger Event” shall mean such term as defined under Section 12.1(b) of the Equity Definitions (but, for
the avoidance of doubt, the remainder of the definition of “Merger Event” in Section 12.1(b) of the Equity Definitions following the definition of “Reverse Merger” therein shall be disregarded) and (B) “Tender Offer” shall mean such term as
defined under Section 12.1(d) of the Equity Definitions.
|
|
|
Valid Third Party Entity:
|
In respect of any transaction, any third party that has a bona fide intent to enter into or consummate
such transaction (it being understood and agreed that in determining whether such third party has such a bona fide intent, the Calculation Agent may take into
consideration the effect of the relevant announcement by such third party on the Shares and/or options relating to the Shares).
|
|
Nationalization, Insolvency or Delisting:
|
Cancellation and Payment (Calculation Agent Determination); provided that notwithstanding Section
12.6(c)(ii) of the Equity Definitions such event shall constitute an Additional Termination Event with respect to which the Transaction is the sole Affected Transaction and Counterparty is the sole Affected Party, and Dealer shall be the
party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement and to determine the amount payable pursuant to Section 6(e) of the Agreement; provided
further that, in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed,
re-traded or re-quoted on any of the New York Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any of the New York
Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange.
|
|
Change in Law:
|
Applicable; provided that (i) Section 12.9(a)(ii) of the Equity Definitions is hereby amended by
replacing the parenthetical beginning after the word “regulation” in the second line thereof with the words “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations
authorized or mandated by existing statute),” (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “its Hedge Positions”, (iii) Section 12.9(a)(ii)(X) of the Equity Definitions
is hereby amended by immediately following the word “Transaction”, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date” and (iv) adding the words “provided that, in the case of clause (Y) hereof where such determination is based on Dealer’s policies and procedures, such policies and procedures have been adopted by Dealer in good faith and are generally applicable in
similar situations and applied in a non-discriminatory manner” after the semicolon in the last line thereof.
|
|
|
Failure to Deliver:
|
Applicable
|
|
|
Hedging Disruption:
|
Applicable; provided that:
|
|
|
(i)
|
Section 12.9(a)(v) of the Equity Definitions is hereby amended by (a) inserting the following words at the end of clause (A) thereof: “in the manner contemplated by the Hedging
Party on the Trade Date” and (b) inserting the following language at the end of such Section:
|
|
|
“, provided that any such inability that occurs solely due to the deterioration of the creditworthiness
of the Hedging Party shall not be deemed a Hedging Disruption. 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.”; and
|
|
(ii)
|
Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in the third line thereof, after the words “to terminate the Transaction”, the words “or a portion
of the Transaction affected by such Hedging Disruption”.
|
|
|
Increased Cost of Hedging:
|
Not Applicable
|
|
|
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer or an affiliate of Dealer; provided that all
calculations and determinations by the Hedging Party shall be made in good faith and in a commercially reasonable manner; provided further that nothing herein shall
limit or alter, or be deemed to limit or alter, the ability of Dealer or an affiliate of Dealer (whether acting as Dealer, the Hedging Party, the Determining Party or the Calculation Agent) to hedge its obligations under the Transaction in a
manner it deems appropriate, as determined by Dealer or an affiliate of Dealer in its sole discretion. The Hedging Party agrees that it will comply with the provisions set forth in the second paragraph under “Calculation Agent” below.
|
|
|
Determining Party:
|
For all applicable Extraordinary Events, Dealer; provided, however, that all calculations, adjustments and determinations by the Determining Party shall be made in good faith and in a commercially reasonable manner. Dealer agrees that it will comply with the provisions
set forth in the second paragraph under “Calculation Agent” in Section 4 below in respect of any calculation, adjustment or determination it makes as Determining Party.
|
|
Non-Reliance:
|
Applicable
|
|
|
Agreements and Acknowledgments
Regarding Hedging Activities:
|
Applicable
|
|
|
Additional Acknowledgments:
|
Applicable
|
|
| 4. |
Calculation Agent.
|
Dealer; provided that, following the occurrence and during
the continuance of an Event of Default of the type described in Section 5(a)(vii) of the Agreement with respect to which Dealer is the sole Defaulting Party, Counterparty shall have the right to designate a nationally recognized
independent equity derivatives dealer to replace Dealer as the Calculation Agent, and the parties shall work in good faith to execute any appropriate documentation required by such replacement Calculation Agent. All calculations,
adjustments and determinations by the Calculation Agent shall be made in good faith and in a commercially reasonable manner.
|
| Following any calculation, adjustment or determination by the Calculation Agent or Determining Party hereunder, upon a written request by Counterparty (which may be by e-mail), the Calculation Agent or Determining Party, as the case may be, shall promptly (but in any event within three Scheduled Trading Days) provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such calculation, adjustment or determination (including any quotations, market data, information from internal or external sources or assumptions used in making such calculation, adjustment or determination), it being understood that neither the Calculation Agent nor Determining Party shall be obligated to disclose any confidential or proprietary models or other information that is confidential, proprietary or subject to contractual, legal or regulatory obligations to not disclose such information. |
| (a) |
Account for payments to Counterparty: To Be Advised.
|
|
|
Account for delivery of Shares to Counterparty: To Be Advised.
|
||
| (b) |
Account for payments to Dealer (or as otherwise provided by or on behalf of Dealer):
|
|
Bank:
|
[____]
|
|
|
SWIFT:
|
[____]
|
|
|
Bank Routing:
|
[____]
|
|
|
Acct Name:
|
[____]
|
|
|
Acct No.:
|
[____]
|
|
| Account for delivery of Shares from Dealer: To Be Advised. | ||
| (a) |
The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party.
|
|
| (b) | The Office of Dealer for the Transaction is: [____] | |
| [____] | ||
| [____] | ||
| [____] |
| (a) |
Address for notices or communications to Counterparty: | |
| (b) |
Address for notices or communications to Dealer: | |
| [__________] |
|
8.
|
Representations and Warranties of Counterparty.
|
|
(a)
|
(i) Counterparty has the corporate power to execute, deliver and perform its obligations under this Confirmation; (ii) this Confirmation has been duly
authorized, executed and delivered by Counterparty; and (iii) this Confirmation constitutes Counterparty’s valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to (A) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and similar laws affecting the rights and remedies of creditors generally, either under state or federal law, (B) general principles of equity and (C) the qualification that broadly worded
waivers, waivers of rights to damages, offsets or defenses, indemnification, waivers of unknown or future claims, and waivers of statutory, regulatory or constitutional rights may be limited on public policy or statutory grounds.
|
|
(b)
|
In lieu of the representation set forth in Section 3(a)(iii) of the Agreement, the execution and delivery by Counterparty of this Confirmation and the
performance of Counterparty’s obligations hereunder (i) will not violate the Amended and Restated Certificate of Incorporation of Counterparty or the Amended and Restated Bylaws of Counterparty, (ii) will not violate any provision of any
Covered Laws (other than federal or state securities, commodities or “blue sky” laws, including the antifraud provisions thereof), (iii) will not result in a breach or violation of, or constitute a default under, any agreement or
instrument filed as an exhibit to Counterparty’s Annual Report on Form 10-K filed on February 24, 2026 (for the year ended December 31, 2025), as updated by any subsequent filings, and (iv) will not conflict with or result in a breach or
violation of any order, writ, injunction or decree of any court or governmental authority or agency. “Covered Laws” means the laws of the State of
New York, the General Corporation Law of the State of Delaware and the federal laws of the United States of America.
|
|
(c)
|
Under the Covered Laws, no consent, approval, license or exemption by, or order or authorization of, or filing, recording or registration with, any
governmental authority is required to be obtained or made by Counterparty in connection with the execution and delivery of this Confirmation or the performance by Counterparty of its obligations hereunder, except (i) such as have been
obtained or made prior to the date hereof or (ii) such as may be required under federal or state securities laws.
|
|
(d)
|
Counterparty is not and, after consummation of the transactions contemplated hereby, will not be required to register as an “investment company” as such term
is defined in the Investment Company Act of 1940, as amended.
|
|
(e)
|
Counterparty is an “eligible contract participant” (as such term is defined in Section 1a(18) of the Commodity Exchange Act, as amended (the “CEA”), other than a person that is an eligible contract participant under Section 1a(18)(C) of the CEA).
|
|
(f)
|
|
(g)
|
Counterparty is not aware of any state or local (including any non-U.S. jurisdiction’s) law, rule, regulation or regulatory order applicable to the Shares
that would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its affiliates owning or holding
(however defined) Shares.
|
|
(h)
|
Counterparty (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies
involving a security or securities; (B) will exercise independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total
assets of at least USD 50 million.
|
|
(i)
|
The assets 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 of 1986, as
amended (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.
|
|
(j)
|
On and immediately after each of the Trade Date and the Premium Payment Date, (A) Counterparty will not be insolvent or rendered insolvent, left with
unreasonably small capital or intend to incur debts beyond its ability to pay its debts as they mature, as these concepts are used in Section 548(a)(1)(B) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and (B) Counterparty would be able to purchase the Number of Shares in compliance with Section 160 of the General Corporation Law of
the State of Delaware.
|
|
(k)
|
Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither Dealer nor any of its affiliates is making
any representations or warranties or taking any position or expressing any view with respect to the treatment of the Transaction under any accounting standards including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or 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 any other accounting guidance.
|
|
(l)
|
Counterparty acknowledges that the Transaction may constitute a purchase of its equity securities. Counterparty further acknowledges that, pursuant to the
provisions of the Coronavirus Aid, Relief and Economic Security Act (the “Cares Act”), Counterparty will be required to agree to certain time-bound
restrictions on its ability to purchase its equity securities if it receives loans, loan guarantees or direct loans (as that term is defined in the Cares Act) under section 4003(b) of the Cares Act. Counterparty further acknowledges that
it may be required to agree to certain time-bound restrictions on its ability to purchase its equity securities if it receives loans, loan guarantees or direct loans (as that term is defined in the Cares Act) under programs or facilities
established by the Board of Governors of the Federal Reserve System for the purpose of providing liquidity to the financial system. Accordingly, Counterparty represents and warrants that it has not applied, and throughout the term of the
Transaction shall not apply, for a loan, loan guarantee, direct loan (as that term is defined in the Cares Act) or other investment, or to receive any financial assistance or relief (howsoever defined) under any program or facility that
(a) is established under applicable law, including the Cares Act and the Federal Reserve Act, as amended, and (b) requires, as a condition of such loan, loan guarantee, direct loan (as that term is defined in the Cares Act), investment,
financial assistance or relief, that Counterparty agree, attest, certify or warrant that it has not, as of the date specified in such condition, repurchased, or will not repurchase, any equity security of Counterparty.
|
|
9.
|
Other Provisions.
|
|
(c)
|
Regulation M. Counterparty is not on the Trade Date
engaged in a distribution, as such term is used in Regulation M under the Exchange Act, of any securities of Counterparty, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of
Regulation M. Counterparty shall not, until the second Scheduled Trading
Day immediately following the Effective Date, engage in any such distribution.
|
|
(d)
|
No Manipulation. Counterparty is not entering into the
Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible
into or exchangeable for the Shares) or otherwise in violation of the Exchange Act.
|
|
(e)
|
Transfer or Assignment.
|
|
(i)
|
Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options
hereunder (such Options, the “Transfer Options”); provided
that such transfer or assignment shall be subject to reasonable conditions that Dealer may impose, including but not limited, to the following conditions:
|
|
(A)
|
With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(b) or any
obligations under Section 9(n) or 9(s) of this Confirmation;
|
|
(B)
|
|
(C)
|
Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an
undertaking with respect to compliance with applicable securities laws in a manner that, in the commercially reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any
documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Dealer;
|
|
(E)
|
|
(F)
|
Without limiting the generality of clause (B), Counterparty shall cause the transferee or assignee to make such Payee Tax Representations and to provide
such tax documentation (including a duly executed and completed U.S. Internal Revenue Service Form W-9 (or applicable successor form)) as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses
(D) and (E) will not occur upon or after such transfer or assignment; and
|
|
(G)
|
|
(iii)
|
Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities, or
make or receive any payment in cash, to or from Counterparty, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or make or receive such payment in cash, and otherwise to
perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Counterparty to the extent of any such performance.
|
|
(f)
|
Staggered Settlement. If upon
advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Dealer’s hedging activities hereunder, Dealer reasonably determines that it would not be practicable or advisable to
deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Dealer on any Settlement Date for the Transaction, Dealer may, by notice to Counterparty on or prior to any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more dates (each, a “Staggered
Settlement Date”) as follows:
|
|
(i)
|
in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (the first of which will be such Nominal Settlement Date and the last of which will
be no later than the twentieth (20th) Exchange Business Day following such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date;
|
|
(ii)
|
the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Dealer would
otherwise be required to deliver on such Nominal Settlement Date; and
|
|
(iii)
|
the Settlement Method terms will apply on each Staggered Settlement Date, except that the cash and/or Shares due upon settlement will be allocated among such Staggered
Settlement Dates as specified by Dealer in the notice referred to in clause (i) above.
|
|
(g)
|
[Role of Agent. [Insert relevant Dealer agency or communications
language, if any.] Any performance by Counterparty of its obligations (including notice obligations) through or by means of [DEALER AGENT’s] agency for Dealer shall constitute good performance of Counterparty’s obligations to
Dealer.][Reserved.]
|
|
(h)
|
Additional Termination Events.
|
| (A) |
Counterparty shall, within five Scheduled Trading Days of the “Conversion Date” (as such term is defined in the Indenture) for such Early Conversion, provide written notice (an “Early Conversion Notice”) to Dealer specifying the number of Convertible Notes surrendered for conversion on such “Conversion Date” (such Convertible Notes, the “Affected Convertible Notes”), and the giving of such Early Conversion Notice shall constitute an
Additional Termination Event as provided in this clause (i)[; provided that any “Early Conversion Notice” as defined in, and delivered to Dealer pursuant to, the Base
Call Option Confirmation shall be deemed to be an Early Conversion Notice pursuant to this Confirmation and the terms of such “Early Conversion Notice” shall apply, mutatis
mutandis, to this Confirmation]18;
|
| (B) |
upon receipt of any such Early Conversion Notice, Dealer shall designate an Exchange Business Day as an Early Termination Date (which Exchange Business Day shall be no earlier
than one Scheduled Trading Day following the “Conversion Date” (as such term is defined in the Indenture) for such Early Conversion) with respect to the portion of the Transaction corresponding to a number of Options (the “Affected Number of Options”) equal to the lesser of (x) the number of Affected Convertible Notes [minus the
“Affected Number of Options” (as defined in the Base Call Option Confirmation), if any, that relate to such Affected Convertible Notes (and for the purposes of determining whether any Options under this Confirmation or under, and as defined
in, the Base Call Option Confirmation will be among the Affected Number of Options hereunder or under, and as defined in, the Base Call Option Confirmation, such Affected Convertible Notes shall be allocated first to the Base Call Option
Confirmation until all Options thereunder are exercised or terminated)]19 and (y) the Number of Options as of the “Conversion Date” (as such term is defined in the Indenture) for such Early Conversion;
|
|
Unwind Date
|
Synthetic Instrument
Adjusted
Issue Price
|
|
[_____]20
|
USD [_______]
|
|
October 15, 2026
|
USD [_______]
|
|
April 15, 2027
|
USD [_______]
|
|
October 15, 2027
|
USD [_______]
|
|
April 15, 2028
|
USD [_______]
|
|
October 15, 2028
|
USD [_______]
|
|
April 15, 2029
|
USD [_______]
|
|
October 15, 2029
|
USD [_______]
|
|
April 15, 2030
|
USD [_______]
|
|
October 15, 2030
|
USD [_______]
|
|
April 15, 2031
|
USD 1,000.00
|
| (D) |
Counterparty shall notify Dealer (which notice may, for the avoidance of
doubt, be by e-mail) of the amount of cash, if any, paid to the “Holder” (as such term is defined in the Indenture) and the number of Shares, if any, delivered to the “Holder” (as
such term is defined in the Indenture), in each case as described in clause (3) of the foregoing Section 9(h)(i)(C), prior to the relevant Early Termination Date;
|
| (E) |
for the avoidance of doubt, in determining the amount payable in respect of such Affected Transaction pursuant to Section 6 of the Agreement, the
Calculation Agent shall assume that (x) the relevant Early Conversion and any conversions, adjustments, agreements, payments, deliveries or acquisitions by or on behalf of Counterparty leading thereto had not occurred, (y) no adjustments to
the “Conversion Rate” (as defined in the Indenture) have occurred pursuant to any Excluded Provision and (z) the corresponding Convertible Notes remain outstanding; and
|
| (F) |
the Transaction shall remain in full force and effect, except that, as of the “Conversion Date” (as such term is defined in the Indenture) for such Early Conversion, the Number
of Options shall be reduced by the Affected Number of Options.
|
|
(i)
|
Amendments to Equity Definitions.
|
|
(i)
|
Section 11.2(e)(v) of the Equity Definitions is hereby amended by adding the phrase “, provided that,
notwithstanding this Section 11.2(e)(v), the parties hereto agree that, with respect to the Transaction, the following repurchases of Shares by the Issuer or any of its subsidiaries shall not be considered Potential Adjustment Events: any
repurchases of Shares in open-market transactions at prevailing market prices or privately negotiated accelerated Share repurchase (or similar) transactions that are entered into at prevailing market prices and in accordance with customary
market terms for transactions of such type to repurchase the Shares, in each case, to the extent that, after giving effect to such transactions, the aggregate number of Shares repurchased during the term of the Transaction pursuant to all
transactions described in this proviso would not exceed 20% of the number of Shares outstanding as of the Trade Date, as determined by the Calculation Agent” at the end of such Section.
|
|
(ii)
|
Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “that may have a diluting or concentrative effect on the theoretical value of the
relevant Shares” and replacing them with the words “that is the result of a corporate event involving the Issuer or its securities that has, in the commercially reasonable judgment of the Calculation Agent, a material economic effect on the
Shares or options on the Shares; provided that such event is not based on (a) an observable market, other than the market for the Issuer’s own stock or (b) an
observable index, other than an index calculated and measured solely by reference to the Issuer’s own operations.”
|
|
(iii)
|
Section 12.1(d) of the Equity Definitions is hereby amended by replacing “10%” with “20%”.
|
|
(iv)
|
Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the fourth line thereof the word “or” after the word “official” and inserting a comma
therefor, and (2) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor: “or (C) at Dealer’s option, the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of the
ISDA Master Agreement with respect to that Issuer;”.
|
|
(v)
|
Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “either party may elect” with “Dealer may elect” and (2) replacing “notice to the other party”
with “notice to Counterparty” in the first sentence of such section.
|
|
(j)
|
No Collateral or Setoff.
Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of Counterparty hereunder are not secured by any collateral. Obligations under the Transaction shall not be set off
by either party against any other obligations of the parties, whether arising under the Agreement, this Confirmation or any other agreement between the parties hereto, by operation of law or otherwise. For the avoidance of doubt and
notwithstanding anything to the contrary provided in this Section 9(j), in the event of bankruptcy or liquidation of either party, neither party shall have the right to set off any obligation that it may have to the other party under the
Transaction against any obligation such other party may have to it, whether arising under the Agreement, this Confirmation or any other agreement between the parties hereto, by operation of law or otherwise.
|
|
Share Termination Alternative:
|
If applicable, Dealer shall deliver to Counterparty the Share Termination Delivery Property on, or within a commercially reasonable period of time after, the date when the
Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Sections 6(d)(ii) and 6(e) of the Agreement, as applicable, in satisfaction of the Payment Obligation in the manner reasonably requested
by Counterparty free of payment.
|
|
|
Share Termination Delivery Property:
|
A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of
such fractional security based on the values used to calculate the Share Termination Unit Price.
|
|
Share Termination Unit Price:
|
The value to Dealer of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the
Calculation Agent to Dealer at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share
Termination Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property.
|
|
|
Share Termination Delivery Unit:
|
One Share or, if all of the Shares have changed into cash or any other property or the right to receive solely cash or any other property as the result of a Nationalization,
Insolvency or Merger Event (any such cash or other property, the “Exchange Property”), a unit consisting of the type and amount of such Exchange Property received by a
holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Nationalization, Insolvency or Merger Event, as determined by the Calculation Agent.
|
|
|
Failure to Deliver:
|
Applicable
|
|
|
Other Applicable Provisions:
|
If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions will be applicable, except that all
references in such provisions to “Physically-settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”. “Share Termination Settled” in
relation to the Transaction means that Share Termination Alternative is applicable to the Transaction.
|
|
(m)
|
Notice of Certain Other Events. Counterparty covenants and agrees that:
|
|
(i)
|
promptly following the public announcement of the results of any election by the holders of Shares with respect to the consideration due upon consummation of any Merger Event,
Counterparty shall give Dealer written notice of the weighted average of the types and amounts of consideration actually received by holders upon consummation of such Merger Event (the date of such notification, the “Consideration Notification Date”); provided that in no event shall the Consideration Notification
Date be later than the date on which such Merger Event is consummated; and
|
|
(ii)
|
promptly following any adjustment to the Convertible Notes in connection with any Potential Adjustment Event, Merger Event or Tender Offer, Counterparty shall give Dealer
written notice of the details of such adjustment.
|
|
(n)
|
Tax Disclosure. Effective
from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and
tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure.
|
|
(o)
|
Right to Extend. Dealer may
postpone or add, in whole or in part, any Valid Day or Valid Days during the Settlement Averaging Period or any other date of valuation, payment or delivery by Dealer, with respect to some or all of the Options hereunder, if Dealer
reasonably determines, based on advice of counsel, that such action is reasonably necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in light of existing liquidity conditions
or to enable Dealer to effect transactions with respect to Shares in connection with its commercially reasonable hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated
purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory organization requirements, or with related policies and procedures applicable to Dealer; provided that no such Valid Day or other date of valuation, payment or delivery may be postponed or added more than 80 Valid Days after the original Valid Day or other date of valuation, payment or delivery,
as the case may be.
|
|
(p)
|
Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Counterparty with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any
United States bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the
event of a breach by Counterparty of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction.
|
|
(q)
|
Securities Contract; Swap Agreement. The parties hereto agree and acknowledge that Dealer 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 Dealer 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.
|
|
(s)
|
Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that
neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify,
amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions
incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, an Excess Ownership Position, or Illegality (as defined in the Agreement)).
|
|
(t)
|
Agreements and Acknowledgements Regarding Hedging. Counterparty understands, acknowledges and agrees that: (A) at any time on and prior to the Expiration Date, Dealer and its affiliates may buy or sell Shares or other securities or buy or sell options or futures
contracts or enter into swaps or other derivative securities in order to adjust its hedge position with respect to the Transaction; (B) Dealer and its affiliates also may be active in the market for Shares other than in connection with
hedging activities in relation to the Transaction; (C) Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in securities of Counterparty shall be conducted and shall do so in a
manner that it deems appropriate to hedge its price and market risk with respect to the Relevant Prices; and (D) any market activities of Dealer and its affiliates with respect to Shares may affect the market price and volatility of
Shares, as well as the Relevant Prices, each in a manner that may be adverse to Counterparty.
|
|
(v)
|
Payment by Counterparty. In
the event that, following payment of the Premium, (i) an Early Termination Date occurs or is designated with respect to the Transaction as a result of a Termination Event or an Event of Default (other than an Event of Default arising
under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement, or (ii) Counterparty owes to Dealer, pursuant to Section 12.7 or Section 12.9 of
the Equity Definitions, an amount calculated under Section 12.8 of the Equity Definitions, such amount shall be deemed to be zero.
|
|
(x)
|
[Conduct Rules. Each party acknowledges and agrees to be bound by the Conduct Rules of the
Financial Industry Regulatory Authority, Inc. applicable to transactions in options, and further agrees not to violate the position and exercise limits set forth therein.
|
|
(y)
|
Risk Disclosure Statement.
Counterparty represents and warrants that it has received, read and understands the OTC Options Risk Disclosure Statement provided by Dealer and a copy of the most recent disclosure pamphlet prepared by The Options Clearing Corporation
entitled “Characteristics and Risks of Standardized Options”.]26
|
|
(z)
|
Counterparts. This
Confirmation may be executed in several counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
|
|
(aa)
|
Tax Matters.
|
|
(i)
|
Payer Tax Representations. For the purpose of Section 3(e) of the Agreement, each of Dealer and Counterparty makes the following representation:
|
|
(ii)
|
Payee Tax Representations:
|
| (A) |
For the purpose of Section 3(f) of the Agreement, Counterparty makes the following representation to Dealer:
|
| (B) |
For the purpose of Section 3(f) of the Agreement, Dealer makes the following representations to Counterparty:
|
|
(iii)
|
Tax Documentation. For the purpose of Sections 4(a)(i) and (ii) of the Agreement, Counterparty agrees to deliver to Dealer one duly executed and completed U.S. Internal Revenue Service Form W-9 (or successor thereto) and Dealer agrees to deliver to
Counterparty [one duly executed and completed U.S. Internal Revenue Service Form [W‑9][insert applicable W-8][insert other applicable Dealer tax form] (or successor thereto)]. Such forms or documents shall be delivered (i) on or before the date of execution of this Confirmation, (ii) upon Counterparty or Dealer, as
applicable, learning that any such tax form previously provided by it has become obsolete or incorrect and (iii) upon reasonable request of the other party.
|
|
(iv)
|
Withholding Tax Imposed on Payments to Non-U.S.
Counterparties under the United States Foreign Account Tax Compliance. “Tax” as used in Section 9(aa)(i) above (Payer Tax
Representations) and “Indemnifiable Tax”, as defined in Section 14 of the Agreement, shall not include any U.S. federal withholding tax imposed or collected
pursuant to Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules
or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (a “FATCA Withholding Tax”).
For the avoidance of doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by applicable law for the purposes of Section 2(d) of the Agreement.
|
|
(bb)
|
Section 871(m) Protocol.
“Tax” as used in Section 9(aa)(i) above (Payer Tax Representations) and “Indemnifiable Tax”, as defined in Section 14 of the Agreement, shall not include any tax
imposed on payments treated as dividends from sources within the United States under Section 871(m) of the Code or any regulations issued thereunder. For the avoidance of doubt, any such tax imposed under Section 871(m) of the Code is a
Tax the deduction or withholding of which is required by applicable law for the purposes of Section 2(d) of the Agreement.
|
|
(cc)
|
Hedging Adjustment. For the
avoidance of doubt, whenever Dealer, the Determining Party or the Calculation Agent makes an adjustment or calculation, or the Determining Party or the Calculation Agent makes a determination, in each case, permitted or required to be
made pursuant to the terms of this Confirmation or the Equity Definitions to take into account the effect of any event (other than an adjustment, calculation or determination made by reference to the Indenture), the Calculation Agent, the
Determining Party or Dealer, as the case may be, shall make such adjustment, calculation or determination in a commercially reasonable manner and by reference to the effect of such event on Dealer assuming that Dealer maintains a
commercially reasonable hedge position.
|
|
(dd)
|
Electronic Signatures. Delivery
of an executed signature page by facsimile or electronic transmission (e.g., “pdf” or “tif”), or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law,
e.g., www.docusign.com, shall be effective as delivery of a manually executed counterpart hereof.
|
|
(ee)
|
[Insert Dealer boilerplate, including applicable resolution stay protocol language, provided by Dealer.]
|
|
Very truly yours,
|
|||
|
[_______]
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
[By:
|
|||
|
Name:
|
|||
|
Title: ]
|
|||
|
[[_______]
|
|||
|
as Agent
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
[By:
|
|||
|
Name:
|
|||
|
Title: ]]
|
|||
|
ATLAS ENERGY SOLUTIONS INC.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||