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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date of report (Date of earliest event reported)
January 17, 2024
Winnebago Industries, Inc. |
(Exact Name of Registrant as Specified in its Charter) |
Minnesota |
001-06403 |
42-0802678 |
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
|
|
|
|
|
13200 Pioneer Trail |
Eden Prairie |
Minnesota |
|
55347 |
(Address of Principal Executive Offices) |
|
(Zip Code) |
Registrant's telephone number, including area code
952-829-8600
______________________________________________________________________
(Former Name or Former Address, if Changed Since
Last Report.)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
¨ Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Stock, $0.50 par value per share |
WGO |
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 1.01 | Entry into a Material Definitive Agreement. |
Purchase Agreement
On January 18, 2024, Winnebago Industries, Inc. (the “Company”)
entered into a Purchase Agreement (the “Purchase Agreement”) with Goldman Sachs & Co. LLC and BMO Capital Markets Corp.,
as the initial purchasers (collectively, the “Initial Purchasers”), relating to the sale of $300.0 million in aggregate principal
amount of the Company’s 3.250% convertible senior notes due 2030 (the “Notes”) to the Initial Purchasers. The Company
also granted the Initial Purchasers a 13-day option to purchase up to an additional $50.0 million in aggregate principal amount of Notes
(the “Option”).
On January 19, 2024, the Initial Purchasers notified the Company of
their election to purchase an additional $50.0 million in aggregate principal amount of Notes pursuant to the Option. A total of $350.0
million in aggregate principal amount of Notes was issued by the Company to the Initial Purchasers on January 23, 2024.
The Purchase Agreement includes customary representations, warranties
and covenants by the Company and customary closing conditions. Under the terms of the Purchase Agreement, the Company has agreed to indemnify
the Initial Purchasers against certain liabilities.
The foregoing description of the Purchase Agreement is qualified in
its entirety by reference to the Purchase Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
Indenture and the Notes
On January 23, 2024, the Company entered into an indenture relating
to the issuance of the Notes (the “Indenture”) with U.S. Bank National Association, as trustee (the “Trustee”).
The Notes will bear interest at the annual rate of 3.250%, payable on January 15 and July 15 of each year, beginning on July 15, 2024,
and will mature on January 15, 2030, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date.
The Company will settle conversions in cash and, if applicable, shares of its common stock, based on the applicable conversion rate(s).
The initial conversion rate for the Notes is 11.3724 shares of common stock per $1,000 principal amount of the Notes, which is equal to
an initial conversion price of approximately $87.93 per share. The initial conversion price of the Notes represents a premium of approximately
30.0% over the $67.64 per share closing price of the Company’s common stock on January 18, 2024. The conversion rate will be subject
to adjustment upon the occurrence of events specified in the Indenture but will not be adjusted for accrued and unpaid interest on any
Note being converted. In addition, upon the occurrence of a make-whole fundamental change (as defined in the Indenture) during the make-whole
fundamental change conversion period (as defined in the Indenture), the Company will, in certain circumstances, increase the conversion
rate by the number of additional shares described in the Indenture for a holder that elects to convert such holder’s Notes in connection
with such make-whole fundamental change.
Holders of the Notes may convert their Notes prior to the close of
business on the business day immediately preceding July 15, 2029, only under the following circumstances:
| · | during any calendar quarter commencing after the calendar quarter ending
on March 31, 2024 (and only during such calendar quarter), if the “last reported sale price” (as defined in the Indenture)
per share of the Company’s common stock for each of at least 20 trading days (whether or not consecutive) during a period of 30
consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than
130% of the “conversion price” (as defined in the Indenture) for the Notes on each applicable trading day; |
| · | during the five consecutive business days immediately after any five consecutive
trading day period (the “measurement period”) in which the “trading price” (as defined in the Indenture) per $1,000
principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price
per share of the Company’s common stock on such trading day and the conversion rate on such trading day; |
| · | upon the occurrence of specified corporate events described in the Indenture;
or |
| · | if the Company calls such Notes for redemption. |
On or after July 15, 2029, until the close of business on the second
scheduled trading day immediately preceding the maturity date, holders of the Notes may convert their Notes at any time regardless of
the foregoing conditions.
The Notes will be redeemable, in whole or in part (subject to certain
limitations), for cash at the Company’s option at any time, and from time to time, on or after January 15, 2028 and on or before
the 40th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of the Company’s
common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal
amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
If the Company undergoes a fundamental change, as described in the
Indenture, prior to the maturity date of the Notes, holders of the Notes will, subject to specified conditions, have the right to require
the Company to repurchase their Notes for cash at a repurchase price equal to the principal amount of the Notes to be repurchased, plus
accrued and unpaid interest on such Notes to, but excluding, the “fundamental change repurchase date” (as defined in the Indenture).
The Indenture contains customary terms and covenants, including
that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% of the aggregate
principal amount of the outstanding Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the
Notes then outstanding to be due and payable immediately.
The foregoing description is qualified in its entirety by
reference to the text of the Indenture and the Form of 3.250% Convertible Senior Notes due 2030, which are attached as Exhibits 4.1
and 4.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Repurchase of 2025 Notes and Unwind of Convertible Call Spread Transactions
The Company has used approximately $295.0 million of the net proceeds
of the offering to repurchase (the “Note Repurchases”) approximately $240.7 million aggregate principal amount of its 1.50%
Convertible Senior Notes due 2025 (the “2025 Notes”) concurrently with the pricing of the offering in separate and individually
negotiated transactions with certain holders of the 2025 Notes.
On October 29, 2019, in connection with issuing the 2025 Notes, the
Company entered into convertible bond hedge transactions (the “Existing Hedge Transactions”) and warrant transactions (the
“Existing Warrant Transactions,” and, together with the Existing Hedge Transactions, the “Existing Call Spread Transactions”)
with certain financial institutions (the “Existing Option Counterparties”). In connection with the Note Repurchases, the Company
entered into agreements with the Existing Option Counterparties to terminate a portion of the Existing Hedge Transactions and the Existing
Warrant Transactions in notional amounts corresponding to the amount of 2025 Notes repurchased. In connection with such terminations,
the Company received net proceeds from the Existing Option Counterparties equal to approximately $30.5 million, which it intends to use
for general corporate purposes.
Concurrent Convertible Note Hedge Transactions and Warrant Transactions
On January 18, 2024, in connection with the pricing of the Notes, the
Company entered into privately negotiated convertible bond hedge transactions (the “Base Hedge Transactions”) with Goldman
Sachs & Co. LLC, Bank of Montreal and J.P. Morgan Securities LLC (the “Hedge Option Counterparties”). On January 19, 2024,
in connection with the Initial Purchasers’ exercise of their option to purchase additional Notes, the Company entered into additional
convertible bond hedge transactions (the “Additional Hedge Transactions” and, together with the Base Hedge Transactions, the
“Hedge Transactions”) with the Hedge Option Counterparties.
The Hedge Transactions cover, subject to customary anti-dilution adjustments,
the number of shares of the Company’s common stock that initially underlie the Notes, and are expected generally to reduce the potential
dilution and/or offset any cash payments the Company is required to make in excess of the principal amount due, as the case may be, upon
conversion of the Notes in the event that the market price of the Company’s common stock is greater than the strike price of the
Hedge Transactions, which is initially $87.93 per share (subject to adjustment under the terms of the Hedge Transactions), corresponding
to the initial conversion price of the Notes.
On January 18, 2024, the Company also entered into separate, privately
negotiated warrant transactions (the “Base Warrant Transactions”) with Goldman Sachs & Co. LLC, Bank of Montreal and J.P.
Morgan Chase Bank, National Association (the “Warrant Option Counterparties”) . On January 19, 2024, the Company entered into
additional privately negotiated warrant transactions (the “Additional Warrant Transactions” and, together with the Base Warrant
Transactions, the “Warrant Transactions”) with the Warrant Option Counterparties. Pursuant to the Warrant Transactions, the
Company sold warrants at a higher strike price relating to the same number of shares of the Company’s common stock that initially
underlie the Notes, subject to customary anti-dilution adjustments. The initial strike price of the warrants is $135.28 per share (subject
to adjustment under the terms of the Warrant Transactions), which is approximately 100% above the last reported sale price of the Company’s
common stock on January 18, 2024. The Warrant Transactions could have a dilutive effect to the Company’s stockholders to the extent
that the market price per share of the Company’s common stock, as measured under the terms of the Warrant Transactions, exceeds
the applicable strike price of the warrants.
The Company used approximately $37.4 million of the net proceeds of
the offering of the Notes to pay the cost of the Hedge Transactions (after such cost was partially offset by the proceeds to the Company
from the sale of warrants in the Warrant Transactions).
The Hedge Transactions and the Warrant Transactions are separate transactions,
in each case, entered into by the Company with the Hedge Option Counterparties and the Warrant Option Counterparties, respectively, and
are not part of the terms of the Notes and will not affect any holder’s rights under the Notes. Holders of the Notes will not have
any rights with respect to the Hedge Transactions or the Warrant Transactions.
The foregoing description of the Hedge Transactions and Warrant Transactions
is qualified in its entirety by reference to the copies of the confirmations for the Hedge Transactions and the Warrant Transactions,
which are attached as Exhibits 10.2 through 10.13 to this Current Report on Form 8-K and are incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under and Off-Balance Sheet Arrangement of a Registrant. |
The information set forth under the heading “Indenture and the
Notes” under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The information set forth under Item 1.01 of this Current Report on
Form 8-K is incorporated herein by reference.
As described in Item 1.01 of this Current Report on Form 8-K, on January
23, 2024, the Company issued $350.0 million aggregate principal amount of notes to the Initial Purchasers in a private placement pursuant
to exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant
to the terms of the Purchase Agreement. The Company offered and sold the Notes to the Initial Purchasers in reliance on the exemption
from registration provided by Section 4(a)(2) of the Securities Act, for resale by such Initial Purchasers to “qualified institutional
buyers” pursuant to the exemption from registration provided by Rule 144A under the Securities Act.
In addition, as described in Item 1.01 of this Current Report on Form
8-K, on January 18, 2024, the Company entered into the Base Warrant Transactions with the Warrant Option Counterparties, and on January
19, 2024, the Company entered into the Additional Warrant Transactions with the Warrant Option Counterparties. Pursuant to the Warrant
Transactions, the Company issued warrants to the Warrant Option Counterparties relating to the same number of shares of the Company’s
common stock initially underlying the Notes, with a strike price of $135.28 per share. The number of warrants and the strike price are
subject to adjustment under certain circumstances described in the respective confirmations for the Warrant Transactions. The Company
offered and sold the warrants in reliance on the exemption from registration requirements of the Securities Act afforded by Section 4(a)(2)
of the Securities Act.
The offer and sale of the Notes and the warrants are not being registered
under the Securities Act, or the securities laws of any other jurisdiction. Neither the Notes nor the warrants may be offered or sold
in the United States except in transactions exempt from, or not subject to, the registration requirements of the Securities Act and any
applicable state securities laws.
On January 17, 2024, and January 18, 2024, the Company issued press
releases announcing the launch and pricing of the Notes offering, respectively.
In accordance with Rule 135c(d) under the Securities Act, copies of
the press releases are attached as Exhibits 99.1 and 99.2 to this Current Report on Form 8-K and are incorporated herein by reference.
This Current Report on Form 8-K does not constitute an offer to sell
or a solicitation of an offer to buy the securities described herein, nor shall there be any offer or sale of these securities in any
state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities
laws of such jurisdiction.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
|
|
|
|
|
Exhibit Number |
Description |
|
4.1 |
Indenture, dated January 23, 2024, by and between Winnebago Industries, Inc. and U.S. Bank National Association. |
|
4.2 |
Form of 3.250% Convertible Senior Note due 2030 (included in Exhibit 4.1). |
|
10.1 |
Purchase Agreement, dated January 18, 2024, by and among Winnebago Industries, Inc., and Goldman Sachs & Co. LLC and BMO Capital Markets Corp., as the initial purchasers. |
|
10.2 |
Base Convertible Bond Hedge Confirmation, dated January 18, 2024, between Winnebago Industries, Inc., and Goldman Sachs & Co. LLC. |
|
10.3 |
Base Convertible Bond Hedge Confirmation, dated January 18, 2024, between Winnebago Industries, Inc., and BMO Capital Markets Corp. |
|
10.4 |
Base Convertible Bond Hedge Confirmation, dated January 18, 2024, between Winnebago Industries, Inc., and J.P. Morgan Securities LLC. |
|
10.5 |
Additional Convertible Bond Hedge Confirmation, dated January 19, 2024, between Winnebago Industries, Inc., and Goldman Sachs & Co. LLC. |
|
10.6 |
Additional Convertible Bond Hedge Confirmation, dated January 19, 2024, between Winnebago Industries, Inc., and BMO Capital Markets Corp. |
|
10.7 |
Additional Convertible Bond Hedge Confirmation, dated January 19, 2024, between Winnebago Industries, Inc., and J.P. Morgan Securities LLC. |
|
10.8 |
Base Warrant Confirmation, dated January 18, 2024, between Winnebago Industries, Inc., and Goldman Sachs & Co. LLC. |
|
10.9 |
Base Warrant Confirmation, dated January 18, 2024, between Winnebago Industries, Inc., and BMO Capital Markets Corp. |
|
10.10 |
Base Warrant Confirmation, dated January 18, 2024, between Winnebago Industries, Inc., and JPMorgan Chase Bank, National Association. |
|
10.11 |
Additional Warrant Confirmation, dated January 19, 2024, between Winnebago Industries, Inc., and Goldman Sachs & Co. LLC. |
|
10.12 |
Additional Warrant Confirmation, dated January 19, 2024, between Winnebago Industries, Inc., and BMO Capital Markets Corp. |
|
10.13 |
Additional Warrant Confirmation, dated January 19, 2024, between Winnebago Industries, Inc., and JPMorgan Chase Bank, National Association. |
|
99.1 |
Press release dated January 17, 2024 |
|
99.2 |
Press release dated January 18, 2024 |
|
104 |
Cover Page Interactive Data File (formatted as Inline XBRL) |
|
|
|
Cautionary Statement Regarding Forward-Looking Information
This press release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently
uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not limited to the
impact of the notes offering and the related repurchase on our financial position and the dilution of our stockholders, general economic
uncertainty in key markets and a worsening of domestic and global economic conditions or low levels of economic growth; availability of
financing for RV and marine dealers; competition and new product introductions by competitors; ability to innovate and commercialize new
products; ability to manage our inventory to meet demand; risk related to cyclicality and seasonality of our business; risk related to
independent dealers; risk related to dealer consolidation or the loss of a significant dealer; significant increase in repurchase obligations;
ability to retain relationships with our suppliers and obtain components; business or production disruptions; inadequate management of
dealer inventory levels; increased material and component costs, including availability and price of fuel and other raw materials; ability
to integrate mergers and acquisitions; ability to attract and retain qualified personnel and changes in market compensation rates; exposure
to warranty claims; ability to protect our information technology systems from data security, cyberattacks, and network disruption risks
and the ability to successfully upgrade and evolve our information technology systems; ability to retain brand reputation and related
exposure to product liability claims; governmental regulation, including for climate change; increased attention to environmental, social,
and governance (“ESG”) matters, and our ability to meet our commitments; impairment of goodwill and trade names; and risks
related to our Convertible and Senior Secured Notes including our ability to satisfy our obligations under these notes. Additional information
concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained
in the Company's filings with the Securities and Exchange Commission (“SEC”) over the last 12 months, copies of which are
available from the SEC or from the Company upon request. The Company disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statements contained in this release or to reflect any changes in the Company's expectations after
the date of this release or any change in events, conditions or circumstances on which any statement is based, except as required by law.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
Winnebago
Industries, Inc. |
|
|
|
Date: January 23, 2024 |
By: |
/s/ Stacy L. Bogart |
|
Name: |
Stacy L. Bogart |
|
Title: |
Senior Vice President, General Counsel, Secretary and Corporate Responsibility |
Exhibit 4.1
Execution Version
Winnebago
Industries, Inc.
and
U.S.
Bank Trust Company, National Association
as Trustee
INDENTURE
Dated as of January 23, 2024
3.250% Convertible Senior Notes due 2030
TABLE OF CONTENTS
Page
Article 1. |
Definitions; Rules of Construction |
1 |
|
|
|
Section 1.01. |
Definitions |
1 |
Section 1.02. |
Other Definitions |
12 |
Section 1.03. |
Rules of Construction |
13 |
|
|
|
Article 2. |
The Notes |
13 |
|
|
|
Section 2.01. |
Form, Dating and Denominations |
13 |
Section 2.02. |
Execution, Authentication and
Delivery |
14 |
Section 2.03. |
Initial Notes and Additional
Notes |
15 |
Section 2.04. |
Method of Payment |
15 |
Section 2.05. |
Accrual of Interest; Defaulted
Amounts; When Payment Date is Not a Business Day |
16 |
Section 2.06. |
Registrar, Paying Agent and
Conversion Agent |
16 |
Section 2.07. |
Paying Agent and Conversion
Agent to Hold Property in Trust |
17 |
Section 2.08. |
Holder Lists |
18 |
Section 2.09. |
Legends |
18 |
Section 2.10. |
Transfers and Exchanges; Certain
Transfer Restrictions |
19 |
Section 2.11. |
Exchange and Cancellation of
Notes to Be Converted or to Be Repurchased Pursuant to a Repurchase Upon Fundamental Change or Redemption |
23 |
Section 2.12. |
Removal of Transfer Restrictions |
24 |
Section 2.13. |
Replacement Notes |
25 |
Section 2.14. |
Registered Holders; Certain
Rights with Respect to Global Notes |
25 |
Section 2.15. |
Cancellation |
25 |
Section 2.16. |
Notes Held by the Company or
its Affiliates |
25 |
Section 2.17. |
Temporary Notes |
26 |
Section 2.18. |
Outstanding Notes |
26 |
Section 2.19. |
Repurchases by the Company |
27 |
Section 2.20. |
CUSIP and ISIN Numbers |
27 |
|
|
|
Article 3. |
Covenants |
27 |
|
|
|
Section 3.01. |
Payment on Notes |
27 |
Section 3.02. |
Exchange Act Reports |
27 |
Section 3.03. |
Rule 144A Information |
28 |
Section 3.04. |
Additional Interest |
28 |
Section 3.05. |
Compliance and Default Certificates |
29 |
Section 3.06. |
Stay, Extension and Usury Laws |
29 |
Section 3.07. |
Corporate Existence |
29 |
Section 3.08. |
Restriction on Acquisition of
Notes by the Company and its Affiliates |
30 |
Section 3.09. |
Further Instruments and Acts |
30 |
|
|
|
Article 4. |
Repurchase and Redemption |
30 |
Section 4.01. |
No Sinking Fund |
30 |
Section 4.02. |
Right of Holders to Require
the Company to Repurchase Notes upon a Fundamental Change |
30 |
Section 4.03. |
Right of the Company to Redeem
the Notes |
34 |
|
|
|
Article 5. |
Conversion |
37 |
|
|
|
Section 5.01. |
Right to Convert |
37 |
Section 5.02. |
Conversion Procedures |
40 |
Section 5.03. |
Settlement upon Conversion |
42 |
Section 5.04. |
Reserve and Status of Common
Stock Issued upon Conversion |
45 |
Section 5.05. |
Adjustments to the Conversion
Rate |
45 |
Section 5.06. |
Voluntary Adjustments |
56 |
Section 5.07. |
Adjustments to the Conversion
Rate in Connection with a Make-Whole Fundamental Change |
56 |
Section 5.08. |
Exchange in Lieu of Conversion |
58 |
Section 5.09. |
Effect of Common Stock Change
Event |
58 |
|
|
|
Article 6. |
Successors |
60 |
|
|
|
Section 6.01. |
When the Company May Merge,
Etc |
60 |
Section 6.02. |
Successor Corporation Substituted |
61 |
|
|
|
Article 7. |
Defaults and Remedies |
61 |
|
|
|
Section 7.01. |
Events of Default |
61 |
Section 7.02. |
Acceleration |
63 |
Section 7.03. |
Sole Remedy for a Failure to
Report |
64 |
Section 7.04. |
Other Remedies |
65 |
Section 7.05. |
Waiver of Past Defaults |
65 |
Section 7.06. |
Control by Majority |
65 |
Section 7.07. |
Limitation on Suits |
65 |
Section 7.08. |
Absolute Right of Holders to
Institute Suit for the Enforcement of the Right to Receive Payment and Conversion Consideration |
66 |
Section 7.09. |
Collection Suit by Trustee |
66 |
Section 7.10. |
Trustee May File Proofs
of Claim |
66 |
Section 7.11. |
Priorities |
67 |
Section 7.12. |
Undertaking for Costs |
67 |
|
|
|
Article 8. |
Amendments, Supplements and
Waivers |
68 |
|
|
|
Section 8.01. |
Without the Consent of Holders |
68 |
Section 8.02. |
With the Consent of Holders |
69 |
Section 8.03. |
Notice of Amendments, Supplements
and Waivers |
70 |
Section 8.04. |
Revocation, Effect and Solicitation
of Consents; Special Record Dates; Etc |
70 |
Section 8.05. |
Notations and Exchanges |
70 |
Section 8.06. |
Trustee to Execute Supplemental
Indentures |
71 |
|
|
|
Article 9. |
Satisfaction and Discharge |
71 |
|
|
|
Section 9.01. |
Termination of Company’s
Obligations |
71 |
Section 9.02. |
Repayment to Company |
72 |
Section 9.03. |
Reinstatement |
72 |
|
|
|
Article 10. |
Trustee |
72 |
|
|
|
Section 10.01. |
Duties of the Trustee |
72 |
Section 10.02. |
Rights of the Trustee |
73 |
Section 10.03. |
Individual Rights of the Trustee |
74 |
Section 10.04. |
Trustee’s Disclaimer |
75 |
Section 10.05. |
Notice of Defaults |
75 |
Section 10.06. |
Compensation and Indemnity |
75 |
Section 10.07. |
Replacement of the Trustee |
76 |
Section 10.08. |
Successor Trustee by Merger,
Etc |
77 |
Section 10.09. |
Eligibility; Disqualification |
77 |
|
|
|
Article 11. |
Miscellaneous |
77 |
|
|
|
Section 11.01. |
Notices. |
77 |
Section 11.02. |
Delivery of Officer’s
Certificate and Opinion of Counsel as to Conditions Precedent |
79 |
Section 11.03. |
Statements Required in Officer’s
Certificate and Opinion of Counsel |
79 |
Section 11.04. |
Rules by the Trustee, the
Registrar and the Paying Agent |
79 |
Section 11.05. |
No Personal Liability of Directors,
Officers, Employees and Stockholders |
79 |
Section 11.06. |
Governing Law; Waiver of Jury
Trial |
80 |
Section 11.07. |
Submission to Jurisdiction |
80 |
Section 11.08. |
No Adverse Interpretation of
Other Agreements |
80 |
Section 11.09. |
Successors |
80 |
Section 11.10. |
Force Majeure |
80 |
Section 11.11. |
U.S.A. PATRIOT Act |
81 |
Section 11.12. |
Calculations |
81 |
Section 11.13. |
Severability |
81 |
Section 11.14. |
Counterparts |
81 |
Section 11.15. |
Table of Contents, Headings,
Etc |
81 |
Section 11.16. |
Withholding Taxes |
82 |
|
|
|
Exhibits |
|
|
|
|
|
Exhibit A: Form of Note |
A-1 |
Exhibit B-1: Form of Restricted Note Legend |
B1-1 |
Exhibit B-2: Form of Global Note Legend |
B2-1 |
Exhibit B-3: Form of Non-Affiliate Legend |
B3-1 |
|
|
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INDENTURE,
dated as of January 23, 2024, between Winnebago Industries, Inc., a Minnesota corporation, as issuer (the “Company”),
and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).
Each party to this Indenture
(as defined below) agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders (as defined
below) of the Company’s 3.250% Convertible Senior Notes due 2030 (the “Notes”).
Article 1. Definitions;
Rules of Construction
Section 1.01. Definitions.
“Additional Interest”
means any interest that accrues on any Note pursuant to Section 3.04.
“Affiliate”
has the meaning set forth in Rule 144 as in effect on the Issue Date.
“Authorized Denomination”
means, with respect to a Note, a principal amount thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof.
“Bankruptcy Law”
means Title 11, United States Code, or any similar U.S. federal or state or non-U.S. law for the relief of debtors.
“Bid Solicitation
Agent” means the Person who is required to obtain bids for the Trading Price in accordance with Section 5.01(C)(i)(2) and
the definition of “Trading Price.” The initial Bid Solicitation Agent on the Issue Date will be the Company; provided,
however, that the Company may appoint any other Person (including any of the Company’s Subsidiaries) to be the Bid Solicitation
Agent at any time after the Issue Date without prior notice.
“Board of Directors”
means the board of directors of the Company or a committee of such board duly authorized to act on behalf of such board.
“Business Day”
means any day other than a Saturday, a Sunday or any day on which the Federal Reserve Bank of New York is authorized or required by law
or executive order to close or be closed.
“Capital Stock”
of any Person means any and all shares of, interests in, rights to purchase, warrants or options for, participations in, or other equivalents
of, in each case however designated, the equity of such Person, but excluding any debt securities convertible into, or exchangeable for,
such equity.
“Close of Business”
means 5:00 p.m., New York City time.
“Common Stock”
means the common stock, $0.50 par value per share, of the Company, subject to Section 5.09.
“Company”
means the Person named as such in the first paragraph of this Indenture and, subject to Article 6, its successors and assigns.
“Company Order”
means a written request or order signed on behalf of the Company by one (1) of its Officers and delivered to the Trustee.
“Conversion Date”
means, with respect to a Note, the first Business Day on which the requirements set forth in Section 5.02(A) to convert
such Note are satisfied, subject to Section 5.03(C).
“Conversion Price”
means, as of any time, an amount equal to (A) one thousand dollars ($1,000) divided by (B) the Conversion Rate in effect
at such time.
“Conversion Rate”
initially means 11.3724 shares of Common Stock per $1,000 principal amount of Notes; provided, however, that the Conversion
Rate is subject to adjustment pursuant to Article 5; provided, further, that whenever this Indenture refers
to the Conversion Rate as of a particular date without setting forth a particular time on such date, such reference will be deemed to
be to the Conversion Rate immediately after the Close of Business on such date.
“Conversion Share”
means any share of Common Stock issued or issuable upon conversion of any Note.
“Corporate Trust
Office of the Trustee” means the address of the Trustee specified in Section 11.01 or such other address as to
which the Trustee may give notice to the Holders and the Company.
“Daily Cash Amount”
means, with respect to any VWAP Trading Day, the lesser of (A) the applicable Daily Maximum Cash Amount; and (B) the Daily
Conversion Value for such VWAP Trading Day.
“Daily Conversion
Value” means, with respect to any VWAP Trading Day, one-fortieth (1/40th) of the product of (A) the Conversion Rate on
such VWAP Trading Day; and (B) the Daily VWAP per share of Common Stock on such VWAP Trading Day.
“Daily Maximum Cash
Amount” means, with respect to the conversion of any Note, the quotient obtained by dividing (A) the Specified Dollar
Amount applicable to such conversion by (B) forty (40).
“Daily Share Amount”
means, with respect to any VWAP Trading Day, the quotient obtained by dividing (A) the excess, if any, of the Daily Conversion Value
for such VWAP Trading Day over the applicable Daily Maximum Cash Amount by (B) the Daily VWAP for such VWAP Trading Day. For the
avoidance of doubt, the Daily Share Amount will be zero for such VWAP Trading Day if such Daily Conversion Value does not exceed such
Daily Maximum Cash Amount.
“Daily VWAP”
means, for any VWAP Trading Day, the per share volume-weighted average price of the Common Stock as displayed under the heading “Bloomberg
VWAP” on Bloomberg page “WGO <EQUITY> AQR” (or, if such page is not available, its equivalent successor
page) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session
on such VWAP Trading Day (or, if such volume-weighted average price is unavailable, the market value of one share of Common Stock on
such VWAP Trading Day, determined, using a volume-weighted average price method, by a nationally recognized independent investment banking
firm selected by the Company, which may include any of the Initial Purchasers). The Daily VWAP will be determined without regard to after-hours
trading or any other trading outside of the regular trading session.
“De-Legending Deadline
Date” means, with respect to any Note, the fifteenth (15th) day after the Free Trade Date of such Note; provided, however,
that if such fifteenth (15th) day would be after a Regular Record Date and before the fifth (5th) Business Day immediately after the
next Interest Payment Date, then the De-Legending Deadline Date for such Note will instead be the fifth (5th) Business Day immediately
after such Interest Payment Date.
“Default”
means any event that is (or, after notice, passage of time or both, would be) an Event of Default.
“Default Settlement
Method” means Combination Settlement with a Specified Dollar Amount of $1,000 per $1,000 principal amount of Notes; provided,
however, that (x) subject to Section 5.03(A)(iii), the Company may, from time to time, change the Default Settlement
Method, to any Settlement Method that the Company is then permitted to elect, by sending notice of the new Default Settlement Method
to the Holders, the Trustee and the Conversion Agent; and (y) the Default Settlement Method will be subject to Section 5.03(A)(ii).
“Depositary”
means The Depository Trust Company or its successor.
“Depositary Participant”
means any member of, or participant in, the Depositary.
“Depositary Procedures”
means, with respect to any conversion, transfer, exchange or other transaction involving a Global Note or any beneficial interest therein,
the rules and procedures of the Depositary applicable to such conversion, transfer, exchange or transaction.
“Ex-Dividend Date”
means, with respect to an issuance, dividend or distribution on the Common Stock, the first date on which shares of Common Stock trade
on the applicable exchange or in the applicable market, regular way, without the right to receive such issuance, dividend or distribution
(including pursuant to due bills or similar arrangements required by the relevant stock exchange). For the avoidance of doubt, any alternative
trading convention on the applicable exchange or market in respect of the Common Stock under a separate ticker symbol or CUSIP number
will not be considered “regular way” for this purpose.
“Exchange Act”
means the U.S. Securities Exchange Act of 1934, as amended.
“Free Trade Date”
means, with respect to any Note, the date that is one (1) year after the Last Original Issue Date of such Note.
“Freely Tradable”
means, with respect to any Note, that such Note would be eligible to be offered, sold or otherwise transferred pursuant to Rule 144
or otherwise if held by a Person that is not an Affiliate of the Company, and that has not been an Affiliate of the Company during the
immediately preceding three (3) months, without any requirements as to volume, manner of sale, availability of current public information
or notice under the Securities Act (except that, during the six (6) month period beginning on, and including, the date that is six
(6) months after the Last Original Issue Date of such Note, any such requirement as to the availability of current public information
will be disregarded if the same is satisfied at that time); provided, however, that from and after the Free Trade Date
of such Note, such Note will not be “Freely Tradable” unless such Note (x) is not identified by a “restricted”
CUSIP or ISIN number; and (y) is not represented by any certificate that bears the Restricted Note Legend. For the avoidance of
doubt, whether a Note is deemed to be identified by a “restricted” CUSIP or ISIN number or to bear the Restricted Note Legend
is subject to Section 2.12.
“Fundamental Change”
means any of the following events:
(A) a
“person” or “group” (within the meaning of Section 13(d)(3) of the Exchange Act), other than the Company
or its Wholly Owned Subsidiaries, has become the direct or indirect “beneficial owner” (as defined below) of shares of the
Company’s common equity representing more than fifty percent (50%) of the voting power of all of the Company’s then-outstanding
common equity;
(B) the
consummation of (i) any sale, lease or other transfer, in one transaction or a series of transactions, of all or substantially all
of the assets of the Company and its Subsidiaries, taken as a whole, to any Person; or (ii) any transaction or series of related
transactions in connection with which (whether by means of merger, consolidation, share exchange, combination, reclassification, recapitalization,
acquisition, liquidation or otherwise) all of the Common Stock is exchanged for, converted into, acquired for, or constitutes solely
the right to receive, other securities, cash or other property; provided, however, that any merger, consolidation, share
exchange or combination of the Company pursuant to which the Persons that directly or indirectly “beneficially owned” (as
defined below) all classes of the Company’s common equity immediately before such transaction directly or indirectly “beneficially
own,” immediately after such transaction, more than fifty percent (50%) of all classes of common equity of the surviving, continuing
or acquiring company or other transferee, as applicable, or the parent thereof, in substantially the same proportions vis-à-vis
each other as immediately before such transaction will be deemed not to be a Fundamental Change pursuant to this clause (B);
(C) the
Company’s stockholders approve any plan or proposal for the liquidation or dissolution of the Company; or
(D) the
Common Stock ceases to be listed on any of The New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or
any of their respective successors);
provided,
however, that a transaction or event described in clause (A) or (B) above will not constitute a Fundamental
Change if at least ninety percent (90%) of the consideration received or to be received by the holders of Common Stock (excluding cash
payments for fractional shares or pursuant to dissenters rights), in connection with such transaction or event, consists of shares of
common stock listed 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 that will be so listed when issued or exchanged in connection with such transaction or event, and such transaction
or event constitutes a Common Stock Change Event whose Reference Property consists of such consideration.
For the purposes of this
definition, (x) any transaction or event described in both clause (A) and in clause (B)(i) or (ii) above
(without regard to the proviso in clause (B)) will be deemed to occur solely pursuant to clause (B) above (subject
to such proviso); and (y) whether a Person is a “beneficial owner” and whether shares are “beneficially
owned” will be determined in accordance with Rule 13d-3 under the Exchange Act.
“Fundamental Change
Repurchase Date” means the date fixed for the repurchase of any Notes by the Company pursuant to a Repurchase Upon Fundamental
Change.
“Fundamental Change
Repurchase Notice” means a notice (including a notice substantially in the form of the “Fundamental Change Repurchase
Notice” set forth in Exhibit A) containing the information, or otherwise complying with the requirements, set forth
in Section 4.02(F)(i) and Section 4.02(F)(ii).
“Fundamental Change
Repurchase Price” means the cash price payable by the Company to repurchase any Note upon its Repurchase Upon Fundamental Change,
calculated pursuant to Section 4.02(D).
“Global Note”
means a Note that is represented by a certificate substantially in the form set forth in Exhibit A, registered in the name
of the Depositary or its nominee, duly executed by the Company and authenticated by the Trustee, and deposited with the Trustee, as custodian
for the Depositary.
“Global Note Legend”
means a legend substantially in the form set forth in Exhibit B-2.
“Holder”
means a person in whose name a Note is registered on the Registrar’s books.
“Indenture”
means this Indenture, as amended or supplemented from time to time.
“Initial Purchasers”
means Goldman Sachs & Co. LLC and BMO Capital Markets Corp.
“Interest Payment
Date” means, with respect to a Note, each January 15 and July 15 of each year, commencing on July 15, 2024 (or
commencing on such other date specified in the certificate representing such Note). For the avoidance of doubt, the Maturity Date is
an Interest Payment Date.
“Issue Date”
means January 23, 2024.
“Last Original Issue
Date” means (A) with respect to any Notes issued pursuant to the Purchase Agreement and any Notes issued in exchange therefor
or in substitution thereof, the Issue Date; and (B) with respect to any Notes issued pursuant to Section 2.03(B), and
any Notes issued in exchange therefor or in substitution thereof, either (i) the later of (x) the date such Notes are originally
issued and (y) the last date any Notes are originally issued as part of the same offering pursuant to the exercise of an option
granted to the initial purchaser(s) of such Notes to purchase additional Notes; or (ii) such other date as is specified in
an Officer’s Certificate delivered to the Trustee before the original issuance of such Notes.
“Last Reported Sale
Price” of the Common Stock for any Trading Day means the closing sale price per share (or, if no closing sale price is reported,
the average of the last bid price and the last ask price per share or, if more than one in either case, the average of the average last
bid prices and the average last ask prices per share) of Common Stock on such Trading Day as reported in composite transactions for the
principal U.S. national or regional securities exchange on which the Common Stock is then listed. If the Common Stock is not listed on
a U.S. national or regional securities exchange on such Trading Day, then the Last Reported Sale Price will be the last quoted bid price
per share of Common Stock on such Trading Day in the over-the-counter market as reported by OTC Markets Group Inc. or a similar organization.
If the Common Stock is not so quoted on such Trading Day, then the Last Reported Sale Price will be the average of the mid-point of the
last bid price and the last ask price per share of Common Stock on such Trading Day from a nationally recognized independent investment
banking firm selected by the Company, which may be any of the Initial Purchasers. Neither the Trustee nor the Conversion Agent will have
any duty to determine the Last Reported Sale Price.
“Make-Whole Fundamental
Change” means (A) a Fundamental Change (determined after giving effect to the proviso immediately after clause (D) of
the definition thereof, but without regard to the proviso to clause (B)(ii) of such definition); or (B) the sending
of a Redemption Notice pursuant to Section 4.03(F); provided, however, that, subject to Section 4.03(I),
the sending of a Redemption Notice will constitute a Make-Whole Fundamental Change only with respect to the Notes called for Redemption
pursuant to such Redemption Notice and not with respect to any other Notes.
“Make-Whole Fundamental
Change Conversion Period” has the following meaning:
(A) in
the case of a Make-Whole Fundamental Change pursuant to clause (A) of the definition thereof, the period from, and including,
the Make-Whole Fundamental Change Effective Date of such Make-Whole Fundamental Change to, and including, the thirty fifth (35th) Trading
Day after such Make-Whole Fundamental Change Effective Date (or, if such Make-Whole Fundamental Change also constitutes a Fundamental
Change, to, but excluding, the related Fundamental Change Repurchase Date); and
(B) in
the case of a Make-Whole Fundamental Change pursuant to clause (B) of the definition thereof, the period from, and including,
the Redemption Notice Date for the related Redemption to, and including, the Business Day immediately before the related Redemption Date;
provided,
however, that if the Conversion Date for the conversion of a Note that has been called (or deemed, pursuant to Section 4.03(I),
to be called) for Redemption occurs during the Make-Whole Fundamental Change Conversion Period for both a Make-Whole Fundamental Change
occurring pursuant to clause (A) of the definition of “Make-Whole Fundamental Change” and a Make-Whole Fundamental
Change resulting from such Redemption pursuant to clause (B) of such definition, then, notwithstanding anything to the contrary
in Section 5.07, solely for purposes of such conversion, (x) such Conversion Date will be deemed to occur solely during
the Make-Whole Fundamental Change Conversion Period for the Make-Whole Fundamental Change with the earlier Make-Whole Fundamental Change
Effective Date; and (y) the Make-Whole Fundamental Change with the later Make-Whole Fundamental Change Effective Date will be deemed
not to have occurred.
“Make-Whole Fundamental
Change Effective Date” means (A) with respect to a Make-Whole Fundamental Change pursuant to clause (A) of
the definition thereof, the date on which such Make-Whole Fundamental Change occurs or becomes effective; and (B) with respect to
a Make-Whole Fundamental Change pursuant to clause (B) of the definition thereof, the applicable Redemption Notice Date.
“Market Disruption
Event” means, with respect to any date, the occurrence or existence, during the one-half hour period ending at the scheduled
close of trading on such date on the principal U.S. national or regional securities exchange or other market on which the Common Stock
is listed for trading or trades, of any material suspension or limitation imposed on trading (by reason of movements in price exceeding
limits permitted by the relevant exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating
to the Common Stock.
“Maturity Date”
means January 15, 2030.
“Non-Affiliate Legend”
means a legend substantially in the form set forth in Exhibit B-3.
“Note Agent”
means any Registrar, Paying Agent or Conversion Agent.
“Notes”
means the 3.250% Convertible Senior Notes due 2030 issued by the Company pursuant to this Indenture.
“Observation Period”
means, with respect to any Note to be converted, (A) subject to clause (B) below, if the Conversion Date for such Note
occurs before the eighty-fifth (85th) Scheduled Trading Day immediately before the Maturity Date, the forty (40) consecutive VWAP Trading
Days beginning on, and including, the third (3rd) VWAP Trading Day immediately after such Conversion Date; (B) if such Conversion
Date occurs on or after the date the Company has sent a Redemption Notice calling all or any Notes for Redemption pursuant to Section 4.03(F) and
before the related Redemption Date, the forty (40) consecutive VWAP Trading Days beginning on, and including, the forty-first (41st)
Scheduled Trading Day immediately before such Redemption Date; and (C) subject to clause (B) above, if such Conversion
Date occurs on or after the eighty-fifth (85th) Scheduled Trading Day immediately before the Maturity Date, the forty (40) consecutive
VWAP Trading Days beginning on, and including, the forty-first (41st) Scheduled Trading Day immediately before the Maturity Date.
“Officer”
means the Chairman of the Board of Directors, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Senior Vice President or Vice President of the
Company.
“Officer’s
Certificate” means a certificate that is signed on behalf of the Company by one (1) of its Officers and that meets
the requirements of Section 11.03.
“Open of Business”
means 9:00 a.m., New York City time.
“Opinion
of Counsel” means an opinion, from legal counsel (including an employee of, or counsel to, the Company or any of its
Subsidiaries) reasonably acceptable to the Trustee, that meets the requirements of Section 11.03, subject to customary qualifications
and exclusions.
“Person”
or “person” means any individual, corporation, partnership, limited liability company, joint venture, association,
joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof. Any division
or series of a limited liability company, limited partnership or trust will constitute a separate “person” under this Indenture.
“Physical Note”
means a Note (other than a Global Note) that is represented by a certificate substantially in the form set forth in Exhibit A,
registered in the name of the Holder of such Note and duly executed by the Company and authenticated by the Trustee.
“Purchase Agreement”
means that certain Purchase Agreement, dated January 18, 2024, between the Company and the Initial Purchasers.
“Redemption”
means the repurchase of any Note by the Company pursuant to Section 4.03.
“Redemption Date”
means the date fixed, pursuant to Section 4.03(D), for the settlement of the repurchase of any Notes by the Company pursuant
to a Redemption.
“Redemption Notice
Date” means, with respect to a Redemption, the date on which the Company sends the Redemption Notice for such Redemption pursuant
to Section 4.03(F).
“Redemption Price”
means the cash price payable by the Company to redeem any Note upon its Redemption, calculated pursuant to Section 4.03(E).
“Regular Record
Date” has the following meaning with respect to an Interest Payment Date: (A) if such Interest Payment Date occurs on
January 15, the immediately preceding January 1; and (B) if such Interest Payment Date occurs on July 15, the immediately
preceding July 1.
“Repurchase Upon
Fundamental Change” means the repurchase of any Note by the Company pursuant to Section 4.02.
“Responsible Officer”
means (A) any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other
officer of the Trustee customarily performing functions similar to those performed by any of such officers; and (B) with respect
to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of, and familiarity
with, the particular subject.
“Restricted
Note Legend” means a legend substantially in the form set forth in Exhibit B-1.
“Restricted Stock
Legend” means, with respect to any Conversion Share, a legend substantially to the effect that the offer and sale of such Conversion
Share have not been registered under the Securities Act and that such Conversion Share cannot be sold or otherwise transferred except
pursuant to a transaction that is registered under the Securities Act or that is exempt from, or not subject to, the registration requirements
of the Securities Act.
“Rule 144”
means Rule 144 under the Securities Act (or any successor rule thereto), as the same may be amended from time to time.
“Rule 144A”
means Rule 144A under the Securities Act (or any successor rule thereto), as the same may be amended from time to time.
“Scheduled
Trading Day” means any day that is scheduled to be a Trading Day on the principal U.S. national or regional securities exchange
on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities
exchange, on the principal other market on which the Common Stock is then traded. If the Common Stock is not so listed or traded, then
“Scheduled Trading Day” means a Business Day.
“SEC”
means the U.S. Securities and Exchange Commission.
“Securities Act”
means the U.S. Securities Act of 1933, as amended.
“Security”
means any Note or Conversion Share.
“Settlement Method”
means Cash Settlement or Combination Settlement.
“Significant Subsidiary”
means, with respect to any Person, any Subsidiary of such Person that constitutes, or any group of Subsidiaries of such Person that,
in the aggregate, would constitute, a “significant subsidiary” (as defined in Rule 1-02(w) of Regulation S-X under
the Exchange Act) of such Person.
“Special Interest”
means any interest that accrues on any Note pursuant to Section 7.03.
“Specified Dollar
Amount” means, with respect to the conversion of a Note to which Combination Settlement applies, the maximum cash amount per
$1,000 principal amount of such Note deliverable upon such conversion (excluding cash in lieu of any fractional share of Common Stock);
provided, however, that in no event will the Specified Dollar Amount be less than $1,000 per $1,000 principal amount of
such Note.
“Stock Price”
has the following meaning for any Make-Whole Fundamental Change: (A) if the holders of Common Stock receive only cash in consideration
for their shares of Common Stock in such Make-Whole Fundamental Change and such Make-Whole Fundamental Change is pursuant to clause
(B) of the definition of “Fundamental Change,” then the Stock Price is the amount of cash paid per share of Common
Stock in such Make-Whole Fundamental Change; and (B) in all other cases, the Stock Price is the average of the Last Reported Sale
Prices per share of Common Stock for the five (5) consecutive Trading Days ending on, and including, the Trading Day immediately
before the Make-Whole Fundamental Change Effective Date of such Make-Whole Fundamental Change.
“Subsidiary”
means, with respect to any Person, (A) any corporation, association or other business entity (other than a partnership or limited
liability company) of which more than fifty percent (50%) of the total voting power of the Capital Stock entitled (without regard to
the occurrence of any contingency, but after giving effect to any voting agreement or stockholders’ agreement that effectively
transfers voting power) to vote in the election of directors, managers or trustees, as applicable, of such corporation, association or
other business entity is owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such
Person; and (B) any partnership or limited liability company where (i) more than fifty percent (50%) of the capital accounts,
distribution rights, equity and voting interests, or of the general and limited partnership interests, as applicable, of such partnership
or limited liability company are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries
of such Person, whether in the form of membership, general, special or limited partnership or limited liability company interests or
otherwise; and (ii) such Person or any one or more of the other Subsidiaries of such Person is a controlling general partner of,
or otherwise controls, such partnership or limited liability company.
“Trading
Day” means any day on which (A) trading in the Common Stock generally occurs on the principal U.S. national or
regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or
regional securities exchange, on the principal other market on which the Common Stock is then traded; and (B) there is no Market
Disruption Event. If the Common Stock is not so listed or traded, then “Trading Day” means a Business Day.
“Trading
Price” of the Notes on any Trading Day means the average of the secondary market bid quotations, expressed as a cash amount
per $1,000 principal amount of Notes, obtained by the Bid Solicitation Agent for one million dollars ($1,000,000) (or such lesser amount
as may then be outstanding) in principal amount of Notes at approximately 3:30 p.m., New York City time, on such Trading Day from three
(3) nationally recognized independent securities dealers selected by the Company, which may include any of the Initial Purchasers;
provided, however, that, if three (3) such bids cannot reasonably be obtained by the Bid Solicitation Agent but two
(2) such bids are obtained, then the average of the two (2) bids will be used, and if only one (1) such bid can reasonably
be obtained by the Bid Solicitation Agent, then that one (1) bid will be used. If, on any Trading Day, (A) the Bid Solicitation
Agent cannot reasonably obtain at least one (1) bid for one million dollars ($1,000,000) (or such lesser amount as may then be outstanding)
in principal amount of Notes from a nationally recognized independent securities dealer; (B) the Company is not acting as
the Bid Solicitation Agent and the Company fails to instruct the Bid Solicitation Agent to obtain bids when required; or (C) the
Bid Solicitation Agent fails to solicit bids when required, then, in each case, the Trading Price per $1,000 principal amount of Notes
on such Trading Day will be deemed to be less than ninety eight percent (98%) of the product of the Last Reported Sale Price per share
of Common Stock on such Trading Day and the Conversion Rate on such Trading Day.
“Transfer-Restricted
Security” means any Security that constitutes a “restricted security” (as defined in Rule 144); provided,
however, that such Security will cease to be a Transfer-Restricted Security upon the earliest to occur of the following events:
(A) such
Security is sold or otherwise transferred to a Person (other than the Company or an Affiliate of the Company) pursuant to a registration
statement that was effective under the Securities Act at the time of such sale or transfer;
(B) such
Security is sold or otherwise transferred to a Person (other than the Company or an Affiliate of the Company) pursuant to an available
exemption (including Rule 144) from the registration and prospectus-delivery requirements of, or in a transaction not subject to,
the Securities Act and, immediately after such sale or transfer, such Security ceases to constitute a “restricted security”
(as defined in Rule 144); and
(C) such
Security is eligible for resale, by a Person that is not an Affiliate of the Company and that has not been an Affiliate of the Company
during the immediately preceding three (3) months, pursuant to Rule 144 without any limitations thereunder as to volume, manner
of sale, availability of current public information or notice.
The Trustee is under no obligation
to determine whether any Security is a Transfer-Restricted Security and may conclusively rely on an Officer’s Certificate with
respect thereto.
“Trust Indenture
Act” means the U.S. Trust Indenture Act of 1939, as amended.
“Trustee”
means the Person named as such in the first paragraph of this Indenture until a successor replaces it in accordance with the provisions
of this Indenture and, thereafter, means such successor.
“VWAP
Market Disruption Event” means, with respect to any date, (A) the failure by the principal U.S. national or regional
securities exchange on which the Common Stock is then listed, or, if the Common Stock is not then listed on a U.S. national or regional
securities exchange, the principal other market on which the Common Stock is then traded, to open for trading during its regular trading
session on such date; or (B) the occurrence or existence, for more than one half hour period in the aggregate, of any suspension
or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant exchange or otherwise) in
the Common Stock or in any options contracts or futures contracts relating to the Common Stock, and such suspension or limitation occurs
or exists at any time before 1:00 p.m., New York City time, on such date.
“VWAP
Trading Day” means a day on which (A) there is no VWAP Market Disruption Event; and (B) trading in the Common Stock
generally occurs on the principal U.S. national or regional securities exchange on which the Common Stock is then listed or, if
the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common
Stock is then traded. If the Common Stock is not so listed or traded, then “VWAP Trading Day” means a Business Day.
“Wholly Owned Subsidiary”
of a Person means any Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than
directors’ qualifying shares) are owned by such Person or one or more Wholly Owned Subsidiaries of such Person.
Section 1.02. Other
Definitions.
“Additional Shares” |
5.07 (A) |
“Business Combination
Event” |
6.01 (A) |
“Cash Settlement” |
5.03 (A) |
“Combination Settlement” |
5.03 (A) |
“Common Stock Change
Event” |
5.09 (A) |
“Conversion Agent” |
2.06 (A) |
“Conversion Consideration” |
5.03 (B) |
“Dividend Threshold” |
5.05 (A)(iv) |
“Default Interest” |
2.05 (B) |
“Defaulted Amount” |
2.05 (B) |
“Event of Default” |
7.01 (A) |
“Exchange Election” |
Section 5.08 |
“Expiration Date” |
5.05 (A)(v) |
“Expiration Time” |
5.05 (A)(v) |
“Fundamental Change Notice” |
4.02 (E) |
“Fundamental Change Repurchase
Right” |
4.02 (A) |
“Initial Notes” |
2.03 (A) |
“Measurement Period” |
5.01 (C)(i)(2) |
“Paying Agent” |
2.06 (A) |
“Redemption Notice” |
4.03 (F) |
“Reference Property” |
5.09 (A) |
“Reference Property Unit” |
5.09 (A) |
“Register” |
2.06 (B) |
“Registrar” |
2.06 (A) |
“Reporting Event of Default” |
7.03 (A) |
“Specified Courts” |
11.07 |
“Spin-Off” |
5.05 (A)(iii)(2) |
“Spin-Off Valuation Period” |
5.05 (A)(iii)(2) |
“Stated Interest” |
2.05 (A) |
“Successor Corporation” |
6.01 (A) |
“Successor Person” |
5.09 (A) |
“Tender/Exchange Offer
Valuation Period” |
5.05 (A)(v) |
“Trading Price Condition” |
5.01 (C)(i)(2) |
Section 1.03. Rules of
Construction.
For purposes of this Indenture:
(A) “or”
is not exclusive;
(B) “including”
means “including without limitation”;
(C) “will”
expresses a command;
(D) the
“average” of a set of numerical values refers to the arithmetic average of such numerical values;
(E) a
merger involving, or a transfer of assets by, a limited liability company, limited partnership or trust will be deemed to include any
division of or by, or an allocation of assets to a series of, such limited liability company, limited partnership or trust, or any unwinding
of any such division or allocation;
(F) words
in the singular include the plural and in the plural include the singular, unless the context requires otherwise;
(G) “herein,”
“hereof” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision of this Indenture, unless the context requires otherwise;
(H) references
to currency mean the lawful currency of the United States of America, unless the context requires otherwise;
(I) the
exhibits, schedules and other attachments to this Indenture are deemed to form part of this Indenture; and
(J) the
term “interest,” when used with respect to a Note, includes any Default Interest, Additional Interest and Special
Interest, unless the context requires otherwise.
Article 2. The
Notes
Section 2.01. Form,
Dating and Denominations.
The Notes and the Trustee’s
certificate of authentication will be substantially in the form set forth in Exhibit A. The Notes will bear the legends required
by Section 2.09 and may bear notations, legends or endorsements required by law, stock exchange rule or usage or the
Depositary. Each Note will be dated as of the date of its authentication.
Except to the extent otherwise
provided in a Company Order delivered to the Trustee in connection with the issuance and authentication thereof, the Notes will be issued
initially in the form of one or more Global Notes. Global Notes may be exchanged for Physical Notes, and Physical Notes may be exchanged
for Global Notes, only as provided in Section 2.10.
The Notes will be issuable
only in registered form without interest coupons and only in Authorized Denominations.
Each certificate representing
a Note will bear a unique registration number that is not affixed to any other certificate representing another outstanding Note.
The terms contained in the
Notes constitute part of this Indenture, and, to the extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, agree to such terms and to be bound thereby; provided, however, that, to the extent that any provision
of any Note conflicts with the provisions of this Indenture, the provisions of this Indenture will control for purposes of this Indenture
and such Note.
Section 2.02. Execution,
Authentication and Delivery.
(A) Due
Execution by the Company. At least one (1) duly authorized Officer will sign the Notes on behalf of the Company by manual or
facsimile signature. A Note’s validity will not be affected by the failure of any Officer whose signature is on any Note to hold,
at the time such Note is authenticated, the same or any other office at the Company.
(B) Authentication
by the Trustee and Delivery.
(i) No
Note will be valid until it is authenticated by the Trustee. A Note will be deemed to be duly authenticated only when an authorized signatory
of the Trustee (or a duly appointed authenticating agent) manually signs the certificate of authentication of such Note.
(ii) The
Trustee will cause an authorized signatory of the Trustee (or a duly appointed authenticating agent) to manually sign the certificate
of authentication of a Note only if (1) the Company delivers such Note to the Trustee; (2) such Note is executed by the Company
in accordance with Section 2.02(A); and (3) the Company delivers a Company Order to the Trustee that (a) requests
the Trustee to authenticate such Note; and (b) sets forth the name of the Holder of such Note and the date as of which such Note
is to be authenticated, together with the documents contemplated by Section 11.02. If such Company Order also requests the
Trustee to deliver such Note to any Holder or to the Depositary, then the Trustee will promptly deliver such Note in accordance with
such Company Order.
(iii) The
Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. A duly appointed authenticating agent may
authenticate Notes whenever the Trustee may do so under this Indenture, and a Note authenticated as provided in this Indenture by such
an agent will be deemed, for purposes of this Indenture, to be authenticated by the Trustee. Each duly appointed authenticating agent
will have the same rights to deal with the Company as the Trustee would have if it were performing the duties that the authentication
agent was validly appointed to undertake.
Section 2.03. Initial
Notes and Additional Notes.
(A) Initial
Notes. On the Issue Date, there will be originally issued three hundred fifty million dollars ($350,000,000) aggregate principal
amount of Notes, subject to the provisions of this Indenture (including Section 2.02). Notes issued pursuant to this Section 2.03(A),
and any Notes issued in exchange therefor or in substitution thereof, are referred to in this Indenture as the “Initial Notes.”
(B) Additional
Notes. The Company may, subject to the provisions of this Indenture (including Section 2.02), originally issue additional
Notes with the same terms as the Initial Notes (except, to the extent applicable, with respect to the date as of which interest begins
to accrue on such additional Notes and the first Interest Payment Date and the Last Original Issue Date of such additional Notes), which
additional Notes will, subject to the foregoing, be considered to be part of the same series of, and rank equally and ratably with all
other, Notes issued under this Indenture; provided, however, that if any such additional Notes are not fungible with other
Notes issued under this Indenture for federal income tax or federal securities laws purposes, then such additional Notes will be identified
by a separate CUSIP number or by no CUSIP number.
Section 2.04. Method
of Payment.
(A) Global
Notes. The Company will pay, or cause the Paying Agent to pay, the principal (whether due upon maturity on the Maturity Date, Redemption
on a Redemption Date or repurchase on a Fundamental Change Repurchase Date or otherwise) of, interest on, and any cash Conversion Consideration
for, any Global Note to the Depositary by wire transfer of immediately available funds no later than the time the same is due as provided
in this Indenture.
(B) Physical
Notes. The Company will pay, or cause the Paying Agent to pay, the principal (whether due upon maturity on the Maturity Date, Redemption
on a Redemption Date or repurchase on a Fundamental Change Repurchase Date or otherwise) of, interest on, and any cash Conversion Consideration
for, any Physical Note no later than the time the same is due as provided in this Indenture as follows: (i) if the principal amount
of such Physical Note is at least five million dollars ($5,000,000) (or such lower amount as the Company may choose in its sole and absolute
discretion) and the Holder of such Physical Note entitled to such payment has delivered to the Paying Agent or the Trustee, no later
than the time set forth in the immediately following sentence, a written request that the Company make such payment by wire transfer
to an account of such Holder within the United States, by wire transfer of immediately available funds to such account; and (ii) in
all other cases, by check mailed to the address of the Holder of such Physical Note entitled to such payment as set forth in the Register.
To be timely, such written request must be so delivered no later than the Close of Business on the following date: (x) with respect
to the payment of any interest due on an Interest Payment Date, the immediately preceding Regular Record Date; (y) with respect
to any cash Conversion Consideration, the relevant Conversion Date; and (z) with respect to any other payment, the date that is
fifteen (15) calendar days immediately before the date such payment is due.
Section 2.05. Accrual
of Interest; Defaulted Amounts; When Payment Date is Not a Business Day.
(A) Accrual
of Interest. Each Note will accrue interest at a rate per annum equal to 3.250% (the “Stated Interest”), plus
any Additional Interest and Special Interest that may accrue pursuant to Sections 3.04 and 7.03, respectively. Stated Interest
on each Note will (i) accrue from, and including, the most recent date to which Stated Interest has been paid or duly provided for
(or, if no Stated Interest has theretofore been paid or duly provided for, the date set forth in the certificate representing such Note
as the date from, and including, which Stated Interest will begin to accrue in such circumstance) to, but excluding, the date of payment
of such Stated Interest; and (ii) be, subject to Sections 4.02(D), 4.03(E) and 5.02(D) (but without
duplication of any payment of interest), payable semi-annually in arrears on each Interest Payment Date, beginning on the first Interest
Payment Date set forth in the certificate representing such Note, to the Holder of such Note as of the Close of Business on the immediately
preceding Regular Record Date. Stated Interest, and, if applicable, Additional Interest and Special Interest, on the Notes will be computed
on the basis of a 360-day year comprised of twelve 30-day months.
(B) Defaulted
Amounts. If the Company fails to pay any amount (a “Defaulted Amount”) payable on a Note on or before the due
date therefor as provided in this Indenture, then, regardless of whether such failure constitutes an Event of Default, (i) such
Defaulted Amount will forthwith cease to be payable to the Holder of such Note otherwise entitled to such payment; (ii) to the extent
lawful, interest (“Default Interest”) will accrue on such Defaulted Amount at a rate per annum equal to the rate per
annum at which Stated Interest accrues from, and including, such due date to, but excluding, the date of payment of such Defaulted Amount
and Default Interest; (iii) such Defaulted Amount and Default Interest will be paid on a payment date selected by the Company to
the Holder of such Note as of the Close of Business on a special record date selected by the Company, provided that such special
record date must be no more than fifteen (15), nor less than ten (10), calendar days before such payment date; and (iv) at least
fifteen (15) calendar days before such special record date, the Company will send notice to the Trustee and the Holders that states such
special record date, such payment date and the amount of such Defaulted Amount and Default Interest to be paid on such payment date.
(C) Delay
of Payment when Payment Date is Not a Business Day. If the due date for a payment on a Note as provided in this Indenture is not
a Business Day, then, notwithstanding anything to the contrary in this Indenture or the Notes, such payment may be made on the immediately
following Business Day and no interest will accrue on such payment as a result of the related delay. Solely for purposes of the immediately
preceding sentence, a day on which the applicable place of payment is authorized or required by law or executive order to close or be
closed will be deemed not to be a “Business Day.”
Section 2.06. Registrar,
Paying Agent and Conversion Agent.
(A) Generally.
The Company will maintain (i) an office or agency in the continental United States where Notes may be presented for registration
of transfer or for exchange (the “Registrar”); (ii) an office or agency in the continental United States where
Notes may be presented for payment (the “Paying Agent”); and (iii) an office or agency in the continental United
States where Notes may be presented for conversion (the “Conversion Agent”). If the Company fails to maintain a Registrar,
Paying Agent or Conversion Agent, then the Trustee will act as such. For the avoidance of doubt, the Company or any of its Subsidiaries
may act as Registrar, Paying Agent or Conversion Agent.
(B) Duties
of the Registrar. The Registrar will keep a record (the “Register”) of the names and addresses of the Holders,
the Notes held by each Holder and the transfer, exchange, repurchase, Redemption and conversion of Notes. Absent manifest error, the
entries in the Register will be conclusive and the Company and the Trustee may treat each Person whose name is recorded as a Holder in
the Register as a Holder for all purposes. The Register will be in written form or in any form capable of being converted into written
form reasonably promptly.
(C) Co-Agents;
Company’s Right to Appoint Successor Registrars, Paying Agents and Conversion Agents. The Company may appoint one or more co-Registrars,
co-Paying Agents and co-Conversion Agents, each of whom will be deemed to be a Registrar, Paying Agent or Conversion Agent, as applicable,
under this Indenture. Subject to Section 2.06(A), the Company may change any Registrar, Paying Agent or Conversion Agent
(including appointing itself or any of its Subsidiaries to act in such capacity) without notice to any Holder. The Company will notify
the Trustee (and, upon request, any Holder) of the name and address of each Note Agent, if any, not a party to this Indenture and will
enter into an appropriate agency agreement with each such Note Agent, which agreement will implement the provisions of this Indenture
that relate to such Note Agent.
(D) Initial
Appointments. The Company appoints the Trustee as the initial Paying Agent, the initial Registrar and the initial Conversion Agent.
Section 2.07. Paying
Agent and Conversion Agent to Hold Property in Trust.
The
Company will require each Paying Agent or Conversion Agent that is not the Trustee to agree in writing that such Note Agent will (A) hold
in trust for the benefit of Holders or the Trustee all money and other property held by such Note Agent for payment or delivery due on
the Notes; and (B) notify the Trustee of any default by the Company in making any such payment or delivery. The Company,
at any time, may, and the Trustee, while any Default continues, may, require a Paying Agent or Conversion Agent to pay or deliver, as
applicable, all money and other property held by it to the Trustee, after which payment or delivery, as applicable, such Note Agent (if
not the Company or any of its Subsidiaries) will have no further liability for such money or property. If the Company or any of its Subsidiaries
acts as Paying Agent or Conversion Agent, then (A) it will segregate and hold in a separate trust fund for the benefit of the Holders
or the Trustee all money and other property held by it as Paying Agent or Conversion Agent; and (B) references in this Indenture
or the Notes to the Paying Agent or Conversion Agent holding cash or other property, or to the delivery of cash or other property to
the Paying Agent or Conversion Agent, in each case for payment or delivery to any Holders or the Trustee or with respect to the Notes,
will be deemed to refer to cash or other property so segregated and held separately, or to the segregation and separate holding of such
cash or other property, respectively. Upon the occurrence of any event pursuant to clause (ix) or (x) of Section 7.01(A) with
respect to the Company (or with respect to any Subsidiary of the Company acting as Paying Agent or Conversion Agent), the Trustee will
serve as the Paying Agent or Conversion Agent, as applicable, for the Notes.
Section 2.08. Holder
Lists.
If
the Trustee is not the Registrar, the Company will furnish to the Trustee, no later than seven (7) Business Days before each Interest
Payment Date, and at such other times as the Trustee may request, a list, in such form and as of such date or time as the Trustee
may reasonably require, of the names and addresses of the Holders.
Section 2.09. Legends.
(A) Global
Note Legend. Each Global Note will bear the Global Note Legend (or any similar legend, not inconsistent with this Indenture, required
by the Depositary for such Global Note).
(B) Non-Affiliate
Legend. Each Note will bear the Non-Affiliate Legend.
(C) Restricted
Note Legend. Subject to Section 2.12,
(i) each
Note that is a Transfer-Restricted Security will bear the Restricted Note Legend; and
(ii) if
a Note is issued in exchange for, in substitution of, or to effect a partial conversion of, another Note (such other Note being referred
to as the “old Note” for purposes of this Section 2.09(C)(ii)), including pursuant to Section 2.10(B),
2.10(C), 2.11 or 2.13, such Note will bear the Restricted Note Legend if such old Note bore the Restricted Note
Legend at the time of such exchange or substitution, or on the related Conversion Date with respect to such conversion, as applicable;
provided, however, that such Note need not bear the Restricted Note Legend if such Note does not constitute a Transfer-Restricted
Security immediately after such exchange or substitution, or as of such Conversion Date, as applicable.
(D) Other
Legends. A Note may bear any other legend or text, not inconsistent with this Indenture, as may be required by applicable law or
by any securities exchange or automated quotation system on which such Note is traded or quoted.
(E) Acknowledgement
and Agreement by the Holders. A Holder’s acceptance of any Note bearing any legend required by this Section 2.09
will constitute such Holder’s acknowledgement of, and agreement to comply with, the restrictions set forth in such legend.
(F) Restricted
Stock Legend.
(i) Each
Conversion Share will bear the Restricted Stock Legend if the Note upon the conversion of which such Conversion Share was issued was
(or would have been had it not been converted) a Transfer-Restricted Security at the time such Conversion Share was issued; provided,
however, that such Conversion Share need not bear the Restricted Stock Legend if the Company determines, in its reasonable discretion,
that such Conversion Share need not bear the Restricted Stock Legend.
(ii) Notwithstanding
anything to the contrary in this Section 2.09(F), a Conversion Share need not bear a Restricted Stock Legend if such Conversion
Share is issued in an uncertificated form that does not permit affixing legends thereto, provided the Company takes measures (including
the assignment thereto of a “restricted” CUSIP number) that it reasonably deems appropriate to enforce the transfer restrictions
referred to in the Restricted Stock Legend.
Section 2.10. Transfers
and Exchanges; Certain Transfer Restrictions.
(A) Provisions
Applicable to All Transfers and Exchanges.
(i) Subject
to this Section 2.10, Physical Notes and beneficial interests in Global Notes may be transferred or exchanged from time to
time and the Registrar will record each such transfer or exchange in the Register.
(ii) Each
Note issued upon transfer or exchange of any other Note (such other Note being referred to as the “old Note” for purposes
of this Section 2.10(A)(ii)) or portion thereof in accordance with this Indenture will be the valid obligation of the Company,
evidencing the same indebtedness, and entitled to the same benefits under this Indenture, as such old Note or portion thereof, as applicable.
(iii) The
Company, the Trustee and the Note Agents will not impose any service charge on any Holder for any transfer, exchange or conversion of
Notes, but the Company, the Trustee, the Registrar and the Conversion Agent may require payment of a sum sufficient to cover any transfer
tax or similar governmental charge that may be imposed in connection with any transfer, exchange or conversion of Notes, other than exchanges
pursuant to Sections 2.11, 2.17 or 8.05 not involving any transfer.
(iv) Notwithstanding
anything to the contrary in this Indenture or the Notes, a Note may not be transferred or exchanged in part unless the portion to be
so transferred or exchanged is in an Authorized Denomination.
(v) The
Trustee will have no obligation or duty to monitor, determine or inquire as to compliance with any transfer restrictions imposed under
this Indenture or applicable law with respect to any Security, other than to require the delivery of such certificates or other documentation
or evidence as expressly required by this Indenture and to examine the same to determine substantial compliance as to form with the requirements
of this Indenture.
(vi) Each
Note issued upon transfer of, or in exchange for, another Note will bear each legend, if any, required by Section 2.09.
(vii) Upon
satisfaction of the requirements of this Indenture to effect a transfer or exchange of any Note, the Company will cause such transfer
or exchange to be effected as soon as reasonably practicable but in no event later than the second (2nd) Business Day after the date
of such satisfaction.
(viii) For
the avoidance of doubt, and subject to the terms of this Indenture, as used in this Section 2.10, an “exchange”
of a Global Note or a Physical Note includes (x) an exchange effected for the sole purpose of removing any Restricted Note Legend
affixed to such Global Note or Physical Note; and (y) if such Global Note or a Physical Note is identified by a “restricted”
CUSIP number, an exchange effected for the sole purpose of causing such Global Note or a Physical Note to be identified by an “unrestricted”
CUSIP number.
(B) Transfers
and Exchanges of Global Notes.
(i) Subject
to the immediately following sentence, no Global Note may be transferred or exchanged in whole except (x) by the Depositary to a
nominee of the Depositary; (y) by a nominee of the Depositary to the Depositary or to another nominee of the Depositary; or (z) by
the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. No Global Note (or any portion
thereof) may be transferred to, or exchanged for, a Physical Note; provided, however, that a Global Note will be exchanged,
pursuant to customary procedures, for one or more Physical Notes if:
(1) (x) the
Depositary notifies the Company or the Trustee that the Depositary is unwilling or unable to continue as depositary for such Global Note
or (y) the Depositary ceases to be a “clearing agency” registered under Section 17A of the Exchange Act and, in
each case, the Company fails to appoint a successor Depositary within ninety (90) days of such notice or cessation;
(2) an
Event of Default has occurred and is continuing and the Company, the Trustee or the Registrar has received a written request from the
Depositary, or from a holder of a beneficial interest in such Global Note, to exchange such Global Note or beneficial interest, as applicable,
for one or more Physical Notes; or
(3) the
Company, in its sole discretion, permits the exchange of any beneficial interest in such Global Note for one or more Physical Notes at
the request of the owner of such beneficial interest.
(ii) Upon
satisfaction of the requirements of this Indenture to effect a transfer or exchange of any Global Note (or any portion thereof):
(1) the
Trustee will reflect any resulting decrease of the principal amount of such Global Note by notation on the “Schedule of Exchanges
of Interests in the Global Note” forming part of such Global Note (and, if such notation results in such Global Note having a principal
amount of zero, the Company may (but is not required to) instruct the Trustee to cancel such Global Note pursuant to Section 2.15);
(2) if
required to effect such transfer or exchange, then the Trustee will reflect any resulting increase of the principal amount of any other
Global Note by notation on the “Schedule of Exchanges of Interests in the Global Note” forming part of such other Global
Note;
(3) if
required to effect such transfer or exchange, then the Company will issue, execute and deliver, and the Trustee will authenticate, in
each case in accordance with Section 2.02, a new Global Note bearing each legend, if any, required by Section 2.09;
and
(4) if
such Global Note (or such portion thereof), or any beneficial interest therein, is to be exchanged for one or more Physical Notes, then
the Company will issue, execute and deliver, and the Trustee will authenticate, in each case in accordance with Section 2.02,
one or more Physical Notes that are in Authorized Denominations (not to exceed, in the aggregate, the principal amount of such Global
Note to be so exchanged), are registered in such name(s) as the Depositary specifies (or as otherwise determined pursuant to customary
procedures) and bear each legend, if any, required by Section 2.09.
(iii) Each
transfer or exchange of a beneficial interest in any Global Note will be made in accordance with the Depositary Procedures.
(C) Transfers
and Exchanges of Physical Notes.
(i) Subject
to this Section 2.10, a Holder of a Physical Note may (x) transfer such Physical Note (or any portion thereof in an
Authorized Denomination) to one or more other Person(s); (y) exchange such Physical Note (or any portion thereof in an Authorized
Denomination) for one or more other Physical Notes in Authorized Denominations having an aggregate principal amount equal to the aggregate
principal amount of the Physical Note (or portion thereof) to be so exchanged; and (z) if then permitted by the Depositary Procedures,
transfer such Physical Note (or any portion thereof in an Authorized Denomination) in exchange for a beneficial interest in one or more
Global Notes; provided, however, that, to effect any such transfer or exchange, such Holder must:
(1) surrender
such Physical Note to be transferred or exchanged to the office of the Registrar, together with any endorsements or transfer instruments
reasonably required by the Company, the Trustee or the Registrar; and
(2) deliver
such certificates, documentation or evidence as may be required pursuant to Section 2.10(D).
(ii) Upon
the satisfaction of the requirements of this Indenture to effect a transfer or exchange of any Physical Note (such Physical Note being
referred to as the “old Physical Note” for purposes of this Section 2.10(C)(ii)) of a Holder (or any portion
of such old Physical Note in an Authorized Denomination):
(1) such
old Physical Note will be promptly cancelled pursuant to Section 2.15;
(2) if
such old Physical Note is to be transferred or exchanged only in part, then the Company will issue, execute and deliver, and the Trustee
will authenticate, in each case in accordance with Section 2.02, one or more Physical Notes that (x) are in Authorized
Denominations and have an aggregate principal
amount equal to the principal amount of such old Physical Note not to be transferred or
exchanged; (y) are registered in the name of such Holder; and (z) bear each legend, if any, required by Section 2.09;
(3) in
the case of a transfer:
(a) to
the Depositary or a nominee thereof that will hold its interest in such old Physical Note (or such portion thereof) to be so transferred
in the form of one or more Global Notes, the Trustee will reflect an increase of the principal amount of one or more existing Global Notes
by notation on the “Schedule of Exchanges of Interests in the Global Note” forming part of such Global Note(s), which increase(s) are
in Authorized Denominations and aggregate to the principal amount to be so transferred, and which Global Note(s) bear each legend,
if any, required by Section 2.09; provided, however, that if such transfer cannot be so effected by notation
on one or more existing Global Notes (whether because no Global Notes bearing each legend, if any, required by Section 2.09
then exist, because any such increase will result in any Global Note having an aggregate principal amount exceeding the maximum aggregate
principal amount permitted by the Depositary or otherwise), then the Company will issue, execute and deliver, and the Trustee will authenticate,
in each case in accordance with Section 2.02, one or more Global Notes that (x) are in Authorized Denominations and have
an aggregate principal amount equal to the principal amount to be so transferred; and (y) bear each legend, if any, required by Section 2.09;
and
(b) to
a transferee that will hold its interest in such old Physical Note (or such portion thereof) to be so transferred in the form of one or
more Physical Notes, the Company will issue, execute and deliver, and the Trustee will authenticate, in each case in accordance with Section 2.02,
one or more Physical Notes that (x) are in Authorized Denominations and have an aggregate principal amount equal to the principal
amount to be so transferred; (y) are registered in the name of such transferee; and (z) bear each legend, if any, required by
Section 2.09; and
(4) in
the case of an exchange, the Company will issue, execute and deliver, and the Trustee will authenticate, in each case in accordance with
Section 2.02, one or more Physical Notes that (x) are in Authorized Denominations and have an aggregate principal amount
equal to the principal amount to be so exchanged; (y) are registered in the name of the Person to whom such old Physical Note was
registered; and (z) bear each legend, if any, required by Section 2.09.
(D) Requirement
to Deliver Documentation and Other Evidence. If a Holder of any Note that is identified by a “restricted” CUSIP number
or that bears a Restricted Note Legend or is a Transfer-Restricted Security requests to:
(i) cause
such Note to be identified by an “unrestricted” CUSIP number;
(ii) remove
such Restricted Note Legend; or
(iii) register
the transfer of such Note to the name of another Person,
then the Company, the Trustee and the Registrar
may refuse to effect such identification, removal or transfer, as applicable, unless there is delivered to the Company, the Trustee and
the Registrar such certificates or other documentation or evidence as the Company may reasonably require to determine that such identification,
removal or transfer, as applicable, complies with the Securities Act and other applicable securities laws; provided, however,
that no such certificates, documentation or evidence need be so delivered on and after the Free Trade Date with respect to such Note unless
the Company determines, in its reasonable discretion, that such Note is not eligible to be offered, sold or otherwise transferred pursuant
to Rule 144 or otherwise without any requirements as to volume, manner of sale, availability of current public information or notice
under the Securities Act. Neither the Trustee nor the Registrar will have any responsibility to determine whether any transfer complies
with the Securities Act and other applicable securities laws.
(E) Transfers
of Notes Subject to Redemption, Repurchase or Conversion. Notwithstanding anything to the contrary in this Indenture or the Notes,
the Company, the Trustee and the Registrar will not be required to register the transfer of or exchange any Note that (i) has been
surrendered for conversion, except to the extent that any portion of such Note is not subject to conversion; (ii) is subject to a
Fundamental Change Repurchase Notice validly delivered, and not withdrawn, pursuant to Section 4.02(F), except to the extent
that any portion of such Note is not subject to such notice or the Company fails to pay the applicable Fundamental Change Repurchase Price
when due; or (iii) has been selected for Redemption pursuant to a Redemption Notice, except to the extent that any portion of such
Note is not subject to Redemption or the Company fails to pay the applicable Redemption Price when due.
Section 2.11. Exchange
and Cancellation of Notes to Be Converted or to Be Repurchased Pursuant to a Repurchase Upon Fundamental Change or Redemption.
(A) Partial
Conversions of Physical Notes and Partial Repurchases of Physical Notes Pursuant to a Repurchase Upon Fundamental Change or Redemption.
If only a portion of a Physical Note of a Holder is to be converted pursuant to Article 5 or repurchased pursuant to a Repurchase
Upon Fundamental Change or Redemption, then, as soon as reasonably practicable after such Physical Note is surrendered for such conversion
or repurchase, as applicable, the Company will cause such Physical Note to be exchanged, pursuant and subject to Section 2.10(C),
for (i) one or more Physical Notes that are in Authorized Denominations and have an aggregate principal amount equal to the principal
amount of such Physical Note that is not to be so converted or repurchased, as applicable, and deliver such Physical Note(s) to such
Holder; and (ii) a Physical Note having a principal amount equal to the principal amount to be so converted or repurchased, as applicable,
which Physical Note will be converted or repurchased, as applicable, pursuant to the terms of this Indenture; provided, however,
that the Physical Note referred to in this clause (ii) need not be issued at any time after which such principal amount subject
to such conversion or repurchase, as applicable, is deemed to cease to be outstanding pursuant to Section 2.18.
(B) Cancellation
of Notes that Are Converted and Notes that Are Repurchased
Pursuant to a Repurchase Upon Fundamental Change or Redemption.
(i) Physical
Notes. If a Physical Note (or any portion thereof that has not theretofore been exchanged pursuant to Section 2.11(A))
of a Holder is to be converted pursuant to Article 5 or repurchased pursuant to a Repurchase Upon Fundamental Change or Redemption,
then, promptly after the later of the time such Physical Note (or such portion) is deemed to cease to be outstanding pursuant to Section 2.18
and the time such Physical Note is surrendered for such conversion or repurchase, as applicable, (1) such Physical Note will be cancelled
pursuant to Section 2.15; and (2) in the case of a partial conversion or repurchase, as applicable, the Company will
issue, execute and deliver to such Holder, and the Trustee will authenticate, in each case in accordance with Section 2.02,
one or more Physical Notes that (x) are in Authorized Denominations and have an aggregate principal amount equal to the principal
amount of such Physical Note that is not to be so converted or repurchased, as applicable; (y) are registered in the name of such
Holder; and (z) bear each legend, if any, required by Section 2.09.
(ii) Global
Notes. If a Global Note (or any portion thereof) is to be converted pursuant to Article 5 or repurchased pursuant to a
Repurchase Upon Fundamental Change or Redemption, then, promptly after the time such Note (or such portion) is deemed to cease to be outstanding
pursuant to Section 2.18, the Trustee will reflect a decrease of the principal amount of such Global Note in an amount equal
to the principal amount of such Global Note to be so converted or repurchased, as applicable, by notation on the “Schedule of Exchanges
of Interests in the Global Note” forming part of such Global Note (and, if the principal amount of such Global Note is zero following
such notation, cancel such Global Note pursuant to Section 2.15).
Section 2.12. Removal
of Transfer Restrictions.
Without limiting the generality
of any other provision of this Indenture (including Section 3.04), the Restricted Note Legend affixed to any Note will be
deemed, pursuant to this Section 2.12 and the footnote to such Restricted Note Legend, to be removed therefrom upon the Company’s
delivery to the Trustee of notice and an Officer’s Certificate, signed on behalf of the Company by one (1) of its Officers,
to such effect (and, for the avoidance of doubt, such notice need not be accompanied by an Opinion of Counsel in order to be effective
to cause such Restricted Note Legend to be deemed to be removed from such Note). If such Note bears a “restricted” CUSIP or
ISIN number at the time of such delivery, then, upon such delivery, such Note will be deemed, pursuant to this Section 2.12
and the footnotes to the CUSIP and ISIN numbers set forth on the face of the certificate representing such Note, to thereafter bear the
“unrestricted” CUSIP and ISIN numbers identified in such footnotes; provided, however, that if such Note is
a Global Note and the Depositary thereof requires a mandatory exchange or other procedure to cause such Global Note to be identified by
“unrestricted” CUSIP and ISIN numbers in the facilities of such Depositary, then (i) the Company will effect such exchange
or procedure as soon as reasonably practicable; and (ii) for purposes of Section 3.04 and the definition of Freely Tradable,
such Global Note will not be deemed to be identified by “unrestricted” CUSIP and ISIN numbers until such time as such exchange
or procedure is effected.
Section 2.13. Replacement
Notes.
If a Holder of any Note claims
that such Note has been mutilated, lost, destroyed or wrongfully taken, then the Company will issue, execute and deliver, and the Trustee
will authenticate, in each case in accordance with Section 2.02, a replacement Note upon surrender to the Trustee of such
mutilated Note, or upon delivery to the Trustee of evidence of such loss, destruction or wrongful taking reasonably satisfactory to the
Trustee and the Company. In the case of a lost, destroyed or wrongfully taken Note, the Company and the Trustee may require the Holder
thereof to provide such security or indemnity that is reasonably satisfactory to the Company and the Trustee to protect the Company and
the Trustee from any loss that any of them may suffer if such Note is replaced.
Every replacement Note issued
pursuant to this Section 2.13 will be an additional obligation of the Company and will be entitled to all of the benefits
of this Indenture equally and ratably with all other Notes issued under this Indenture.
Section 2.14. Registered
Holders; Certain Rights with Respect to Global Notes.
Only the Holder of a Note
will have rights under this Indenture as the owner of such Note. Without limiting the generality of the foregoing, Depositary Participants
will have no rights as such under this Indenture with respect to any Global Note held on their behalf by the Depositary or its nominee,
or by the Trustee as its custodian, and the Company, the Trustee and the Note Agents, and their respective agents, may treat the Depositary
as the absolute owner of such Global Note for all purposes whatsoever; provided, however, that (A) the Holder of any
Global Note may grant proxies and otherwise authorize any Person, including Depositary Participants and Persons that hold interests in
Notes through Depositary Participants, to take any action that such Holder is entitled to take with respect to such Global Note under
this Indenture or the Notes; and (B) the Company and the Trustee, and their respective agents, may give effect to any written certification,
proxy or other authorization furnished by the Depositary.
Section 2.15. Cancellation.
Without limiting the generality
of Section 3.08, the Company may at any time deliver Notes to the Trustee for cancellation. The Registrar, the Paying Agent
and the Conversion Agent will forward to the Trustee each Note duly surrendered to them for transfer, exchange, payment or conversion.
The Trustee will promptly cancel all Notes so surrendered to it in accordance with its customary procedures. Without limiting the generality
of Section 2.03(B), the Company may not originally issue new Notes to replace Notes that it has paid or that have been cancelled
upon transfer, exchange, payment or conversion.
Section 2.16. Notes
Held by the Company or its Affiliates.
Without limiting the generality
of Section 3.08, in determining whether the Holders of the required aggregate principal amount of Notes have concurred in
any direction, waiver or consent, Notes owned by the Company or any of its Affiliates will be deemed not to be outstanding; provided,
however, that, for purposes of determining whether the Trustee is protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned will be
so disregarded.
Section 2.17. Temporary
Notes.
Until definitive Notes are
ready for delivery, the Company may issue, execute and deliver, and the Trustee will authenticate, in each case in accordance with Section 2.02,
temporary Notes. Temporary Notes will be substantially in the form of definitive Notes but may have variations that the Company considers
appropriate for temporary Notes. The Company will promptly prepare, issue, execute and deliver, and the Trustee will authenticate, in
each case in accordance with Section 2.02, definitive Notes in exchange for temporary Notes. Until so exchanged, each temporary
Note will in all respects be entitled to the same benefits under this Indenture as definitive Notes.
Section 2.18. Outstanding
Notes.
(A) Generally.
The Notes that are outstanding at any time will be deemed to be those Notes that, at such time, have been duly executed and authenticated,
excluding those Notes (or portions thereof) that have theretofore been (i) cancelled by the Trustee or delivered to the Trustee for
cancellation in accordance with Section 2.15; (ii) assigned a principal amount of zero by notation on the “Schedule
of Exchanges of Interests in the Global Note” forming part of any a Global Note representing such Note; (iii) paid in full
in accordance with this Indenture; or (iv) deemed to cease to be outstanding to the extent provided in, and subject to, clause
(B), (C) or (D) of this Section 2.18.
(B) Replaced
Notes. If a Note is replaced pursuant to Section 2.13, then such Note will cease to be outstanding at the time of its
replacement, unless the Trustee and the Company receive proof reasonably satisfactory to them that such Note is held by a “bona
fide purchaser” under applicable law.
(C) Maturing
Notes and Notes Called for Redemption or Subject to Repurchase. If, on a Redemption Date, a Fundamental Change Repurchase Date or
the Maturity Date, the Paying Agent holds money sufficient to pay the aggregate Redemption Price, Fundamental Change Repurchase Price
or principal amount, respectively, together, in each case, with the aggregate interest, in each case due on such date, then (unless there
occurs a Default in the payment of any such amount) (i) the Notes (or portions thereof) to be redeemed or repurchased, or that mature,
on such date will be deemed, as of such date, to cease to be outstanding, except to the extent provided in Sections 4.02(D), 4.03(E) or
5.02(D); and (ii) the rights of the Holders of such Notes (or such portions thereof), as such, will terminate with respect
to such Notes (or such portions thereof), other than the right to receive the Redemption Price, Fundamental Change Repurchase Price or
principal amount, as applicable, of, and accrued and unpaid interest on, such Notes (or such portions thereof), in each case as provided
in this Indenture.
(D) Notes
to Be Converted. At the Close of Business on the Conversion Date for any Note (or any portion thereof) to be converted, such Note
(or such portion) will (unless there occurs a Default in the delivery of the Conversion Consideration or interest due, pursuant to Section 5.03(B) or
Section 5.02(D), upon such conversion) be deemed to cease to be outstanding, except to the extent provided in Section 5.02(D) or
Section 5.08.
(E) Cessation
of Accrual of Interest. Except as provided in Sections 4.02(D), 4.03(E) or 5.02(D), interest will cease
to accrue on each Note from, and including, the date that such Note is deemed, pursuant to this Section 2.18, to cease to
be outstanding, unless there occurs a default in the payment or delivery of any cash or other property due on such Note.
Section 2.19. Repurchases
by the Company.
Without limiting the generality
of Section 2.15, the Company may, from time to time, repurchase Notes in open market purchases or in negotiated transactions
without delivering prior notice to Holders.
Section 2.20. CUSIP
and ISIN Numbers.
Subject to Section 2.12,
the Company may use one or more CUSIP or ISIN numbers to identify any of the Notes, and, if so, the Company and the Trustee will use such
CUSIP or ISIN number(s) in notices to Holders; provided, however, that (i) such notices state that the Trustee
makes no representation as to the correctness or accuracy of any such CUSIP or ISIN number; and (ii) the effectiveness of any such
notice will not be affected by any defect in, or omission of, any such CUSIP or ISIN number. The Company will promptly notify the Trustee
of any change in the CUSIP or ISIN number(s) identifying any Notes.
Article 3. Covenants
Section 3.01. Payment
on Notes.
(A) Generally.
The Company will pay or cause to be paid all the principal of, the Fundamental Change Repurchase Price and Redemption Price for, interest
on, and other amounts due with respect to, the Notes on the dates and in the manner set forth in this Indenture.
(B) Deposit
of Funds. Before 10:00 A.M., New York City time, on each Redemption Date, Fundamental Change Repurchase Date or Interest Payment Date,
and on the Maturity Date or any other date on which any cash amount is due on the Notes, the Company will deposit, or will cause there
to be deposited, with the Paying Agent cash, in funds immediately available on such date, sufficient to pay the cash amount due on the
applicable Notes on such date. The Paying Agent will return to the Company, as soon as practicable, upon written request, any money not
required for such purpose.
Section 3.02. Exchange
Act Reports.
(A) Generally.
The Company will send to the Trustee copies of all reports that the Company is required to file with the SEC pursuant to Section 13(a) or
15(d) of the Exchange Act within fifteen (15) calendar days after the date that the Company is required to file the same (after giving
effect to all applicable grace periods under the Exchange Act); provided, however, that the Company need not send to the
Trustee any material for which the Company has received, or is seeking in good faith and has not been denied, confidential treatment by
the SEC. Any report that the Company files with the SEC through the EDGAR system (or any successor thereto) will be deemed to be sent
to the Trustee at the time such report is so filed via the EDGAR system (or such successor). Upon the request of any Holder, the Trustee
will provide to such Holder a copy of any
report that the Company has sent the Trustee pursuant to this Section 3.02(A), other
than a report that is deemed to be sent to the Trustee pursuant to the preceding sentence.
(B) Trustee’s
Disclaimer. The Trustee need not determine whether the Company has filed any material via the EDGAR system (or such successor). Delivery
of reports, information and documents to the Trustee is for informational purposes only, and the Trustee’s receipt of the same will
not constitute constructive or actual notice of any information contained therein or determinable from information contained therein,
including the Company’s compliance with any of its covenants under this Indenture (as to which the Trustee is entitled to rely exclusively
on Officer’s Certificates).
Section 3.03. Rule 144A
Information.
If the Company is not subject
to Section 13 or 15(d) of the Exchange Act at any time when any Notes or shares of Common Stock issuable upon conversion of
the Notes are outstanding and constitute “restricted securities” (as defined in Rule 144), then the Company (or its successor)
will promptly provide, to the Trustee and, upon written request, to any Holder, beneficial owner or prospective purchaser of such Notes
or shares, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale
of such Notes or shares pursuant to Rule 144A. The Company (or its successor) will take such further action as any Holder or beneficial
owner of such Notes or shares may reasonably request to enable such Holder or beneficial owner to sell such Notes or shares pursuant to
Rule 144A.
Section 3.04. Additional
Interest.
(A) Accrual
of Additional Interest.
(i) If,
at any time during the six (6) month period beginning on, and including, the date that is six (6) months after the Last Original
Issue Date of any Note,
(1) the
Company fails to timely file any report (other than Form 8-K reports) that the Company is required to file with the SEC pursuant
to Section 13 or 15(d) of the Exchange Act (after giving effect to all applicable grace periods thereunder); or
(2) such
Note is not otherwise Freely Tradable,
then Additional Interest will accrue
on such Note for each day during such period on which such failure is continuing or such Note is not Freely Tradable.
(ii) In
addition, Additional Interest will accrue on a Note on each day on which such Note is not Freely Tradable on or after the De-Legending
Deadline Date for such Note.
(B) Amount
and Payment of Additional Interest. Any Additional Interest that accrues on a Note pursuant to Section 3.04(A) will
be payable on the same dates and in the same manner as the Stated Interest on such Note and will accrue at a rate per annum equal to one
quarter of one percent (0.25%) of the principal amount thereof for the first ninety (90) days on which Additional
Interest accrues and,
thereafter, at a rate per annum equal to one half of one percent (0.50%) of the principal amount thereof; provided, however,
that in no event will Additional Interest, together with any Special Interest, accrue on any day on a Note at a combined rate per annum
that exceeds one half of one percent (0.50%), regardless of the number of events or circumstances giving rise to requirements to pay such
Additional Interest or Special Interest. For the avoidance of doubt, any Additional Interest that accrues on a Note will be in addition
to the Stated Interest that accrues on such Note and, subject to the proviso of the immediately preceding sentence, in addition to any
Special Interest that accrues on such Note.
(C) Notice
of Accrual of Additional Interest; Trustee’s Disclaimer. The Company will send notice to the Holder of each Note, and to the
Trustee, of the commencement and termination of any period in which Additional Interest accrues on such Note. In addition, if Additional
Interest accrues on any Note, then, no later than five (5) Business Days before each date on which such Additional Interest is to
be paid, the Company will deliver an Officer’s Certificate to the Trustee and the Paying Agent stating (i) that the Company
is obligated to pay Additional Interest on such Note on such date of payment; and (ii) the amount of such Additional Interest that
is payable on such date of payment. The Trustee will have no duty to determine whether any Additional Interest is payable or the amount
thereof.
Section 3.05. Compliance
and Default Certificates.
(A) Annual
Compliance Certificate. Within ninety (90) days after the last day of each fiscal year of the Company, beginning with the first such
fiscal year ending after the date of this Indenture, the Company will deliver an Officer’s Certificate to the Trustee stating (i) that
the signatory thereto has supervised a review of the activities of the Company and its Subsidiaries during such fiscal year with a view
towards determining whether any Default or Event of Default has occurred; and (ii) whether, to such signatory’s knowledge,
a Default or Event of Default has occurred or is continuing (and, if so, describing all such Defaults or Events of Default and what action
the Company is taking or proposes to take with respect thereto).
(B) Default
Certificate. If a Default or Event of Default occurs, then the Company will promptly deliver an Officer’s Certificate to the
Trustee describing the same and what action the Company is taking or proposes to take with respect thereto.
Section 3.06. Stay,
Extension and Usury Laws.
To the extent that it may
lawfully do so, the Company (A) agrees that it will not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law (wherever or whenever enacted or in force) that may affect the covenants
or the performance of this Indenture; and (B) expressly waives all benefits or advantages of any such law and agrees that it will
not, by resort to any such law, hinder, delay or impede the execution of any power granted to the Trustee by this Indenture, but will
suffer and permit the execution of every such power as though no such law has been enacted.
Section 3.07. Corporate
Existence.
Subject to Article 6,
the Company will cause to preserve and keep in full force and effect:
(A) its
corporate existence in accordance with the organizational documents of the Company; and
(B) the
material rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries;
provided,
however, that the Company need not preserve or keep in full force and effect any such license or franchise if the Board of Directors
determines that (x) the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole; and (y) the loss thereof is not, individually or in the aggregate, materially adverse to the Holders.
Section 3.08. Restriction
on Acquisition of Notes by the Company and its Affiliates.
The Company will promptly
deliver to the Trustee for cancellation all Notes that the Company or any of its Subsidiaries have purchased or otherwise acquired. The
Company will use commercially reasonable efforts to prevent any of its controlled Affiliates from acquiring any Note (or any beneficial
interest therein).
Section 3.09. Further
Instruments and Acts.
At the Trustee’s request,
the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to more
effectively carry out the purposes of this Indenture.
Article 4. Repurchase
and Redemption
Section 4.01. No
Sinking Fund.
No sinking fund is required
to be provided for the Notes.
Section 4.02. Right
of Holders to Require the Company to Repurchase Notes upon a Fundamental Change.
(A) Right
of Holders to Require the Company to Repurchase Notes Upon a Fundamental Change. Subject to the other terms of this Section 4.02,
if a Fundamental Change occurs, then each Holder will have the right (the “Fundamental Change Repurchase Right”) to
require the Company to repurchase such Holder’s Notes (or any portion thereof in an Authorized Denomination) on the Fundamental
Change Repurchase Date for such Fundamental Change for a cash purchase price equal to the Fundamental Change Repurchase Price.
(B) Repurchase
Prohibited in Certain Circumstances. If the principal amount of the Notes has been accelerated and such acceleration has not been
rescinded on or before the Fundamental Change Repurchase Date for a Repurchase Upon Fundamental Change (including as a result of the payment
of the related Fundamental Change Repurchase Price, and any related
interest pursuant to the proviso to Section 4.02(D), on
such Fundamental Change Repurchase Date), then (i) the Company may not repurchase any Notes pursuant to this Section 4.02;
and (ii) the Company will cause any Notes theretofore surrendered for such Repurchase upon Fundamental Change to be returned to the
Holders thereof (or, if applicable with respect to Global Notes, cancel any instructions for book-entry transfer to the Company, the Trustee
or the Paying Agent of the applicable beneficial interest in such Notes in accordance with the Depositary Procedures).
(C) Fundamental
Change Repurchase Date. The Fundamental Change Repurchase Date for any Fundamental Change will be a Business Day of the Company’s
choosing that is no more than thirty five (35), nor less than twenty (20), Business Days after the date the Company sends the related
Fundamental Change Notice pursuant to Section 4.02(E).
(D) Fundamental
Change Repurchase Price. The Fundamental Change Repurchase Price for any Note to be repurchased upon a Repurchase Upon Fundamental
Change following a Fundamental Change is an amount in cash equal to the principal amount of such Note plus accrued and unpaid interest
on such Note to, but excluding, the Fundamental Change Repurchase Date for such Fundamental Change; provided, however, that
if such Fundamental Change Repurchase Date is after a Regular Record Date and on or before the next Interest Payment Date, then (i) the
Holder of such Note at the Close of Business on such Regular Record Date will be entitled, notwithstanding such Repurchase Upon Fundamental
Change, to receive, on or, at the Company’s election, before such Interest Payment Date, the unpaid interest that would have accrued
on such Note to, but excluding, such Interest Payment Date (assuming, solely for these purposes, that such Note remained outstanding through
such Interest Payment Date, if such Fundamental Change Repurchase Date is before such Interest Payment Date); and (ii) the Fundamental
Change Repurchase Price will not include accrued and unpaid interest on such Note to, but excluding, such Fundamental Change Repurchase
Date. For the avoidance of doubt, if an Interest Payment Date is not a Business Day within the meaning of Section 2.05(C) and
such Fundamental Change Repurchase Date occurs on the Business Day immediately after such Interest Payment Date, then (x) accrued
and unpaid interest on Notes to, but excluding, such Interest Payment Date will be paid, in accordance with Section 2.05(C),
on the next Business Day to Holders as of the Close of Business on the immediately preceding Regular Record Date; and (y) the Fundamental
Change Repurchase Price will include interest on Notes to be repurchased from, and including, such Interest Payment Date.
(E) Fundamental
Change Notice. On or before the twentieth (20th) calendar day after the occurrence of a Fundamental Change, the Company will send
to each Holder, the Trustee and the Paying Agent a notice of such Fundamental Change (a “Fundamental Change Notice”).
Substantially contemporaneously therewith, the Company will issue a press release through such national newswire service as the Company
then uses (or publish the same through such other widely disseminated public medium as the Company then uses, including its website) containing
the information set forth in the Fundamental Change Notice.
Such Fundamental Change Notice
must state:
(i) briefly,
the events causing such Fundamental Change;
(ii) the
effective date of such Fundamental Change;
(iii) the
procedures that a Holder must follow to require the Company to repurchase its Notes pursuant to this Section 4.02, including
the deadline for exercising the Fundamental Change Repurchase Right and the procedures for submitting and withdrawing a Fundamental Change
Repurchase Notice;
(iv) the
Fundamental Change Repurchase Date for such Fundamental Change;
(v) the
Fundamental Change Repurchase Price per $1,000 principal amount of Notes for such Fundamental Change (and, if such Fundamental Change
Repurchase Date is after a Regular Record Date and on or before the next Interest Payment Date, the amount, manner and timing of the interest
payment payable pursuant to the proviso to Section 4.02(D));
(vi) the
name and address of the Paying Agent and the Conversion Agent;
(vii) the
Conversion Rate in effect on the date of such Fundamental Change Notice and a description and quantification of any adjustments to the
Conversion Rate that may result from such Fundamental Change (including pursuant to Section 5.07);
(viii) that
Notes for which a Fundamental Change Repurchase Notice has been duly tendered and not duly withdrawn must be delivered to the Paying Agent
for the Holder thereof to be entitled to receive the Fundamental Change Repurchase Price;
(ix) that
Notes (or any portion thereof) that are subject to a Fundamental Change Repurchase Notice that has been duly tendered may be converted
only if such Fundamental Change Repurchase Notice is withdrawn in accordance with this Indenture; and
(x) the
CUSIP and ISIN numbers, if any, of the Notes.
Neither the failure to deliver
a Fundamental Change Notice nor any defect in a Fundamental Change Notice will limit the Fundamental Change Repurchase Right of any Holder
or otherwise affect the validity of any proceedings relating to any Repurchase Upon Fundamental Change.
(F) Procedures
to Exercise the Fundamental Change Repurchase Right.
(i) Delivery
of Fundamental Change Repurchase Notice and Notes to Be Repurchased. To exercise its Fundamental Change Repurchase Right for a Note
following a Fundamental Change, the Holder thereof must deliver to the Paying Agent:
(1) before
the Close of Business on the Business Day immediately before the related Fundamental Change Repurchase Date (or such later time as may
be required by law), a duly completed, written Fundamental Change Repurchase Notice with respect to such Note; and
(2) such
Note, duly endorsed for transfer (if such Note is a Physical Note) or by book-entry transfer (if such Note is a Global Note).
The Paying Agent will promptly deliver
to the Company a copy of each Fundamental Change Repurchase Notice that it receives.
(ii) Contents
of Fundamental Change Repurchase Notices. Each Fundamental Change Repurchase Notice with respect to a Note must state:
(1) if
such Note is a Physical Note, the certificate number of such Note;
(2) the
principal amount of such Note to be repurchased, which must be an Authorized Denomination; and
(3) that
such Holder is exercising its Fundamental Change Repurchase Right with respect to such principal amount of such Note;
provided,
however, that if such Note is a Global Note, then such Fundamental Change Repurchase Notice must comply with the Depositary Procedures
(and any such Fundamental Change Repurchase Notice delivered in compliance with the Depositary Procedures will be deemed to satisfy the
requirements of this Section 4.02(F)).
(iii) Withdrawal
of Fundamental Change Repurchase Notice. A Holder that has delivered a Fundamental Change Repurchase Notice with respect to a Note
may withdraw such Fundamental Change Repurchase Notice by delivering a written notice of withdrawal to the Paying Agent at any time before
the Close of Business on the Business Day immediately before the related Fundamental Change Repurchase Date. Such withdrawal notice must
state:
(1) if
such Note is a Physical Note, the certificate number of such Note;
(2) the
principal amount of such Note to be withdrawn, which must be an Authorized Denomination; and
(3) the
principal amount of such Note, if any, that remains subject to such Fundamental Change Repurchase Notice, which must be an Authorized
Denomination;
provided,
however, that if such Note is a Global Note, then such withdrawal notice must comply with the Depositary Procedures (and any such
withdrawal notice delivered in compliance with the Depositary Procedures will be deemed to satisfy the requirements of this Section 4.02(F)).
Upon receipt of any such withdrawal
notice with respect to a Note (or any portion thereof), the Paying Agent will (x) promptly deliver a copy of such withdrawal notice
to the Company; and (y) if such Note is surrendered to the Paying Agent, cause such Note (or such portion thereof in accordance with
Section 2.11, treating such Note as having been then surrendered for partial repurchase in the amount set forth in such withdrawal
notice as remaining subject to repurchase) to be returned to the Holder thereof (or, if applicable with respect to any Global Note, cancel
any instructions for book-entry transfer to the Company, the Trustee or the Paying Agent of the applicable beneficial interest in such
Note
in accordance with the Depositary Procedures).
(G) Payment
of the Fundamental Change Repurchase Price. Without limiting the Company’s obligation to deposit the Fundamental Change Repurchase
Price within the time proscribed by Section 3.01(B), the Company will cause the Fundamental Change Repurchase Price for a
Note (or portion thereof) to be repurchased pursuant to a Repurchase Upon Fundamental Change to be paid to the Holder thereof on or before
the later of (i) the applicable Fundamental Change Repurchase Date; and (ii) the date (x) such Note is delivered to the
Paying Agent (in the case of a Physical Note) or (y) the Depositary Procedures relating to the repurchase, and the delivery to the
Paying Agent, of such Holder’s beneficial interest in such Note to be repurchased are complied with (in the case of a Global Note).
For the avoidance of doubt, interest payable pursuant to the proviso to Section 4.02(D) on any Note to be repurchased
pursuant to a Repurchase Upon Fundamental Change must be paid pursuant to such proviso regardless of whether such Note is delivered or
such Depositary Procedures are complied with pursuant to the first sentence of this Section 4.02(G).
(H) Compliance
with Applicable Securities Laws. To the extent applicable, the Company will comply with all federal and state securities laws in connection
with a Repurchase Upon Fundamental Change (including complying with Rules 13e-4 and 14e-1 under the Exchange Act and filing any required
Schedule TO, to the extent applicable) so as to permit effecting such Repurchase Upon Fundamental Change in the manner set forth in this
Indenture; provided, however, that, to the extent that the Company’s obligations pursuant to this Section 4.02
conflict with any law or regulation that is applicable to the Company and enacted after the Issue Date, the Company’s compliance
with such law or regulation will not be considered to be a Default of such obligations.
(I) Repurchase
in Part. Subject to the terms of this Section 4.02, Notes may be repurchased pursuant to a Repurchase Upon Fundamental
Change in part, but only in Authorized Denominations. Provisions of this Section 4.02 applying to the repurchase of a Note
in whole will equally apply to the repurchase of a permitted portion of a Note.
Section 4.03. Right
of the Company to Redeem the Notes.
(A) No
Right to Redeem Before January 15, 2028. The Company may not redeem the Notes at its option at any time before January 15,
2028.
(B) Right
to Redeem the Notes on or After January 15, 2028. Subject to the terms of this Section 4.03, the Company has the
right, at its election, to redeem all, or any portion in an Authorized Denomination, of the Notes, at any time, and from time to time,
on a Redemption Date on or after January 15, 2028 and on or before the fortieth (40th) Scheduled Trading Day immediately before the
Maturity Date, for a cash purchase price equal to the Redemption Price, but only if the Last Reported Sale Price per share of Common Stock
exceeds one hundred and thirty percent (130%) of the Conversion Price on (x) each of at least twenty (20) Trading Days (whether or
not consecutive) during the thirty (30) consecutive Trading Days ending on, and including, the Trading Day immediately before the Redemption
Notice Date for such Redemption; and (y) the Trading Day immediately before such Redemption Notice Date; provided, however,
that the Company will not be entitled to call less than all of the outstanding Notes for Redemption
unless the excess of the principal
amount of Notes outstanding as of the time the Company sends the related Redemption Notice over the aggregate principal amount of Notes
set forth in such Redemption Notice as being subject to such Redemption is at least one hundred million dollars ($100,000,000). For the
avoidance of doubt, the calling of any Notes for Redemption will constitute a Make-Whole Fundamental Change with respect to such Notes
pursuant to clause (B) of the definition thereof.
(C) Redemption
Prohibited in Certain Circumstances. If the principal amount of the Notes has been accelerated and such acceleration has not been
rescinded on or before the Redemption Date (including as a result of the payment of the related Redemption Price, and any related interest
pursuant to the proviso to the first sentence of Section 4.03(E), on such Redemption Date), then (i) the Company may
not call for Redemption or otherwise redeem any Notes pursuant to this Section 4.03; and (ii) the Company will cause
any Notes theretofore surrendered for such Redemption to be returned to the Holders thereof (or, if applicable with respect to Global
Notes, cancel any instructions for book-entry transfer to the Company, the Trustee or the Paying Agent of the applicable beneficial interests
in such Notes in accordance with the Depositary Procedures).
(D) Redemption
Date. The Redemption Date for any Redemption will be a Business Day of the Company’s choosing that is no more than sixty five
(65), nor less than forty five (45), Scheduled Trading Days after the Redemption Notice Date for such Redemption. If the Company elects
to redeem Notes, it shall furnish to the Trustee, at least 5 days but not more than 10 days before the Redemption Notice Date (unless
a shorter notice period shall be satisfactory to the Trustee), an Officer’s Certificate setting forth the Section of this Indenture
pursuant to which the redemption shall occur, the Redemption Date, the principal amount of Notes to be redeemed and the Redemption Price.
(E) Redemption
Price. The Redemption Price for any Note called for Redemption is an amount in cash equal to the principal amount of such Note plus
accrued and unpaid interest on such Note to, but excluding, the Redemption Date for such Redemption; provided, however,
that if such Redemption Date is after a Regular Record Date and on or before the next Interest Payment Date, then (i) the Holder
of such Note at the Close of Business on such Regular Record Date will be entitled, notwithstanding such Redemption, to receive, on or,
at the Company’s election, before such Interest Payment Date, the unpaid interest that would have accrued on such Note to, but excluding,
such Interest Payment Date (assuming, solely for these purposes, that such Note remained outstanding through such Interest Payment Date,
if such Redemption Date is before such Interest Payment Date); and (ii) the Redemption Price will not include accrued and unpaid
interest on such Note to, but excluding, such Redemption Date. For the avoidance of doubt, if an Interest Payment Date is not a Business
Day within the meaning of Section 2.05(C) and such Redemption Date occurs on the Business Day immediately after such
Interest Payment Date, then (x) accrued and unpaid interest on Notes to, but excluding, such Interest Payment Date will be paid,
in accordance with Section 2.05(C), on the next Business Day to Holders as of the Close of Business on the immediately preceding
Regular Record Date; and (y) the Redemption Price will include interest on Notes to be redeemed from, and including, such Interest
Payment Date.
(F) Redemption
Notice. To call any Notes for Redemption, the Company must send to each Holder of such Notes and the Trustee a written notice of such
Redemption (a “Redemption Notice”). Substantially contemporaneously, the Company will issue a press release through
such
national newswire service as the Company then uses (or publish the same through such other widely disseminated public medium as the
Company then uses, including its website) containing the information required by this Indenture to be set forth in the Redemption Notice.
Such Redemption Notice must
state:
(i) that
such Notes have been called for Redemption, briefly describing the Company’s Redemption right under this Indenture;
(ii) the
Redemption Date for such Redemption;
(iii) the
Redemption Price per $1,000 principal amount of Notes for such Redemption (and, if the Redemption Date is after a Regular Record Date
and on or before the next Interest Payment Date, the amount, manner and timing of the interest payment payable pursuant to the proviso
to the first sentence of Section 4.03(E));
(iv) the
name and address of the Paying Agent and the Conversion Agent;
(v) that
Notes called for Redemption may be converted at any time before the Close of Business on the Business Day immediately before the Redemption
Date (or, if the Company fails to pay the Redemption Price due on such Redemption Date in full, at any time until such time as the Company
pays such Redemption Price in full);
(vi) the
Conversion Rate in effect on the Redemption Notice Date for such Redemption and a description and quantification of any adjustments to
the Conversion Rate that may result from such Redemption (including pursuant to Section 5.07);
(vii) the
Settlement Method that will apply to all conversions of Notes with a Conversion Date that occurs on or after such Redemption Notice Date
and before such Redemption Date; and
(viii) the
CUSIP and ISIN numbers, if any, of the Notes.
On or before the Redemption
Notice Date, the Company will send a copy of such Redemption Notice to the Trustee, the Conversion Agent and the Paying Agent.
(G) Selection
and Conversion of Notes to Be Redeemed in Part.
(i) If
less than all Notes then outstanding are called for Redemption, then the Notes to be redeemed will be selected by the Company as follows:
(1) in the case of Global Notes, in accordance with the Depositary Procedures; and (2) in the case of Physical Notes, pro rata,
by lot or by such other method the Company considers fair and appropriate.
(ii) If
only a portion of a Note is subject to Redemption and such Note is converted in part, then the converted portion of such Note will be
deemed to be from the portion of such Note that was subject to Redemption.
(H) Payment
of the Redemption Price. Without limiting the Company’s obligation to
deposit the Redemption Price by the time proscribed by
Section 3.01(B), the Company will cause the Redemption Price for a Note (or portion thereof) subject to Redemption to be paid
to the Holder thereof on or before the applicable Redemption Date. For the avoidance of doubt, interest payable pursuant to the proviso
to the first sentence of Section 4.03(E) on any Note (or portion thereof) subject to Redemption must be paid pursuant
to such proviso.
(I) Special
Provisions for Partial Calls. If the Company elects to redeem less than all of the outstanding Notes pursuant to this Section 4.03,
and the Holder of any Note, or any owner of a beneficial interest in any Global Note, is reasonably not able to determine, before the
Close of Business on the forty second (42nd) Scheduled Trading Day immediately before the Redemption Date for such Redemption, whether
such Note or beneficial interest, as applicable, is to be redeemed pursuant to such Redemption, then such Holder or owner, as applicable,
will be entitled to convert such Note or beneficial interest, as applicable, at any time before the Close of Business on the Business
Day immediately before such Redemption Date, and each such conversion will be deemed to be of a Note called for Redemption for purposes
of this Section 4.03 and Sections 5.01(C)(i)(4) and 5.07.
Article 5. Conversion
Section 5.01. Right
to Convert.
(A) Generally.
Subject to the provisions of this Article 5, each Holder may, at its option, convert such Holder’s Notes into Conversion
Consideration.
(B) Conversions
in Part. Subject to the terms of this Indenture, Notes may be converted in part, but only in Authorized Denominations. Provisions
of this Article 5 applying to the conversion of a Note in whole will equally apply to conversions of a permitted portion of
a Note.
(C) When
Notes May Be Converted.
(i) Generally.
Subject to Section 5.01(C)(ii), a Note may be converted only in the following circumstances:
(1) Conversion
upon Satisfaction of Common Stock Sale Price Condition. A Holder may convert its Notes during any calendar quarter commencing after
the calendar quarter ending on March 31, 2024 (and only during such calendar quarter) , if the Last Reported Sale Price per share
of Common Stock exceeds one hundred and thirty percent (130%) of the Conversion Price for each of at least twenty (20) Trading Days (whether
or not consecutive) during the thirty (30) consecutive Trading Days ending on, and including, the last Trading Day of the immediately
preceding calendar quarter.
(2) Conversion
upon Satisfaction of Note Trading Price Condition. A Holder may convert its Notes during the five (5) consecutive Business Days
immediately after any five (5) consecutive Trading Day period (such five (5) consecutive Trading Day period, the “Measurement
Period”) if the Trading Price per $1,000 principal amount of Notes, as determined following a request by a Holder in accordance
with the procedures set forth below, for each Trading Day of
the Measurement Period was less than ninety eight percent (98%) of the product
of the Last Reported Sale Price per share of Common Stock on such Trading Day and the Conversion Rate on such Trading Day. The condition
set forth in the preceding sentence is referred to in this Indenture as the “Trading Price Condition.”
The Trading Price will be determined by
the Bid Solicitation Agent pursuant to this Section 5.01(C)(i)(2) and the definition of “Trading Price.”
The Bid Solicitation Agent (if not the Company) will have no obligation to determine the Trading Price of the Notes unless the Company
has requested such determination in writing, and the Company will have no obligation to make such request (or seek bids itself) unless
a Holder provides the Company with reasonable evidence that the Trading Price per $1,000 principal amount of Notes would be less than
ninety eight percent (98%) of the product of the Last Reported Sale Price per share of Common Stock and the Conversion Rate. If a Holder
provides such evidence, then the Company will (if acting as Bid Solicitation Agent), or will instruct the Bid Solicitation Agent to, determine
the Trading Price of the Notes beginning on the next Trading Day and on each successive Trading Day until the Trading Price per $1,000
principal amount of Notes is greater than or equal to ninety eight percent (98%) of the product of the Last Reported Sale Price per share
of Common Stock on such Trading Day and the Conversion Rate on such Trading Day. If the Trading Price Condition has been met as set forth
above, then the Company will notify the Holders, the Trustee and the Conversion Agent of the same. If, on any Trading Day after the Trading
Price Condition has been met as set forth above, the Trading Price per $1,000 principal amount of Notes is greater than or equal to ninety
eight percent (98%) of the product of the Last Reported Sale Price per share of Common Stock on such Trading Day and the Conversion Rate
on such Trading Day, then the Company will notify the Holders, the Trustee and the Conversion Agent of the same.
(3) Conversion
upon Specified Corporate Events.
(a) Certain
Distributions. If the Company elects to:
(I) distribute,
to all or substantially all holders of Common Stock, any rights, options or warrants (other than rights issued pursuant to a stockholder
rights plan, so long as such rights have not separated from the Common Stock and are not exercisable until the occurrence of a triggering
event, except that such rights will be deemed to be distributed under this clause (I) upon their separation from the Common
Stock or upon the occurrence of such triggering event) entitling them, for a period of not more than sixty (60) calendar days after the
record date of such distribution, to subscribe for or purchase shares of Common Stock at a price per share that is less than the average
of the Last Reported Sale Prices per share of Common Stock for the ten (10) consecutive Trading Days ending on, and including, the
Trading Day immediately before the date such distribution is announced (determined in the manner set forth in the third paragraph of Section 5.05(A)(ii));
or
(II) distribute,
to all or substantially all holders of Common Stock, assets or securities of the Company or rights to purchase the Company’s securities,
which distribution per share of Common Stock has a value, as reasonably determined by the Board of Directors, exceeding ten percent (10%)
of the Last Reported Sale Price per share of Common Stock on the Trading Day immediately before the date such distribution is announced,
then, in either case, (x) the Company
will send notice of such distribution, and of the related right to convert Notes, to Holders, the Trustee and the Conversion Agent at
least forty-five (45) Scheduled Trading Days before the Ex-Dividend Date for such distribution (or, if later in the case of any such separation
of rights issued pursuant to a stockholder rights plan or the occurrence of any such triggering event under a stockholder rights plan,
as soon as reasonably practicable after the Company becomes aware that such separation or triggering event has occurred or will occur);
and (y) once the Company has sent such notice, Holders may convert their Notes at any time until the earlier of the Close of Business
on the Business Day immediately before such Ex-Dividend Date and the Company’s announcement that such distribution will not take
place.
(b) Certain
Corporate Events. If a Fundamental Change, Make-Whole Fundamental Change (other than a Make-Whole Fundamental Change pursuant to clause
(B) of the definition thereof) or Common Stock Change Event occurs, then, in each case, Holders may convert their Notes at any
time from, and including, the effective date of such transaction or event to, and including, the thirty fifth (35th) Trading Day after
such effective date (or, if such transaction or event also constitutes a Fundamental Change, to, but excluding, the related Fundamental
Change Repurchase Date); provided, however, that if the Company does not provide the notice referred to in the immediately
following sentence by such effective date, then the last day on which the Notes are convertible pursuant to this sentence will be extended
by the number of Business Days from, and including, such effective date to, but excluding, the date the Company provides such notice.
No later than such effective date, the Company will send notice to the Holders, the Trustee and the Conversion Agent of such transaction
or event, such effective date and the related right to convert Notes.
(4) Conversion
Upon Redemption. If the Company calls any Note for Redemption, then the Holder of such Note may convert such Note at any time before
the Close of Business on the Business Day immediately before the related Redemption Date (or, if the Company fails to pay the Redemption
Price due on such Redemption Date in full, at any time until such time as the Company pays such Redemption Price in full).
(5) Conversions
During Free Convertibility Period. A Holder may
convert its Notes at any time from, and including, July 15, 2029 until the Close
of Business on the second (2nd) Scheduled Trading Day immediately before the Maturity Date.
For the avoidance of doubt, the Notes
may become convertible pursuant to any one or more of the preceding sub-paragraphs of this Section 5.01(C)(i) and the
Notes ceasing to be convertible pursuant to a particular sub-paragraph of this Section 5.01(C)(i) will not preclude the
Notes from being convertible pursuant to any other sub-paragraph of this Section 5.01(C)(i).
(ii) Limitations
and Closed Periods. Notwithstanding anything to the contrary in this Indenture or the Notes:
(1) Notes
may be surrendered for conversion only after the Open of Business and before the Close of Business on a day that is a Business Day;
(2) in
no event may any Note be converted after the Close of Business on the second (2nd) Scheduled Trading Day immediately before the Maturity
Date;
(3) if
the Company calls any Note for Redemption pursuant to Section 4.03, then the Holder of such Note may not convert such Note
after the Close of Business on the Business Day immediately before the applicable Redemption Date, except to the extent the Company fails
to pay the Redemption Price for such Note in accordance with this Indenture; and
(4) if
a Fundamental Change Repurchase Notice is validly delivered pursuant to Section 4.02(F) with respect to any Note, then
such Note may not be converted, except to the extent (a) such Note is not subject to such notice; (b) such notice is withdrawn
in accordance with Section 4.02(F); or (c) the Company fails to pay the Fundamental Change Repurchase Price for such
Note in accordance with this Indenture.
Section 5.02. Conversion
Procedures.
(A) Generally.
(i) Global
Notes. To convert a beneficial interest in a Global Note that is convertible pursuant to Section 5.01(C), the owner of
such beneficial interest must (1) comply with the Depositary Procedures for converting such beneficial interest (at which time such
conversion will become irrevocable); and (2) pay any amounts due pursuant to Section 5.02(D) or Section 5.02(E).
(ii) Physical
Notes. To convert all or a portion of a Physical Note that is convertible pursuant to Section 5.01(C), the Holder of such
Note must (1) complete, manually sign and deliver to the Conversion Agent the conversion notice attached to such Physical Note or
a facsimile of such conversion notice; (2) deliver such Physical Note to the Conversion Agent (at which time such conversion will
become irrevocable); (3) furnish any endorsements and transfer documents that the Company or the Conversion Agent may
require; and
(4) pay any amounts due pursuant to Section 5.02(D) or Section 5.02(E).
(B) Effect
of Converting a Note. At the Close of Business on the Conversion Date for a Note (or any portion thereof), such Note (or such portion
thereof) will (unless there occurs a Default in the delivery of the Conversion Consideration or interest due, pursuant to Section 5.03(B) or
5.02(D), upon such conversion) be deemed to cease to be outstanding (and, for the avoidance of doubt, no Person will be deemed
to be a Holder of such Note (or such portion thereof) as of the Close of Business on such Conversion Date), except to the extent provided
in Section 5.02(D).
(C) Holder
of Record of Conversion Shares. The Person in whose name any share of Common Stock is issuable upon conversion of any Note will be
deemed to become the holder of record of such share as of the Close of Business on the last VWAP Trading Day of the Observation Period
for such conversion.
(D) Interest
Payable upon Conversion in Certain Circumstances. If the Conversion Date of a Note is after a Regular Record Date and before the next
Interest Payment Date, then (i) the Holder of such Note at the Close of Business on such Regular Record Date will be entitled, notwithstanding
such conversion (and, for the avoidance of doubt, notwithstanding anything set forth in the proviso to this sentence), to receive, on
or, at the Company’s election, before such Interest Payment Date, the unpaid interest that would have accrued on such Note to, but
excluding, such Interest Payment Date (assuming, solely for these purposes, that such Note remained outstanding through such Interest
Payment Date); and (ii) the Holder surrendering such Note for conversion must deliver to the Conversion Agent, at the time of such
surrender, an amount of cash equal to the amount of such interest referred to in clause (i) above; provided, however,
that the Holder surrendering such Note for conversion need not deliver such cash (v) if the Company has specified a Redemption Date
that is after such Regular Record Date and on or before the Business Day immediately after such Interest Payment Date; (w) if such
Conversion Date occurs after the Regular Record Date immediately before the Maturity Date; (x) if the Company has specified a Fundamental
Change Repurchase Date that is after such Regular Record Date and on or before the Business Day immediately after such Interest Payment
Date; or (y) to the extent of any Additional Interest, Special Interest, overdue interest or interest that has accrued on any overdue
interest. For the avoidance of doubt, as a result of, and without limiting the generality of, the foregoing, if a Note is converted with
a Conversion Date that is after the Regular Record Date immediately before the Maturity Date, then the Company will pay, as provided above,
the interest that would have accrued on such Note to, but excluding, the Maturity Date. For the avoidance of doubt, if the Conversion
Date of a Note to be converted is on an Interest Payment Date, then the Holder of such Note at the Close of Business on the Regular Record
Date immediately before such Interest Payment Date will be entitled to receive, on such Interest Payment Date, the unpaid interest that
has accrued on such Note to, but excluding, such Interest Payment Date, and such Note, when surrendered for conversion, need not be accompanied
by any cash amount pursuant to the first sentence of this Section 5.02(D).
(E) Taxes
and Duties. If a Holder converts a Note, the Company will pay any documentary, stamp or similar issue or transfer tax or duty due
on the issue of any shares of Common Stock upon such conversion; provided, however, that if any tax or duty is due because
such Holder requested such shares to be registered in a name other than such Holder’s name, then
such Holder will pay such tax or
duty and, until having received a sum sufficient to pay such tax or duty, the Conversion Agent may refuse to deliver any such shares to
be issued in a name other than that of such Holder.
(F) Conversion
Agent to Notify Company of Conversions. If any Note is submitted for conversion to the Conversion Agent or the Conversion Agent receives
any notice of conversion with respect to a Note, then the Conversion Agent will promptly notify the Company and the Trustee of such occurrence,
together with any other information reasonably requested by the Company, and will cooperate with the Company to determine the Conversion
Date for such Note.
Section 5.03. Settlement
upon Conversion.
(A) Settlement
Method. Upon the conversion of any Note, the Company will settle such conversion by paying or delivering, as applicable and as provided
in this Article 5, either (x) solely cash as provided in Section 5.03(B)(i)(1) (a “Cash Settlement”);
or (y) a combination of cash and shares of Common Stock, together, if applicable, with cash in lieu of fractional shares as provided
in Section 5.03(B)(i)(2) (a “Combination Settlement”).
(i) The
Company’s Right to Elect Settlement Method. The Company will have the right to elect the Settlement Method applicable to any
conversion of a Note; provided, however, that:
(1) subject
to clause (3) below, all conversions of Notes with a Conversion Date that occurs on or after the eighty-fifth (85th) Scheduled
Trading Day immediately before the Maturity Date will be settled using the same Settlement Method, and the Company will send notice of
such Settlement Method to Holders and the Conversion Agent no later than the Open of Business on the eighty-fifth (85th) Scheduled Trading
Day immediately before the Maturity Date;
(2) subject
to clause (3) below, if the Company elects a Settlement Method with respect to the conversion of any Note whose Conversion
Date occurs before the eighty-fifth (85th) Scheduled Trading Day immediately before the Maturity Date, then the Company will send notice
of such Settlement Method to the Holder of such Note and the Conversion Agent no later than the Close of Business on the Business Day
immediately after such Conversion Date;
(3) if
any Notes are called for Redemption, then (a) the Company will specify, in the related Redemption Notice (and, in the case of a Redemption
of less than all outstanding Notes, in a notice simultaneously sent to all Holders of Notes not called for Redemption) sent pursuant to
Section 4.03(F), the Settlement Method that will apply to all conversions of Notes with a Conversion Date that occurs on or
after the related Redemption Notice Date and before the related Redemption Date; and (b) if such Redemption Date occurs on or after
the eighty-fifth (85th) Scheduled Trading Day immediately before the Maturity Date, then such Settlement Method must be the same Settlement
Method that, pursuant to clause (1) above, applies to all conversions of Notes with a Conversion Date that occurs on or after
the eighty-fifth (85th) Scheduled Trading Day immediately before the
Maturity Date;
(4) the
Company will use the same Settlement Method for all conversions of Notes with a Conversion Date that occurs on the same day (and, for
the avoidance of doubt, the Company will not be obligated to use the same Settlement Method with respect to conversions of Notes whose
Conversion Dates occur on different days, except as provided in clause (1) or (3) above);
(5) if
the Company does not timely elect a Settlement Method with respect to the conversion of a Note, then the Company will be deemed to have
elected the Default Settlement Method (and, for the avoidance of doubt, the failure to timely make such election will not constitute a
Default or Event of Default);
(6) if
the Company timely elects Combination Settlement with respect to the conversion of a Note but does not timely notify the Holder of such
Note of the applicable Specified Dollar Amount, then the Specified Dollar Amount for such conversion will be deemed to be $1,000 per $1,000
principal amount of Notes (and, for the avoidance of doubt, the failure to timely send such notification will not constitute a Default
or Event of Default).
(ii) The
Company’s Right to Irrevocably Fix or Eliminate Settlement Methods. The Company will have the right, exercisable at its election
by sending notice of such exercise to the Holders (with a copy to the Trustee and the Conversion Agent), to (1) irrevocably fix the
Settlement Method that will apply to all conversions of Notes with a Conversion Date that occurs on or after the date such notice is sent
to Holders; or (2) irrevocably eliminate any one or more (but not all) Settlement Methods (including eliminating Combination Settlement
with a particular Specified Dollar Amount or range of Specified Dollar Amounts) with respect to all conversions of Notes with a Conversion
Date that occurs on or after the date such notice is sent to Holders, provided, in each case, that (v) in no event will the
Company elect (whether directly or by eliminating all other Settlement Methods) Combination Settlement with a Specified Dollar Amount
that is less than $1,000 per $1,000 principal amount of Notes; (w) the Settlement Method so elected pursuant to clause (1) above,
or the Settlement Method(s) remaining after any elimination pursuant to clause (2) above, as applicable, must be a Settlement
Method or Settlement Method(s), as applicable, that the Company is then permitted to elect (for the avoidance of doubt, including pursuant
to, and subject to, the other provisions of this Section 5.03(A)); (x) no such irrevocable election will affect any Settlement
Method theretofore elected (or deemed to be elected) with respect to any Note pursuant to this Indenture (including pursuant to Section 8.01(G) or
this Section 5.03(A)); (y) upon any such irrevocable election pursuant to clause (1) above, the Default Settlement
Method will automatically be deemed to be set to the Settlement Method so fixed; and (z) upon any such irrevocable election pursuant
to clause (2) above, the Company will, if needed, simultaneously change the Default Settlement Method to a Settlement Method
that is consistent with such irrevocable election. Such notice, if sent, must set forth the applicable Settlement Method(s) so elected
or eliminated, as applicable, and the Default Settlement Method applicable immediately after such election, and expressly state that the
election is
irrevocable and applicable to all conversions of Notes with a Conversion Date that occurs on or after the date such notice
is sent to Holders. For the avoidance of doubt, such an irrevocable election, if made, will be effective without the need to amend this
Indenture or the Notes, including pursuant to Section 8.01(G) (it being understood, however, that the Company may nonetheless
choose to execute such an amendment at its option).
(iii) Requirement
to Publicly Disclose the Fixed or Default Settlement Method. If the Company changes the Default Settlement Method pursuant to clause
(x) of the proviso to the definition of such term or irrevocably fixes the Settlement Method(s) pursuant to Section 5.03(A)(ii),
then the Company will either post the Default Settlement Method or fixed Settlement Method(s), as applicable, on its website or disclose
the same in a Current Report on Form 8-K (or any successor form) that is filed with, or furnished to, the SEC.
(B) Conversion
Consideration.
(i) Generally.
Subject to Sections 5.03(B)(ii), 5.03(B)(iii) and 5.09(A)(2), the type and amount of consideration (the “Conversion
Consideration”) due in respect of each $1,000 principal amount of a Note to be converted will be as follows:
(1) if
Cash Settlement applies to such conversion, cash in an amount equal to the sum of the Daily Conversion Values for each VWAP Trading Day
in the Observation Period for such conversion; or
(2) if
Combination Settlement applies to such conversion, consideration consisting of (a) a number of shares of Common Stock equal to the
sum of the Daily Share Amounts for each VWAP Trading Day in the Observation Period for such conversion; and (b) an amount of cash
equal to the sum of the Daily Cash Amounts for each VWAP Trading Day in such Observation Period.
(ii) Cash
in Lieu of Fractional Shares. If Combination Settlement applies to the conversion of any Note and the number of shares of Common Stock
deliverable pursuant to Section 5.03(B)(i) upon such conversion is not a whole number, then such number will be rounded
down to the nearest whole number and the Company will deliver, in addition to the other consideration due upon such conversion, cash in
lieu of the related fractional share in an amount equal to the product of (1) such fraction and (2) the Daily VWAP on the last
VWAP Trading Day of the Observation Period for such conversion.
(iii) Conversion
of Multiple Notes by a Single Holder. If a Holder converts more than one (1) Note on a single Conversion Date, then the Conversion
Consideration due in respect of such conversion will (in the case of any Global Note, to the extent permitted by, and practicable under,
the Depositary Procedures) be computed based on the total principal amount of Notes converted on such Conversion Date by such Holder.
(iv) Notice
of Calculation of Conversion Consideration. If any Note is to be converted, then the Company will determine the Conversion Consideration
due thereupon promptly following the last VWAP Trading Day of the applicable Observation Period and will promptly thereafter send notice
to the Trustee and the Conversion Agent of the same
and the calculation thereof in reasonable detail. Neither the Trustee nor the Conversion
Agent will have any duty to make any such determination.
(C) Delivery
of the Conversion Consideration. Except as set forth in Sections 5.05(D) and 5.09, the Company will pay
or deliver, as applicable, the Conversion Consideration due upon the conversion of any Note to the Holder on the second (2nd) Business
Day immediately after the last VWAP Trading Day of the Observation Period for such conversion.
(D) Deemed
Payment of Principal and Interest; Settlement of Accrued Interest Notwithstanding Conversion. If a Holder converts a Note, then the
Company will not adjust the Conversion Rate to account for any accrued and unpaid interest on such Note, and, except as provided in Section 5.02(D),
the Company’s payment or delivery of the Conversion Consideration due in respect of such conversion will be deemed to fully satisfy
and discharge the Company’s obligation to pay the principal of, and accrued and unpaid interest, if any, on, such Note to, but excluding
the Conversion Date. As a result, except as provided in Section 5.02(D), any accrued and unpaid interest on a converted Note
will be deemed to be paid in full rather than cancelled, extinguished or forfeited. In addition, subject to Section 5.02(D),
if the Conversion Consideration for a Note consists of both cash and shares of the Common Stock, then accrued and unpaid interest that
is deemed to be paid therewith will be deemed to be paid first out of such cash.
Section 5.04. Reserve
and Status of Common Stock Issued upon Conversion.
(A) Stock
Reserve. At all times when any Notes are outstanding, the Company will reserve (out of its authorized and not outstanding shares of
Common Stock that are not reserved for other purposes) a number of shares of Common Stock equal to the product of (i) the aggregate
principal amount (expressed in thousands) of all then-outstanding Notes; and (ii) the Conversion Rate then in effect (assuming, for
these purposes, that the Conversion Rate is increased by the maximum amount pursuant to which the Conversion Rate may be increased pursuant
to Section 5.07). To the extent the Company delivers shares of Common Stock held in its treasury in settlement of the conversion
of any Notes, each reference in this Indenture or the Notes to the issuance of shares of Common Stock in connection therewith will be
deemed to include such delivery, mutatis mutandis.
(B) Status
of Conversion Shares; Listing. Each Conversion Share, if any, delivered upon conversion of any Note will be a newly issued or treasury
share (except that any Conversion Share delivered by a designated financial institution pursuant to Section 5.08 need not
be a newly issued or treasury share) and will be duly and validly issued, fully paid, non-assessable, free from preemptive rights and
free of any lien or adverse claim (except to the extent of any lien or adverse claim created by the action or inaction of the Holder of
such Note or the Person to whom such Conversion Share will be delivered). If the Common Stock is then listed on any securities exchange,
or quoted on any inter-dealer quotation system, then the Company will cause each Conversion Share, when delivered upon conversion of any
Note, to be admitted for listing on such exchange or quotation on such system.
Section 5.05. Adjustments
to the Conversion Rate.
(A) Events
Requiring an Adjustment to the Conversion Rate. The Conversion Rate will
be adjusted from time to time as follows:
(i) Stock
Dividends, Splits and Combinations. If the Company issues solely shares of Common Stock as a dividend or distribution on all or substantially
all shares of the Common Stock, or if the Company effects a stock split or a stock combination of the Common Stock (in each case excluding
an issuance solely pursuant to a Common Stock Change Event, as to which Section 5.09 will apply), then the Conversion Rate
will be adjusted based on the following formula:
where:
CR0 |
= |
the Conversion Rate in effect immediately before the Open of Business on the Ex-Dividend Date for such dividend or distribution,
or immediately before the Open of Business on the effective date of such stock split or stock combination, as applicable; |
CR1 |
= |
the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date or the Open of Business on such effective
date, as applicable; |
OS0 |
= |
the number of shares of Common Stock outstanding immediately before the Open of Business on such Ex-Dividend Date or effective date,
as applicable, without giving effect to such dividend, distribution, stock split or stock combination; and |
OS1 |
= |
the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, stock split or stock
combination. |
For the avoidance of doubt, each adjustment
to the Conversion Rate made pursuant to this Section 5.05(A)(i) will become effective as of the time set forth in the
preceding definition of CR1. If any dividend, distribution, stock split or stock combination of the type described in this
Section 5.05(A)(i) is declared or announced, but not so paid or made, then the Conversion Rate will be readjusted, effective
as of the date the Board of Directors determines not to pay such dividend or distribution or to effect such stock split or stock combination,
to the Conversion Rate that would then be in effect had such dividend, distribution, stock split or stock combination not been declared
or announced.
(ii) Rights,
Options and Warrants. If the Company distributes, to all or substantially all holders of Common Stock, rights, options or warrants
(other than rights issued or otherwise distributed pursuant to a stockholder rights plan, as to which the provisions set forth in Sections
5.05(A)(iii)(1) and 5.05(F) will apply) entitling such holders, for a period of not more than sixty (60) calendar
days after the record date of such distribution, to subscribe for or purchase shares of Common Stock at a price per share that
is less
than the average of the Last Reported Sale Prices per share of Common Stock for the ten (10) consecutive Trading Days ending on,
and including, the Trading Day immediately before the date such distribution is announced, then the Conversion Rate will be increased
based on the following formula:
where:
CR0 |
= |
the Conversion Rate in effect immediately before the Open of
Business on the Ex-Dividend Date for such distribution; |
|
CR1 |
= |
the Conversion Rate in effect
immediately after the Open of Business on such Ex-Dividend Date; |
| OS | = |
the
number of shares of Common Stock outstanding immediately before the Open of Business on such
Ex-Dividend Date; |
| X | = |
the
total number of shares of Common Stock issuable pursuant to such rights, options or warrants;
and |
| Y | = |
a
number of shares of Common Stock obtained by dividing (x) the aggregate price payable
to exercise such rights, options or warrants by (y) the average of the Last Reported
Sale Prices per share of Common Stock for the ten (10) consecutive Trading Days ending
on, and including, the Trading Day immediately before the date such distribution is announced. |
To
the extent such rights, options or warrants are not so distributed, the Conversion Rate will be readjusted to the Conversion Rate
that would then be in effect had the increase to the Conversion Rate for such distribution been made on the basis of only the rights,
options or warrants, if any, actually distributed. In addition, to the extent that shares of Common Stock are not delivered after the
expiration of such rights, options or warrants (including as a result of such rights, options or warrants not being exercised), the Conversion
Rate will be readjusted to the Conversion Rate that would then be in effect had the increase to the Conversion Rate for such distribution
been made on the basis of delivery of only the number of shares of Common Stock actually delivered upon exercise of such rights, option
or warrants.
For the avoidance of doubt, each adjustment
to the Conversion Rate made pursuant to this Section 5.05(A)(ii) will become effective as of the time set forth in the
preceding definition of CR1.
For purposes of this Section 5.05(A)(ii) and
Section 5.01(C)(i)(3)(a)(I), in determining whether any rights, options or warrants entitle holders of Common Stock to subscribe
for or purchase shares of Common Stock at a price per share that is less than the average of the Last Reported Sale Prices per share of
Common Stock for the ten (10) consecutive
Trading Days ending on, and including, the Trading Day immediately before the date the
distribution of such rights, options or warrants is announced, and in determining the aggregate price payable to exercise such rights,
options or warrants, there will be taken into account any consideration the Company receives for such rights, options or warrants and
any amount payable on exercise thereof, with the value of such consideration, if not cash, to be determined by the Board of Directors.
(iii) Spin-Offs
and Other Distributed Property.
(1) Distributions
Other than Spin-Offs. If the Company distributes shares of its Capital Stock, evidences of its indebtedness or other assets or property
of the Company, or rights, options or warrants to acquire Capital Stock of the Company or other securities, to all or substantially all
holders of the Common Stock, excluding:
(u) dividends,
distributions, rights, options or warrants for which an adjustment to the Conversion Rate is required (or would be required without regard
to Section 5.05(C)) pursuant to Section 5.05(A)(i) or 5.05(A)(ii);
(v) dividends
or distributions paid exclusively in cash for which an adjustment to the Conversion Rate is required (or would be required assuming the
Dividend Threshold were zero and without regard to Section 5.05(C)) pursuant to Section 5.05(A)(iv);
(w) rights
issued or otherwise distributed pursuant to a stockholder rights plan, except to the extent provided in Section 5.05(F);
(x) Spin-Offs
for which an adjustment to the Conversion Rate is required (or would be required without regard to Section 5.05(C)) pursuant
to Section 5.05(A)(iii)(2);
(y) a
distribution solely pursuant to a tender offer or exchange offer for shares of Common Stock, as to which Section 5.05(A)(v) will
apply; and
(z) a
distribution solely pursuant to a Common Stock Change Event, as to which Section 5.09 will apply,
then the Conversion Rate will be increased
based on the following formula:
where:
|
CR0 |
= |
the Conversion Rate in effect immediately before the Open of |
Business
on the Ex-Dividend Date for such distribution;
|
CR1 |
= |
the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date; |
| SP | = |
the average of the Last Reported Sale Prices per share of Common Stock for the ten (10) consecutive Trading Days ending on,
and including, the Trading Day immediately before such Ex-Dividend Date; and |
| FMV | = |
the fair market value (as determined by the Board of Directors), as of such Ex-Dividend Date, of the shares of Capital Stock, evidences
of indebtedness, assets, property, rights, options or warrants distributed per share of Common Stock pursuant to such distribution; |
provided,
however, that if FMV is equal to or greater than SP, then, in lieu of the foregoing adjustment to the Conversion
Rate, each Holder will receive, for each $1,000 principal amount of Notes held by such Holder on the record date for such distribution,
at the same time and on the same terms as holders of Common Stock, the amount and kind of shares of Capital Stock, evidences of indebtedness,
assets, property, rights, options or warrants that such Holder would have received if such Holder had owned, on such record date, a number
of shares of Common Stock equal to the Conversion Rate in effect on such record date.
To the extent such distribution is not
so paid or made, the Conversion Rate will be readjusted to the Conversion Rate that would then be in effect had the adjustment been made
on the basis of only the distribution, if any, actually made or paid.
For
the avoidance of doubt, each adjustment to the Conversion Rate made pursuant to this Section 5.05(A)(iii)(1) will
become effective as of the time set forth in the preceding definition of CR1.
(2) Spin-Offs.
If the Company distributes or dividends shares of Capital Stock of any class or series, or similar equity interests, of or relating to
an Affiliate, a Subsidiary or other business unit of the Company to all or substantially all holders of the Common Stock (other than solely
pursuant to (x) a Common Stock Change Event, as to which Section 5.09 will apply; or (y) a tender offer or exchange
offer for shares of Common Stock, as to which Section 5.05(A)(v) will apply), and such Capital Stock or equity interests
are listed or quoted (or will be listed or quoted upon the consummation of the transaction) on a U.S. national securities exchange (a
“Spin-Off”), then the Conversion Rate will be increased based on the following formula:
where:
|
CR0 |
= |
the Conversion Rate in effect immediately before the Close of Business on the last Trading Day of the Spin-Off Valuation Period for
such Spin-Off; |
|
CR1 |
= |
the Conversion Rate in effect immediately after the Close of Business on the last Trading Day of the Spin-Off Valuation Period; |
| FMV | = |
the product of (x) the average of the Last Reported Sale Prices per share or unit of the Capital Stock or equity interests distributed
in such Spin-Off over the ten (10) consecutive Trading Day period (the “Spin-Off Valuation Period”) beginning
on, and including, the Ex-Dividend Date for such Spin-Off (such average to be determined as if references to Common Stock in the definitions
of Last Reported Sale Price, Trading Day and Market Disruption Event were instead references to such Capital Stock or equity interests);
and (y) the number of shares or units of such Capital Stock or equity interests distributed per share of Common Stock in such Spin-Off;
and |
| SP | = |
the average of the Last Reported Sale Prices per share of Common Stock for each Trading Day in the Spin-Off Valuation Period. |
Notwithstanding anything to the contrary
in this Section 5.05(A)(iii)(2), if any VWAP Trading Day of the Observation Period for a Note to be converted occurs during
the Spin-Off Valuation Period for such Spin-Off, then, solely for purposes of determining the Conversion Rate for such VWAP Trading Day
for such conversion, such Spin-Off Valuation Period will be deemed to consist of the Trading Days occurring in the period from, and including,
the Ex-Dividend Date for such Spin-Off to, and including, such VWAP Trading Day.
To the extent any dividend or distribution
of the type set forth in this Section 5.05(A)(iii)(2) is declared but not made or paid, the Conversion Rate will be readjusted
to the Conversion Rate that would then be in effect had the adjustment been made on the basis of only the dividend or distribution, if
any, actually made or paid.
For the avoidance of doubt, each adjustment
to the Conversion Rate made pursuant to this Section 5.05(A)(iii)(2) will become effective as of the time set forth in
the preceding definition of CR1.
(iv) Cash
Dividends or Distributions. If any cash dividend or distribution is made to all or substantially all holders of Common Stock (other
than a regular quarterly cash dividend that does not exceed the Dividend Threshold per share of Common Stock),
then the Conversion Rate
will be increased based on the following formula:
where:
|
CR0 |
= |
the Conversion Rate in effect immediately before the Open of Business on the Ex-Dividend Date for such dividend or distribution; |
|
|
|
|
|
CR1 |
= |
the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date; |
|
|
|
|
| SP | = |
the Last Reported Sale Price per share of Common Stock on the Trading Day immediately before such Ex-Dividend Date; |
| | |
|
| T | = |
an amount (subject to the proviso below, the “Dividend Threshold”) initially equal to $0.31 per share of Common
Stock; provided, however, that (x) if such dividend or distribution is not a regular quarterly cash dividend on the
Common Stock, then T will be deemed to be zero dollars ($0.00) per share of Common Stock with respect to such dividend or distribution;
and (y) the Dividend Threshold will be adjusted in the same manner as, and at the same time and for the same events for which, the
Conversion Price is adjusted as a result of the operation of Section 5.05(A) (other than this Section 5.05(A)(iv));
and |
| | |
|
| D | = |
the cash amount distributed per share of Common Stock in such dividend or distribution; |
provided,
however, that if D is equal to or greater than SP, then, in lieu of the foregoing adjustment to the Conversion Rate,
each Holder will receive, for each $1,000 principal amount of Notes held by such Holder on the record date for such dividend or distribution,
at the same time and on the same terms as holders of Common Stock, the amount of cash that such Holder would have received if such Holder
had owned, on such record date, a number of shares of Common Stock equal to the Conversion Rate in effect on such record date.
To the extent such dividend or distribution
is declared but not made or paid, the Conversion Rate will be readjusted to the Conversion Rate that would then be in effect had the adjustment
been made on the basis of only the dividend or distribution, if any, actually made or paid.
For the avoidance of doubt, each adjustment
to the Conversion Rate made pursuant to this Section 5.05(A)(iv) will become effective as of the time set forth in the
preceding definition of CR1.
(v) Tender
Offers or Exchange Offers. If the Company or any of its Subsidiaries
makes a payment in
respect of a tender offer or exchange offer for shares of Common Stock, and the value (determined as of the Expiration Time by the Board
of Directors) of the cash and other consideration paid per share of Common Stock in such tender or exchange offer exceeds the Last Reported
Sale Price per share of Common Stock on the Trading Day immediately after the last date (the “Expiration Date”) on
which tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended), then the Conversion Rate will
be increased based on the following formula:
where:
| CR0 | = |
the Conversion Rate in effect immediately before the Close of Business on the last Trading Day of the Tender/Exchange Offer Valuation
Period for such tender or exchange offer; |
| CR1 | = |
the Conversion Rate in effect immediately after the Close of Business on the last Trading Day of the Tender/Exchange Offer Valuation
Period; |
| AC | = |
the aggregate value (determined as of the time (the “Expiration Time”) such tender or exchange offer expires by the
Board of Directors) of all cash and other consideration paid for shares of Common Stock purchased or exchanged in such tender or exchange
offer; |
| OS0 | = |
the number of shares of Common Stock outstanding immediately before the Expiration Time (including all shares of Common Stock accepted
for purchase or exchange in such tender or exchange offer); |
| OS1 | = |
the number of shares of Common Stock outstanding immediately after the Expiration Time (excluding all shares of Common Stock accepted
for purchase or exchange in such tender or exchange offer); and |
| SP |
= | the average of the Last Reported Sale Prices per share of Common Stock over the ten (10) consecutive
Trading Day period (the “Tender/Exchange Offer Valuation Period”) beginning on, and including, the Trading Day immediately
after the Expiration Date; |
provided,
however, that the Conversion Rate will in no event be adjusted down pursuant to this Section 5.05(A)(v), except to
the extent provided in the immediately following paragraph. Notwithstanding anything to the contrary in this Section 5.05(A)(v),
if any VWAP Trading Day of the Observation Period for a Note to be converted occurs during the Tender/Exchange Offer Valuation Period
for such tender or exchange offer, then, solely for purposes of determining the Conversion Rate for such VWAP Trading Day for such conversion,
such Tender/Exchange Offer Valuation Period will be deemed to consist of the Trading Days occurring in the period from, and including,
the Trading Day immediately
after the Expiration Date for such tender or exchange offer to, and including, such VWAP Trading Day.
To the extent such tender or exchange
offer is announced but not consummated (including as a result of the Company being precluded from consummating such tender or exchange
offer under applicable law), or any purchases or exchanges of shares of Common Stock in such tender or exchange offer are rescinded, the
Conversion Rate will be readjusted to the Conversion Rate that would then be in effect had the adjustment been made on the basis of only
the purchases or exchanges of shares of Common Stock, if any, actually made, and not rescinded, in such tender or exchange offer.
For
the avoidance of doubt, each adjustment to the Conversion Rate made pursuant to this Section 5.05(A)(v) will become
effective as of the time set forth in the preceding definition of CR1.
(B) No
Adjustments in Certain Cases.
(i) Where
Holders Participate in the Transaction or Event Without Conversion. Notwithstanding anything to the contrary in Section 5.05(A),
the Company will not be obligated to adjust the Conversion Rate on account of a transaction or other event otherwise requiring an adjustment
pursuant to Section 5.05(A) (other than a stock split or combination of the type set forth in Section 5.05(A)(i) or
a tender or exchange offer of the type set forth in Section 5.05(A)(v)) if each Holder participates, at the same time and
on the same terms as holders of Common Stock, and solely by virtue of being a Holder of Notes, in such transaction or event without having
to convert such Holder’s Notes and as if such Holder held a number of shares of Common Stock equal to the product of (i) the
Conversion Rate in effect on the related record date; and (ii) the aggregate principal amount (expressed in thousands) of Notes held
by such Holder on such date.
(ii) Certain
Events. The Company will not be required to adjust the Conversion Rate except as provided in Section 5.05 or Section 5.07.
Without limiting the foregoing, the Company will not be obligated to adjust the Conversion Rate on account of:
(1) stock
repurchases, including pursuant to structured or derivative transactions or transactions pursuant to a stock repurchase program approved
by the Board of Directors or otherwise, in each case that are not tender offers or exchange offers of the type referred to in Section 5.05(A)(v);
(2) except
as otherwise provided in Section 5.05, the sale of shares of Common Stock for a purchase price that is less than the market
price per share of Common Stock or less than the Conversion Price;
(3) the
issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest
payable on the Company’s securities and the investment of additional optional amounts in shares of Common Stock under any such plan;
(4) the
issuance of any shares of Common Stock or options or rights to purchase shares of Common Stock pursuant to any present or future employee,
director or consultant benefit plan, program or agreement of, or assumed by, the Company or any of its Subsidiaries;
(5) the
issuance of any shares of Common Stock pursuant to any option, warrant or right or any exercisable, convertible or exchangeable security
of the Company outstanding as of the Issue Date;
(6) solely
a change in the par value of the Common Stock; or
(7) accrued
and unpaid interest on the Notes.
(C) Adjustment
Deferral. If an adjustment to the Conversion Rate otherwise required by this Article 5 would result in a change of less
than one percent (1%) to the Conversion Rate, then, notwithstanding anything to the contrary in this Article 5, the Company
may, at its election, defer such adjustment, except that all such deferred adjustments must be given effect immediately upon the earliest
of the following: (i) when all such deferred adjustments would result in a change of at least one percent (1%) to the Conversion
Rate; (ii) the Conversion Date of, or any VWAP Trading Day of an Observation Period for, any Note; (iii) the date a Fundamental
Change or Make-Whole Fundamental Change occurs; (iv) the date the Company calls any Notes for Redemption; and (v) the eighty-fifth
(85th) Scheduled Trading Day immediately before the Maturity Date.
(D) Adjustments
Not Yet Effective. Notwithstanding anything to the contrary in this Indenture or the Notes, if:
(i) a
Note is to be converted pursuant to Combination Settlement;
(ii) the
record date, effective date or Expiration Time for any event that requires an adjustment to the Conversion Rate pursuant to Section 5.05(A) has
occurred on or before any VWAP Trading Day in the Observation Period for such conversion, but an adjustment to the Conversion Rate for
such event has not yet become effective as of such VWAP Trading Day;
(iii) the
Conversion Consideration due in respect of such VWAP Trading Day includes any whole or fractional shares of Common Stock; and
(iv) such
shares are not entitled to participate in such event (because they were not held on the related record date or otherwise),
then, solely for purposes of such conversion,
the Company will, without duplication, give effect to such adjustment on such VWAP Trading Day. In such case, if the date on which the
Company is otherwise required to deliver the consideration due upon such conversion is before the first date on which the amount of such
adjustment can be determined, then the Company will delay the settlement of such conversion until the second (2nd) Business Day after
such first date.
(E) Conversion
Rate Adjustments where Converting Holders Participate in the
Relevant Transaction or
Event. Notwithstanding anything to the contrary in this Indenture or the Notes, if:
(i) a
Conversion Rate adjustment for any dividend or distribution becomes effective on any Ex-Dividend Date pursuant to Section 5.05(A);
(ii) a
Note is to be converted pursuant to Combination Settlement;
(iii) any
VWAP Trading Day in the Observation Period for such conversion occurs on or after such Ex-Dividend Date and on or before the related record
date;
(iv) the
Conversion Consideration due in respect of such VWAP Trading Day includes any whole or fractional shares of Common Stock based on a Conversion
Rate that is adjusted for such dividend or distribution; and
(v) such
shares would be entitled to participate in such dividend or distribution (including pursuant to Section 5.02(C)),
then the Conversion Rate adjustment relating to
such Ex-Dividend Date will be made for such conversion in respect of such VWAP Trading Day, but the shares of Common Stock issuable with
respect to such VWAP Trading Day based on such adjusted Conversion Rate will not be entitled to participate in such dividend or distribution.
(F) Stockholder
Rights Plans. If any shares of Common Stock are to be issued upon conversion of any Note and, at the time of such conversion, the
Company has in effect any stockholder rights plan, then the Holder of such Note will be entitled to receive, in addition to, and concurrently
with the delivery of, the Conversion Consideration otherwise payable under this Indenture upon such conversion, the rights set forth in
such stockholder rights plan, unless such rights have separated from the Common Stock at such time, in which case, and only in such case,
the Conversion Rate will be adjusted pursuant to Section 5.05(A)(iii)(1) on account of such separation as if, at the
time of such separation, the Company had made a distribution of the type referred to in such Section to all holders of the Common
Stock, subject to readjustment in accordance with such Section if such rights expire, terminate or are redeemed.
(G) Limitation
on Effecting Transactions Resulting in Certain Adjustments. The Company will not engage in or be a party to any transaction or event
that would require the Conversion Rate to be adjusted pursuant to Section 5.05(A) or Section 5.07 to an amount
that would result in the Conversion Price per share of Common Stock being less than the par value per share of Common Stock.
(H) Equitable
Adjustments to Prices. Whenever any provision of this Indenture requires the Company to calculate the average of the Last Reported
Sale Prices, or any function thereof, over a period of multiple days (including to calculate the Stock Price or an adjustment to the Conversion
Rate), or to calculate Daily VWAPs over an Observation Period, the Company will make proportionate adjustments, if any, to such calculations
to account for any adjustment to the Conversion Rate pursuant to Section 5.05(A)(i) that becomes effective, or any event
requiring such an adjustment to the Conversion Rate where the Ex-Dividend Date or effective date, as applicable, of such event occurs,
at any time during such period or Observation Period, as
applicable.
(I) Calculation
of Number of Outstanding Shares of Common Stock. For purposes of Section 5.05(A), the number of shares of Common Stock
outstanding at any time will (i) include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of
Common Stock; and (ii) exclude shares of Common Stock held in the Company’s treasury (unless the Company pays any dividend
or makes any distribution on shares of Common Stock held in its treasury).
(J) Calculations.
All calculations with respect to the Conversion Rate and adjustments thereto will be made to the nearest 1/10,000th of a share of Common
Stock (with 5/100,000ths rounded upward).
(K) Notice
of Conversion Rate Adjustments. Upon the effectiveness of any adjustment to the Conversion Rate pursuant to Section 5.05(A),
the Company will promptly send notice to the Holders, the Trustee and the Conversion Agent containing (i) a brief description of
the transaction or other event on account of which such adjustment was made; (ii) the Conversion Rate in effect immediately after
such adjustment; and (iii) the effective time of such adjustment.
(L) Trustee
Adjustment Disclaimer. The Trustee has no duty to determine when an adjustment under this Article 5 should be made, how
it should be made or what it should be. The Trustee will not be accountable for and makes no representation as to the validity or value
of any securities or assets issued upon conversion of Notes. The Trustee will not be responsible for the Company's failure to comply with
this Article 5. Each Conversion Agent (other than the Company or an affiliate of the Company) will have the same protection
under this Article 5 as the Trustee.
Section 5.06. Voluntary
Adjustments.
(A) Generally.
To the extent permitted by law and applicable stock exchange rules, the Company, from time to time, may (but is not required to) increase
the Conversion Rate by any amount if (i) the Board of Directors determines that such increase is either (x) in the best interest
of the Company; or (y) advisable to avoid or diminish any income tax imposed on holders of Common Stock or rights to purchase Common
Stock as a result of any dividend or distribution of shares (or rights to acquire shares) of Common Stock or any similar event; (ii) such
increase is in effect for a period of at least twenty (20) Business Days; and (iii) such increase is irrevocable during such period.
(B) Notice
of Voluntary Increases. If the Board of Directors determines to increase the Conversion Rate pursuant to Section 5.06(A),
then, no later than the first Business Day of the related twenty (20) Business Day period referred to in Section 5.06(A),
the Company will send notice to each Holder, the Trustee and the Conversion Agent of such increase, the amount thereof and the period
during which such increase will be in effect.
Section 5.07. Adjustments
to the Conversion Rate in Connection with a Make-Whole Fundamental Change.
(A) Generally.
If a Make-Whole Fundamental Change occurs and the Conversion Date for the conversion of a Note occurs during the related Make-Whole Fundamental
Change
Conversion Period, then, subject to this Section 5.07,
the Conversion Rate applicable to such conversion will be increased by a number of shares (the “Additional Shares”)
set forth in the table below corresponding (after interpolation as provided in, and subject to, the provisions below) to the Make-Whole
Fundamental Change Effective Date and the Stock Price of such Make-Whole Fundamental Change:
| |
Stock Price | |
Make-Whole
Fundamental
Change
Effective
Date | |
$ | 67.64 | |
$ | 75.00 | |
$ | 87.93 | |
$ | 100.00 | |
$ | 114.31 | |
$ | 125.00 | |
$ | 150.00 | |
$ | 200.00 | |
$ | 250.00 | |
$ | 300.00 | |
$ | 350.00 | |
$ | 400.00 | |
$ | 450.00 | |
January 23, 2024 | |
| 3.4117 | |
| 2.7615 | |
| 1.9632 | |
| 1.4700 | |
| 1.0742 | |
| 0.8646 | |
| 0.5440 | |
| 0.2422 | |
| 0.1142 | |
| 0.0518 | |
| 0.0196 | |
| 0.0041 | |
| 0.0000 | |
January 15, 2025 | |
| 3.4117 | |
| 2.7615 | |
| 1.9476 | |
| 1.4279 | |
| 1.0199 | |
| 0.8084 | |
| 0.4938 | |
| 0.2114 | |
| 0.0972 | |
| 0.0429 | |
| 0.0156 | |
| 0.0031 | |
| 0.0000 | |
January 15, 2026 | |
| 3.4117 | |
| 2.7536 | |
| 1.8490 | |
| 1.3150 | |
| 0.9084 | |
| 0.7042 | |
| 0.4121 | |
| 0.1671 | |
| 0.0740 | |
| 0.0309 | |
| 0.0099 | |
| 0.0009 | |
| 0.0000 | |
January 15, 2027 | |
| 3.4117 | |
| 2.6531 | |
| 1.6961 | |
| 1.1520 | |
| 0.7566 | |
| 0.5673 | |
| 0.3125 | |
| 0.1191 | |
| 0.0508 | |
| 0.0198 | |
| 0.0052 | |
| 0.0000 | |
| 0.0000 | |
January 15, 2028 | |
| 3.4117 | |
| 2.5025 | |
| 1.4752 | |
| 0.9258 | |
| 0.5573 | |
| 0.3953 | |
| 0.1995 | |
| 0.0725 | |
| 0.0305 | |
| 0.0108 | |
| 0.0018 | |
| 0.0000 | |
| 0.0000 | |
January 15, 2029 | |
| 3.4117 | |
| 2.2584 | |
| 1.1145 | |
| 0.5801 | |
| 0.2866 | |
| 0.1826 | |
| 0.0835 | |
| 0.0327 | |
| 0.0143 | |
| 0.0044 | |
| 0.0001 | |
| 0.0000 | |
| 0.0000 | |
January 15, 2030 | |
| 3.4117 | |
| 1.9609 | |
| 0.0000 | |
| 0.0000 | |
| 0.0000 | |
| 0.0000 | |
| 0.0000 | |
| 0.0000 | |
| 0.0000 | |
| 0.0000 | |
| 0.0000 | |
| 0.0000 | |
| 0.0000 | |
If such Make-Whole Fundamental
Change Effective Date or Stock Price is not set forth in the table above, then:
(i) if
such Stock Price is between two Stock Prices in the table above or the Make-Whole Fundamental Change Effective Date is between two dates
in the table above, then the number of Additional Shares will be determined by a straight-line interpolation between the numbers of Additional
Shares set forth for the higher and lower Stock Prices in the table above or the earlier and later dates in the table above, based on
a 365- or 366-day year, as applicable; and
(ii) if
the Stock Price is greater than $450 (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of
the table above are adjusted pursuant to Section 5.07(B)), or less than $67.64 (subject to adjustment in the same manner),
per share, then no Additional Shares will be added to the Conversion Rate.
Notwithstanding anything to
the contrary in this Indenture or the Notes, in no event will the Conversion Rate be increased to an amount that exceeds 14.7841 shares
of Common Stock per $1,000 principal amount of Notes, which amount is subject to adjustment in the same manner as, and at the same time
and for the same events for which, the Conversion Rate is required to be adjusted pursuant to Section 5.05(A).
For the avoidance of doubt,
but subject to Section 4.03(I), (x) the sending of a Redemption Notice will constitute a Make-Whole Fundamental Change
only with respect to the Notes called for Redemption pursuant to such Redemption Notice, and not with respect to any other Notes; and
(y) the Conversion Rate applicable to the Notes not so called for Redemption will not be subject to increase pursuant to this Section 5.07
on account of such Redemption Notice.
(B) Adjustment
of Stock Prices and Additional Shares. The Stock Prices in the first row (i.e., the column headers) of the table set forth
in Section 5.07(A) will be adjusted in the same manner as, and at the same time and for the same events for which, the
Conversion Price is adjusted as a result of the operation of Section 5.05(A). The numbers of Additional Shares in the table
set forth in Section 5.07(A) will be adjusted in the same manner as, and at the same time and for the same events for
which, the Conversion Rate is adjusted pursuant to Section 5.05(A).
(C) Notice
of the Occurrence of a Make-Whole Fundamental Change. The Company will notify the Holders, the Trustee and the Conversion Agent of
each Make-Whole Fundamental Change (i) occurring pursuant to clause (A) of the definition thereof in accordance with
Section 5.01(C)(i)(3)(b); and (ii) occurring pursuant to clause (B) of the definition thereof in accordance
with Section 4.03(F).
Section 5.08. Exchange
in Lieu of Conversion.
When a Holder surrenders any
Notes for conversion, the Company may, at its election (an “Exchange Election”), direct the Conversion Agent to deliver,
on or prior to the Trading Day immediately following the conversion date, such Notes to one or more financial institution(s) designated
by the Company for exchange in lieu of conversion. In order to accept any Notes surrendered for conversion, the designated financial institution(s) must
agree to timely pay or deliver, as the case may be, in exchange for such Notes, the Conversion Consideration. If the Company makes an
Exchange Election, the Company will, by the close of business on the Trading Day following the relevant conversion date, notify in writing
the Trustee, the Conversion Agent (if other than the Trustee) and the Holder surrendering its Notes for conversion that the Company has
made the Exchange Election, and the Company will notify the designated financial institution(s) of the relevant deadline for delivery
of the Conversion Consideration and the type of Conversion Consideration to be paid and/or delivered, as the case may be.
Any Notes delivered to the
designated financial institution(s) will remain outstanding, subject to applicable DTC procedures. If the financial institution(s) agree(s) to
accept any Notes for exchange but does not timely pay and/or deliver, as the case may be, the related Conversion Consideration, or if
such designated financial institution does not accept the Notes for exchange, the Company will notify the Trustee, the Conversion Agent
(if other than the Trustee) and the Holder surrendering its Notes for conversion, in writing, and the Company will pay and/or deliver,
as the case may be, the relevant Conversion Consideration at the time and in the manner required hereunder as if the Company had not made
the Exchange Election. The Company’s designation of any financial institution(s) to which the Notes may be submitted for exchange
does not require such financial institution(s) to accept any Notes.
Section 5.09. Effect
of Common Stock Change Event.
(A) Generally.
If there occurs any:
(i) recapitalization,
reclassification or change of the Common Stock (other than (x) changes solely resulting from a subdivision or combination of the
Common Stock, (y)
a change only in par value or from par value to no par value
or no par value to par value and (z) stock splits and stock combinations that do not involve the issuance of any other series or
class of securities);
(ii) consolidation,
merger, combination or binding or statutory share exchange involving the Company;
(iii) sale,
lease or other transfer of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any Person;
or
(iv) other
similar event,
and, as a result of which, the Common Stock is
converted into, or is exchanged for, or represents solely the right to receive, other securities, cash or other property or assets, or
any combination of the foregoing (such an event, a “Common Stock Change Event,” and such other securities, cash, property
or assets, the “Reference Property,” and the amount and kind of Reference Property that a holder of one (1) share
of Common Stock would be entitled to receive on account of such Common Stock Change Event (without giving effect to any arrangement not
to issue or deliver a fractional portion of any security or other property), a “Reference Property Unit”), then, notwithstanding
anything to the contrary in this Indenture or the Notes,
(1) from
and after the effective time of such Common Stock Change Event, (I) the Conversion Consideration due upon conversion of any Note,
and the conditions to any such conversion, will be determined in the same manner as if each reference to any number of shares of Common
Stock in this Article 5 (or in any related definitions) were instead a reference to the same number of Reference Property
Units; (II) for purposes of Section 4.03, each reference to any number of shares of Common Stock in such Section (or
in any related definitions) will instead be deemed to be a reference to the same number of Reference Property Units; and (III) for
purposes of the definitions of “Fundamental Change” and “Make-Whole Fundamental Change,” the terms “Common
Stock” and “common equity” will be deemed to mean the common equity (including depositary receipts representing common
equity), if any, forming part of such Reference Property;
(2) if
such Reference Property Unit consists entirely of cash, then (I) each conversion of any Note with a Conversion Date that occurs on
or after the effective date of such Common Stock Change Event will be settled entirely in cash in an amount, per $1,000 principal amount
of such Note being converted, equal to the product of (x) the Conversion Rate in effect on such Conversion Date (including, for the
avoidance of doubt, any increase to such Conversion Rate pursuant to Section 5.07, if applicable); and (y) the amount
of cash constituting such Reference Property Unit; and (II) the Company will settle each such conversion no later than the tenth
(10th) Business Day after the relevant Conversion Date; and
(3) for
these purposes, (I) the Daily VWAP of any Reference Property Unit or portion thereof that consists of a class of common equity securities
will be determined by reference to the definition of “Daily VWAP,” substituting, if applicable, the Bloomberg page for
such class of securities in such definition; and (II) the Daily VWAP of any
Reference Property Unit or portion thereof that does not consist
of a class of common equity securities, and the Last Reported Sale Price of any Reference Property Unit or portion thereof that does
not consist of a class of securities, will be the fair value of such Reference Property Unit or portion thereof, as applicable, determined
in good faith by the Company (or, in the case of cash denominated in U.S. dollars, the face amount thereof).
If the Reference Property
consists of more than a single type of consideration to be determined based in part upon any form of stockholder election, then the composition
of the Reference Property Unit will be deemed to be the weighted average of the types and amounts of consideration actually received,
per share of Common Stock, by the holders of Common Stock. The Company will notify Holders of such weighted average as soon as practicable
after such determination is made.
At or before the effective
time of such Common Stock Change Event, the Company and the resulting, surviving or transferee Person (if not the Company) of such Common
Stock Change Event (the “Successor Person”) will execute and deliver to the Trustee a supplemental indenture pursuant
to Section 8.01(F), which supplemental indenture will (x) provide for subsequent conversions of Notes in the manner set
forth in this Section 5.09; (y) provide for subsequent adjustments to the Conversion Rate pursuant to Section 5.05(A) in
a manner consistent with this Section 5.09 (including giving effect, in the reasonable discretion of the Company, to the Dividend
Threshold in a manner that preserves the economic interests of the Holders); and (z) contain such other provisions as the Company
reasonably determines are appropriate to preserve the economic interests of the Holders and to give effect to the provisions of this Section 5.09(A).
If the Reference Property includes shares of stock or other securities or assets of a Person other than the Successor Person, then such
other Person will also execute such supplemental indenture and such supplemental indenture will contain such additional provisions the
Company reasonably determines are appropriate to preserve the economic interests of the Holders.
(B) Notice
of Common Stock Change Events. The Company will provide notice of each Common Stock Change Event in accordance with Section 5.01(C)(i)(3)(b).
(C) Compliance
Covenant. The Company will not become a party to any Common Stock Change Event unless its terms are consistent with this Section 5.09.
Article 6. Successors
Section 6.01. When
the Company May Merge, Etc.
(A) Generally.
The Company will not consolidate with or merge with or into, or (directly, or indirectly through one or more of its Subsidiaries) sell,
lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and
its Subsidiaries, taken as a whole, to another Person (a “Business Combination Event”), unless:
(i) the
resulting, surviving or transferee Person either (x) is the Company or (y) if not the Company, is a corporation (the “Successor
Corporation”) duly organized and existing under the laws of the United States of America, any State thereof or the District
of Columbia that expressly assumes (by executing and delivering to the Trustee, at or before
the effective time of such Business Combination
Event, a supplemental indenture pursuant to Section 8.01(E)) all of the Company’s obligations under this Indenture and
the Notes; and
(ii) immediately
after giving effect to such Business Combination Event, no Default or Event of Default will have occurred and be continuing.
(B) Delivery
of Officer’s Certificate and Opinion of Counsel to the Trustee. Before the effective time of any Business Combination Event,
the Company will deliver to the Trustee an Officer’s Certificate and Opinion of Counsel, each stating that (i) such Business
Combination Event (and, if applicable, the related supplemental indenture) comply with Section 6.01(A); and (ii) all
conditions precedent to such Business Combination Event provided in this Indenture have been satisfied.
Section 6.02. Successor
Corporation Substituted.
At the effective time of any
Business Combination Event that complies with Section 6.01, the Successor Corporation (if not the Company) will succeed to,
and may exercise every right and power of, the Company under this Indenture and the Notes with the same effect as if such Successor Corporation
had been named as the Company in this Indenture and the Notes, and, except in the case of a lease, the predecessor Company will be discharged
from its obligations under this Indenture and the Notes.
Article 7. Defaults
and Remedies
Section 7.01. Events
of Default.
(A) Definition
of Events of Default. “Event of Default” means the occurrence of any of the following:
(i) a
default in the payment when due (whether at maturity, upon Redemption or Repurchase Upon Fundamental Change or otherwise) of the principal
of, or the Redemption Price or Fundamental Change Repurchase Price for, any Note;
(ii) a
default for thirty (30) days in the payment when due of interest on any Note;
(iii) the
Company’s failure to deliver, when required by this Indenture, a Fundamental Change Notice, or a notice pursuant to Section 5.01(C)(i)(3);
(iv) a
default in the Company’s obligation to convert a Note in accordance with Article 5 upon the exercise of the conversion
right with respect thereto, if such default continues for a period of five (5) Business Days;
(v) a
default in the Company’s obligations under Article 6;
(vi) a
default in any of the Company’s obligations or agreements under this Indenture or the Notes (other than a default set forth in clause
(i), (ii), (iii), (iv) or (v) of
this Section 7.01(A))
where such default is not cured or waived within sixty (60) days after notice to the Company by the Trustee, or to the Company and the
Trustee by Holders of at least twenty five percent (25%) of the aggregate principal amount of Notes then outstanding, which notice must
specify such default, demand that it be remedied and state that such notice is a “Notice of Default”;
(vii) a
default by the Company or any of its Subsidiaries with respect to any one or more mortgages, agreements or other instruments under which
there is outstanding, or by which there is secured or evidenced, any indebtedness for money borrowed of at least thirty-five million dollars
($35,000,000) (or its foreign currency equivalent) in the aggregate of the Company or any of its Subsidiaries, whether such indebtedness
exists as of the Issue Date or is thereafter created, where such default:
(1) constitutes
a failure to pay the principal of, or premium or interest on, any of such indebtedness when due and payable at its stated maturity, upon
required repurchase, upon declaration of acceleration or otherwise, in each case after the expiration of any applicable grace period;
or
(2) results
in such indebtedness becoming or being declared due and payable before its stated maturity,
in each case where such default is not
cured or waived within thirty (30) days after notice to the Company by the Trustee or to the Company and the Trustee by Holders of at
least twenty five percent (25%) of the aggregate principal amount of Notes then outstanding;
(viii) one
or more final judgments being rendered against the Company or any of its Subsidiaries for the payment of at least thirty-five million
dollars ($35,000,000) (or its foreign currency equivalent) in the aggregate (excluding any amounts covered by insurance), where such judgment
is not discharged or stayed within sixty (60) days after (i) the date on which the right to appeal the same has expired, if no such
appeal has commenced; or (ii) the date on which all rights to appeal have been extinguished;
(ix) the
Company or any of its Significant Subsidiaries, pursuant to or within the meaning of any Bankruptcy Law, either:
(1) commences
a voluntary case or proceeding;
(2) consents
to the entry of an order for relief against it in an involuntary case or proceeding;
(3) consents
to the appointment of a custodian of it or for any substantial part of its property;
(4) makes
a general assignment for the benefit of its creditors;
(5) takes
any comparable action under any foreign Bankruptcy Law; or
(6) generally
is not paying its debts as they become due; or
(x) a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that either:
(1) is
for relief against the Company or any of its Significant Subsidiaries in an involuntary case or proceeding;
(2) appoints
a custodian of the Company or any of its Significant Subsidiaries, or for any substantial part of the property of the Company or any of
its Significant Subsidiaries;
(3) orders
the winding up or liquidation of the Company or any of its Significant Subsidiaries; or
(4) grants
any similar relief under any foreign Bankruptcy Law,
and, in each case under this Section 7.01(A)(x),
such order or decree remains unstayed and in effect for at least sixty (60) days.
(B) Cause
Irrelevant. Each of the events set forth in Section 7.01(A) will constitute an Event of Default regardless of the
cause thereof or whether voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental body.
Section 7.02. Acceleration.
(A) Automatic
Acceleration in Certain Circumstances. If an Event of Default set forth in Section 7.01(A)(ix) or 7.01(A)(x) occurs
with respect to the Company (and not solely with respect to a Significant Subsidiary of the Company), then the principal amount of, and
all accrued and unpaid interest on, all of the Notes then outstanding will immediately become due and payable without any further action
or notice by any Person.
(B) Optional
Acceleration. Subject to Section 7.03, if an Event of Default (other than an Event of Default set forth in Section 7.01(A)(ix) or
7.01(A)(x) with respect to the Company and not solely with respect to a Significant Subsidiary of the Company) occurs and
is continuing, then the Trustee, by notice to the Company, or Holders of at least twenty five percent (25%) of the aggregate principal
amount of Notes then outstanding, by notice to the Company and the Trustee, may declare the principal amount of, and all accrued and unpaid
interest on, all of the Notes then outstanding to become due and payable immediately.
(C) Rescission
of Acceleration. Notwithstanding anything to the contrary in this Indenture or the Notes, the Holders of a majority in aggregate principal
amount of the Notes then outstanding, by notice to the Company and the Trustee, may, on behalf of all Holders, rescind any acceleration
of the Notes and its consequences if (i) such rescission would not conflict with any judgment or decree of a court of competent jurisdiction;
and (ii) all existing Events of Default (except the non-payment of principal of, or interest on, the Notes that has become due solely
because of such acceleration) have been cured or waived. No such rescission will affect any subsequent Default or impair any right consequent
thereto.
Section 7.03. Sole
Remedy for a Failure to Report.
(A) Generally.
Notwithstanding anything to the contrary in this Indenture or the Notes, the Company may elect that the sole remedy for any Event of Default
(a “Reporting Event of Default”) pursuant to Section 7.01(A)(vi) arising from the Company’s
failure to comply with Section 3.02 will, for each of the first one hundred eighty (180) calendar days on which a Reporting
Event of Default has occurred and is continuing, consist exclusively of the accrual of Special Interest on the Notes. If the Company has
made such an election, then (i) the Notes will be subject to acceleration pursuant to Section 7.02 on account of the
relevant Reporting Event of Default from, and including, the one hundred and eighty first (181st) calendar day on which a Reporting Event
of Default has occurred and is continuing or if the Company fails to pay any accrued and unpaid Special Interest when due; and (ii) Special
Interest will cease to accrue on any Notes from, and including, such one hundred and eighty first (181st) calendar day (it
being understood that interest on any defaulted Special Interest will nonetheless accrue pursuant to Section 2.05(B)).
(B) Amount
and Payment of Special Interest. Any Special Interest that accrues on a Note pursuant to Section 7.03(A) will be
payable on the same dates and in the same manner as the Stated Interest on such Note and will accrue at a rate per annum equal to one
quarter of one percent (0.25%) of the principal amount thereof for the first ninety (90) days on which Special Interest accrues and, thereafter,
at a rate per annum equal to one half of one percent (0.50%) of the principal amount thereof; provided, however, that in
no event will Special Interest, together with any Additional Interest, accrue on any day on a Note at a combined rate per annum that exceeds
one half of one percent (0.50%). For the avoidance of doubt, any Special Interest that accrues on a Note will be in addition to the Stated
Interest that accrues on such Note and, subject to the proviso of the immediately preceding sentence, in addition to any Additional Interest
that accrues on such Note.
(C) Notice
of Election. To make the election set forth in Section 7.03(A), the Company must send to the Holders, the Trustee and
the Paying Agent, before the date on which each Reporting Event of Default first occurs, a notice that (i) briefly describes the
report(s) that the Company failed to file with the SEC; (ii) states that the Company is electing that the sole remedy for such
Reporting Event of Default consist of the accrual of Special Interest; and (iii) briefly describes the periods during which and rate
at which Special Interest will accrue and the circumstances under which the Notes will be subject to acceleration on account of such Reporting
Event of Default.
(D) Notice
to Trustee and Paying Agent; Trustee’s Disclaimer. If Special Interest accrues on any Note, then, no later than five (5) Business
Days before each date on which such Special Interest is to be paid, the Company will deliver an Officer’s Certificate to the Trustee
and the Paying Agent stating (i) that the Company is obligated to pay Special Interest on such Note on such date of payment; and
(ii) the amount of such Special Interest that is payable on such date of payment. The Trustee will have no duty to determine whether
any Special Interest is payable or the amount thereof.
(E) No
Effect on Other Events of Default. No election pursuant to this Section 7.03 with respect to a Reporting Event of Default
will affect the rights of any Holder with respect to
any other Event of Default, including with respect to any other Reporting Event of
Default.
Section 7.04. Other
Remedies.
(A) Trustee
May Pursue All Remedies. If an Event of Default occurs and is continuing, then the Trustee may pursue any available remedy to
collect the payment of any amounts due with respect to the Notes or to enforce the performance of any provision of this Indenture or the
Notes.
(B) Procedural
Matters. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in such
proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy following an Event of Default will not
impair the right or remedy or constitute a waiver of, or acquiescence in, such Event of Default. All remedies will be cumulative to the
extent permitted by law.
Section 7.05. Waiver
of Past Defaults.
An
Event of Default pursuant to clause (i), (ii), (iv) or (vi) of Section 7.01(A) (that,
in the case of clause (vi) only, results from a Default under any covenant that cannot be amended without the consent of each
affected Holder), and a Default that could lead to such an Event of Default, can be waived only with the consent of each affected Holder.
Each other Default or Event of Default may be waived, on behalf of all Holders, by the Holders of a majority in aggregate principal
amount of the Notes then outstanding. If an Event of Default is so waived, then it will cease to exist. If a Default is so waived, then
it will be deemed to be cured and any Event of Default arising therefrom will be deemed not to occur. However, no such waiver will extend
to any subsequent or other Default or Event of Default or impair any right arising therefrom.
Section 7.06. Control
by Majority.
Holders
of a majority in aggregate principal amount of the Notes then outstanding may direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law, this Indenture or the Notes, or that, subject to Section 10.01, the Trustee
determines may be unduly prejudicial to the rights of other Holders or may involve the Trustee in liability, unless the Trustee is offered
security and indemnity satisfactory to the Trustee against any loss, liability or expense to the Trustee that may result from the Trustee’s
following such direction.
Section 7.07. Limitation
on Suits.
No
Holder may pursue any remedy with respect to this Indenture or the Notes (except to enforce (x) its rights to receive the
principal of, or the Fundamental Change Repurchase Price or Redemption Price for, or any interest on, any Notes; or (y) the Company’s
obligations to convert any Notes pursuant to Article 5), unless:
(A) such
Holder has previously delivered to the Trustee notice that an Event of Default is continuing;
(B) Holders
of at least twenty five percent (25%) in aggregate principal amount of the
Notes then outstanding deliver a request to the Trustee to
pursue such remedy;
(C) such
Holder or Holders offer and, if requested, provide to the Trustee security and indemnity satisfactory to the Trustee against any loss,
liability or expense to the Trustee that may result from the Trustee’s following such request;
(D) the
Trustee does not comply with such request within sixty (60) calendar days after its receipt of such request and such offer of security
or indemnity; and
(E) during
such sixty (60) calendar day period, Holders of a majority in aggregate principal amount of the Notes then outstanding do not deliver
to the Trustee a direction that is inconsistent with such request.
A
Holder of a Note may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another
Holder. The Trustee will have no duty to determine whether any Holder’s use of this Indenture complies with the preceding
sentence.
Section 7.08. Absolute
Right of Holders to Institute Suit for the Enforcement of the Right to Receive Payment and Conversion Consideration.
Notwithstanding
anything to the contrary in this Indenture or the Notes (but without limiting Section 8.01), the right of each Holder
of a Note to bring suit for the enforcement of any payment or delivery, as applicable, of the principal of, or the Fundamental Change
Repurchase Price or Redemption Price for, or any interest on, or the Conversion Consideration due pursuant to Article 5 upon
conversion of, such Note on or after the respective due dates therefor provided in this Indenture and the Notes, will not be impaired
or affected without the consent of such Holder.
Section 7.09. Collection
Suit by Trustee.
The
Trustee will have the right, upon the occurrence and continuance of an Event of Default pursuant to clause (i), (ii) or
(iv) of Section 7.01(A), to recover judgment in its own name and as trustee of an express trust against the Company
for the total unpaid or undelivered principal of, or Fundamental Change Repurchase Price or Redemption Price for, or any interest on,
or Conversion Consideration due pursuant to Article 5 upon conversion of, the Notes, as applicable, and, to the extent lawful,
any Default Interest on any Defaulted Amounts, and such further amounts sufficient to cover the costs and expenses of collection, including
compensation, expenses and indemnities provided for in Section 10.06.
Section 7.10. Trustee
May File Proofs of Claim.
The
Trustee has the right to (A) file such proofs of claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company (or any other obligor upon
the Notes) or its creditors or property and (B) collect, receive and distribute any money or other property payable or deliverable
on any such claims. Each Holder authorizes any custodian in such proceeding to make such payments to the Trustee, and, if the Trustee
consents to the making of such payments directly to the Holders, to pay to the Trustee any amount due to the Trustee for the reasonable
compensation, expenses, disbursements and advances of the Trustee,
and its agents and counsel, and any other amounts payable to the Trustee pursuant to Section 10.06. To the extent that the
payment of any such compensation, expenses, disbursements, advances and other amounts out of the estate in such proceeding, is denied
for any reason, payment of the same will be secured by a lien on, and will be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in such proceeding (whether in liquidation or under any plan
of reorganization or arrangement or otherwise). Nothing in this Indenture will be deemed to authorize the Trustee to authorize, consent
to, accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 7.11. Priorities.
The Trustee will pay or deliver
in the following order any money or other property that it collects pursuant to this Article 7:
First: to
the Trustee and its agents and attorneys for amounts due under Section 10.06, including payment of all fees, compensation,
expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;
Second: to
Holders for unpaid amounts or other property due on the Notes, including the principal of, or the Fundamental Change Repurchase Price
or Redemption Price for, or any interest on, or any Conversion Consideration due upon conversion of, the Notes, ratably, and without preference
or priority of any kind, according to such amounts or other property due and payable on all of the Notes; and
Third: to
the Company or such other Person as a court of competent jurisdiction directs.
The Trustee may fix a record
date and payment date for any payment or delivery to the Holders pursuant to this Section 7.11, in which case the Trustee
will instruct the Company to, and the Company will, deliver, at least fifteen (15) calendar days before such record date, to each Holder
and the Trustee a notice stating such record date, such payment date and the amount of such payment or nature of such delivery, as applicable.
Section 7.12. Undertaking
for Costs.
In any suit for the enforcement
of any right or remedy under this Indenture or the Notes or in any suit against the Trustee for any action taken or omitted by it as Trustee,
a court, in its discretion, may (A) require the filing by any litigant party in such suit of an undertaking to pay the costs of such
suit, and (B) assess reasonable costs (including reasonable attorneys’ fees) against any litigant party in such suit, having
due regard to the merits and good faith of the claims or defenses made by such litigant party; provided, however, that this
Section 7.12 does not apply to any suit by the Trustee, any suit by a Holder pursuant to Section 7.08 or any suit
by one or more Holders of more than ten percent (10%) in aggregate principal amount of the Notes then outstanding.
Article 8. Amendments,
Supplements and Waivers
Section 8.01. Without
the Consent of Holders.
Notwithstanding anything to
the contrary in Section 8.02, the Company and the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder to:
(A)
cure any ambiguity or correct any omission, defect or
inconsistency in this Indenture or the Notes;
(B)
add guarantees with respect to the Company’s
obligations under this Indenture or the Notes;
(C)
secure the Notes;
(D) add
to the Company’s covenants or Events of Default for the benefit of the Holders or surrender any right or power conferred on the
Company;
(E) provide
for the assumption of the Company’s obligations under this Indenture and the Notes pursuant to, and in compliance with, Article 6;
(F)
enter into supplemental indentures pursuant to, and in accordance with, Section 5.09
in connection with a Common Stock Change Event;
(G) irrevocably
elect or eliminate any Settlement Method or Specified Dollar Amount; provided, however, that (i) no such election or
elimination will affect any Settlement Method theretofore elected (or deemed to be elected) with respect to any Note pursuant to Section 5.03(A);
and (ii) such irrevocable election or elimination can in no event result in a Specified Dollar Amount of less than $1,000 per $1,000
principal amount of Notes applying to the conversion of any Note;
(H)
evidence or provide for the acceptance of the appointment, under this Indenture, of a
successor Trustee;
(I)
conform the provisions of this Indenture and the Notes to the “Description of
Notes” section of the Company’s preliminary offering memorandum, dated January 17, 2024, as supplemented by the
related pricing term sheet, dated January 18, 2024;
(J)
provide for or confirm the issuance of additional Notes pursuant to Section 2.03(B);
(K)
comply with any requirement of the SEC in connection with any qualification of
this Indenture or any supplemental indenture under the Trust Indenture Act, as then in effect; or
(L)
make any other change to this Indenture or the Notes that does not,
individually or in the aggregate with all other such changes, adversely affect the rights of the Holders, as such, in any material
respect.
At the written request of
any Holder of a Note or owner of a beneficial interest in a Global
Note, the Company will provide a copy of the “Description of
Notes” section and pricing term sheet referred to in (I).
Section 8.02. With
the Consent of Holders.
(A) Generally.
Subject to Sections 8.01, 7.05 and 7.08 and the immediately following sentence, the Company and the Trustee may,
with the consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding, amend or supplement this Indenture
or the Notes or waive compliance with any provision of this Indenture or the Notes. Notwithstanding anything to the contrary in the foregoing
sentence, but subject to Section 8.01, without the consent of each affected Holder, no amendment or supplement to this Indenture
or the Notes, or waiver of any provision of this Indenture or the Notes, may:
(i) reduce
the principal, or extend the stated maturity, of any Note;
(ii) reduce
the Redemption Price or Fundamental Change Repurchase Price for any Note or change the times at which, or the circumstances under which,
the Notes will be redeemed or repurchased by the Company;
(iii) reduce
the rate, or extend the time for the payment, of interest on any Note;
(iv) make
any change that adversely affects the conversion rights of any Note;
(v) impair
the rights of any Holder set forth in Section 7.08 (as such section is in effect on the Issue Date);
(vi) change
the ranking of the Notes;
(vii) make
any Note payable in money, or at a place of payment, other than that stated in this Indenture or the Note;
(viii) reduce
the amount of Notes whose Holders must consent to any amendment, supplement, waiver or other modification; or
(ix) make
any direct or indirect change to any amendment, supplement, waiver or modification provision of this Indenture or the Notes that requires
the consent of each affected Holder.
For the avoidance of doubt,
pursuant to clauses (i), (ii), (iii) and (iv) of this Section 8.02(A), no amendment
or supplement to this Indenture or the Notes, or waiver of any provision of this Indenture or the Notes, may change the amount or type
of consideration due on any Note (whether on an Interest Payment Date, Redemption Date, Fundamental Change Repurchase Date or the Maturity
Date or upon conversion, or otherwise), or the date(s) or time(s) such consideration is payable or deliverable, as applicable,
without the consent of each affected Holder.
(B) Holders
Need Not Approve the Particular Form of any Amendment. A consent of any Holder pursuant to this Section 8.02 need
approve only the substance, and not necessarily the particular form, of the proposed amendment, supplement or waiver.
Section 8.03. Notice
of Amendments, Supplements and Waivers.
As soon as reasonably practicable
after any amendment, supplement or waiver pursuant to Section 8.01 or 8.02 becomes effective, the Company will send
to the Holders and the Trustee notice that (A) describes the substance of such amendment, supplement or waiver in reasonable detail
and (B) states the effective date thereof; provided, however, that the Company will not be required to provide such
notice to the Holders if such amendment, supplement or waiver is included in a periodic report filed by the Company with the SEC within
four (4) Business Days of its effectiveness. The failure to send, or the existence of any defect in, such notice will not impair
or affect the validity of such amendment, supplement or waiver.
Section 8.04. Revocation,
Effect and Solicitation of Consents; Special Record Dates; Etc.
(A) Revocation
and Effect of Consents. The consent of a Holder of a Note to an amendment, supplement or waiver will bind (and constitute the consent
of) each subsequent Holder of any Note to the extent the same evidences any portion of the same indebtedness as the consenting Holder’s
Note, subject to the right of any Holder of a Note to revoke (if not prohibited pursuant to Section 8.04(B)) any such consent
with respect to such Note by delivering notice of revocation to the Trustee before the time such amendment, supplement or waiver becomes
effective.
(B) Special
Record Dates. The Company may, but is not required to, fix a record date for the purpose of determining the Holders entitled to consent
or take any other action in connection with any amendment, supplement or waiver pursuant to this Article 8. If a record date
is fixed, then, notwithstanding anything to the contrary in Section 8.04(A), only Persons who are Holders as of such record
date (or their duly designated proxies) will be entitled to give such consent, to revoke any consent previously given or to take any such
action, regardless of whether such Persons continue to be Holders after such record date; provided, however, that no such
consent will be valid or effective for more than one hundred and twenty (120) calendar days after such record date.
(C) Solicitation
of Consents. For the avoidance of doubt, each reference in this Indenture or the Notes to the consent of a Holder will be deemed to
include any such consent obtained in connection with a repurchase of, or tender or exchange offer for, any Notes.
(D) Effectiveness
and Binding Effect. Each amendment, supplement or waiver pursuant to this Article 8 will become effective in accordance
with its terms and, when it becomes effective with respect to any Note (or any portion thereof), will thereafter bind every Holder of
such Note (or such portion).
Section 8.05. Notations
and Exchanges.
If
any amendment, supplement or waiver changes the terms of a Note, then the Company may, in its discretion, require the Holder of such Note
to deliver such Note to the Trustee so that the Trustee may place an appropriate notation prepared by the Company on such Note and return
such Note to such Holder. Alternatively, at its discretion, the Company may, in exchange for such
Note, issue, execute and deliver, and the Trustee will authenticate,
in each case in accordance with Section 2.02, a new Note that reflects the changed terms. The failure to make any appropriate
notation or issue a new Note pursuant to this Section 8.05 will not impair or affect the validity of such amendment, supplement
or waiver.
Section 8.06. Trustee
to Execute Supplemental Indentures.
The Trustee will execute and
deliver any amendment or supplemental indenture authorized pursuant to this Article 8; provided, however, that
the Trustee need not (but may, in its sole and absolute discretion) execute or deliver any such amendment or supplemental indenture that
adversely affects the Trustee’s rights, duties, liabilities or immunities. In executing any amendment or supplemental indenture,
the Trustee will be entitled to receive, and (subject to Sections 10.01 and 10.02) will be fully protected in relying on,
an Officer’s Certificate and an Opinion of Counsel stating that (A) the execution and delivery of such amendment or supplemental
indenture is authorized or permitted by this Indenture; and (B) in the case of the Opinion of Counsel, such amendment or supplemental
indenture is valid, binding and enforceable against the Company in accordance with its terms.
Article 9. Satisfaction
and Discharge
Section 9.01. Termination
of Company’s Obligations.
This Indenture will be discharged,
and will cease to be of further effect as to all Notes issued under this Indenture, when:
(A) all
Notes then outstanding (other than Notes replaced pursuant to Section 2.13) have (i) been delivered to the Trustee for
cancellation; or (ii) become due and payable (whether on a Redemption Date, a Fundamental Change Repurchase Date, the Maturity Date,
upon conversion or otherwise) for an amount of cash or Conversion Consideration, as applicable, that has been fixed;
(B) the
Company has caused there to be irrevocably deposited with the Trustee, or with the Paying Agent (or, with respect to Conversion Consideration,
the Conversion Agent), in each case for the benefit of the Holders, or has otherwise caused there to be delivered to the Holders, cash
(or, with respect to Notes to be converted, Conversion Consideration) sufficient to satisfy all amounts or other property due on all Notes
then outstanding (other than Notes replaced pursuant to Section 2.13);
(C) the
Company has paid all other amounts payable by it under this Indenture; and
(D) the
Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that the conditions precedent
to the discharge of this Indenture have been satisfied;
provided,
however, that Article 10 and Section 11.01 will survive such discharge and, until no Notes remain outstanding,
Section 2.15 and the obligations of the Trustee, the Paying Agent and the Conversion Agent with respect to money or other
property deposited with them will survive such discharge.
At the Company’s request,
the Trustee will acknowledge the satisfaction and discharge of this Indenture.
Section 9.02. Repayment
to Company.
Subject to applicable unclaimed
property law, the Trustee, the Paying Agent and the Conversion Agent will promptly notify the Company if there exists (and, at the Company’s
request, promptly deliver to the Company) any cash, Conversion Consideration or other property held by any of them for payment or delivery
on the Notes that remain unclaimed two (2) years after the date on which such payment or delivery was due. After such delivery to
the Company, the Trustee, the Paying Agent and the Conversion Agent will have no further liability to any Holder with respect to such
cash, Conversion Consideration or other property, and Holders entitled to the payment or delivery of such cash, Conversion Consideration
or other property must look to the Company for payment as a general creditor of the Company.
Section 9.03. Reinstatement.
If the Trustee, the Paying
Agent or the Conversion Agent is unable to apply any cash or other property deposited with it pursuant to Section 9.01 because
of any legal proceeding or any order or judgment of any court or other governmental authority that enjoins, restrains or otherwise prohibits
such application, then the discharge of this Indenture pursuant to Section 9.01 will be rescinded; provided, however,
that if the Company thereafter pays or delivers any cash or other property due on the Notes to the Holders thereof, then the Company will
be subrogated to the rights of such Holders to receive such cash or other property from the cash or other property, if any, held by the
Trustee, the Paying Agent or the Conversion Agent, as applicable.
Article 10. Trustee
Section 10.01. Duties
of the Trustee.
(A) If
an Event of Default has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it by this Indenture,
and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct
of such person’s own affairs.
(B) Except
during the continuance of an Event of Default:
(i) the
duties of the Trustee will be determined solely by the express provisions of this Indenture, and the Trustee need perform only those duties
that are specifically set forth in this Indenture and no others, and no implied covenants or obligations will be read into this Indenture
against the Trustee; and
(ii) in
the absence of bad faith or willful misconduct on its part, the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions that are provided to the Trustee and conform to the requirements
of this Indenture. However, the Trustee will examine the
certificates and opinions to determine whether or not they conform to the requirements
of this Indenture but the Trustee need not confirm or investigate the accuracy of any mathematical calculations or other facts stated
therein.
(C) The
Trustee may not be relieved from liabilities for its negligence, bad faith or willful misconduct, except that:
(i) this
paragraph will not limit the effect of Section 10.01(B);
(ii) the
Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the
Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received
by it pursuant to Section 7.06.
(D) Each
provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (A), (B) and (C) of
this Section 10.01, regardless of whether such provision so expressly provides.
(E) No
provision of this Indenture will require the Trustee to expend or risk its own funds or incur any liability.
(F) The
Trustee will not be liable for interest on any money received by it, except as the Trustee may agree in writing with the Company. Money
held in trust by the Trustee need not be segregated from other funds, except to the extent required by law.
Section 10.02. Rights
of the Trustee.
(A) The
Trustee may conclusively rely on any document that it believes to be genuine and signed or presented by the proper Person, and the Trustee
need not investigate any fact or matter stated in such document.
(B)
Before the Trustee acts or refrains from acting, it may require an
Officer’s Certificate, an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits to take
in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel; and the
advice of such counsel, or any Opinion of Counsel, will constitute full and complete authorization of the Trustee to take or omit to
take any action in good faith in reliance thereon without liability.
(C) The
Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any such agent or attorney
appointed with due care.
(D) The
Trustee will not be liable for any action it takes or omits to take in good faith and that it believes to be authorized or within the
rights or powers vested in it by this Indenture.
(E) Unless
otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company will be sufficient if signed
by an Officer of the Company.
(F) The
Trustee need not exercise any rights or powers vested in it by this Indenture at the request or direction of any Holder unless such Holder
has offered the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense that it may incur in
complying with such request or direction.
(G) The
Trustee will not be responsible or liable for any punitive, special, indirect or consequential loss or damage (including lost profits),
even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(H) The
Trustee will not be deemed to have notice or knowledge of any Default or Event of Default unless written notice of any event that is in
fact such a Default or Event of Default is received by a Responsible Officer of the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Notes and this Indenture.
(I) The
rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to,
and will be enforceable by, the Trustee in each of its capacities hereunder, including as Note Agents, and each agent, custodian and other
Person employed to act hereunder.
(J) The
permissive rights of the Trustee to take certain actions under this Indenture will not be construed as a duty unless so specified in this
Indenture.
(K) The
Trustee is not bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee determines to make such further inquiry or investigation, it will be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney at the sole cost of the Company, and will incur no liability of any kind by reason
of such inquiry or investigation.
(L) The
Trustee will not be required to give any bond or surety in respect of the performance of its powers and duties under this Indenture.
(M) The
Trustee may request that the Company deliver a certificate setting forth the names of individuals or titles of officers authorized at
such time to take specified actions pursuant to this Indenture.
Section 10.03. Individual
Rights of the Trustee.
The
Trustee, in its individual or any other capacity, may become the owner or pledgee of any Note and may otherwise deal with the Company
or any of its Affiliates with the same rights that it would have if it were not Trustee; provided, however, that if the
Trustee acquires a “conflicting interest” (within the meaning of Section 310(b) of the Trust Indenture Act), then
it must eliminate such conflict within ninety (90) days or resign as Trustee. Each Note Agent will have the same rights and duties as
the Trustee under this Section 10.03.
Section 10.04. Trustee’s
Disclaimer.
The Trustee will not be (A) responsible
for, and makes no representation as to, the validity or adequacy of this Indenture (or any supplement hereto) or the Notes; (B) accountable
for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under
any provision of this Indenture; (C) responsible for the use or application of any money received by any Paying Agent other than
the Trustee; and (D) responsible for any statement or recital in this Indenture, the Notes or any other document relating to the
sale of the Notes or this Indenture, other than the Trustee’s certificate of authentication.
Section 10.05. Notice
of Defaults.
If
a Default or Event of Default occurs and is continuing and is actually known to a Responsible Officer of the Trustee, then the Trustee
will send Holders a notice of such Default or Event of Default within ninety (90) days after it occurs or, if it is not actually
known to a Responsible Officer of the Trustee at such time, promptly (and in any event within ten (10) Business Days) after it becomes
actually known to a Responsible Officer of the Trustee; provided, however, that, except in the case of a Default or Event
of Default in the payment of the principal of, or interest on, any Note, the Trustee may withhold such notice if and for so long as it
in good faith determines that withholding such notice is in the interests of the Holders.
Section 10.06. Compensation
and Indemnity.
(A) The
Company will, from time to time, pay the Trustee compensation as is agreed between the Company and the Trustee for its acceptance of this
Indenture and services under this Indenture. The Trustee’s compensation will not be limited by any law on compensation of a trustee
of an express trust. In addition to the compensation for the Trustee’s services, the Company will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or made by it under this Indenture, including the reasonable
compensation, disbursements and expenses of the Trustee’s agents and counsel.
(B) The
Company will indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture
(including this Section 10.06) and defending itself against any claim (whether asserted by the Company, any Holder or any
other Person) or liability in connection with the exercise or performance of any of its powers or duties under this Indenture, except
to the extent any such loss, liability or expense may be attributable to its negligence, bad faith or willful misconduct. The Trustee
will promptly notify the Company of any claim for which it may seek indemnity, but the Trustee’s failure to so notify the Company
will not relieve the Company of its obligations under this Section 10.06(B). The Company will defend such claim, and the Trustee
will cooperate in such defense. If the Trustee is advised by counsel that it may have defenses available to it that are in conflict with
the defenses available to the Company, or that there is an actual or potential conflict of interest, then the Trustee may retain separate
counsel, and the Company will pay the reasonable fees and expenses of such counsel (including the reasonable fees and expenses of counsel
to the Trustee incurred in evaluating whether such a conflict exists). The Company need not pay for any settlement of any such claim made
without its consent, which consent will not be unreasonably withheld.
(C) The
obligations of the Company under this Section 10.06 will survive the resignation or removal of the Trustee and the discharge
of this Indenture.
(D) To
secure the Company’s payment obligations in this Section 10.06, the Trustee will have a lien prior to the Notes on all
money or property held or collected by the Trustee, except that held in trust to pay principal of, or interest on, particular Notes, which
lien will survive the discharge of this Indenture.
(E) If
the Trustee incurs expenses or renders services after an Event of Default pursuant to clause (ix) or (x) of Section 7.01(A) occurs,
then such expenses and the compensation for such services (including the fees and expenses of its agents and counsel) are intended to
constitute expenses of administration under any Bankruptcy Law.
Section 10.07. Replacement
of the Trustee.
(A) Notwithstanding
anything to the contrary in this Section 10.07, a resignation or removal of the Trustee, and the appointment of a successor
Trustee, will become effective only upon such successor Trustee’s acceptance of appointment as provided in this Section 10.07.
(B) The
Trustee may resign at any time and be discharged from the trust created by this Indenture by so notifying the Company. The Holders of
a majority in aggregate principal amount of the Notes then outstanding may remove the Trustee by so notifying the Trustee and the Company
in writing. The Company may remove the Trustee if:
(i) the
Trustee fails to comply with Section 10.09;
(ii) the
Trustee is adjudged to be bankrupt or insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
(iii) a
custodian or public officer takes charge of the Trustee or its property; or
(iv) the
Trustee becomes incapable of acting.
(C) If
the Trustee resigns or is removed, or if a vacancy exists in the office of Trustee for any reason, then (i) the Company will promptly
appoint a successor Trustee; and (ii) at any time within one (1) year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of the Notes then outstanding may appoint a successor Trustee to replace such successor Trustee
appointed by the Company.
(D) If
a successor Trustee does not take office within sixty (60) days after the retiring Trustee resigns or is removed, then the retiring Trustee,
the Company or the Holders of at least ten percent (10%) in aggregate principal amount of the Notes then outstanding may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(E) If
the Trustee, after written request by a Holder of at least six (6) months, fails to comply with Section 10.09, then such
Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(F) A
successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Company, upon which notice the
resignation or removal of the retiring Trustee will become effective and the successor Trustee will have all the rights, powers and duties
of the Trustee under this Indenture. The successor Trustee will send notice of its succession to Holders. The retiring Trustee will, upon
payment of all amounts due to it under this Indenture, promptly transfer all property held by it as Trustee to the successor Trustee,
which property will, for the avoidance of doubt, be subject to the lien provided for in Section 10.06(D).
Section 10.08. Successor
Trustee by Merger, Etc.
If the Trustee consolidates,
merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, then such corporation
will become the successor Trustee without any further act.
Section 10.09. Eligibility;
Disqualification.
There will at all times be
a Trustee under this Indenture that is a corporation organized and doing business under the laws of the United States of America or of
any state thereof, that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination
by federal or state authorities and that has a combined capital and surplus of at least $100.0 million as set forth in its most recent
published annual report of condition.
Article 11. Miscellaneous
Section 11.01. Notices.
Any
notice or communication by the Company or the Trustee to the other will be deemed to have been duly given if in writing and delivered
in person or by first class mail (registered or certified, return receipt requested), facsimile transmission, electronic transmission
or other similar means of unsecured electronic communication or overnight air courier guaranteeing next day delivery, or to the other’s
address, which initially is as follows:
If to the Company:
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, MN 55347
Attention: General Counsel
with a copy (which will not constitute
notice) to:
Faegre Drinker Biddle & Reath
LLP
2200 Wells Fargo Center
Minneapolis, MN 55402-3901
Attention: Ben Stacke
If to the Trustee:
U.S. Bank Trust Company, National Association
190 S. LaSalle Street
10th Floor – MK-IL-SLTR
Global Corporate Trust
Chicago, IL 60603
Facsimile: (312) 332-8008
Attention: Linda Garcia
Email: linda.garcia@usbank.com
The Company or the Trustee,
by notice to the other, may designate additional or different addresses (including facsimile numbers and electronic addresses) for subsequent
notices or communications.
All
notices and communications (other than those sent to Holders) will be deemed to have been duly given: (A) at the time delivered by
hand, if personally delivered; (B) five (5) Business Days after being deposited in the mail, postage prepaid, if mailed; (C) when
receipt acknowledged, if transmitted by facsimile, electronic transmission or other similar means of unsecured electronic communication;
and (D) the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.
All
notices or communications required to be made to a Holder pursuant to this Indenture must be made in writing and will be deemed to be
duly sent or given in writing if mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery, to its address shown on the Register; provided, however, that a notice or communication
to a Holder of a Global Note may, but need not, instead be sent pursuant to the Depositary Procedures (in which case, such notice will
be deemed to be duly sent or given in writing). The failure to send a notice or communication to a Holder, or any defect in such notice
or communication, will not affect its sufficiency with respect to any other Holder.
If
the Trustee is then acting as the Depositary’s custodian for the Notes, then, at the reasonable request of the Company to the Trustee,
the Trustee will cause any notice prepared by the Company to be sent to any Holder(s) pursuant to the Depositary Procedures, provided
such request is evidenced in a Company Order delivered, together with the text of such notice, to the Trustee at least two (2) Business
Days before the date such notice is to be so sent. The Trustee will not have any liability relating to the contents of any notice
that it sends to any Holder pursuant to any such Company Order.
If a notice or communication
is mailed or sent in the manner provided above within the time prescribed, it will be deemed to have been duly given, whether or not the
addressee receives it.
Notwithstanding anything to
the contrary in this Indenture or the Notes, whenever any provision of this Indenture requires a party to send notice to another party,
no such notice need be sent if the sending party and the recipient are the same Person acting in different capacities.
Section 11.02. Delivery
of Officer’s Certificate and Opinion of Counsel as to Conditions Precedent.
Upon any request or application
by the Company to the Trustee to take any action under this Indenture (other than the initial authentication of Notes under this Indenture),
the Company will furnish to the Trustee:
(A) an
Officer’s Certificate in form and substance reasonably satisfactory to the Trustee that complies with Section 11.03
and states that, in the opinion of the signatory thereto, all conditions precedent and covenants, if any, provided for in this Indenture
relating to such action have been satisfied; and
(B) an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee that complies with Section 11.03 and states
that, in the opinion of such counsel, all such conditions precedent and covenants, if any, have been satisfied.
Section 11.03. Statements
Required in Officer’s Certificate and Opinion of Counsel.
Each Officer’s Certificate
(other than an Officer’s Certificate pursuant to Section 3.05) or Opinion of Counsel with respect to compliance with
a covenant or condition provided for in this Indenture will include:
(A) a
statement that the signatory thereto has read such covenant or condition;
(B) a
brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained therein
are based;
(C) a
statement that, in the opinion of such signatory, he, she or it has made such examination or investigation as is necessary to enable him,
her or it to express an informed opinion as to whether or not such covenant or condition has been satisfied; and
(D) a
statement as to whether, in the opinion of such signatory, such covenant or condition has been satisfied.
Section 11.04. Rules by
the Trustee, the Registrar and the Paying Agent.
The
Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.
Section 11.05. No
Personal Liability of Directors, Officers, Employees and Stockholders.
No
past, present or future director, officer, employee, incorporator or stockholder of the Company, as such, will have any liability for
any obligations of the Company under this Indenture or the Notes or for any claim based on, in respect of, or by reason of, such obligations
or their creation. By accepting any Note, each Holder waives and releases all such liability. Such waiver
and release are part
of the consideration for the issuance of the Notes.
Section 11.06. Governing
Law; Waiver of Jury Trial.
THIS INDENTURE AND THE NOTES,
AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS INDENTURE OR THE NOTES, WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. EACH OF THE COMPANY AND THE TRUSTEE IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS
CONTEMPLATED BY THIS INDENTURE OR THE NOTES.
Section 11.07. Submission
to Jurisdiction.
Any legal suit, action or
proceeding arising out of or based upon this Indenture or the transactions contemplated by this Indenture may be instituted in the federal
courts of the United States of America located in the City of New York or the courts of the State of New York, in each case located in
the City of New York (collectively, the “Specified Courts”), and each party irrevocably submits to the non-exclusive
jurisdiction of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail (to the
extent allowed under any applicable statute or rule of court) to such party’s address set forth in Section 11.01
will be effective service of process for any such suit, action or proceeding brought in any such court. Each of the Company, the Trustee
and each Holder (by its acceptance of any Note) irrevocably and unconditionally waives any objection to the laying of venue of any suit,
action or other proceeding in the Specified Courts and irrevocably and unconditionally waives and agrees not to plead or claim any such
suit, action or other proceeding has been brought in an inconvenient forum.
Section 11.08. No
Adverse Interpretation of Other Agreements.
Neither this Indenture nor
the Notes may be used to interpret any other indenture, note, loan or debt agreement of the Company or its Subsidiaries or of any other
Person, and no such indenture, note, loan or debt agreement may be used to interpret this Indenture or the Notes.
Section 11.09. Successors.
All
agreements of the Company in this Indenture and the Notes will bind its successors. All agreements of the Trustee in this Indenture
will bind its successors.
Section 11.10. Force
Majeure.
The Trustee and each Note
Agent will not incur any liability for not performing any act or fulfilling any duty, obligation or responsibility under this Indenture
or the Notes by reason of any occurrence beyond its control (including any act or provision of any present or future law or regulation
or governmental authority, act of God or war, civil unrest, local or national disturbance or disaster, act of terrorism or unavailability
of the Federal Reserve Bank wire or facsimile or other wire or communication facility).
Section 11.11. U.S.A.
PATRIOT Act.
The Company acknowledges that,
in accordance with Section 326 of the U.S.A. PATRIOT Act, the Trustee, like all financial institutions, in order to help fight the
funding of terrorism and money laundering, is required to obtain, verify and record information that identifies each person or legal entity
that establishes a relationship or opens an account with the Trustee. The Company agrees to provide the Trustee with such information
as it may request to enable the Trustee to comply with the U.S.A. PATRIOT Act.
Section 11.12. Calculations.
Except as otherwise provided
in this Indenture, the Company will be responsible for making all calculations called for under this Indenture or the Notes, including
determinations of the Last Reported Sale Price, the Daily Conversion Value, the Daily Cash Amount, the Daily Share Amount, the Daily VWAP,
the Trading Price, accrued interest on the Notes, the Redemption Price, the Fundamental Change Repurchase Price and the Conversion Rate.
Neither the Trustee nor any Conversion Agent will be responsible for making any such calculations or monitoring the price of the Common
Stock.
The Company will make all
calculations in good faith, and, absent manifest error, its calculations will be final and binding on all Holders. The Company will provide
a schedule of its calculations to the Trustee and the Conversion Agent, and each of the Trustee and the Conversion Agent may rely conclusively
on the accuracy of the Company’s calculations without independent verification. The Trustee will promptly forward a copy of each
such schedule to a Holder upon its written request therefor.
Section 11.13. Severability.
If any provision of this Indenture
or the Notes is invalid, illegal or unenforceable, then the validity, legality and enforceability of the remaining provisions of this
Indenture or the Notes will not in any way be affected or impaired thereby.
Section 11.14. Counterparts.
The
parties may sign any number of copies of this Indenture. Each signed copy will be an original, and all of them together represent
the same agreement. Delivery of an executed counterpart of this Indenture by facsimile, electronically in portable document format or
in any other format will be effective as delivery of a manually executed counterpart.
Section 11.15. Table
of Contents, Headings, Etc.
The table of contents and
the headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered
a part of this Indenture and will in no way modify or restrict any of the terms or provisions of this Indenture.
Section 11.16. Withholding
Taxes.
Each Holder of a Note agrees,
and each beneficial owner of an interest in a Global Note, by its acquisition of such interest, is deemed to agree, that if the Company
or other applicable withholding agent pays withholding taxes or backup withholding on behalf of such Holder or beneficial owner as a result
of an adjustment or the non-occurrence of an adjustment to the Conversion Rate, then the Company or such withholding agent, as applicable,
may, at its option, withhold from or set off such payments against payments of cash or the delivery of other Conversion Consideration
on such Note, any payments on the Common Stock or sales proceeds received by, or other funds or assets of, such Holder or the beneficial
owner of such Note.
[The Remainder of This Page Intentionally
Left Blank; Signature Page Follows]
IN
WITNESS WHEREOF, the parties to this Indenture have caused this Indenture to be duly executed as of the date first written
above.
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Winnebago Industries, Inc. |
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By: |
/s/ Bryan L. Hughes |
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Name: |
Bryan L. Hughes |
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Title: |
Chief Financial Officer and Senior Vice
President |
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U.S. Bank Trust Company, National Association, as Trustee |
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By: |
/s/ Linda E. Garcia |
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Name: |
Linda E. Garcia |
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Title: |
Vice President |
[Signature Page to Indenture]
EXHIBIT A
FORM OF NOTE
[Insert Global Note Legend, if applicable]
[Insert Restricted Note Legend, if applicable]
[Insert Non-Affiliate Legend]
Winnebago
Industries, Inc.
3.250% Convertible Senior Note due 2030
CUSIP No.: |
[___][Insert for a “restricted” CUSIP number: *] |
Certificate No. [___] |
ISIN
No.: |
[___][Insert for a “restricted” ISIN number:
*] |
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Winnebago Industries, Inc.,
a Minnesota corporation, for value received, promises to pay to [Cede & Co.], or its registered assigns, the principal sum of
[___] dollars ($[___]) [(as revised by the attached Schedule of Exchanges of Interests in the Global Note)]† on January 15,
2030 and to pay interest thereon, as provided in the Indenture referred to below, until the principal and all accrued and unpaid interest
are paid or duly provided for.
Interest Payment Dates: |
January 15 and July 15 of each year, commencing on [date]. |
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Regular Record Dates: |
January 1
and July 1. |
Additional provisions of this
Note are set forth on the other side of this Note.
[The Remainder of This Page Intentionally
Left Blank; Signature Page Follows]
| * | This Note will be deemed to be identified by CUSIP No. [___]
and ISIN No. [___] from and after such time when the Company delivers, pursuant to Section 2.12 of the within-mentioned Indenture, written
notice to the Trustee of the deemed removal of the Restricted Note Legend affixed to this Note. |
| † | Insert bracketed language for Global Notes only. |
IN
WITNESS WHEREOF, Winnebago Industries, Inc. has caused this instrument to be duly executed as of the date set forth below.
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Date: |
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TRUSTEE’S CERTIFICATE OF AUTHENTICATION
U.S. Bank Trust Company, National Association,
as Trustee, certifies that this is one of the Notes referred to in the within-mentioned Indenture.
Date: |
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Winnebago
Industries, Inc.
3.250% Convertible Senior Note due 2030
This Note is one of a duly
authorized issue of notes of Winnebago Industries, Inc., a Minnesota corporation (the “Company”), designated as
its 3.250% Convertible Senior Notes due 2030 (the “Notes”), all issued or to be issued pursuant to an indenture, dated
as of January 23, 2024 (as the same may be amended from time to time, the “Indenture”), between the Company and
U.S. Bank Trust Company, National Association, as trustee. Capitalized terms used in this Note without definition have the respective
meanings ascribed to them in the Indenture.
The Indenture sets forth the
rights and obligations of the Company, the Trustee and the Holders and the terms of the Notes. Notwithstanding anything to the contrary
in this Note, to the extent that any provision of this Note conflicts with the provisions of the Indenture, the provisions of the Indenture
will control.
1. Interest.
This Note will accrue interest at a rate and in the manner set forth in Section 2.05 of the Indenture. Stated Interest on this Note
will begin to accrue from, and including, [date].
2. Maturity.
This Note will mature on January 15, 2030, unless earlier repurchased, redeemed or converted.
3. Method
of Payment. Cash amounts due on this Note will be paid in the manner set forth in Section 2.04 of the Indenture.
4. Persons
Deemed Owners. The Holder of this Note will be treated as the owner of this Note for all purposes.
5. Denominations;
Transfers and Exchanges. All Notes will be in registered form, without coupons, in principal amounts equal to any Authorized Denominations.
Subject to the terms of the Indenture, the Holder of this Note may transfer or exchange this Note by presenting it to the Registrar and
delivering any required documentation or other materials.
6. Right
of Holders to Require the Company to Repurchase Notes upon a Fundamental Change. If a Fundamental Change occurs, then each Holder
will have the right to require the Company to repurchase such Holder’s Notes (or any portion thereof in an Authorized Denomination)
for cash in the manner, and subject to the terms, set forth in Section 4.02 of the Indenture.
7. Right
of the Company to Redeem the Notes. The Company will have the right to redeem the Notes for cash in the manner, and subject to the
terms, set forth in Section 4.03 of the Indenture.
8. Conversion.
The Holder of this Note may convert this Note into Conversion Consideration in the manner, and subject to the terms, set forth in Article 5
of the Indenture.
9. When
the Company May Merge, Etc. Article 6 of the Indenture places limited restrictions on the Company’s ability to be
a party to a Business Combination Event.
10. Defaults
and Remedies. If an Event of Default occurs, then the principal amount of, and all accrued and unpaid interest on, all of the Notes
then outstanding may (and, in certain circumstances, will automatically) become due and payable in the manner, and subject to the terms,
set forth in Article 7 of the Indenture.
11. Amendments,
Supplements and Waivers. The Company and the Trustee may amend or supplement the Indenture or the Notes or waive compliance with any
provision of the Indenture or the Notes in the manner, and subject to the terms, set forth in Section 7.05 and Article 8 of
the Indenture.
12. No
Personal Liability of Directors, Officers, Employees and Stockholders. No past, present or future director, officer, employee, incorporator
or stockholder of the Company, as such, will have any liability for any obligations of the Company under the Indenture or the Notes or
for any claim based on, in respect of, or by reason of, such obligations or their creation. By accepting any Note, each Holder waives
and releases all such liability. Such waiver and release are part of the consideration for the issuance of the Notes.
13. Authentication.
No Note will be valid until it is authenticated by the Trustee. A Note will be deemed to be duly authenticated only when an authorized
signatory of the Trustee (or a duly appointed authenticating agent) manually signs the certificate of authentication of such Note.
14. Abbreviations.
Customary abbreviations may be used in the name of a Holder or its assignee, such as TEN COM (tenants in common), TEN ENT (tenants by
the entireties), JT TEN (joint tenants with right of survivorship and not as tenants in common), CUST (custodian), and U/G/M/A (Uniform
Gift to Minors Act).
15. Governing
Law. THIS NOTE, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS NOTE, WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
* * *
To request a copy of the Indenture,
which the Company will provide to any Holder at no charge, please send a written request to the following address:
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, MN 55347
Attention: General Counsel
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL
NOTE*
INITIAL PRINCIPAL AMOUNT OF THIS GLOBAL NOTE: $[___]
The following exchanges, transfers or cancellations
of this Global Note have been made:
Date |
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Amount of
Increase
(Decrease) in
Principal Amount of
this Global Note |
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Principal
Amount of
this Global Note
After Such Increase
(Decrease) |
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Signature
of
Authorized
Signatory of Trustee |
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| * | Insert for Global Notes only. |
CONVERSION NOTICE
Winnebago
Industries, Inc.
3.250% Convertible Senior Notes due 2030
Subject to the terms of the Indenture, by executing
and delivering this Conversion Notice, the undersigned Holder of the Note identified below directs the Company to convert (check one):
| ¨ | the entire principal amount of |
| ¨ | $ *
aggregate principal amount of |
the Note identified by CUSIP No.
and Certificate No. .
The undersigned acknowledges that if the Conversion
Date of a Note to be converted is after a Regular Record Date and before the next Interest Payment Date, then such Note, when surrendered
for conversion, must, in certain circumstances, be accompanied with an amount of cash equal to the interest that would have accrued on
such Note to, but excluding, such Interest Payment Date. The undersigned Holder represents to the Company that, as of the Conversion Date
relating to this Conversion Notice, the undersigned Holder is either a “qualified institutional buyer” (as defined in Rule 144A)
or an “accredited investor” (as defined in Rule 501).
Date: |
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(Legal Name of Holder) |
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By: |
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Name: |
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Title: |
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Signature Guaranteed: |
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Participant in a Recognized Signature |
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Guarantee Medallion Program |
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By: |
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Authorized Signatory |
| * | Must be an Authorized Denomination. |
FUNDAMENTAL CHANGE REPURCHASE NOTICE
Winnebago
Industries, Inc.
3.250% Convertible Senior Notes due 2030
Subject to the terms of the Indenture, by executing
and delivering this Fundamental Change Repurchase Notice, the undersigned Holder of the Note identified below is exercising its Fundamental
Change Repurchase Right with respect to (check one):
| ¨ | the entire principal amount of |
| ¨ | $ *
aggregate principal amount of |
the Note identified by CUSIP No.
and Certificate No. .
The undersigned acknowledges that this Note, duly
endorsed for transfer, must be delivered to the Paying Agent before the Fundamental Change Repurchase Price will be paid.
Date: |
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(Legal Name of Holder) |
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By: |
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Name: |
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Title: |
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Signature Guaranteed: |
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Participant in a Recognized Signature |
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Guarantee Medallion Program |
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By: |
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Authorized Signatory |
| * | Must be an Authorized Denomination. |
ASSIGNMENT FORM
Winnebago
Industries, Inc.
3.250% Convertible Senior Notes due 2030
Subject to the terms of the Indenture, the undersigned
Holder of the Note identified below assigns (check one):
| ¨ | the entire principal amount of |
| ¨ | $ *
aggregate principal amount of |
the Note identified by CUSIP No.
and Certificate No. ,
and all rights thereunder, to:
Name: |
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Address: |
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Social security or tax id. #: |
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and irrevocably appoints: |
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as agent to transfer the within Note on the books
of the Company. The agent may substitute another to act for him/her.
Date: |
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(Legal Name of Holder) |
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By: |
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Name: |
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Title: |
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Signature Guaranteed: |
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Participant in a Recognized Signature |
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Guarantee Medallion Program |
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By: |
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Authorized Signatory |
| * | Must be an Authorized Denomination. |
TRANSFEROR ACKNOWLEDGEMENT
If the within Note bears a Restricted Note Legend,
the undersigned further certifies that (check one):
| 1. | ¨ |
Such Transfer is being made to the Company or a Subsidiary of the Company. |
| 2. | ¨ |
Such Transfer is being made pursuant to, and in accordance with, a registration statement that is effective under the Securities Act
at the time of the Transfer. |
| 3. | ¨ |
Such Transfer is being made pursuant to, and in accordance with, Rule 144A under the Securities Act, and, accordingly, the undersigned
further certifies that the within Note is being transferred to a Person that the undersigned reasonably believes is purchasing the within
Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such
Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities
Act in a transaction meeting the requirements of Rule 144A. If this item is checked, then the transferee must complete and execute
the acknowledgment contained on the next page. |
| 4. | ¨ |
Such Transfer is being made pursuant to, and in accordance with, any other available exemption from the registration requirements of
the Securities Act (including, if available, the exemption provided by Rule 144 under the Securities Act). |
By: |
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Title: |
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Signature Guaranteed: |
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(Participant in a Recognized Signature |
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Guarantee Medallion Program) |
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By: |
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Authorized Signatory |
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TRANSFEREE ACKNOWLEDGEMENT
The undersigned represents that it is purchasing
the within Note for its own account, or for one or more accounts with respect to which the undersigned exercises sole investment discretion,
and that and the undersigned and each such account is a “qualified institutional buyer” within the meaning of Rule 144A
under the Securities Act. The undersigned acknowledges that the transferor is relying, in transferring the within Note on the exemption
from the registration and prospectus-delivery requirements of the Securities Act of 1933, as amended, provided by Rule 144A and that
the undersigned has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A.
EXHIBIT B-1
FORM OF RESTRICTED NOTE LEGEND
THE OFFER AND SALE OF THIS NOTE AND THE SHARES
OF COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE
WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
| (1) | REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER”
(WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH
ACCOUNT; AND |
| (2) | AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE OR
ANY BENEFICIAL INTEREST HEREIN, EXCEPT ONLY: |
| (A) | TO THE COMPANY OR ANY SUBSIDIARY THEREOF; |
| (B) | PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT; |
| (C) | TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT; |
| (D) | PURSUANT TO RULE 144 UNDER THE SECURITIES ACT; OR |
| (E) | PURSUANT TO ANY OTHER EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT. |
BEFORE THE REGISTRATION OF ANY SALE OR TRANSFER
IN ACCORDANCE WITH (2)(C), (D) OR (E) ABOVE, THE COMPANY, THE TRUSTEE AND THE REGISTRAR RESERVE THE RIGHT TO REQUIRE THE DELIVERY
OF SUCH CERTIFICATES OR OTHER DOCUMENTATION OR EVIDENCE AS THEY MAY REASONABLY REQUIRE IN ORDER TO DETERMINE THAT THE PROPOSED SALE
OR TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.*
| * | This paragraph and the immediately preceding paragraph will
be deemed to be removed from the face of this Note at such time when the Company delivers written notice to the Trustee of such deemed
removal pursuant to Section 2.12 of the within-mentioned Indenture. |
EXHIBIT B-2
FORM OF GLOBAL NOTE LEGEND
THIS IS A GLOBAL NOTE WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED
BY THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS THE OWNER AND HOLDER OF THIS NOTE FOR ALL PURPOSES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE WILL BE LIMITED
TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC, OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE, AND TRANSFERS
OF PORTIONS OF THIS GLOBAL NOTE WILL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE 2 OF THE
INDENTURE HEREINAFTER REFERRED TO.
EXHIBIT B-3
FORM OF NON-AFFILIATE LEGEND
NO AFFILIATE (AS DEFINED IN RULE 144 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED) OF THE COMPANY MAY PURCHASE OR OTHERWISE ACQUIRE THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN.
Exhibit
10.1
Execution
Version
Winnebago Industries, Inc.
3.250% Convertible
Senior Notes Due 2030
Purchase Agreement
January 18, 2024
Goldman Sachs & Co. LLC
200 West Street
New York, New York 10282-2198
BMO Capital Markets Corp.
151 West 42nd Street, 32nd Floor
New York, New York 10036
Ladies and Gentlemen:
Winnebago Industries, Inc.,
a Minnesota corporation (the “Company”), proposes, subject to the terms and conditions set forth in this agreement (this “Agreement”),
to issue and sell to the several Initial Purchasers named in Schedule I hereto (the “Purchasers”) an aggregate of $300,000,000
principal amount of its 3.250% Convertible Senior Notes due 2030 (the “Firm Securities”) and, at the option of the Purchasers,
up to an additional $50,000,000 aggregate principal amount of its 3.250% Convertible Senior Notes due 2030 (the “Optional Securities”)
if and to the extent that the Purchasers shall exercise the option to purchase such Optional Securities granted to the Purchasers in Section 2
hereof. The Firm Securities and the Optional Securities are herein referred to collectively as the “Securities.” The Securities
will be convertible into cash and, if applicable, shares of common stock, par value $0.50 per share, of the Company (“Stock”),
at the option of the Company, on the terms, and subject to the conditions, set forth in the Indenture (as defined below).
The Securities will be issued
pursuant to an indenture (the “Indenture”), dated as of the First Time of Delivery (as defined below), that will be entered
into by and between the Company and U.S. Bank National Association, as trustee, registrar, paying agent and conversion agent (in such
capacity, the “Trustee”).
In connection with the offering
of the Firm Securities, the Company is separately entering into convertible note hedge and warrant transactions with certain financial
institutions, including one or more of the Purchasers (the “Call Spread Counterparties”) pursuant to convertible note hedge
confirmations (the “Base Bond Hedge Confirmations”) and warrant confirmations (the “Base Warrant Confirmations”
and, together with the Base Bond Hedge Confirmations, the “Base Call Spread Confirmations”), respectively, each to be dated
the date hereof, and in connection with any exercise by the Purchasers of their option to purchase any Optional Securities, the Company
and the Call Spread Counterparties will enter into additional convertible note hedge and warrant transactions pursuant to additional convertible
note hedge confirmations (the “Additional Bond Hedge Confirmations”) and additional warrant confirmations (the “Additional
Warrant Confirmations” and, the Additional Warrant Confirmations together with the Additional Bond Hedge Confirmations, the “Additional
Call Spread Confirmations”), respectively, each to be dated the date on which the Purchasers exercise their option
to purchase such Optional Securities. We refer
to the Base Call Spread Confirmations and the Additional Call Spread Confirmations collectively herein as the “Call Spread Confirmations.”
This Agreement, the Securities
and the Indenture are hereinafter referred to collectively as the “Transaction Documents.”
1. | The Company represents and warrants to, and agrees with, each of the Purchasers as of the date hereof
and as of the First Time of Delivery, that: |
| (a) | A preliminary offering memorandum, dated January 17, 2024 (the “Preliminary
Offering Memorandum”), and an offering memorandum, dated January 18, 2024 (the “Offering Memorandum”), have been
prepared in connection with the offering of the Securities and any shares of Stock issuable upon conversion thereof. The Preliminary
Offering Memorandum, as amended and supplemented immediately prior to the Applicable Time (as defined in Section 1(b)), is hereinafter
referred to as the “Pricing Memorandum.” Any reference to the Preliminary Offering Memorandum, the Pricing Memorandum or the
Offering Memorandum shall be deemed to refer to and include all documents filed with the United States Securities and Exchange Commission
(the “Commission”) pursuant to Section 13(a), 13(c) or 15(d) of the United States Securities Exchange Act of
1934, as amended (the “Exchange Act”), on or prior to the date of such memorandum and incorporated by reference therein and
any reference to the Preliminary Offering Memorandum, the Pricing Memorandum or the Offering Memorandum, as the case may be, as amended
or supplemented, as of any specified date, shall be deemed to include (i) any documents filed with the Commission pursuant to Section 13(a),
13(c) or 15(d) of the Exchange Act after the date of the Preliminary Offering Memorandum or the Offering Memorandum, as the
case may be, and prior to such specified date and (ii) any Additional Issuer Information (as defined in Section 5(f)) furnished
by the Company prior to the completion of the distribution of the Securities; and all documents filed under the Exchange Act and so deemed
to be included in the Preliminary Offering Memorandum, the Pricing Memorandum or the Offering Memorandum, as the case may be, or any amendment
or supplement thereto are hereinafter called the “Exchange Act Reports” (provided that where only sections of such documents
are specifically incorporated by reference, only such sections shall be considered to be part of the “Exchange Act Reports”).
The Exchange Act Reports, when they were or are filed with the Commission, conformed or will conform in all material respects to the applicable
requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder; and no such documents were
filed with the Commission since the Commission’s close of business on the business day immediately prior to the date of this Agreement
and prior to the execution of this Agreement, except as set forth on Schedule II(a) hereof. The Preliminary Offering Memorandum,
the Pricing Memorandum or the Offering Memorandum and any amendments or supplements thereto and the Exchange Act Reports did not and will
not, as of their respective dates, contain an untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by a Purchaser expressly for use therein. |
| (b) | For the purposes of this Agreement, the “Applicable Time” is 7:15 p.m., New York City time,
on the date of this Agreement; the Pricing Memorandum as supplemented by the |
|
|
information set forth in Schedule III hereto, taken together (collectively, the “Pricing Disclosure Package”) as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Company Supplemental Disclosure Document (as defined in Section 6(i)) listed on Schedule II(b) hereto and each Permitted General Solicitation Material (as defined in Section 6(i)) listed on Schedule II(d) hereto) does not conflict with the information contained in the Pricing Memorandum or the Offering Memorandum and each such Company Supplemental Disclosure Document and Permitted General Solicitation Material, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions made in a Company Supplemental Disclosure Document or Permitted General Solicitation Material in reliance upon and in conformity with information furnished in writing to the Company by a Purchaser expressly for use therein. |
| (c) | Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial
statements included in the Pricing Memorandum any material loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than
as set forth or contemplated in the Pricing Memorandum; and, since the respective dates as of which information is given in the Pricing
Memorandum, there has not been any change in the capital stock (except for subsequent issuances, if any, pursuant to reservations, agreements
or employee benefit plans referred to in the Pricing Memorandum and Offering Memorandum or pursuant to the exercise of options referred
to in the Pricing Memorandum and Offering Memorandum) or long-term debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial
position, stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole, otherwise than as
set forth or contemplated in the Pricing Memorandum. |
| (d) | The Company and its subsidiaries have good and marketable title in fee simple to all real property and
good and marketable title to all personal property owned by them as described in the Pricing Memorandum and Offering Memorandum, in each
case free and clear of all liens, encumbrances and defects except such as are described in the Pricing Memorandum and Offering Memorandum
or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and any real property and buildings held under lease by the Company and its subsidiaries
as described in the Pricing Memorandum and Offering Memorandum are held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company
and its subsidiaries. |
| (e) | The Company and each of its subsidiaries has been duly incorporated or formed and is validly existing
as a corporation or limited liability company in good standing under the |
|
|
laws of the jurisdiction in which it is incorporated, chartered, organized or formed with full corporate or limited liability company, as applicable, power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Pricing Disclosure Package and the Offering Memorandum, and is duly qualified to do business as a foreign corporation or limited liability company and is in good standing under the laws of each jurisdiction which requires such qualification, and in which the failure to so qualify or to so be in good standing would have a material adverse effect on the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries, taken as a whole (“Material Adverse Effect”). None of the outstanding shares of capital stock of any subsidiary were issued in violation of the preemptive or similar rights of any securityholder of such subsidiary. |
| (f) | The Company has an authorized capitalization as set forth in the Pricing Disclosure Package and the Offering
Memorandum, and all of the issued and outstanding shares of capital stock of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable; the shares of Stock initially issuable upon conversion of the Securities (assuming full physical
settlement of the Securities upon conversion and the maximum conversion rate under any “make-whole” adjustment applies (the
“Conversion Shares”)) have been duly and validly authorized and reserved for issuance and, when issued and delivered in accordance
with the provisions of the Securities and the Indenture referred to below, will be duly and validly issued, fully paid and non-assessable
and will conform to the description of the Stock contained in the Pricing Disclosure Package and the Offering Memorandum; and all of the
issued and outstanding shares of capital stock, partnership interests or membership interests, as applicable, of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims. |
| (g) | The Securities have been duly authorized by the Company and, when issued and delivered at each Time of
Delivery pursuant to this Agreement, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company enforceable against the Company, entitled to the benefits provided by the Indenture, under which they
are to be issued, which will be substantially in the form previously delivered to you, subject, as to enforcement, to bankruptcy, insolvency,
receivership, fraudulent transfer, fraudulent conveyance, voidable transaction, voidable preference, reorganization, moratorium, assignment
for the benefit of creditors’ rights generally, equitable principles of general applicability (regardless of whether considered
in a proceeding in equity or at law) and other laws of general applicability relating to or affecting creditors’ rights and to general
equity principles; the Indenture has been duly authorized by the Company and, when executed and delivered by the Company and the Trustee,
the Indenture will constitute a valid and legally binding instrument, enforceable against the Company in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, receivership, fraudulent transfer, fraudulent conveyance, voidable transaction, voidable
preference, reorganization, moratorium, assignment for the benefit of creditors’ rights generally, equitable principles of general
applicability (regardless of whether considered in a proceeding in equity or at law) and other laws of general applicability relating
to or affecting creditors’ rights and to general equity principles and entitled to the benefits provided by the Indenture; and the
Securities and the Indenture will conform in all material respects to the descriptions thereof in the |
| | Pricing Disclosure Package and the Offering Memorandum and will be in substantially the form
previously delivered to you. |
| (h) | The Base Call Spread Confirmations have been, and any Additional Call Spread Confirmations on the date
or dates that the Purchasers exercise their right to purchase the relevant Optional Securities will have been, duly authorized, executed
and delivered by the Company and, assuming due execution and delivery thereof by the counterparties, constitute, or will constitute, as
the case may be, valid and legally binding agreements of the Company enforceable against the Company in accordance with their terms, subject,
as to enforcement, to bankruptcy, insolvency, receivership, fraudulent transfer, fraudulent conveyance, voidable transaction, voidable
preference, reorganization, moratorium, assignment for the benefit of creditors’ rights generally, equitable principles of general
applicability (regardless of whether considered in a proceeding in equity or at law) and other laws of general applicability relating
to or affecting creditors’ rights and to general equity principles. A total of 3,980,340 shares of Stock issuable under the Base
Warrant Confirmations and any Additional Warrant Confirmations (the “Warrant Shares”), have been duly authorized and reserved
for issuance by all necessary corporate action and all shares of Stock issuable upon conversion of the Securities will be duly authorized
and reserved for issuance. All shares of Stock issuable upon conversion of the Securities and when issued in accordance with the terms
of the Securities and the Indenture, and all Warrant Shares, when issued in accordance with the Base Warrant Confirmations or the Additional
Warrant Confirmations, as applicable, will be validly issued, fully paid and non-assessable; no holder of such shares will be subject
to personal liability by reason of being such a holder; and the issuance of such shares upon such conversion will not be subject to the
preemptive or other similar rights of any securityholder of the Company. |
| (i) | The Company has all requisite corporate power to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly and validly authorized, executed and delivered by the Company. |
| (j) | None of the transactions contemplated by this Agreement or the other Transaction Documents (including,
without limitation, the use of the proceeds from the sale of the Securities) will violate or result in a violation of Section 7 of
the Exchange Act, or any regulation promulgated thereunder, including, without limitation, Regulations T, U, and X of the Board of Governors
of the Federal Reserve System. |
| (k) | The Company has not taken, directly or indirectly, any action designed to or that would constitute or
that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the Securities. |
| (l) | The issue and sale of the Securities (and any conversion of Securities
or issuance of Stock upon conversion), the compliance by the Company with all of the provisions of the Transaction Documents (and the
consummation of the transactions contemplated therein), the Call Spread Confirmations (and the consummation of the transactions contemplated
therein) and the application of the proceeds from the sale of the Securities as described under “Use of Proceeds” in the Pricing
Disclosure Package and the Offering Memorandum will not conflict with or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to |
| | which any of the property or
assets of the Company or any of its subsidiaries is subject, except for such conflicts, breaches or defaults that would not, singly
or in the aggregate, result in a Material Adverse Effect, nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws or equivalent organizational documents of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries
or any of its properties, except for such violations of any statute or any order, rule or regulation that would not, singly or
in the aggregate, result in a Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required for the transactions contemplated by this Agreement, under the
Call Spread Confirmations or the other Transaction Documents (including the conversion of Securities or issuance of Stock
upon conversion), except such consents, approvals, authorizations, registrations or qualifications as have already been obtained or
may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the
Purchasers. |
| (m) | Neither the Company nor any of its subsidiaries is (i) in violation of its Certificate of Incorporation
or By-laws or equivalent organizational document; (ii) in default in the performance or observance of any material obligation, covenant
or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is
a party or by which it or any of its properties may be bound; or (iii) in violation of any law or statute or any judgment, order,
rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clause (iii) above,
for any such violation that would not, individually or in the aggregate, have a Material Adverse Effect. |
| (n) | The statements set forth in the Pricing Memorandum and the Offering Memorandum under the captions “Description
of Notes” and “Description of Securities” insofar as they purport to constitute a summary of the terms of the Securities
and the Stock, under the captions “Certain Relationships and Related Transactions, and Director Independence,” “Description
of Other Indebtedness” and “Description of the Concurrent Convertible Note Hedge Transactions and Warrant Transactions”
insofar as they purport to constitute a summary of the terms of the documents referred to therein, and under the caption “Material
U.S. Federal Income Tax Considerations” insofar as they purport to describe the provisions of the laws and documents referred to
therein, fairly present and summarize, in all material respects, the matters referred to therein. |
| (o) | The consolidated historical financial statements and schedules of the Company and its consolidated subsidiaries
included in the Pricing Disclosure Package and Offering Memorandum present fairly in all material respects the financial condition, results
of operations and cash flows of the entities to which they relate as of the dates and for the periods indicated, comply as to form in
all material respects with the applicable accounting requirements of the Act and have been prepared in conformity with U.S. generally
accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved (except as otherwise
noted therein). The pro forma financial statements, if any, included in the Pricing Disclosure Package and Offering Memorandum present
fairly in all material respects the information shown therein and include assumptions that provide a reasonable basis for presenting the
significant effects directly attributable to the |
| | transactions and events described therein.
The pro forma financial statements, if any, included in the Pricing Disclosure Package and Offering Memorandum comply as to form in all
material respects with the applicable accounting requirements of Regulation S-X under the Act and the Commission’s rules and
guidelines with respect to pro forma financial statements and the pro forma adjustments have been properly applied to the historical
amounts in the compilation of those statements. The interactive data in eXtensible Business Reporting Language included or incorporated
by reference in each of the Preliminary Offering Memorandum, the Pricing Disclosure Package and the Offering Memorandum fairly presents
the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines
applicable thereto. |
| (p) | No action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its subsidiaries or its or their property is pending or, to the knowledge
of the Company, threatened that (i) could reasonably be expected to have a material adverse effect on the performance of this Agreement,
the Call Spread Transactions or the consummation of the Transactions or (ii) could reasonably be expected to have a Material
Adverse Effect, except as set forth in or contemplated in the Pricing Disclosure Package and the Offering Memorandum (exclusive of any
supplement thereto). |
| (q) | The Company and its subsidiaries are not required to register as an “investment company” as
defined in the Investment Company Act of 1940, as amended. |
| (r) | Deloitte & Touche LLP, who have certified certain financial statements of the Company and its
consolidated subsidiaries and delivered their report with respect to the audited consolidated financial statements and schedules included
in the Pricing Disclosure Package and the Offering Memorandum, are independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations thereunder. |
| (s) | The Company has filed all tax returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a Material Adverse Effect, except as set forth in or contemplated in
the Pricing Disclosure Package and the Offering Memorandum (exclusive of any supplement thereto)) and has paid all taxes required to be
paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty the amount or validity of which is currently being contested in good faith or as would not have
a Material Adverse Effect, except as set forth in or contemplated in the Pricing Disclosure Package and the Offering Memorandum (exclusive
of any supplement thereto). |
| (t) | No strike or labor dispute with the employees of the Company or any of its subsidiaries exists or, to
the knowledge of the Company, is threatened except as would not reasonably be expected to result in a Material Adverse Effect, except
as set forth in or contemplated in the Pricing Disclosure Package and the Offering Memorandum (exclusive of any supplement thereto). |
| (u) | The Company and each of its subsidiaries maintain insurance against such losses and risks and in such
amounts as are adequate and customarily maintained by companies engaged in the same or similar businesses operating in the same or similar
locations, |
| | except where failure to do so would not result in a Material Adverse Effect; all premiums in respect
of such insurance have been paid to the extent due and payable; and there are no claims by the Company or any of its subsidiaries
under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of
rights clause where such claims would be reasonably expected to have a Material Adverse Effect. |
| (v) | No subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends
to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or assets to the Company or
any other subsidiary of the Company, except as provided under applicable law or as described in or contemplated by the Pricing Disclosure
Package and the Offering Memorandum (exclusive of any supplement thereto). |
| (w) | The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations
issued by all applicable governmental authorities necessary to conduct their respective businesses as set forth in the Pricing Disclosure
Package and the Offering Memorandum, except where the failure to so possess would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, and neither the Company nor any such subsidiary has received any written notice of proceedings
relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as set forth in or contemplated in
the Pricing Disclosure Package and the Offering Memorandum (exclusive of any supplement thereto). |
| (x) | The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain
asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization;
(iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences; and (v) interactive data in eXtensible Business Reporting Language included or incorporated
by reference in each of the Preliminary Offering Memorandum, the Pricing Disclosure Package and the Offering Memorandum is prepared in
accordance with the Commission’s rules and guidelines applicable thereto. There were no material weaknesses in the Company’s
and its subsidiaries’ internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) as
of the end of the period covered by the most recent audited financial statements included in the Pricing Disclosure Package and the Offering
Memorandum. The Company and its subsidiaries’ internal controls over financial reporting are effective as of the end of the period
covered by the most recent audited financial statements included in the Pricing Disclosure Package and the Offering Memorandum and since
the date of the latest audited financial statements included in the Pricing Memorandum, there has been no change in the Company’s
internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting. |
| (y) | The Company and its subsidiaries maintain “disclosure controls and procedures” (as such term
is defined in Rule 13a-15(e) under the Exchange Act) and such disclosure controls and procedures were effective as of the end
of the period covered by the most recent unaudited financial statements included in the Pricing Memorandum and the Offering Memorandum. |
| (z) | Except as described in the Pricing Disclosure Package and the Offering Memorandum or as would not, singly
or in the aggregate, reasonably be expected to result in a Material Adverse Effect, the Company and its subsidiaries are (i) in compliance
with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have
received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) have not received written notice of any actual or potential liability under any Environmental
Laws. Except as set forth in the Pricing Disclosure Package and the Offering Memorandum, neither the Company nor any of the subsidiaries
has been named as a “potentially responsible party” under the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended. |
| (aa) | None of the following events has occurred or exists: (i) a failure to fulfill the obligations, if
any, under the minimum funding standards of Section 302 of the United States Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), and the regulations and published interpretations thereunder with respect to a Plan (as defined below),
determined without regard to any waiver of such obligations or extension of any amortization period; or (ii) an audit or investigation
by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any other federal or state
governmental agency or any foreign regulatory agency with respect to the employment or compensation of employees by any of the Company
or any of its subsidiaries, which audit or investigation if resulting in an unfavorable decision, ruling or finding would have a Material
Adverse Effect. None of the following events has occurred: (i) a material increase in the aggregate amount of contributions required
to be made to all Plans in the current fiscal year of the Company and its subsidiaries compared to the amount of such contributions made
in the most recently completed fiscal year of the Company and its subsidiaries; (ii) a material increase in the “accumulated
post-retirement benefit obligations” (within the meaning of Statement of Financial Accounting Standards 106) of the Company and
its subsidiaries compared to the amount of such obligations in the most recently completed fiscal year of the Company and its subsidiaries;
or (iii) any event or condition giving rise to a liability under Title IV of ERISA that could have a Material Adverse Effect. For
purposes of this paragraph, the term “Plan” means a plan (within the meaning of Section 3(3) of ERISA) subject to
Title IV of ERISA with respect to which the Company or any of its subsidiaries may have any liability. |
| (bb) | There is and has been no failure on the part of the Company and any of the Company’s directors or
officers, in their capacities as such, to comply in all material respects with any provision of the Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”) applicable to the Company, including
Section 402 relating to loans and Sections 302 and 906 relating to certifications. |
| (cc) | None of the Company, any of its subsidiaries, its directors and officers, nor, to the knowledge of the
Company, any agent, employee, affiliate or other person associated with or acting on behalf of the Company or any of its subsidiaries
has (i) made any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made
any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated
or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; (iv) violated or is in violation of any provision
of the Bribery Act 2010 of the United Kingdom; or (v) made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment. The Company and its subsidiaries have instituted, maintain and enforce, and will continue to maintain and enforce, policies and
procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws. |
| (dd) | The operations of the Company and its subsidiaries are and have been conducted at all times in compliance
with the requirements of applicable anti-money laundering laws, including, but not limited to, the Bank Secrecy Act of 1970, as amended
by the USA PATRIOT ACT of 2001, and the rules and regulations promulgated thereunder, and the anti-money laundering laws of the various
jurisdictions in which the Company and its subsidiaries conduct business (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or
any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened. |
| (ee) | The Company and its subsidiaries, its directors and officers or, to the knowledge of the Company, any
agent, employee or affiliate of the Company or any of its subsidiaries is not currently the subject or the target of any sanctions administered
or enforced by the U.S. Government, including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the
Treasury (“OFAC”), or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company or any
of its subsidiaries located, organized or resident in a country or territory that is the subject or target of Sanctions, including, without
limitation, Crimea Region of Ukraine, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, Cuba, Iran,
North Korea, Syria and Russia (each, a “Sanctioned Country”); and the Company will not directly or indirectly use the proceeds
of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity (i) to fund or facilitate any activities of or business with any person, or in any country or territory,
that, at the time of such funding, is the subject or the target of Sanctions, (ii) to fund or facilitate any activities of or business
in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating
in the transaction, whether as initial purchaser, advisor, investor or otherwise) of Sanctions. |
| (ff) | Other than as set forth in the Pricing Disclosure Package and the Offering Memorandum, there are no legal
or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a material adverse effect on the current or future financial position, stockholders’ equity or results
of operations of the Company and its subsidiaries or would materially adversely affect on the ability to consummate any of the transactions
described in the Pricing Disclosure Package and Offering Memorandum; |
| | and, to the best of the Company’s knowledge,
no such proceedings are threatened or contemplated by governmental authorities or threatened by others. |
| (gg) | The Company is subject to Section 13 or 15(d) of the Exchange
Act. |
| (hh) | Neither the Company nor any person acting on its behalf (other than the Purchasers, as to which no representation
is made) has offered or sold the Securities by means of any general solicitation or general advertising within the meaning of Rule 502(c) under
the Act (other than by means of a Permitted General Solicitation, as defined below). |
| (ii) | Within the preceding six months, neither the Company nor any other person acting on behalf of the Company
has offered or sold to any person any Securities, or any securities of the same or a similar class as the Securities, other than Securities
offered or sold to the Purchasers hereunder. The Company will take reasonable precautions designed to insure that any offer or sale, direct
or indirect, in the United States or to any U.S. person (as defined in Rule 902 under the Act) of any Securities or any substantially
similar security issued by the Company, within six months subsequent to the date on which the distribution of the Securities has been
completed (as notified to the Company by the Purchasers), is made under restrictions and other circumstances reasonably designed not to
affect the status of the offer and sale of the Securities in the United States and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the Act. |
| (jj) | (i)(x) Except as disclosed in the Pricing Disclosure Package and the Offering Memorandum, there has
been no security breach or other compromise of or relating to any of the Company’s or its subsidiaries’ information technology
and computer systems, networks, hardware, software, data (including the data of their respective customers, employees, suppliers, vendors
and any third party data maintained by or on behalf of them), equipment or technology (collectively, “IT Systems and Data”)
and (y) the Company and its subsidiaries have not been notified of, and have no knowledge of any event or condition that would reasonably
be expected to result in, any security breach or other compromise to their IT Systems and Data; (ii) the Company and its subsidiaries
are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or
arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security
of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification,
except as would not, in the case of clauses (i) and (ii), individually or in the aggregate, have a Material Adverse Effect; (iii) the
Company and its subsidiaries have implemented and maintained commercially reasonable controls, policies, procedures, and safeguards to
maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT
Systems and Data (including all personal, personally identifiable, sensitive, confidential or regulated data), and the Company and its
subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and practices; and (iv) the
Company and its subsidiaries’ IT Systems and Data are adequate for, and operate and perform in all material respects as required
in connection with the operation of the business of the Company and its subsidiaries as currently conducted, to the Company’s knowledge,
free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. |
| (kk) | The Company is not an issuer of the type set forth in Rule 144(i)(1) under the Securities Act. |
2. | Subject to the terms and conditions herein set forth, (a) the Company agrees to issue and sell to
each of the Purchasers, and each of the Purchasers agrees, severally and not jointly, to purchase from the Company, at a purchase price
of 97.25% of the aggregate principal amount thereof, the Firm Securities, and (b) in the event and to the extent that the Purchasers
shall exercise the election to purchase Optional Securities as provided below, the Company agrees to issue and sell to each of the Purchasers,
and each of the Purchasers agrees, severally and not jointly, to purchase from the Company, at the same purchase price set forth in clause
(a) of this Section 2, that portion of the aggregate principal amount of the Optional Securities as to which such election shall
have been exercised (to be adjusted by you so as to eliminate Securities in denominations other than in multiples of $1,000), in each
case as set forth opposite the name of such Purchaser in Schedule I hereto and any additional principal amount of Securities which such
Purchaser may become obligated to purchase pursuant to the provisions of Section 10(b) hereof. |
| The Company hereby grants to the Purchasers the right to purchase at their election up to
$50,000,000 in aggregate principal amount of the Optional Securities, at the purchase price set forth in clause (a) of the
first paragraph of this Section 2. Any such election to purchase Optional Securities may be exercised only by written notice
from the Purchasers to the Company, given within a period of 13 calendar days after the date of this Agreement, setting forth the
aggregate principal amount of Optional Securities and the date on which such Optional Securities are to be delivered, as determined
by the Purchasers but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless the
Purchasers and the Company otherwise agree in writing, earlier than two or later than ten business days after the date of such
notice. |
3. | Upon the authorization by you of the release of the Securities, the several Purchasers propose to offer
the Securities for sale upon the terms and conditions set forth in this Agreement and the Offering Memorandum and each Purchaser, acting
severally and not jointly, hereby represents and warrants to, and agrees with the Company that: |
| (a) | It will sell the Securities only to persons who it reasonably believes are “qualified institutional
buyers” (“QIBs”) within the meaning of Rule 144A under the Act in transactions meeting the requirements of Rule 144A;
and |
| (b) | It is an Institutional Accredited Investor (within the meaning of Rule 501 under the Act). |
4. | (a) |
The Securities to be purchased by each Purchaser hereunder will be represented by one or more definitive
global notes in book-entry form which will be deposited by or on behalf of the Company with The Depository Trust Company (“DTC”)
or its designated custodian. The Company will deliver the Securities to Goldman Sachs & Co. LLC, for the account of each Purchaser,
against payment by or on behalf of such Purchaser of the purchase price therefor by wire transfer in Federal (same day) funds, by causing
DTC to credit the Securities to the account of Goldman Sachs & Co. LLC at DTC. The Company will cause the certificates representing
the Securities to be made available to Goldman Sachs & Co. LLC for checking at least twenty-four hours prior to each Time of
Delivery (as defined below) at the office of Latham & Watkins LLP, 1271 Avenue of the Americas, New York, New York 10020
(the “Closing Location”) or such other place as may be agreed by the Company and the Purchasers. |
| | The time and date of such delivery and payment shall be, with respect to the Firm Securities, 9:30
a.m., New York City time, on January 23, 2024 or such other time and date as the |
| | Purchasers and the Company may agree upon in writing, and, with respect to the Optional Securities,
9:30 a.m., New York City time, on the date specified by the Purchasers in the written notice given by the Purchasers of the their
election to purchase such Optional Securities, or such other time and date as the Purchasers and the Company may agree upon in
writing. Such time and date for delivery of the Firm Securities is herein called the “First Time of Delivery,” such time
and date for delivery of the Optional Securities, if not the First Time of Delivery, is herein called the “Second Time of
Delivery,” and each such time and date for delivery is herein called a “Time of Delivery.” |
| (b) | The documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant
to Section 8 hereof, including the cross-receipt for the Securities and any additional documents requested by the Purchasers pursuant
to Section 8(i) hereof, will be delivered at such time and date at the Closing Location, and the Securities will be delivered
at the office of DTC (or its designated custodian), all at such Time of Delivery. A meeting will be held at the Closing Location at 4:30
p.m., New York City time, on the New York Business Day next preceding such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this
Section 4, “New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which banking institutions in New York are generally authorized or obligated by law or executive order to close. |
5. | The Company agrees with each of the Purchasers: |
| (a) | To prepare the Offering Memorandum in a form approved by you; to make no amendment or any supplement to
the Offering Memorandum which shall be disapproved by you promptly after reasonable notice thereof; and to furnish you with copies thereof; |
| (b) | Promptly from time to time to take such action as you may reasonably request
to qualify (or to obtain exemptions from qualifying) the Securities and the shares of Stock issuable upon conversion of the Securities
for offering and sale under the securities laws of such jurisdictions as you may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the
Securities, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation in any jurisdiction
where it is not now so qualified, subject itself to taxation in any jurisdiction where it is not presently so subject or to file a general
consent to service of process in any jurisdiction where it is not presently so subject; |
| (c) | To furnish the Purchasers with written and electronic copies of the Preliminary Offering Memorandum, Pricing
Memorandum and Offering Memorandum and any amendment or supplement thereto in such quantities as you may from time to time reasonably
request, and if, at any time prior to the expiration of nine months after the date of the Offering Memorandum, any event shall have occurred
as a result of which the Offering Memorandum as then amended or supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were
made when such Offering Memorandum is delivered, not misleading, or, if for any other reason it shall be necessary or desirable during
such same period to amend or supplement the Offering Memorandum, to notify you and upon your request to prepare and furnish without charge
to each Purchaser and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request
of an amended Offering Memorandum or a supplement to the Offering Memorandum which will correct such statement or omission or effect such
compliance; |
| (d) | During the period beginning from the date hereof and continuing until
the date that is 90 days after the First Time of Delivery, not to (i) offer, issue, sell, contract to sell, pledge, grant any option
to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, or file with or confidentially submit to
the Commission a registration statement under the Act relating to any securities of the Company that are substantially similar to the
Securities or the Stock, including but not limited to any options or warrants to purchase shares of Stock or any securities that are convertible
into or exchangeable for, or that represent the right to receive, Stock or any such substantially similar securities, or publicly disclose
the intention to make any offer, sale, pledge, disposition or filing or (ii) enter into any swap or other agreement that transfers,
in whole or in part, any of the economic consequences of ownership of the Stock or any such other securities, whether any such transaction
is to be settled by delivery of Stock or such other securities, in cash or otherwise (other than for (i) and (ii) above pursuant
to the Company’s equity incentive plan and employee stock purchase plan existing on, or upon the conversion or exchange of convertible
or exchangeable securities outstanding as of, the date of this Agreement), without your prior written consent; provided, however, that
nothing in this clause (d) will prohibit the issuance of the Securities to be sold hereunder, the conversion of any Security in accordance
with its terms and the terms of the Indenture or the issuance of any Warrant Shares; or |
| (e) | Not to be or become, at any time prior to the expiration of two years after each Time of Delivery, an
open-end investment company, unit investment trust, closed-end investment company or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act; |
| (f) | At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act, for
the benefit of holders from time to time of Securities, to furnish at its expense, upon request, to holders of Securities and prospective
purchasers of Securities information (the “Additional Issuer Information”) satisfying the requirements of subsection (d)(4)(i) of
Rule 144A under the Act; |
| (g) | Except for such documents that are publicly available on EDGAR, to furnish to the Purchasers of the Securities,
as long as any Securities remain outstanding, as soon as practicable after the end of each fiscal year an annual report (including a balance
sheet and statements of income, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning
with the fiscal quarter ending after the date of the Offering Memorandum), to make available to the Purchasers consolidated summary financial
information of the Company and its subsidiaries for such quarter in reasonable detail; |
| (h) | During the period of one year after each Time of Delivery, the Company will not, and will not permit any
of its “affiliates” (as defined in Rule 144 under the Act) to, resell any of the Securities or the Stock issued upon
conversion thereof which constitute “restricted securities” under Rule 144 that have been reacquired by any of them (other
than pursuant to a registration statement that has been declared effective under the Act); |
| (i) | To use the net proceeds received by the Company from the sale of the Securities pursuant to this Agreement
in the manner specified in the Pricing Memorandum under the caption “Use of Proceeds”; |
| (j) | To reserve and keep available at all times, free of preemptive rights, the Conversion Shares for the purpose
of enabling the Company to satisfy any obligations to issue shares of its Stock upon conversion of the Securities; |
| (k) | To use its best efforts to list, subject to notice of issuance, the Conversion Shares on the New York
Stock Exchange (the “NYSE”); |
| (l) | The Company will advise the Purchasers promptly, and confirm such advice in writing, (i) of the issuance
by any governmental or regulatory authority of any order preventing or suspending the use of any of the Pricing Disclosure Package, any
Permitted General Solicitation Material (as defined below) or the Offering Memorandum or the initiation or threatening of any proceeding
for that purpose; (ii) of the occurrence of any event at any time prior to the completion of the initial offering of the Securities
as a result of which any of the Pricing Disclosure Package, any Permitted General Solicitation Material or the Offering Memorandum as
then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances existing when such Pricing Disclosure Package, Permitted General Solicitation
Material or the Offering Memorandum is delivered to a purchaser, not misleading; and (iii) of the receipt by the Company of any notice
with respect to any suspension of the qualification of the Securities for offer and sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose; and the Company will use its reasonable best efforts to prevent the issuance of any such order preventing
or suspending the use of any of the Pricing Disclosure Package, any Permitted General Solicitation Material or the Offering Memorandum
or suspending any such qualification of the Securities and, if any such order is issued, will obtain as soon as possible the withdrawal
thereof; |
| (m) | None of the Company or any of its affiliates or any other person acting on its or their behalf (other
than the Purchasers, as to which no covenant is given) will (i) solicit offers for, or offer or sell, the Securities by means of
any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving
a public offering within the meaning of Section 4(a)(2) of the Securities Act or (ii) engage in any directed selling efforts
within the meaning of Regulation S, and all such persons will comply with the offering restrictions requirement of Regulation S; |
| (n) | Neither the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation D) will,
directly or through any agent, sell, offer for sale, solicit offers to buy or otherwise negotiate in respect of, any security (as defined
in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the
Securities under the Securities Act; and |
| (o) | The Company will not take, directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of the Securities. |
| | (i) The Company represents and agrees that, without the prior consent of the Purchasers, it and its
affiliates and any other person acting on its or their behalf (other than the Purchasers, as to which no statement is given)
(x) have not made and will not make any offer relating to the Securities that, if the offering of the Securities contemplated
by this Agreement were conducted as a public offering pursuant to a registration statement filed under the Act with the Commission,
would constitute an “issuer free writing prospectus,” as defined in Rule 433 under |
| | the Act (any such offer is hereinafter referred to as a “Company Supplemental Disclosure
Document”) and (y) have not solicited and will not solicit offers for, and have not offered or sold and will not offer or
sell, the Securities by means of any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D other than any such solicitation listed on Schedule II(d) (each such solicitation, a
“Permitted General Solicitation”; each written general solicitation document listed on Schedule II(d), a
“Permitted General Solicitation Material”); |
| | (ii) each Purchaser, severally and not jointly, represents and agrees
that, without the prior consent of the Company and the Purchasers, other than one or more term sheets relating to the Securities containing
customary information and conveyed to purchasers of securities or any Permitted General Solicitation Material, it has not made and will
not make any offer relating to the Securities that, if the offering of the Securities contemplated by this Agreement were conducted as
a public offering pursuant to a registration statement filed under the Act with the Commission, would constitute a “free writing
prospectus,” that would be required to be filed with the Commission and as defined in Rule 405 under the Act (any such offer
(other than any such term sheets and any Permitted General Solicitation Material), is hereinafter referred to as a “Purchaser Supplemental
Disclosure Document”); and |
| | (iii) any Company Supplemental Disclosure Document, Purchaser Supplemental Disclosure Document or Permitted
General Solicitation Material, the use of which has been consented to by the Company and the Purchasers, is listed as applicable on Schedule
II(b), Schedule II(c) or Schedule II(d) hereto, respectively. |
7. | The Company covenants and agrees with the several Purchasers that the Company
will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and accountants
in connection with the issue of the Securities and the shares of Stock issuable upon conversion of the Securities and all other
expenses in connection with the preparation, printing, reproduction and filing of the Preliminary Offering Memorandum and the Offering
Memorandum and any amendments and supplements thereto and the mailing and delivering of copies thereof to the Purchasers and dealers;
(ii) the cost of printing or producing any Agreement among Purchasers, this Agreement, the Indenture, the Call Spread Confirmations,
the Securities, the Blue Sky Memorandum, closing documents (including any compilations thereof), Permitted General Solicitation Materials
and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all reasonable and
documented expenses in connection with the qualification of the Securities and the shares of Stock issuable upon conversion of the Securities
for offering and sale under state securities laws as provided in Section 5(b) hereof, including the reasonable and documented
fees and disbursements of counsel for the Purchasers in connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for rating the Securities; (v) the cost of preparing
the Securities; (vi) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel
for the Trustee in connection with the Indenture and the Securities; (vii) all costs and expenses incurred in connection with any
“road show” presentation to potential purchasers of the Securities; (viii) any cost incurred in connection with the issuance,
delivery and listing of the shares of Stock issuable upon conversion of the Securities and the Warrant Shares; and (ix) all other
costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section, and Sections 9 and 12 hereof, the Purchasers will pay all
of their own costs |
| and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities
by them, and any advertising expenses connected with any offers they may make. |
8. | The obligations of the Purchasers hereunder, as to the Securities to be delivered at each Time of Delivery,
shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company herein
are, at and as of such Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions: |
| (a) | Latham & Watkins LLP, counsel for the Purchasers, shall have furnished to you their opinion and
negative assurance letter, in each case, dated such Time of Delivery, with respect to matters as you may reasonably request, and such
counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters. |
| (b) | Faegre Drinker Biddle & Reath LLP, counsel for the Company, shall have furnished to you their
written opinion and negative assurance letter, in each case, dated such Time of Delivery, in form and substance reasonably satisfactory
to you. |
| (c) | On the date of the Offering Memorandum concurrently with the execution of this Agreement and also at each
Time of Delivery, Deloitte & Touche LLP shall have furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you. |
| (d) | (i) Neither the Company nor any of its subsidiaries shall have sustained since the date of the latest
audited financial statements included in the Pricing Memorandum any loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Pricing Memorandum, and (ii) since the respective dates as of which information is given
in the Pricing Memorandum, at each Time of Delivery, there shall not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Pricing Memorandum, the effect of which, in any such case described in clause (i) or (ii), is
in your judgment so material and adverse as to make it impracticable or inadvisable to proceed with the offering or the delivery of the
Securities on the terms and in the manner contemplated in this Agreement and in each of the Pricing Disclosure Package and the Offering
Memorandum. |
| (e) | On or after the Applicable Time (i) no downgrading shall have occurred in the rating accorded the
Company’s debt securities by any “nationally recognized statistical rating organization,” as that term is defined in
Section 3(a)62 of the Exchange Act, and (ii) no such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the Company’s debt securities; |
| (f) | On or after the Applicable Time there shall not have occurred any of the following: (i) a suspension
or material limitation in trading in securities generally on the NYSE or the Nasdaq Global Select Market; (ii) a suspension or material
limitation in trading in the Company’s securities on the NYSE; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the
United States of a |
| | national emergency or war; or (v) the occurrence of any other calamity or crisis or any change
in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in
clause (iv) or (v) in your judgment makes it impracticable or inadvisable to proceed with the offering or the delivery of
the Securities on the terms and in the manner contemplated in the Pricing Disclosure Package and the Offering Memorandum. |
| (g) | The Company shall have executed and delivered the Indenture and the Securities, in each case, in form
and substance reasonably satisfactory to the Purchasers, and the Purchasers shall have received executed copies thereof. |
| (h) | The Securities shall be eligible for clearance and settlement through the facilities of DTC. |
| (i) | The Company shall have furnished or caused to be furnished to you at each Time of Delivery certificates
of officers of the Company satisfactory to you as to the accuracy of the representations and warranties of the Company herein at and as
of such Time of Delivery, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in subsection (e) of this Section and as to such other matters as you may reasonably
request. |
| (j) | The Company shall have obtained and delivered to the Purchasers executed copies of a lock-up agreement
from each of the parties named in Schedule IV hereto substantially in the form set forth in Annex I hereto. |
| (k) | No event has occurred that would, if the Securities were outstanding, require an adjustment to the conversion
rate for the Securities pursuant to the Indenture. |
| (l) | At the time of the execution of this Agreement, and each Time of Delivery,
the Purchasers shall have received a certificate of the chief financial officer of the Company, dated the date of delivery thereof, satisfactory
to the Purchasers, as to certain financial information contained in the Pricing Disclosure Package and the Offering Memorandum. |
9. | (a) |
The Company will indemnify and hold harmless each Purchaser against any losses, claims, damages or liabilities,
joint or several, to which such Purchaser may become subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Offering Memorandum, the Pricing Disclosure Package, the Pricing Disclosure Package, the Offering Memorandum,
or any amendment or supplement thereto, any Company Supplemental Disclosure Document, any Permitted General Solicitation Material or
arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, and will reimburse each Purchaser for any legal or other
expenses reasonably incurred by such Purchaser in connection with investigating or defending any such action or claim as such expenses
are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Offering Memorandum, the Pricing Memorandum, the Pricing Disclosure Package, the Offering Memorandum
or any such amendment or supplement thereto, any Company Supplemental Disclosure Document or any Permitted General Solicitation Material,
in reliance |
| | upon and in conformity with written information furnished to the Company by the Purchasers expressly
for use therein. |
| (b) | Each Purchaser, severally and not jointly, will indemnify and hold harmless
the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Offering Memorandum, the Pricing Memorandum, the Pricing Disclosure Package,
the Offering Memorandum, or any amendment or supplement thereto, any Company Supplemental Disclosure Document, any Permitted General Solicitation
Material or arise out of or are based upon the omission or alleged omission to state therein a material fact or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary
Offering Memorandum, the Pricing Memorandum, the Pricing Disclosure Package, the Offering Memorandum or any such amendment or supplement
thereto, any Company Supplemental Disclosure Document or any Permitted General Solicitation Material, in reliance upon and in conformity
with written information furnished to the Company by such Purchaser expressly for use therein; and each Purchaser will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim
as such expenses are incurred, it being understood and agreed that the only such information furnished by any Purchaser consists of the
following information in the Preliminary Offering Memorandum and Offering Memorandum furnished on behalf of each Purchaser: the seventh
paragraph of the Preliminary Offering Memorandum and Offering Memorandum in the section titled “Plan of Distribution.” |
| (c) | Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of
the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party
under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection unless and
to the extent it did not learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights
and defenses. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof, with counsel (including local counsel) satisfactory to
such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel (including local counsel)
or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. Any indemnified party shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall
have mutually agreed to the contrary; (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably
satisfactory to the indemnified party; (iii) the indemnified party |
| | shall have reasonably concluded that there may be legal defenses available to it that are different
from or in addition to those available to the indemnifying party; or (iv) the named parties in any such proceeding (including
any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the
indemnifying party shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local counsel) for all indemnified parties, and that all such
fees and expenses shall be paid or reimbursed as they are incurred. Any such separate firm for any Purchaser, its affiliates,
directors and officers and any control persons of such Purchaser shall be designated in writing by Goldman Sachs & Co. LLC
and any such separate firm for the Company, its respective directors and officers and any control persons of the Company shall be
designated in writing by the Company. No indemnifying party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release
of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to, or
an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party. |
| (d) | If the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless
an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the Purchasers on the other from the offering of the Securities.
If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party
failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Purchasers on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Purchasers on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total discounts and commissions
received by the Purchasers, in each case as set forth in the Offering Memorandum. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand or the Purchasers on the other and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Purchasers
agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation
(even if the Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The amount paid or |
| | payable by an indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Purchaser shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities purchased by it and distributed to investors were offered to investors
exceeds the amount of any damages which such Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The Purchasers’ obligations in this subsection (d) to contribute are several
in proportion to their respective purchase obligations and not joint. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. |
| (e) | The obligations of the Company under this Section 9 shall be in addition to any liability which the
Company may otherwise have and shall extend, upon the same terms and conditions, to each employee, officer and director each Purchaser,
any affiliate of each Purchaser and each person, if any, who controls any Purchaser within the meaning of the Act; and the obligations
of the Purchasers under this Section 9 shall be in addition to any liability which the respective Purchasers may otherwise have and
shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls
the Company within the meaning of the Act. |
10. | (a) |
If any Purchaser shall default in its obligation to purchase the Securities which it has agreed to purchase hereunder at a Time of Delivery,
you may in your discretion arrange for you or another party or other parties to purchase such Securities on the terms contained herein.
If within thirty-six hours after such default by any Purchaser you do not arrange for the purchase of such Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you
to purchase such Securities on such terms. In the event that, within the respective prescribed periods, you notify the Company that you
have so arranged for the purchase of such Securities, or the Company notifies you that it has so arranged for the purchase of such Securities,
you or the Company shall have the right to postpone such Time of Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Offering Memorandum, or in any other documents or arrangements, and the Company
agrees to prepare promptly any amendments or supplements to the Offering Memorandum which in your opinion may thereby be made necessary.
The term “Purchaser” as used in this Agreement shall include any person substituted under this Section with like effect
as if such person had originally been a party to this Agreement with respect to such Securities. |
| (b) | If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Purchaser
or Purchasers by you and the Company as provided in subsection (a) above, the aggregate principal amount of such Securities which
remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Securities to be purchased at such Time
of Delivery, then the Company shall have the right to require each non-defaulting Purchaser to purchase the principal amount of Securities
which such Purchaser agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non-defaulting Purchaser
to purchase its pro rata share (based on the principal amount of Securities which such Purchaser agreed to purchase hereunder) of the
Securities of such defaulting Purchaser |
| | or Purchasers for which such arrangements have not been made; but nothing herein shall relieve a
defaulting Purchaser from liability for its default. |
| (c) | If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Purchaser
or Purchasers by you and the Company as provided in subsection (a) above, the aggregate principal amount of Securities which remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all the Securities to be purchased at such Time of Delivery, or
if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Purchasers to purchase Securities
of a defaulting Purchaser or Purchasers, then this Agreement (or, with respect to the Second Time of Delivery, the obligations of the
Purchasers to purchase and the Company to sell the Optional Securities) shall thereupon terminate, without liability on the part of any
non-defaulting Purchaser or the Company, except for the expenses to be borne by the Company and the Purchasers as provided in Section 6
hereof and the indemnity and contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Purchaser
from liability for its default. |
11. | The respective indemnities, agreements, representations, warranties and other statements of the Company
and the several Purchasers, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement,
shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or the Company or any officer or director or controlling person of the Company,
and shall survive delivery of and payment for the Securities. |
12. | If this Agreement shall be terminated pursuant to Section 10 hereof, the Company shall not then be
under any liability to any Purchaser except as provided in Sections 7 and 9 hereof; but, if for any other reason, the Securities are not
delivered by or on behalf of the Company as provided herein, the Company will reimburse the Purchasers for all expenses approved in writing
by you, including fees and disbursements of counsel, reasonably incurred and documented by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be under no further liability to any Purchaser except as provided
in Sections 7 and 9 hereof. |
13. | All statements, requests, notices and agreements hereunder shall be in writing,
and if to the Purchasers shall be delivered or sent by mail to you at Goldman Sachs & Co. LLC, 200 West Street, New York,
New York 10282-2198, Attention: Registration Department and BMO Capital Markets Corp., 151 West 42nd Street, 32nd
Floor, New York, New York 10036, Attention: Equity Capital Markets with a copy to the Legal Department, with a copy to Latham &
Watkins LLP, 1271 Avenue of the Americas, New York, New York 10020, Attention: Gregory Rodgers; and if to the Company shall be delivered
or sent by mail or facsimile transmission to the address of the Company set forth in the Offering Memorandum, Attention: Secretary; provided,
however, that any notice to a Purchaser pursuant to Section 9 hereof shall be delivered or sent by mail or facsimile transmission
to such Purchaser at its address set forth in its Purchasers’ Questionnaire, which address will be supplied to the Company by you
upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. |
| In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)), the Purchasers are required to obtain, verify and record information that identifies their respective
clients, including the Company, which information may include the name and address of their respective clients, as well as other
information that will allow the Purchasers to properly identify their respective clients. |
14. | This Agreement shall be binding upon, and inure solely to the benefit of, the Purchasers, the Company
and, to the extent provided in Sections 9 and 11 hereof, the officers and directors of the Company, the officers and directors of each
Purchaser, any affiliate of each Purchaser and each person who controls the Company or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser
of any of the Securities from any Purchaser shall be deemed a successor or assign by reason merely of such purchase. |
15. | Time shall be of the essence of this Agreement. |
16. | The Company acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to
this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the several Purchasers, on the
other, (ii) in connection therewith and with the process leading to such transaction each Purchaser is acting solely as a principal
and not the agent or fiduciary of the Company, (iii) no Purchaser has assumed an advisory or fiduciary responsibility in favor of
the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Purchaser has
advised or is currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly
set forth in this Agreement and (iv) the Company has consulted its own legal and financial advisors to the extent it deemed appropriate.
The Company agrees that it will not claim that the Purchaser, or any of them, has rendered advisory services of any nature or respect,
or owes a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto. |
17. | This Agreement supersedes all prior agreements and understandings (whether written or oral) between or
among the Company and the Purchasers, or any of them, with respect to the subject matter hereof. |
18. | THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED HERETO AND ANY MATTERS RELATED
TO THIS TRANSACTION SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAWS OF THE STATE OF NEW YORK. The Company agrees that
any suit or proceeding arising in respect of this agreement or our engagement will be tried exclusively in the U.S. District Court for
the Southern District of New York or, if that court does not have subject matter jurisdiction, in any state court located in The City
and County of New York and the Company agrees to submit to the jurisdiction of, and to venue in, such courts. |
19. | The Company and each of the Purchasers hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby. |
20. | This Agreement may be executed by any one or more of the parties hereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. |
21. | Notwithstanding anything herein to the contrary, the Company (and the Company’s employees, representatives,
and other agents) are authorized to disclose to any and all persons, the tax treatment and tax structure of the potential transaction
and all materials of any kind (including tax opinions and other tax analyses) provided to the Company relating to that treatment and structure,
without the Purchasers’ imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure
shall remain confidential (and the foregoing sentence shall not |
| apply) to the extent necessary to enable any person to comply with securities laws. For this
purpose, “tax treatment” means US federal and state income tax treatment, and “tax structure” is limited to
any facts that may be relevant to that treatment. |
22. | Recognition of the U.S. Special Resolution Regimes. |
(a) In the event that
any Purchaser that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such
Purchaser of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer
would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by
the laws of the United States or a state of the United States.
(b) In the event that
any Purchaser that is a Covered Entity or a BHC Act Affiliate of such Purchaser becomes subject to a proceeding under a U.S. Special Resolution
Regime, Default Rights under this Agreement that may be exercised against such Purchaser are permitted to be exercised to no greater extent
than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the
United States or a state of the United States.
(c) As used in this section:
“BHC Act Affiliate”
has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity”
means any of the following:
(i) a “covered
entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered
bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered
FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right”
has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.
“U.S. Special
Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title
II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
If the foregoing is in accordance with your understanding
of our agreement, please sign and return to us counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Purchasers,
this letter and such acceptance hereof shall constitute a binding agreement among each of the Purchasers and the Company. It is understood
that your acceptance of this letter on behalf of each of the Purchasers is pursuant to the authority set forth in a form of Agreement
among Purchasers, the form of which shall be submitted to the Company for examination upon request, but without warranty on your part
as to the authority of the signers thereof.
|
Very truly yours, |
|
Winnebago Industries, Inc. |
|
|
|
By: |
/s/ Bryan L. Hughes |
|
|
Name: |
Bryan L. Hughes |
|
|
Title: |
Chief Financial Officer and Senior Vice President |
Accepted as of the date hereof: | |
By: |
/s/ Mike Voris |
|
|
(Goldman Sachs & Co. LLC) |
|
|
|
|
|
Name: |
Mike Voris |
|
|
Title: |
Partner |
|
BMO Capital Markets Corp. | |
By: |
/s/ Brian Riley |
|
|
(BMO Capital Markets Corp.) |
|
|
|
|
|
Name: |
Brian Riley |
|
|
Title: |
Managing Director, Global Markets |
|
[Signature Page to the
Purchase Agreement]
SCHEDULE I | |
| |
Principal | |
| |
Amount of | |
| |
Firm Securities | |
| |
to be | |
Purchasers | |
Purchased | |
Goldman Sachs & Co. LLC | |
$ | 195,000,000 | |
BMO Capital Markets Corp. | |
| 105,000,000 | |
Total | |
$ | 300,000,000 | |
SCHEDULE II
(a) Additional
Documents Incorporated by Reference: None
(b) Company
Supplemental Disclosure Documents:
Electronic Roadshow Presentation, dated January 18, 2024
(c) Purchaser
Supplemental Disclosure Documents: None
(d) Permitted
General Solicitation Materials:
Press release of the Company dated January 17, 2024, relating
to the announcement of the offering of the Securities.
Press release of the Company dated January 18, 2024, relating
to the pricing of the offering of the Securities.
SCHEDULE III
[Pricing Term Sheet]
PRICING TERM SHEET |
CONFIDENTIAL |
January 18, 2024
Winnebago Industries, Inc.
Offering of
$300,000,000 Aggregate Principal Amount of
3.250% Convertible Senior Notes due 2030
The information in this pricing term sheet
supplements Winnebago Industries, Inc.’s preliminary offering memorandum, dated January 17, 2024 (the “Preliminary
Offering Memorandum”), and supersedes the information in the Preliminary Offering Memorandum to the extent inconsistent with the
information in the Preliminary Offering Memorandum. Terms used, but not defined, in this pricing term sheet have the respective meanings
set forth in the Preliminary Offering Memorandum. As used in this pricing term sheet, “we,” “our” and “us”
refer to Winnebago Industries, Inc. and not to its subsidiaries.
Issuer | Winnebago Industries, Inc. |
Ticker / Exchange for |
|
Common Stock |
WGO / New York Stock Exchange (“NYSE”). |
|
|
Trade Date |
January 19, 2024. |
|
|
Settlement Date |
January 23, 2024. |
Notes | 3.250% convertible senior notes due 2030 (the “Notes”). |
Principal Amount |
$300,000,000 (or, if the initial purchasers fully exercise their option to purchase additional Notes, $350,000,000) aggregate principal amount of Notes. |
|
|
Offering Price |
100% of the principal amount of the Notes, plus accrued interest, if any, from the Settlement Date. |
Maturity | January 15, 2030, unless earlier repurchased, redeemed or converted. |
Stated Interest Rate |
3.250% per annum. |
|
|
Interest Payment Dates |
January 15 and July 15 of each year, beginning on July 15, 2024. |
|
|
Record Dates |
January 1 and July 1. |
|
|
Last Reported Sale Price per |
|
Share of Common Stock on |
|
the NYSE on |
|
January 18, 2024 |
$67.64. |
Conversion Premium |
Approximately 30.0% above the Last Reported Sale Price per Share of Common Stock on the NYSE on January 18, 2024. |
|
|
Initial Conversion Price |
Approximately $87.93 per share of our common stock. |
|
|
Initial Conversion Rate |
11.3724 shares of our common stock per $1,000 principal amount of Notes. |
|
|
Optional Redemption |
The Notes will be redeemable, in whole or in part (subject to certain limitations described below), at our option at any time, and from time to time, on or after January 15, 2028 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of our common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (2) the trading day immediately before the date we send such notice. However, we may not redeem less than all of the outstanding Notes unless at least $100.0 million aggregate principal amount of Notes are outstanding and not called for redemption as of the time we send the related redemption notice. In addition, calling any Note for redemption will constitute a make-whole fundamental change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. See “Description of Notes—Optional Redemption” in the Preliminary Offering Memorandum. |
|
|
Use of Proceeds |
We estimate that the net proceeds to us from this offering will be approximately $291.1 million (or approximately $339.8 million if the initial purchasers fully exercise their option to purchase additional Notes), after deducting the initial purchasers’ discounts and commissions and our estimated offering expenses. We intend to use approximately $32.0 million of the net proceeds to fund the cost of entering into the convertible note hedge transactions described below (after such cost is partially offset by the proceeds that we receive from entering into the warrant transactions described below). We expect to use approximately $295 million of the net proceeds from this offering to repurchase approximately $241 million aggregate principal amount of our 1.50% Convertible Senior Notes due 2025, including accrued and unpaid interest on our 1.50% Convertible Senior Notes due 2025, |
|
in privately negotiated transactions effected through Goldman Sachs & Co. LLC or its affiliate, as our agent. We intend to use the remainder of the net proceeds for general corporate purposes. If the initial purchasers exercise their option to purchase additional Notes, then we intend to use a portion of the additional net proceeds to fund the cost of entering into additional convertible note hedge transactions as described below (after such cost is partially offset by the proceeds that we receive from entering into the additional warrant transactions described below). |
|
|
Concurrent Convertible Note |
|
Hedge Transactions |
|
and Warrant Transactions |
In connection with the pricing of the Notes, we entered into convertible note hedge transactions with one or more of the initial purchasers or their respective affiliates or other financial institutions (the “option counterparties”). The convertible note hedge transactions will cover, subject to customary anti-dilution adjustments, the aggregate number of shares of our common stock that initially underlie the Notes, and are expected generally to reduce or offset potential dilution to our common stock upon any conversion of Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be. We also entered into separate warrant transactions with the option counterparties, under which we will sell to the option counterparties warrants relating to the same number of shares of our common stock. The strike price of the warrants will initially be $135.28 per share, which is 100% above the Last Reported Sale Price per Share of Common Stock on the NYSE on January 18, 2024, and is subject to certain adjustments under the terms of the warrant transactions. The warrant transactions could separately have a dilutive effect to the extent that the market value per share of our common stock exceeds the strike price of the warrants. If the initial purchasers exercise their option to purchase additional Notes, we expect to enter into additional convertible note hedge transactions and additional warrant transactions with the option counterparties, which would cover the number of shares of our common stock that initially underlie the additional Notes sold to the initial purchasers. For a discussion of the potential impact of any market or other activity by the option counterparties or their respective affiliates in connection with these convertible note hedge and warrant transactions, see the discussion in the Preliminary Offering Memorandum under the caption “Risk Factors—The convertible note hedge and warrant transactions may affect the value of the notes and our common stock.” |
Book-Running Managers |
Goldman Sachs & Co. LLC |
|
BMO Capital Markets Corp. |
|
|
CUSIP / ISIN Numbers |
974637 AE0 / US974637AE01. |
|
|
Increase to Conversion Rate in |
|
Connection with a |
|
Make-Whole Fundamental |
|
Change | If a make-whole fundamental change occurs and the conversion date for the conversion of a Note occurs
during the related make-whole fundamental change conversion period, then, subject to the provisions described in the Preliminary Offering
Memorandum under the caption “Description of Notes—Conversion Rights—Increase in Conversion Rate in Connection with
a Make-Whole Fundamental Change,” the conversion rate applicable to such conversion will be increased by a number of shares set
forth in the table below corresponding (after interpolation, as described below) to the effective date and the stock price of such make-whole
fundamental change: |
| |
Stock
Price | |
Effective
Date | |
$67.74 | | |
$75.00 | | |
$87.93 | | |
$100.00 | | |
$114.31 | | |
$125.00 | | |
$150.00 | | |
$200.00 | | |
$250.00 | | |
$300.00 | | |
$350.00 | | |
$400.00 | | |
$450.00 | |
January 23,
2024 | |
| 3.4117 | | |
| 2.7615 | | |
| 1.9632 | | |
| 1.4700 | | |
| 1.0742 | | |
| 0.8646 | | |
| 0.5440 | | |
| 0.2422 | | |
| 0.1142 | | |
| 0.0518 | | |
| 0.0196 | | |
| 0.0041 | | |
| 0.0000 | |
January 15,
2025 | |
| 3.4117 | | |
| 2.7615 | | |
| 1.9476 | | |
| 1.4279 | | |
| 1.0199 | | |
| 0.8084 | | |
| 0.4938 | | |
| 0.2114 | | |
| 0.0972 | | |
| 0.0429 | | |
| 0.0156 | | |
| 0.0031 | | |
| 0.0000 | |
January 15,
2026 | |
| 3.4117 | | |
| 2.7536 | | |
| 1.8490 | | |
| 1.3150 | | |
| 0.9084 | | |
| 0.7042 | | |
| 0.4121 | | |
| 0.1671 | | |
| 0.0740 | | |
| 0.0309 | | |
| 0.0099 | | |
| 0.0009 | | |
| 0.0000 | |
January 15,
2027 | |
| 3.4117 | | |
| 2.6531 | | |
| 1.6961 | | |
| 1.1520 | | |
| 0.7566 | | |
| 0.5673 | | |
| 0.3125 | | |
| 0.1191 | | |
| 0.0508 | | |
| 0.0198 | | |
| 0.0052 | | |
| 0.0000 | | |
| 0.0000 | |
January 15,
2028 | |
| 3.4117 | | |
| 2.5025 | | |
| 1.4752 | | |
| 0.9258 | | |
| 0.5573 | | |
| 0.3953 | | |
| 0.1995 | | |
| 0.0725 | | |
| 0.0305 | | |
| 0.0108 | | |
| 0.0018 | | |
| 0.0000 | | |
| 0.0000 | |
January 15,
2029 | |
| 3.4117 | | |
| 2.2584 | | |
| 1.1145 | | |
| 0.5801 | | |
| 0.2866 | | |
| 0.1826 | | |
| 0.0835 | | |
| 0.0327 | | |
| 0.0143 | | |
| 0.0044 | | |
| 0.0001 | | |
| 0.0000 | | |
| 0.0000 | |
January 15,
2030 | |
| 3.4117 | | |
| 1.9609 | | |
| 0.0000 | | |
| 0.0000 | | |
| 0.0000 | | |
| 0.0000 | | |
| 0.0000 | | |
| 0.0000 | | |
| 0.0000 | | |
| 0.0000 | | |
| 0.0000 | | |
| 0.0000 | | |
| 0.0000 | |
If such effective date or stock price is not set
forth in the table above, then:
| · | if such stock price is between two stock prices in the table above or the effective date is between two
dates in the table above, then the number of additional shares will be determined by a straight-line interpolation between the numbers
of additional shares set forth for the higher and lower stock prices in the table and the earlier and later dates in the table above,
as applicable, based on a 365- or 366-day year, as applicable; and |
| · | if the stock price is greater than $450 (subject to adjustment in the same manner as the stock prices
set forth in the column headings of the table above are adjusted, as described in the Preliminary Offering Memorandum under the caption
“Description of Notes—Conversion Rights—Increase in Conversion Rate in Connection with a Make-Whole Fundamental Change—Adjustment
of Stock Prices and Number of Additional Shares”), or less than $67.64 (subject to adjustment in the same manner), per share, then
no additional shares will be added to the conversion rate. |
Notwithstanding anything to the contrary, in no
event will the conversion rate be increased to an amount that exceeds 14.7841 shares of our common stock per $1,000 principal amount of
Notes, which amount is subject to adjustment in the same manner as, and at the same time and for the same events for which, the conversion
rate is required to be adjusted pursuant to the provisions described in the Preliminary Offering Memorandum under the caption “Description
of Notes—Conversion Rights—Conversion Rate Adjustments—Generally.”
* * *
This communication is confidential and is intended
for the sole use of the person to whom it is provided by the sender. The information in this pricing term sheet does not purport to be
a complete description of the Notes or the offering.
The offer and sale of the Notes and any shares
of common stock issuable upon conversion of the Notes have not been, and will not be, registered under the Securities Act of 1933, as
amended (the “Securities Act”), or any other securities laws, and the Notes and any such shares cannot be offered or sold
except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any
other applicable securities laws. The initial purchasers are initially offering the Notes only to qualified institutional buyers as defined
in, and in reliance on, Rule 144A under the Securities Act. The Notes and any shares of common stock issuable upon conversion of
the Notes are not transferable except in accordance with the restrictions described in the Preliminary Offering Memorandum under the caption
“Transfer Restrictions.”
You should rely only on the information contained
or incorporated by reference in the Preliminary Offering Memorandum, as supplemented by this pricing term sheet, in making an investment
decision with respect to the Notes.
Neither this pricing term sheet nor the Preliminary
Offering Memorandum constitutes an offer to sell or a solicitation of an offer to buy any Notes in any jurisdiction where it is unlawful
to do so, where the person making the offer is not qualified to do so or to any person who cannot legally be offered the Notes.
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR
BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED
AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
SCHEDULE IV
Parties to Lock-Up Agreement
Executive Officers
Directors (other than as listed above)
Annex I
Form of Lock-Up Agreement
Lock-Up Agreement
[ · ],
2024
Goldman Sachs & Co. LLC
200 West Street,
New York, New York 10282-2198.
BMO Capital Markets Corp.
151 West 42nd Street, 32nd Floor
New York, New York 10036
Dear Ladies and Gentlemen:
The undersigned,
a stockholder, an officer and/or director of Winnebago Industries, Inc., a Minnesota corporation (the “Company”),
understands that Goldman, Sachs & Co. LLC and BMO Capital Markets Corp., Inc. (together, the “Purchasers”) propose
to enter into a purchase agreement (the “Purchase Agreement”) with the Company providing for the private offering of Convertible
Senior Notes due 2030 (the “Offering”), convertible into cash and, if applicable, shares of common stock, par value $0.50
per share, of the Company (the “Common Stock”), at the option of the Company, which will be offered pursuant to Rule 144A
by means of an offering memorandum (the “Offering Memorandum”). In recognition of the benefit that such an offering will confer
upon the undersigned as a an officer and/or director of the Company, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned agrees with the Purchasers that, during the period beginning on the date hereof and
ending on the date that is 90 days from the date of the Purchase Agreement (the “Lock-Up Period”), the undersigned will not,
without the prior written consent of the Purchasers, except pursuant to the Purchase Agreement, (i) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of any shares of the Company’s Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which
the undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up Securities”), or exercise any
right with respect to the registration of any of the Lock-up Securities, or file or cause to be filed any registration statement in connection
therewith, under the Securities Act of 1933, as amended, or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up Securities, whether any such
swap or transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise.
Notwithstanding the foregoing,
and subject to the conditions below, the undersigned may transfer the Lock-Up Securities without the prior written consent of the Purchasers
as follows, provided that (1) the Purchasers receive or have received a signed lock-up agreement for the balance of the lockup period
from each donee, trustee, distributee, or transferee, as the case may be (except in the
case of clauses (iv) and (v)), (2) any
such transfer shall not involve a disposition for value (except in the case of clauses (iv) and (v)), (3) such transfers are
not required during the Lock-Up Period to be reported with the Securities and Exchange Commission on Form 4 in accordance with Section 16
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (except in the case of clauses (i), (iv), (v) and
(vii)), and (4) the undersigned does not otherwise voluntarily effect any public filing or report regarding such transfers during
the Lock-Up Period (except in the case of clauses (i), (iv), (v) and (vii)):
| i. | as a bona fide gift or gifts; or |
| ii. | to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned
(for purposes of this lock-up agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not
more remote than first cousin); or |
| iii. | as a distribution to limited partners, stockholders or equity holders of the undersigned; or |
| iv. | in connection with the withholding, receipt, exercise, cashless (or net) exercise (whether to cover exercise
price, taxes or other fees and expenses), settlement, vesting or forfeiture of, or removal or lapse of restrictions on, any stock option,
Common Stock issued upon exercise of a stock option, restricted share unit, restricted stock or other award pursuant to any employee benefit
or director equity plan or agreement in existence as of the date hereof, so long as (x) such transaction or event does not involve
the sale or transfer of any shares of Common Stock (other than from the undersigned to the Company), (y) any filing or public announcement
made in connection therewith states that such transfer was to the Company in connection with such exercise or settlement, and (z) such
right of exercise or settlement occurs or expires during the Lock-Up Period; provided, that for the avoidance of doubt, this clause (iv) will
expressly permit the cashless exercise of stock options due to expire during the term of this Agreement; provided, further, that the net
proceeds of such exercise following the sale or transfer of any shares of Common Stock to cover the exercise price, taxes or other fees
and expenses, shall be held in shares of Common Stock; or |
| v. | in connection with the withholding of Common Stock or restricted share units by the Company, at the direction
of the undersigned, for the payment of taxes in connection with the vesting or settlement of a stock option, restricted share unit, restricted
stock or other award pursuant to any employee benefit or director equity plan or agreement in existence as of the date hereof; provided,
that (x) such transaction or event does not involve the sale or transfer of any shares of Common Stock or restricted share units
(other than from the undersigned to the Company), (y) any filing or public announcement made in connection therewith states that
such transfer was to the Company in connection with such exercise, and (z) such right of vesting or settlement occurs or expires
during the Lock-Up Period; or |
| vi. | in connection with the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange
Act for the purchase of shares of Common Stock, provided, that such plan does not provide for the purchase of Common Stock during the
Lock-Up Period and no public announcement or filing under the Exchange Act regarding the establishment of |
|
| such plan shall be required of or voluntarily made by or on behalf
of the undersigned or the Company; or |
| vii. | to the undersigned’s affiliates or to any investment fund or other entity controlled, managed by
the undersigned, provided that any filing or public announcement made in connection therewith states that such transfer was to the undersigned’s
affiliates or to any investment fund or other entity controlled, managed by the undersigned. |
Furthermore, the undersigned
may sell shares of Common Stock of the Company purchased by the undersigned on the open market following the Offering if and only if (i) such
sales are not required during the Lock-Up Period to be reported in any public report or filing with the Securities and Exchange Commission,
or otherwise and (ii) the undersigned does not otherwise voluntarily effect any public filing or report regarding such sales during
the Lock-Up Period.
This letter agreement shall
automatically terminate and become void upon the earlier to occur, if applicable of: (i) the termination of the Purchase Agreement
prior to the consummation of the Offering and (ii) February 15, 2024 if the Purchase Agreement has not been executed by then.
The undersigned also agrees
and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of
the Lock-Up Securities except in compliance with the foregoing restrictions.
|
Very truly yours, |
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Signature: |
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Print Name: |
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Exhibit 10.2
GOLDMAN SACHS & CO. LLC
| 200 WEST STREET | NEW YORK, NEW YORK 10282-2198 | TEL: 212-902-1000
Opening Transaction
To: |
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, Minnesota 55347 |
|
|
From: |
Goldman Sachs & Co. LLC |
|
|
Re: |
Base Convertible Bond Hedge
Transaction |
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|
Date: |
January 18,
2024 |
Dear Ladies and Gentlemen:
The
purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of the above-referenced
transaction entered into on the Trade Date specified below (the “Transaction”) between Goldman Sachs & Co.
LLC (“Dealer”) and Winnebago Industries, Inc. (“Counterparty”). Dealer is acting as principal
in this Transaction and BMO Capital Markets Corp. (“Agent”), its affiliate, is acting as agent for this Transaction
solely in connection with Rule 15a-6 of the Exchange Act (as defined herein), as amended. This communication constitutes a “Confirmation”
as referred to in the ISDA Master Agreement specified below.
1. This
Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (the “2006 Definitions”)
and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and
together with the 2006 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”). Certain defined terms used herein have the meanings assigned to them in the Indenture
to be dated as of January 23, 2024 between Counterparty and U.S. Bank Trust Company, National Association, as trustee (the “Indenture”),
relating to the USD 300,000,000 principal amount of 3.25% Convertible Senior Notes due 2030 (the “Base Convertible Securities”)
and the additional USD 50,000,000 principal amount of 3.25% Convertible Senior Notes due 2030 that may be issued pursuant to the option
to purchase additional convertible securities (the “Optional Convertible Securities” and, together with the Base Convertible
Securities, the “Convertible Securities”). In the event of any inconsistency between the terms defined in the Indenture
and this Confirmation, this Confirmation shall govern. For the avoidance of doubt, references herein to sections of, or definitions set
forth in, the Indenture are based on the draft of the Indenture most recently reviewed by the parties at the time of execution of this
Confirmation. If any relevant sections of, or definitions set forth in, the Indenture are changed, added or renumbered between the execution
of this Confirmation and the execution of the Indenture, the parties will amend this Confirmation in good faith to preserve the economic
intent of the parties, as evidenced by such draft of the Indenture. Subject to the foregoing, the parties acknowledge that references
to the Indenture herein are references to the Indenture as in effect on the date of its execution and if the Indenture is, or the Convertible
Securities are, amended, modified or supplemented following the date of their execution, any such amendment, modification or supplement
(other than any amendment, modification or supplement pursuant to a Merger Supplemental Indenture (as defined below)) will be disregarded
for purposes of this Confirmation unless the parties agree otherwise in writing.
Counterparty
is hereby advised, and Counterparty acknowledges, that Dealer has engaged in, or refrained from engaging in, substantial financial transactions
and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates
on the terms and conditions set forth below.
This
Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this
Confirmation relates. This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992
ISDA Master Agreement (Multicurrency—Cross Border) as if Dealer and Counterparty had executed an agreement in such form on the
date hereof (but without any Schedule except for (i) the election of Loss and Second Method and US Dollars (“USD”)
as the Termination Currency, (ii) the replacement of the word “third” in the last line of Section 5(a)(i) of
the Agreement with the word “first”, and (iii) (a) the election that the “Cross Default” provisions
of Section 5(a)(vi) of the Agreement shall apply to Counterparty with a “Threshold Amount” of USD35.0 million)
(b) the phrase “, or becoming capable at such time of being declared,” shall
be deleted from clause (1) of such Section 5(a)(vi), and (c) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event of Default if (x) the
default was caused solely by error or omission of an administrative or operational nature; (y) funds were available to enable the
party to make the payment when due; and (z) the payment is made within two Local Business Days of such party’s receipt of
written notice of its failure to pay.”.
All
provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein.
In the event of any inconsistency among this Confirmation, the Equity Definitions, the 2006 Definitions or the Agreement, the following
shall prevail in the order of precedence indicated: (i) this Confirmation; (ii) the Equity Definitions; (iii) the 2006
Definitions; and (iv) the Agreement. For the avoidance of doubt, except to the extent of an express conflict, the application of
any provision of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions shall not be construed to exclude or
limit any other provision of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions.
The
Transaction hereunder shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and
Counterparty or any confirmation or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed
to exist between Dealer and Counterparty, then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation
or agreement or any other agreement to which Dealer and Counterparty are parties, the Transaction shall not be considered a Transaction
under, or otherwise governed by, such existing or deemed ISDA Master Agreement.
2. The
Transaction constitutes a Share Option Transaction for purposes of the Equity Definitions. The terms of the particular Transaction to
which this Confirmation relates are as follows:
General Terms:
Trade Date: |
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January 18, 2024 |
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Effective Date: |
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The closing date of the initial issuance of the Convertible Securities. |
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Option Style: |
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Modified American, as described under “Procedures for Exercise” below. |
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Option Type: |
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Call |
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Seller: |
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Dealer |
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Buyer: |
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Counterparty |
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Shares: |
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The Common Stock of Counterparty, par value USD0.50 (Ticker Symbol: “WGO”). |
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Applicable Percentage: |
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33 1/3% |
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Number of Options: |
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The number of Base Convertible Securities in denominations of USD1,000 principal amount issued by Counterparty on the closing date for the initial |
|
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issuance of the Convertible Securities. For the avoidance of doubt, the Number of Options outstanding shall be reduced by each exercise of Options hereunder. |
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Option Entitlement: |
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11.3724 |
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Fundamental Change Adjustment: |
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Any adjustment to the Conversion Rate pursuant to Section 5.07 of the Indenture. |
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Discretionary Adjustment: |
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Any adjustment to the Conversion Rate pursuant to Section 5.06 of the Indenture. |
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Strike Price: |
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USD87.9322 |
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Rounding of Strike Price/ |
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Option Entitlement: |
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In connection with any adjustment to the Option Entitlement or Strike Price, the Option Entitlement or the Strike Price, as the case may be, shall be rounded by the Calculation Agent in accordance with the provisions of the Indenture relating to rounding of the “Conversion Price” or the “Conversion Rate” as applicable (each as defined in the Indenture). |
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Number of Shares: |
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As of any date, a number of Shares equal to the product of (i) the Applicable Percentage, (ii) the Number of Options and (iii) the Option Entitlement. |
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Premium: |
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USD19,620,000.00 |
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Premium Payment Date: |
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The Effective Date |
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Exchange: |
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The New York Stock Exchange |
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Related Exchange: |
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All Exchanges |
Procedures for Exercise:
Exercise Dates: |
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Each Conversion Date. |
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Conversion Date: |
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Each “Conversion Date” (as defined in the Indenture) occurring during the Exercise Period for Convertible Securities each in denominations of USD1,000 principal amount (such Convertible Securities, the “Relevant Convertible Securities” for such Conversion Date). |
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Exercise Period: |
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The period from and excluding the Effective Date to, and including, the Expiration Date. |
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Expiration Date: |
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The earlier of (i) the last day on which any Convertible Securities remain outstanding and (ii) the second “Scheduled Trading Day” (as defined in the Indenture) immediately preceding the “Maturity Date” (as defined in the Indenture). |
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Automatic Exercise on Conversion Dates: |
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Applicable; and means that on each Conversion Date, a number of Options equal to the number of Relevant Convertible Securities for such Conversion Date in denominations of USD1,000 principal amount shall be automatically exercised, subject to “Notice of Exercise” below. |
Notice Deadline: |
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In respect of any exercise of Options hereunder on any Conversion Date, 5:00 P.M., New York City time, on (i) in the case the applicable Relevant Convertible Securities will be settled by Counterparty by delivery of Shares only (together with cash in lieu of any fractional Share), the “Trading Day” (as defined in the Indenture) immediately following the relevant Conversion Date, or (ii) otherwise, the Scheduled Trading Day immediately preceding the first day of the relevant Cash Settlement Averaging Period; provided that in the case of any exercise of Options hereunder in connection with the conversion of any Relevant Convertible Securities for any Conversion Date occurring during the period from and including the 85th “Scheduled Trading Day” (as defined in the Indenture) prior to the Maturity Date, to and including the Expiration Date (such period, the “Final Conversion Period”), the Notice Deadline shall be 5:00 P.M., New York City time, on the “Scheduled Trading Day” (as defined in the Indenture) immediately preceding the “Maturity Date” (as defined in the Indenture). |
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Notice of Exercise: |
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Notwithstanding anything
to the contrary in the Equity Definitions, Dealer shall have no obligation to make any payment or delivery in respect of any
exercise of Options hereunder and such obligation in respect of such exercise shall be permanently extinguished unless Counterparty
notifies Dealer in writing prior to the Notice Deadline in respect of such exercise, of (i) the number of Relevant Convertible
Securities being converted on the related Conversion Date (specifying, if applicable, whether all or any portion of such Convertible
Securities are Convertible Securities as to which additional Shares would be added to the Conversion Rate (as defined in the
Indenture) pursuant to Section 5.07 of the Indenture), (ii) the scheduled settlement date under the Indenture for the
Relevant Convertible Securities for such Conversion Date, (iii) whether such Relevant Convertible Securities will be settled by
Counterparty by delivery of cash or a combination of cash and Shares and, if such a combination, the “Specified Dollar
Amount” (as defined in the Indenture) and (iv) the first day of the relevant “Observation Period” (as defined
in the Indenture), if any; provided that in the case of any exercise of Options in connection with the conversion of any
Relevant Convertible Securities for any Conversion Date occurring during the Final Conversion Period, the contents of such notice
shall be as set forth in clauses (i) and (ii) above. Counterparty acknowledges its responsibilities under applicable
securities laws, and in particular Section 9 and Section 10(b) of the Exchange Act (as defined below) and the
rules and regulations thereunder, in respect of any election
of a |
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settlement method with respect to the Convertible Securities. For the avoidance of doubt, if Counterparty fails to give such notice when due in respect of any exercise of Options hereunder, Dealer’s obligation to make any payment or delivery in respect of such exercise shall be permanently extinguished, and late notice shall not cure such failure. If applicable, the Notice of Exercise shall also contain the Settlement Method Election Provisions. |
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Notice of Final Convertible Security Settlement Method: |
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Counterparty shall notify Dealer in writing before 5:00 P.M., New York City time, on the “Scheduled Trading Day” (as defined in the Indenture) immediately preceding the 85th “Scheduled Trading Day” (as defined in the Indenture) prior to the Maturity Date of the settlement method (and, if applicable, the Specified Dollar Amount) elected (or deemed to be elected) with respect to Relevant Convertible Securities with a Conversion Date occurring during the Final Conversion Period (any such notice, a “Notice of Final Convertible Security Settlement Method”). If applicable, the Notice of Final Convertible Security Settlement Method shall also contain the Settlement Method Election Provisions. |
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Dealer’s Telephone Number and Telex and/or Facsimile Number and Contact Details for purpose of Giving Notice: |
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As specified in Section 6(b) below. |
Settlement Terms:
Settlement Date: |
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For any Exercise Date, the date one Settlement Cycle following the final day of the relevant Cash Settlement Averaging Period; provided that the Settlement Date shall not be prior to the Exchange Business Day immediately following the date Counterparty provides the Notice of Delivery Obligation prior to 5:00 P.M., New York City time. |
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Delivery Obligation: |
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In lieu of the obligations set forth in Sections 8.1 and 9.1 of the Equity Definitions, and subject to “Notice of Exercise” above and “Discretionary Adjustments” , “Dividends” and “Consequences of Merger Events” below, in respect of an Exercise Date, Dealer will deliver to Counterparty on the related Settlement Date (the “Delivery Obligation”), amounts equal to the product of the Applicable Percentage and |
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(i) (I) a number of Shares equal to the aggregate number of Shares, if any, that Counterparty would be obligated to deliver to the holder(s) of the Relevant Convertible Securities for such Conversion Date pursuant to Section 5.03 of the Indenture (except that such number of Shares shall be determined without taking into |
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consideration any rounding pursuant to Section 5.03(B)(ii) of the Indenture and shall be rounded down to the nearest whole number) and (II) cash in lieu of any fractional Share resulting from such rounding; and/or |
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(ii) the aggregate amount of cash, if any, in excess of the principal amount of the Relevant Convertible Securities that Counterparty would be obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date pursuant to Section 5.03 of the Indenture, determined, for each of clauses (i) and (ii), by the Calculation Agent (by reference to such Sections of the Indenture) |
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as if Counterparty had elected to satisfy its conversion obligation in respect of such Relevant Convertible Securities by the Applicable Settlement Method, notwithstanding any different actual election by Counterparty with respect to the settlement of such Relevant Convertible Securities; provided that the Delivery Obligation shall be determined excluding any Shares and/or cash that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Securities as a direct or indirect result of any adjustments to the Conversion Rate pursuant to a Fundamental Change Adjustment or a Discretionary Adjustment and any interest payment that Counterparty is (or would have been) obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date. Notwithstanding the foregoing, if, in respect of any Exercise Date, (x)(I) the number of Shares included in the Delivery Obligation multiplied by the Share Obligation Value Price plus (II) the amount of cash included in the Delivery Obligation, would otherwise exceed (y) the relevant Net Convertible Share Obligation Value, such number of Shares and such amount of cash shall be proportionately reduced to the extent necessary to eliminate such excess. |
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Make-Whole Adjustment: |
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Notwithstanding anything to the contrary herein, in respect of any exercise of Options relating to a conversion of Relevant Convertible Securities in connection with which holders of the Relevant Convertible Securities would be entitled to receive additional Shares and/or cash as a result of adjustments to the Conversion Rate pursuant to a Fundamental Change Adjustment, the Delivery Obligation shall include such additional Shares and/or cash; provided that if the sum of (i) the product of (a) the number of Shares (if any) included in the Delivery Obligation per exercised Option and (b) the Share Obligation Value Price and (ii) the amount of cash (if any) included in the Delivery Obligation per exercised Option would otherwise |
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exceed the amount per Option, as determined by the Calculation Agent, that would be payable by Dealer under Section 6 of the Agreement if (x) the relevant Conversion Date were an Early Termination Date resulting from an Additional Termination Event with respect to which the Transaction was the sole Affected Transaction and Counterparty was the sole Affected Party and (y) the provisions of the Indenture relating to the Fundamental Change Adjustment were deleted, then such number of Shares and such amount of cash shall be proportionately reduced to the extent necessary to eliminate such excess. |
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Applicable Settlement Method: |
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For any Relevant Convertible Securities, if such Notice of Exercise (or such Notice of Final Convertible Security Settlement Method, as the case may be) contains all of the Settlement Method Election Provisions, the Applicable Settlement Method shall be the settlement method actually so elected by Counterparty in respect of such Relevant Convertible Securities (the “Convertible Securities Settlement Method”); otherwise, the Applicable Settlement Method shall assume Counterparty had made a Cash Election with respect to such Relevant Convertible Securities (a “Deemed Cash Election”) with a Specified Dollar Amount of USD1,000 per Relevant Convertible Security and the Delivery Obligation shall be determined by the Calculation Agent as if the relevant “Observation Period” pursuant to Section 5.03(B)(i) of the Indenture were the Cash Settlement Averaging Period. |
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Cash Settlement Averaging Period: |
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The 40 “Trading Days” (as defined in the Indenture) commencing on (I) the third “Trading Day” (as defined in the Indenture) after the Conversion Date for conversions with a related Conversion Date occurring prior to the Final Conversion Period or (II) the 41st “Scheduled Trading Day” (as defined in the Indenture) prior to the “Maturity Date” (as defined in the Indenture) for conversions with a related Conversion Date occurring during the Final Conversion Period. |
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Settlement Method Election Provisions: |
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In order for the Applicable Settlement Method to be the Convertible Securities Settlement Method in accordance with “Applicable Settlement Method” above, the related Notice of Exercise (or Notice of Final Convertible Security Settlement Method, as the case may be) must contain in writing the following representations and warranties from Counterparty to Dealer as of such notice delivery date: |
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(i) none of Counterparty and its officers or directors, or any person that controls, potentially controls, or otherwise exercises influence over, Counterparty’s decision to elect the Convertible Security Settlement Method is aware of any |
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material nonpublic information regarding Counterparty or the Shares; |
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(ii) Counterparty is electing the Convertible Security Settlement Method in good faith and not as part of a plan or scheme to evade compliance with the U.S. federal securities laws; Counterparty is not electing the Convertible Security Settlement Method to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the Exchange Act; and Counterparty has not entered into or altered any hedging transaction relating to the Shares corresponding to or offsetting the Transaction; |
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(iii) Counterparty has the power to make such election and to execute and deliver any documentation relating to such election that it is required by this Confirmation to deliver and to perform its obligations under this Confirmation and has taken all necessary action to authorize such election, execution, delivery and performance; |
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(iv) such election and performance of its obligations under this Confirmation do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets; and |
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(v) any transaction that Dealer makes with respect to the Shares during the period beginning at the time that Counterparty delivers such notice and ending at the close of business on the final day of the Cash Settlement Averaging Period shall be made by Dealer at Dealer’s sole discretion for Dealer’s own account and Counterparty shall not have, and shall not attempt to exercise, any influence over how, when, whether or at what price Dealer effects such transactions, including, without limitation, the prices paid or received by Dealer per Share pursuant to such transactions, or whether such transactions are made on any securities exchange or privately. |
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Notice of Delivery Obligation: |
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No later than the Exchange
Business Day immediately following the last day of the relevant Cash Settlement Averaging Period, Counterparty shall give Dealer notice
of the final number of Shares |
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and/or amount of cash included in the Total Convertible Share Obligation Value (as defined below); provided that, with respect to any Exercise Date occurring during the Final Conversion Period, Counterparty may provide Dealer with a single notice of the aggregate number of Shares and/or amount of cash included in the Total Convertible Share Obligation Value for all Exercise Dates occurring during such period (it being understood, for the avoidance of doubt, that the requirement of Counterparty to deliver such notice shall not limit Counterparty’s obligations with respect to a Notice of Exercise or Notice of Final Convertible Security Settlement Method, as the case may be, as set forth above, in any way). |
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Net Convertible Share Obligation Value: |
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With respect to Relevant Convertible Securities as to a Conversion Date, the product of (i) the Applicable Percentage and (ii)(A) the Total Convertible Share Obligation Value of such Relevant Convertible Securities for such Conversion Date minus (B) the aggregate principal amount of such Relevant Convertible Securities for such Conversion Date. |
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Total Convertible Share Obligation Value: |
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With respect to Relevant Convertible Securities with respect to a Conversion Date, (i) (A) the number of Shares equal to the aggregate number of Shares that Counterparty is obligated to deliver to the holder(s) of Relevant Convertible Securities for such Conversion Date pursuant to the Indenture (it being understood that such number of Shares shall be determined taking into consideration any rounding pursuant to Section 5.03(B)(ii) of the Indenture) multiplied by (B) the Share Obligation Value Price plus (ii) an amount of cash equal to the aggregate amount of cash that Counterparty is obligated to deliver to the holder(s) of Relevant Convertible Securities for such Conversion Date pursuant to the Indenture (including, for the avoidance of doubt, any cash payable by Counterparty in lieu of fractional Shares); provided that the Total Convertible Share Obligation Value shall be determined excluding any Shares and/or cash that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Securities as a direct or indirect result of any adjustments to the Conversion Rate pursuant to a Fundamental Change Adjustment or a Discretionary Adjustment and any interest payment that Counterparty is (or would have been) obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date. |
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Share Obligation Value Price: |
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The opening price as displayed under the heading “Op” on Bloomberg page “WGO.N <Equity>” (or any successor thereto) on the applicable Settlement Date or other date of delivery. |
Other Applicable Provisions: |
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To the extent Dealer is obligated to deliver Shares hereunder, the provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws that exist as a result of the fact that Counterparty is the issuer of the Shares. |
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Restricted Certificated Shares: |
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Notwithstanding anything to the contrary in the Equity Definitions, Dealer may, in whole or in part, deliver Shares required to be delivered to Counterparty hereunder in certificated form in lieu of delivery through the Clearance System. With respect to such certificated Shares, the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by deleting the remainder of the provision after the word “encumbrance” in the fourth line thereof. |
Adjustments:
Method of Adjustment: |
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Notwithstanding Section 11.2 of the Equity Definitions, upon the occurrence of any event or condition set forth in Section 5.05(A)(i), (ii), (iii), (iv) and (v) and Section 5.05(H) of the Indenture (a “Potential Adjustment Event”) that results in an adjustment under the Indenture, the Calculation Agent shall make a corresponding adjustment in respect of any one or more of the Strike Price, the Number of Options, the Option Entitlement and any other term relevant to the exercise, settlement or payment of the Transaction, subject to “Discretionary Adjustments” below. Promptly upon the occurrence of any Potential Adjustment Event, Counterparty shall notify the Calculation Agent of such Potential Adjustment Event; and once the adjustments to be made to the terms of the Indenture and the Convertible Securities in respect of such Potential Adjustment Event have been determined, Counterparty shall immediately notify the Calculation Agent in writing of the details of such adjustments. |
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Notwithstanding anything to the contrary herein or in the Equity Definitions: |
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(i) in connection with any Potential Adjustment Event as a result of an event or condition set forth in Section 5.05(A)(ii) of the Indenture or Section 5.05(A)(iii)(1) of the Indenture where, in either case, the period for determining “Y” (as such term is used in Section 5.05(A)(ii) of the Indenture) or “SP” (as such term is used in Section 5.05(A)(iii)(1) of the Indenture), as the |
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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 of 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 |
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(ii) 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 is otherwise not adjusted at the time or in the manner contemplated by the Indenture based on such declaration or (c) the Conversion Rate 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 of 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. |
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Upon the occurrence of any Potential Adjustment Event Change, Counterparty shall immediately notify the Calculation Agent in writing of the details of such Potential Adjustment Event Change. |
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For the avoidance of doubt, Dealer shall not have any payment or delivery obligation hereunder in respect of, 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 the holders of Convertible Securities (upon conversion or otherwise) or (y) any other transaction in which holders of Convertible Securities are entitled to participate, in each case, in lieu of an adjustment under the Indenture in respect of a Potential Adjustment Event (including, without limitation, under the proviso to the first sentence of Section 5.05(A)(iii)(1) of the Indenture or the proviso to the first sentence of Section 5.05(A)(iv) of the |
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Indenture)1. |
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Discretionary Adjustments: |
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Notwithstanding anything to the contrary herein or in the Equity Definitions, if the Calculation Agent in good faith disagrees with any adjustment under the Indenture that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation, pursuant to Section 5.05(H) of the Indenture or pursuant to Section 5.08(A) of the Indenture or any supplemental indenture entered into thereunder (a “Merger Supplemental Indenture”) or in connection with the determination of the fair value of any securities, property, rights or other assets), then the Calculation Agent will determine the adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment of or under the Transaction in a commercially reasonable manner and, for the avoidance of doubt, the Delivery Obligation shall be calculated on the basis of such adjustments by the Calculation Agent; provided that, notwithstanding the foregoing, in any Potential Adjustment Event occurs during the Cash 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 holder of the underlying Shares on the related Conversion Date, 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. |
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Dividends: |
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If (i) at any time during the period from and including the Trade Date, to but excluding the Expiration Date, an ex-dividend date for a regular quarterly cash dividend occurs with respect to the Shares (an “Ex-Dividend Date”) and that dividend is less than the Regular Dividend on a per Share basis or (ii) no Ex-Dividend Date for a regular quarterly cash dividend occurs with respect to the Shares in any quarterly dividend period of Counterparty, then the Calculation Agent will make a corresponding adjustment in respect of any one or more of the Strike Price, the Number of Options, the Option Entitlement and any other term relevant to the exercise, settlement or payment of the Transaction to account for the economic effect on the Transaction of such dividend or lack thereof, and, for the avoidance of doubt, any such adjustments shall be taken into |
1
Include references to provisions of Indenture providing for pass-through of cash or Distributed Property in lieu of Conversion
Rate adjustments.
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account in calculating the Delivery Obligation. “Regular Dividend” shall mean USD 0.31 per Share. |
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Notice of Certain Other Events: |
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Counterparty shall give Dealer commercially reasonable advance (but in no event less than one Exchange Business Day) written notice of the section or sections of the Indenture and, if applicable, the formula therein, pursuant to which any adjustment will be made to the Convertible Securities in connection with any Potential Adjustment Event, Merger Event or Tender Offer. |
Extraordinary Events:
Merger Events: |
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Notwithstanding Section 12.1(b) of the Equity Definitions, “Merger Event” shall mean the occurrence of any event or condition set forth in the definition of “Common Stock Change Event” set forth in Section 5.08(A) of the Indenture. |
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Consequences of Merger Events: |
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Notwithstanding Section 12.2 of the Equity Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall make an adjustment to the terms relevant to the exercise, settlement or payment of the Transaction corresponding to the adjustment required under Section 5.08 of the Indenture in respect of such Merger Event, as determined by the Calculation Agent (by reference to such Section), subject to “Discretionary Adjustments” above; provided that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to a Fundamental Change Adjustment or a Discretionary Adjustment; and provided further that the Calculation Agent may make such further adjustments to the terms of the Transaction as may be necessary to ensure that the fair value of the Transaction to Dealer is not adversely affected as a result of any adjustment referenced in this paragraph and, for the avoidance of doubt, any such further adjustments shall be taken into account in calculating the Delivery Obligation; and provided further that if, with respect to a Merger Event, (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 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, will not be a corporation organized under the laws of the United States, any state thereof or the District of Columbia and/or will not be the Issuer, Dealer may elect in its sole discretion that Cancellation and Payment (Calculation Agent Determination) shall apply. |
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Notice of Merger Consideration and Consequences: |
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Upon the occurrence of a Merger Event, Counterparty shall reasonably promptly (but in any event prior to the relevant merger date) notify the |
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Calculation Agent of (i) in the case of a Merger Event that causes the Shares to be converted into the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), the types and amount of consideration actually received by such holders, and (ii) the details of the adjustment to be made under the Indenture in respect of such Merger Event. |
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Nationalization, Insolvency or Delisting: |
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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 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. |
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Additional Termination Event(s): |
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Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, the Transaction would be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event (with the Transaction (or the cancelled or terminated portion thereof) being the Affected Transaction and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to such Affected Transaction. |
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Additional Disruption Events: |
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(a) Change in Law: |
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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”, (ii) by adding the phrase “and/or Hedge Position” after the word “Shares” in
clause (X) thereof and (iii) by immediately following the word “Transaction” in clause (X) thereof,
adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date”; and provided further that
Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the parenthetical beginning after
the word “regulation” in the second line thereof 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)” and (ii) adding the words “, or holding, acquiring or disposing of Shares or any Hedge Positions relating
to,” after the words |
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“obligations under” in clause (Y) thereof. |
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(b) Failure to Deliver: |
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Applicable |
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(c) Insolvency Filing: |
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Applicable |
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(d) Hedging Disruption: |
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Applicable; provided that: |
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(i) |
Section 12.9(a)(v) of the Equity Definitions is hereby
amended by: |
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(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 |
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(b) |
inserting the following paragraphs at the end of such Section: |
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“Such inability described in clauses (A) or (B) above
shall not constitute a “Hedging Disruption” if such inability results from Hedging Party’s creditworthiness. |
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For the avoidance of doubt, (i) the term “equity
price risk” shall be deemed to include, but shall not be limited to, stock price and volatility risk, and (ii) the transactions
or assets referred to in phrases (A) or (B) above must be available on commercially reasonable pricing and other terms.”;
and |
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(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”. |
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(e) Increased Cost of Hedging: |
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Applicable; provided that such increased cost described in Section 12.9(vi) of the Equity Definitions shall not constitute an “Increased Cost of Hedging” if such increased cost results from Hedging Party’s creditworthiness. |
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Hedging Party: |
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Dealer |
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Determining Party: |
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Dealer. All calculations and determinations by the Determining Party shall be made in good faith and in a commercially reasonable manner. Following any calculation by the Determining Party hereunder, upon written request by Counterparty, the Determining Party will, within five Exchange Business Days immediately following such request, provide to Counterparty 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; provided, however, that in no event will the Determining Party be obligated to share with |
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Counterparty any proprietary or confidential data or information or any proprietary or confidential models used by it. |
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Non-Reliance: |
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Applicable |
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Agreements and Acknowledgments Regarding Hedging Activities: |
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Applicable |
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Additional Acknowledgments: |
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Applicable |
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3. Calculation Agent: |
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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, if the Calculation Agent fails to timely make any calculation, adjustment or determination required to be made by the Calculation Agent hereunder or to perform any obligations of the Calculation Agent hereunder and such failure continues for five Exchange Business Days following notice to the Calculation Agent by Counterparty of such failure, Counterparty shall have the right to designate a nationally recognized third-party dealer in over-the-counter corporate equity derivatives to act, during the period commencing on the first date the Calculation Agent fails to timely make such calculation, adjustment or determination or to perform such obligation, as the case may be, and ending on the earlier of the Early Termination Date with respect to such Event of Default and the date on which such Event of Default is no longer continuing, as Calculation Agent. |
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Following any calculation by the Calculation Agent hereunder, upon written request by Counterparty, the Calculation Agent will, within five Exchange Business Days immediately following such request, provide to Counterparty by email to the email 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 the basis for such calculation; provided that in no event will Dealer be obligated to share with Counterparty any proprietary or confidential data or information or any proprietary or confidential models used by it or any information that is subject to an obligation not to disclose such information. |
4. Account
Details:
Dealer Payment Instructions:
Chase
Manhattan Bank New York
For
A/C Goldman, Sachs & Co.
A/C
#930-1-011483
ABA: 021-000021
Counterparty
Payment Instructions:
To
be provided by Counterparty.
5. Offices:
The
Office of Dealer for the Transaction is: 200 West Street, New York, New York 10282-2198
The
Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party.
6. Notices:
For purposes of this Confirmation:
(a) Address
for notices or communications to Counterparty:
Winnebago
Industries, Inc.
13200
Pioneer Trail, Suite 150
Eden
Prairie, MN 55347
Attention:
Kathy Hiebert, Treasurer
(b) Address for notices or communications to Dealer:
To: Goldman
Sachs & Co. LLC
200 West
Street
New York,
NY 10282-2198
Attn:
Michael Voris, Equity Capital Markets Telephone: 212-902-4895
Facsimile:
212-256-5738
E-mail:
michael.voris@gs.com With a copy to:
Attn:
Jan Debeuckelaer Telephone: 212-934-0893
Facsimile:
212-256-5738
Email:
jan.debeuckelaer@gs.com And
Attn:
Garrett Cohen Telephone: 212-357-3427
Facsimile:
212-256-5738
Email:
garrett.cohen@gs.com
And email
notification to the following address: Eq-derivs-notifications@ny.ibd.gs.com
7. Representations,
Warranties and Agreements:
(a) In
addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants
to and for the benefit of, and agrees with, Dealer as follows:
(i) On
the Trade Date and as of the date of any Notice of Share Termination under (and as defined in) Section 8(c) below, (A) none
of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and
(B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports
and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be stated therein
or
necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.
(ii) (A) On
the Trade Date, the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not subject to a “restricted
period,” as such term is defined in Regulation M under the Exchange Act (“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 Trade Date.
(iii) 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).
(iv) Without
limiting the generality of Section 3(a)(iii) of the Agreement, the Transaction will not violate Rule 13e-1 or Rule 13e-4
under the Exchange Act.
(v) Prior
to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction
and such other certificate or certificates as Dealer shall reasonably request. Based on such resolutions, neither Dealer nor any of its
affiliates shall be subject to the restrictions under Section 302A.673 of the Minnesota Business Corporations Act as an “interested
shareholder” of Counterparty by virtue of (A) its role as initial purchaser of, or market-maker in, any securities of Counterparty
convertible into the Shares, (B) its entry into the Transaction and/or (C) any hedging transactions in Counterparty’s
securities in connection with the Transaction.
(vi) Counterparty
is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into
or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into
or exchangeable for Shares) or otherwise in violation of the Exchange Act.
(vii) 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.
(viii) On
each of the Trade Date and the Premium Payment Date, Counterparty is not “insolvent” (as such term is defined under Section 101(32)
of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be
able to purchase the Number of Shares in compliance with the laws of the jurisdiction of Counterparty’s incorporation.
(ix) The
representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement,
dated as of January 18, 2024, between Goldman Sachs & Co. LLC and BMO Capital Markets Corp. as the Representatives and
Counterparty (the “Purchase Agreement”) are true and correct as of the Trade Date and the Effective Date and are hereby
deemed to be repeated to Dealer as if set forth herein.
(x) No
state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise
to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from
any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares; provided however, that Counterparty
makes no representation or warranty regarding any such requirement that is applicable generally to the ownership of equity securities
by Dealer or any of its affiliates as a result of it or any such affiliates being financial institutions or broker-dealers .
(xi) 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, including, without limitation, the transaction that is the subject of this confirmation
and any transactions related hereto or contemplated hereby; (B) will exercise independent judgment in evaluating the recommendations
of Dealer and its affiliates or associated persons with regard to any such securities transactions or strategies unless it has otherwise
notified Dealer in writing; and (C) has total assets of at least $50 million. Counterparty will notify Dealer if the immediately
preceding statement contained in this Section 7(a)(xi) ceases to be true.
(xii) Without
limiting the generality of Section 3(a) of the Agreement, neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation
or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree
of any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Counterparty’s Annual Report
on Form 10-K for the year ended August 26,
2023, as updated by any subsequent filings, to which Counterparty or any of its subsidiaries is
a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject,
or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
(b) Each
of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18)
of the U.S. Commodity Exchange Act, as amended, and is entering into the Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise) and not for the benefit of any third party.
(c) Each
of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under
the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(a)(2) thereof. Accordingly,
Counterparty represents and warrants to Dealer that (i) it has the financial ability to bear the economic risk of its investment
in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in respect of the Transaction,
which it understands are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection
with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an “accredited investor”
as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its
own account and without a view to the distribution or resale thereof, (iv) the assignment, transfer or other disposition of the
Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities
Act and state securities laws, and (v) its financial condition is such that it has no need for liquidity with respect to its investment
in the Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness
and is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands
and accepts, the terms, conditions and risks of the Transaction.
(d) Each
of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution” and “financial participant”
within the meaning of Sections 101(22) and 101(22A) of the Bankruptcy Code. The parties hereto further agree and acknowledge (A) that
this Confirmation is a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code,
with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment
amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement
payment” within the meaning of Section 546 of the Bankruptcy Code, and (B) that Dealer is entitled to the protections
afforded by, among other sections, Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 548(d)(2), 555 and 561 of the Bankruptcy Code.
(e) As
a condition to the effectiveness of the Transaction, Counterparty shall deliver to Dealer (i) an incumbency certificate, dated as
of the Premium Payment Date, of Counterparty in customary form and (ii) an opinion of counsel, dated as of the Premium Payment Date
and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement,
Sections 7(a)(vii) and 7(a)(xii) hereof and such other matters as Dealer may reasonably request.
(f) Counterparty
understands that notwithstanding any other relationship between Counterparty and Dealer and its affiliates, in connection with this Transaction
and any other over-the-counter derivative transactions between Counterparty and Dealer or its affiliates, Dealer or its affiliates is
acting as principal and is not a fiduciary or advisor in respect of any such transaction, including any entry, exercise, amendment, unwind
or termination thereof.
(g) Counterparty
represents and warrants that it has received, read and understands the OTC Options Risk Disclosure Statement and a copy of the
most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled “Characteristics and Risks of Standardized
Options”.
(h) 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.
(i) Counterparty
represents and warrants that the assets used in the Transaction (i) 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 (ii) do not constitute
“plan assets” within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR
Section 2510-3-101.
(j) On
the Trade Date, neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18
under 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.
(k) Counterparty
acknowledges that the Transaction may constitute a purchase of its equity securities or a capital distribution. Counterparty further
acknowledges that, pursuant to the provisions of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”),
the Counterparty will be required to agree to certain time-bound restrictions on its ability to purchase its equity securities or make
capital distributions 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 or make capital distributions 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 or the U.S. Department of Treasury for the purpose of providing liquidity to the financial system, and may be required to agree
to similar restrictions under programs or facilities established in the future. Accordingly, Counterparty represents and warrants that
neither it nor any of its subsidiaries has applied for, 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 (whether in existence as of the Trade
Date or subsequently enacted, adopted or amended), including without limitation the CARES Act and the Federal Reserve Act, as amended,
and (b) requires under applicable law (or any regulation, guidance, interpretation or other pronouncement thereunder), as a condition
of such loan, loan guarantee, direct loan (as that term is defined in the CARES Act), investment, financial assistance or relief, that
Counterparty or any of its subsidiaries agree, attest, certify or warrant that it has not, as of the date specified in such condition,
repurchased, or will not repurchase, any equity security of Counterparty, and that it has not, as of the date specified in such condition,
made a capital distribution or will not make a capital distribution (collectively, “Restricted Financial Assistance”);
provided that Counterparty may apply for Restricted Financial Assistance if Counterparty either (a) determines, based on the advice
of outside counsel of national standing, that the terms of the Transaction would not cause Counterparty to fail to satisfy any condition
for application for or receipt or retention of such loan, loan guarantee, direct loan (as that term is defined in the CARES Act), investment,
financial assistance or relief based on the terms of the program or facility as of the date of such advice or (b) delivers to Dealer
evidence of a waiver or other guidance from a governmental authority with jurisdiction for such program or facility that the Transaction
is permitted under such program or facility (either by specific reference to the Transaction or by general reference to transactions
with attributes of the Transaction in all relevant respects). Counterparty further represents and warrants that the Premium is not being
paid, in whole or in part, directly or indirectly, with
funds received under or pursuant to any program or facility, including the U.S.
Small Business Administration’s “Paycheck Protection Program”, that (a) is established under applicable law (whether
in existence as of the Trade Date or subsequently enacted, adopted or amended), including without limitation the CARES Act and the Federal
Reserve Act, as amended, and (b) requires under such applicable law (or any regulation, guidance, interpretation or other pronouncement
of a governmental authority with jurisdiction for such program or facility) that such funds be used for specified or enumerated purposes
that do not include the purchase of the Transaction (either by specific reference to the Transaction or by general reference to transactions
with the attributes of the Transaction in all relevant respects).
8.
Other Provisions:
(a) Right
to Extend. Dealer may postpone or add, in whole or in part, any Exercise Date or Settlement Date or any other
date of valuation or delivery by Dealer, with respect to some or all of the relevant Options (in which event the Calculation Agent shall
make appropriate adjustments to the Delivery Obligation), if Dealer determines, in its commercially reasonable discretion, that such
extension or addition is reasonably necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind
activity hereunder in light of existing liquidity conditions in the cash market, the stock borrow market or other relevant market or
to enable Dealer to effect transactions with respect to Shares or Share Termination Delivery Units 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 requirements, or with related policies
and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer,
and in the case of policies or procedures, so long as such policies and procedures are consistently applied to transactions similar to
the Transaction).
(b) Additional
Termination Events.
(A) The
occurrence of an event of default with respect to Counterparty under the terms of the Convertible Securities as set forth in Section 7.01
of the Indenture that results in the acceleration of the Convertible Notes, or (B) an Amendment Event, in each case, 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. “Amendment Event” means that
Counterparty amends, modifies, supplements, waives or obtains a waiver in respect of any term of the Indenture or the Convertible Securities
governing the principal amount, coupon, maturity, repurchase obligation of Counterparty, any term relating to conversion of the Convertible
Securities (including changes to the conversion rate, conversion rate adjustment provisions, conversion settlement dates or conversion
conditions), or any term that would require consent of the holders of not less than 100% of the principal amount of the Convertible Securities
to amend (other than, in each case, any amendment or supplement (x) pursuant to Section 8.01(I) of the Indenture that,
as determined by the Calculation Agent, conforms the Indenture to the description of Convertible Securities in the Offering Memorandum
or (y) pursuant to Section 5.08 of the Indenture), in each case, without the consent of Dealer.
(B) Within
3 Scheduled Trading Days promptly following any Repayment Event (as defined below), Counterparty shall notify Dealer of such Repayment
Event and the aggregate principal amount of Convertible Notes subject to such Repayment Event or the portion of such aggregate principal
amount that Counterparty elects to be subject to such Repayment Event) (any such notice, a “Repayment Notice”). Any
Repayment Notice shall contain a written representation by Counterparty to Dealer that Counterparty is not, on the date of such Repayment
Notice, in possession of any material non-public information with respect to Counterparty or the Shares. The receipt by Dealer from Counterparty
of any Repayment Notice shall constitute an Additional Termination Event as provided in this Section 8(b)(B). Upon receipt of any
such Repayment Notice, Dealer shall designate an Exchange Business Day following receipt of such Repayment Notice as an Early Termination
Date with respect to the portion of the Transaction
corresponding
to a number of Options (the “Repayment Options”) equal to the lesser of (A) the aggregate principal amount of
such Convertible Notes specified in such Repayment Notice, divided by USD 1,000, and (B) the Number of Options as of the
date Dealer designates such Early Termination Date and, as of such date, the Number of Options shall be reduced by the number of Repayment
Options. Any payment hereunder with respect to such termination (the “Repayment Unwind Payment”) shall be calculated
pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction
having terms identical to the Transaction and a Number of Options equal to the number of Repayment Options, (2) Counterparty were
the sole Affected Party with respect to such Additional Termination Event and (3) the terminated portion of the Transaction were
the sole Affected Transaction; provided that, in the event of a Repayment Event pursuant to Section 4.02 of the Indenture
or Section 4.03 of the Indenture, such payment shall not be greater than (x) the number of Repayment Options multiplied by
(y) the product of (A) the Applicable Percentage and (B) the excess, if any of (I) the amount paid by Counterparty
per Convertible Security pursuant to Section 4.02 of the Indenture or Section 4.03 of the Indenture, as the case may be, over
(II) USD 1,000.” “Repayment Event” means that (i) any Convertible Notes are repurchased or redeemed
(whether pursuant to Section 4.02 of the Indenture, Section 4.03 of the Indenture or for any other reason) by Counterparty
or any of its subsidiaries, (ii) any Convertible Notes are delivered to Counterparty or any of its subsidiaries in exchange for
delivery of any property or assets of such party (howsoever described), (iii) any principal of any of the Convertible Notes is repaid
prior to the final maturity date of the Convertible Notes, or (iv) any Convertible Notes are exchanged by or for the benefit of
the Holders (as such term is defined in the Indenture) thereof for any other securities of Counterparty or any of its subsidiaries (or
any other property, or any combination thereof) pursuant to any exchange offer or similar transaction. For the avoidance of doubt, any
conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute a Repayment Event.
(c) Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Dealer shall owe Counterparty any amount pursuant
to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Counterparty shall have the right, in its
sole discretion, to require Dealer to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by
giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day (which written confirmation shall
contain the representation and warranty set forth in Section 7(a)(i)), no later than 9:30 A.M., New York City time, on the relevant
merger date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as
applicable (“Notice of Share Termination”); provided that if Counterparty does not elect to require Dealer
to satisfy its Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to elect
to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s failure to elect or election
to the contrary; and provided further that Counterparty shall not have the right to so elect (but, for the avoidance of doubt,
Dealer shall have the right to so elect) in the event of (i) an Insolvency, a Nationalization or a Merger Event, in each case, in
which the consideration or proceeds to be paid to holders of Shares consists solely of cash or (ii) an Event of Default in which
Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party or an Extraordinary Event, which
Event of Default, Termination Event or Extraordinary Event resulted from an event or events within Counterparty’s control. Upon
such Notice of Share Termination, the following provisions shall apply on the Scheduled Trading Day immediately following the relevant
merger date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as
applicable:
Share Termination Alternative: |
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If applicable, means that Dealer shall deliver to Counterparty the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to Section 6(d)(ii) of the Agreement or such later date or dates as Dealer may commercially reasonably determine (the “Share Termination Payment Date”) taking into account commercially reasonable hedging or hedge unwind activity, in satisfaction of the Payment Obligation. |
Share Termination Delivery Property: |
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A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of the aggregate amount of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price. |
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Share Termination Unit Price: |
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The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. |
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Share Termination Delivery Unit: |
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In the case of a Termination Event (other than on account of an Insolvency, Nationalization or Merger Event), Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization or Merger Event, one Share or a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization or Merger Event, as applicable. If such Insolvency, Nationalization 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. |
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Failure to Deliver: |
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Applicable |
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Other Applicable Provisions: |
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If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares” shall be read as references to “Share Termination Delivery Units”; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Counterparty is the issuer of any Share Termination Delivery Units (or any part thereof). |
(d) Disposition
of Hedge Shares. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer, the Shares (the “Hedge
Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction in a commercially reasonable
manner cannot be sold in the U.S. public market by Dealer without registration under the Securities Act, Counterparty shall, at its election:
(i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration
statement under the Securities Act to cover the resale of such Hedge Shares and (A) enter into an agreement, in form and substance
reasonably satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered offering, (B) provide
accountant’s “comfort” letters in customary form for registered offerings of equity securities, (C) provide disclosure
opinions of nationally recognized outside counsel to Counterparty reasonably acceptable to Dealer, (D) provide other customary opinions,
certificates and closing documents customary in form for registered offerings of equity securities and (E) afford Dealer a reasonable
opportunity to conduct a “due diligence” investigation with respect to Counterparty customary in scope for underwritten offerings
of equity securities; provided that if Counterparty elects clause (i) above but the items referred to therein are not completed
in a timely manner, or if Dealer, in its sole discretion, is not satisfied with access to due diligence materials, the results of its
due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or
clause (iii) of this Section 8(d) shall apply at the election of Counterparty; (ii) in order to allow Dealer to sell
the Hedge Shares in a private placement, enter into a private placement
agreement substantially similar to private placement purchase
agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to Dealer,
including customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer,
due diligence rights (for Dealer or any designated buyer of the Hedge Shares from Dealer), and best efforts obligations to provide opinions
and certificates and such other documentation as is customary for private placements agreements, all commercially reasonably acceptable
to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary to compensate
Dealer for any commercially reasonable discount from the public market price of the Shares incurred on the sale of Hedge Shares in a
private placement); or (iii) purchase the Hedge Shares from Dealer at the “Daily VWAP” (as defined in the Indenture)
on such Exchange Business Days, and in the amounts, commercially reasonably requested by Dealer. This Section 8(d) shall survive
the termination, expiration or early unwind of the Transaction.
(e) Repurchase
and Conversion Rate Adjustment Notices. Counterparty shall, at least two Exchange Business Days prior to any day on which Counterparty
effects any repurchase of Shares or consummates or otherwise engages in any transaction or event (a “Conversion Rate Adjustment
Event”) that could reasonably be expected to lead to an increase in the Conversion Rate, give Dealer a written notice of such
repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if, following such repurchase or
Conversion Rate Adjustment Event, the Notice Percentage would reasonably be expected to be (i) greater than 13.27% and (ii) greater
by 0.5% than the Notice Percentage included in the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase
Notice, greater than the Notice Percentage as of the date hereof). The “Notice Percentage” as of any day is the fraction,
expressed as a percentage, the numerator of which is the Number of Shares plus the number of shares underlying any other convertible
bond hedge transactions or call options sold by Dealer to Counterparty and the denominator of which is the number of Shares outstanding
on such day. In the event that Counterparty fails to provide Dealer with a Repurchase Notice on the day and in the manner specified in
this Section 8(e) then Counterparty agrees to indemnify and hold harmless Dealer, its affiliates and their respective directors,
officers, employees, agents and controlling persons (Dealer and each such person being an “Indemnified Party”) from
and against any and all losses (including losses relating to the Dealer’s hedging activities as a consequence of becoming, or of
the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities
or cessation of hedging activities and any losses in connection therewith with respect to this Transaction), claims, damages and liabilities
(or actions in respect thereof), joint or several, to which such Indemnified Party may become subject under applicable securities laws,
including without limitation, Section 16 of the Exchange Act or under any state or federal law, regulation or regulatory order,
relating to or arising out of such failure. If for any reason the foregoing indemnification is unavailable to any Indemnified Party or
insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to the maximum extent permitted by law, to the
amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability. In addition, Counterparty will
reimburse any Indemnified Party for all reasonable, actual expenses (including reasonable counsel fees and expenses) as they are incurred
(after notice to Counterparty and supported by invoices or other documentation setting forth in reasonable detail such expenses) in connection
with the investigation of, preparation for or defense or settlement of any pending or threatened claim or any action, suit or proceeding
arising therefrom, whether or not such Indemnified Party is a party thereto and whether or not such claim, action, suit or proceeding
is initiated or brought by or on behalf of Counterparty. To the extent an Indemnified Party fails to provide notice of any action commenced
against it in respect of which indemnity may be sought hereunder within a commercially reasonable period of time that would materially
prejudice Counterparty (it being understood that any such notice delivered within 30 calendar days of the commencement of any such action
shall be deemed to have been delivered within a commercially reasonable period of time for such purpose). Counterparty shall be relived
from liability. This indemnity shall survive the completion of the Transaction contemplated by this Confirmation and any assignment and
delegation of the Transaction made pursuant to this Confirmation or the Agreement and shall inure to the benefit of any permitted assignee
of Dealer.
(f) Transfer
and Assignment. Either party may transfer or assign any of its rights or obligations under the Transaction with the prior written
consent of the non-transferring party, such consent not to be unreasonably withheld or delayed; provided that Dealer may transfer
or assign without any consent of Counterparty its rights and obligations hereunder, in whole or in part, to (i) any affiliate of
Dealer or (ii) any
person, or any person whose obligations hereunder would be guaranteed, pursuant to the terms of a customary guarantee in a form
generally used for similar transactions, by a person, in either case, of credit quality at least equivalent to Dealer’s (or
its ultimate parent’s). If at any time at which (1) the Equity Percentage exceeds 8.0% or (2) Dealer, Dealer Group
(as defined below) or any person whose ownership position would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer
Group or any such person, a “Dealer Person”) under the Minnesota Business Corporations Act or other federal,
state or local law, rule, regulation or regulatory order or organizational documents or contracts of Counterparty applicable to
ownership of Shares (“Applicable Restrictions”), 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, registration, filing or notification obligations or other requirements (including
obtaining prior approval by a state or federal regulator) of a Dealer Person under Applicable Restrictions and with respect to which
such requirements have not been met or the relevant approval has not been received or that would subject a Dealer Person to
restrictions (including restrictions relating to business combinations or other designated transactions), or have any other adverse
effect on a Dealer Person, under Applicable Restrictions minus (y) 1% of the number of Shares outstanding on the date of
determination (either such condition described in clause (1) or (2), an “Excess Ownership Position”),
Dealer, in its discretion, is unable to effect a transfer or assignment to a third party after its commercially reasonable efforts
on pricing and terms and within a time period reasonably acceptable to Dealer such that an Excess Ownership Position no longer
exists, Dealer 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 would no longer exist following
the resulting partial termination of the Transaction (after taking into account commercially reasonable adjustments to
Dealer’s commercially reasonable Hedge Positions from such partial termination). In the event that Dealer so designates an
Early Termination Date with respect to a portion of the Transaction, a payment or delivery shall be made pursuant to Section 6
of the Agreement or Section 8(c) of this Confirmation as if (i) an Early Termination Date had been designated in
respect of a Transaction having terms identical to the Terminated Portion of the Transaction, (ii) Counterparty were the sole
Affected Party with respect to such partial termination, (iii) such portion of the Transaction were the only Terminated
Transaction and (iv) Dealer were 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. 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 Dealer and any of its affiliates subject to aggregation with Dealer for purposes of the “beneficial
ownership” test under Section 13 of the Exchange Act and all persons who may form a “group” (within the
meaning of Rule 13d-5(b)(1) under the Exchange Act) with Dealer (collectively, “Dealer Group”)
“beneficially own” (within the meaning of Section 13 of the Exchange Act) without duplication on such day (or, to
the extent that for any reason the equivalent calculation under Section 16 of the Exchange Act and the rules and
regulations thereunder results in a higher number, such higher number) and (B) the denominator of which is the number of Shares
outstanding on such day. In the case of a transfer or assignment by Counterparty of its rights and obligations hereunder and under
the Agreement, in whole or in part (any such Options so transferred or assigned, the “Transfer Options”), to any
party, withholding of such consent by Dealer shall not be considered unreasonable if such transfer or assignment does not meet the
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 8(e) or
any obligations under Section 2 (regarding Extraordinary Events) or 8(d) of this Confirmation;
(B) Any
Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended (the “Code”));
(C) Such
transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited
to, undertakings with respect to compliance with applicable securities laws in a manner that, in the 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 by, and reasonably satisfactory
to, Dealer;
(D) Dealer
shall not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of
the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and
assignment;
(E) An
Event of Default, Potential Event of Default or Termination Event shall not occur as a result of such transfer and assignment;
(F) Without
limiting the generality of clause (B), Counterparty shall have caused the transferee to make such Payee Tax Representations and to provide
such tax documentation 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 and assignment; and
(G) Counterparty
shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with
such transfer or assignment.
(g) Delivery
of Shares. Notwithstanding anything to the contrary herein, Dealer may, by prior notice to Counterparty, satisfy its obligation to
deliver any Shares or other securities on any date due (an “Original Delivery Date”) by making separate deliveries
of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate
number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered
on such Original Delivery Date.
(h) 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.
(i) No
Netting and Set-off. The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party waives
any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any
delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between
parties hereto, by operation of law or otherwise.
(j) Equity
Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction
that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy. For the avoidance of doubt, the
parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim
arising as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement. For the avoidance
of doubt, the parties acknowledge that the obligations of Counterparty under this Confirmation are not secured by any collateral that
would otherwise secure the obligations of Counterparty herein under or pursuant to any other agreement.
(k) Early
Unwind. In the event the sale by Counterparty of the Firm Securities not consummated pursuant to the Purchase Agreement for any reason
by the close of business in New York on January 23, 2024 (or such later date as agreed upon by the parties) (January 23, 2024
or such later date being the “Early Unwind Date”), the Transaction shall automatically terminate (the “Early
Unwind”) on the Early Unwind Date and the Transaction and all of the respective rights and obligations of Dealer and Counterparty
hereunder shall be cancelled and terminated and Counterparty shall pay to Dealer an amount in cash
equal to the aggregate amount of costs and expenses relating to the unwinding of Dealer’s hedging activities in respect of the
Transaction (including market losses incurred in reselling any Shares purchased by Dealer or its affiliates in connection with such hedging
activities, unless Counterparty agrees to purchase any such Shares at the cost at which Dealer purchased such Shares). Following such
termination, cancellation and payment, each party shall be released and discharged by the other party from, and agrees not to make any
claim against the other party with respect to, any obligations or liabilities of either party
arising out of, and to be performed in
connection with, the Transaction either prior to or after the Early Unwind Date. Dealer and Counterparty represent and acknowledge to
the other that upon an Early Unwind and following the payment referred to above, all obligations with respect to the Transaction shall
be deemed fully and finally discharged.
(l) 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 Issuer 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 “Daily VWAP” (as defined in the Indenture); (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 “Daily VWAP” (as defined in the Indenture),
each in a manner that may be adverse to Counterparty; and (E) the Transaction is a derivatives transaction in which it has granted
Dealer an option, and Dealer may purchase shares for its own account at an average price that may be greater than, or less than, the
price paid by Counterparty under the terms of the Transaction.
(m) Wall
Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability
Act of 2010 (the “WSTAA”), the parties hereby agree that neither the enactment of the WSTAA (or any statute containing
any legal certainty provision similar to Section 739 of the WSTAA) or any regulation under the WSTAA (or any such statute),
nor any requirement under the WSTAA (or any statute containing any legal certainty provision similar to Section 739 of the WSTAA)
or an amendment made by the WSTAA (or any such statute), 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, Increased
Cost of Hedging or Illegality).
(n) Governing
Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW
DOCTRINE, OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(o) Amendment.
This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty
and Dealer.
(p) 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.
(q) Tax
Matters.
(i) Withholding
Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act. “Indemnifiable Tax”
as defined in Section 14 of the Agreement, shall not include any 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.
(ii) HIRE
Act. To the extent that either party to the Agreement with respect to this Transaction is not an
adhering party to the ISDA 2015 Section 871(m) Protocol published by the International Swaps and Derivatives Association, Inc.
on November 2, 2015 and available at www.isda.org, as may be amended, supplemented, replaced or superseded from time to time (the
“871(m) Protocol”), the parties agree that the provisions and amendments contained in the Attachment to the 871(m) Protocol
are incorporated into and apply to the Agreement with respect to this Transaction as if set forth in full herein. The parties further
agree that, solely for purposes of applying such provisions and amendments to the Agreement with respect to this Transaction, references
to “each Covered Master Agreement” in the 871(m) Protocol will be deemed to be references to the Agreement with respect
to this Transaction, and references to the “Implementation Date” in the 871(m) Protocol will be deemed to be references
to the Trade Date of this Transaction.
(iii) Tax
documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on
or before the date of execution of this Confirmation, (ii) upon reasonable request of Dealer and (iii) promptly upon learning
that any such tax form previously provided by Counterparty has become obsolete or incorrect. Dealer shall provide to Counterparty a valid
U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on or before the date of execution of this Confirmation,
(ii) upon reasonable request of Counterparty and (iii) promptly upon learning that any such tax form previously provided by
Dealer has become obsolete or incorrect.
(iv) Tax
Representations. For the purpose of Section 3(f) of the Agreement, Counterparty is a
corporation for U.S. federal income tax purposes and is organized under the laws of the State of Minnesota. Counterparty represents
to Dealer that for U.S. federal income tax purposes it is a “U.S.
person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations) and an
“exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States Treasury Regulations). For
the purpose of Section 3(f) of the Agreement, Dealer represents to Counterparty that for U.S. federal income tax purposes
it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury
Regulations) and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States
Treasury Regulations)
(r) QFC
Stay Provisions.
(i) (A) In
the event that Dealer becomes subject to a proceeding under (i) the Federal Deposit Insurance Act and the regulations promulgated
thereunder or (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder
(a “U.S. Special Resolution Regime”) the transfer from Dealer of this Confirmation, and any interest and obligation
in or under, and any property securing, this Confirmation, will be effective to the same extent as the transfer would be effective under
the U.S. Special Resolution Regime if this Confirmation, and any interest and obligation in or under, and any property securing, this
Confirmation were governed by the laws of the United States or a state of the United States. (B) In the event that Dealer or an
Affiliate becomes subject to a proceeding under a U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§
252.81, 47.2 or 382.1, as applicable (“Default Right”)) under this Confirmation that may be exercised against Dealer are
permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if
this Confirmation were governed by the laws of the United States or a state of the United States.
(ii) Notwithstanding
anything to the contrary in this Confirmation, the parties expressly acknowledge and agree that: (A) Counterparty shall not be permitted
to exercise any Default Right with respect to this Confirmation or any Affiliate Credit Enhancement that is related, directly or indirectly,
to an Affiliate of Dealer becoming subject to receivership, insolvency, liquidation, resolution, or similar proceeding (an
“Insolvency
Proceeding”), except to the extent that the exercise of such Default Right would be permitted under the provisions of 12 C.F.R.
252.84, 12 C.F.R. 47.5 or 12 C.F.R. 382.4, as applicable; and (B) Nothing in this Confirmation shall prohibit the transfer of any
Affiliate Credit Enhancement, any interest or obligation in or under such Affiliate Credit Enhancement, or any property securing such
Affiliate Credit Enhancement, to a transferee upon or following an Affiliate of Dealer becoming subject to an Insolvency Proceeding,
unless the transfer would result in the Counterparty being the beneficiary of such Affiliate Credit Enhancement in violation of any law
applicable to the Counterparty.
(iii) If
Counterparty has previously adhered to, or subsequently adheres to, the ISDA 2018 U.S. Resolution Stay Protocol as published by the International
Swaps and Derivatives Association, Inc. as of July 31, 2018 (the “ISDA U.S. Protocol”), the terms of such
protocol shall be incorporated into and form a part of this Confirmation and the terms of the ISDA U.S. Protocol shall supersede and
replace the terms of this Section 8(r). For purposes of incorporating the ISDA U.S. Protocol, Dealer shall be deemed to be a Regulated
Entity, Counterparty shall be deemed to be an Adhering Party, and this Confirmation shall be deemed to be a Protocol Covered Agreement.
Capitalized terms used but not defined in this paragraph shall have the meanings given to them in the ISDA U.S. Protocol.
(iv) Dealer
and Counterparty agree that to the extent there are any outstanding “in-scope QFCs,” as defined in 12 C.F.R. § 252.82(d),
that are not excluded under 12 C.F.R. § 252.88, between Dealer and Counterparty that do not otherwise comply with the requirements
of 12 C.F.R. § 252.2, 252.81–8 (each such agreement, a “Preexisting In-Scope Agreement”), then each such
Preexisting In-Scope Agreement is hereby amended to include the foregoing provisions in this Section 8(r), with references to “this
Confirmation”
being understood to be references to the applicable Preexisting In-Scope Agreement.
For purposes
of this Section 8(r):
“Affiliate”
is defined in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Credit
Enhancement” means any credit enhancement or credit support arrangement in support of the obligations of Dealer under or with
respect to this Confirmation, including any guarantee, collateral arrangement (including any pledge, charge, mortgage or other security
interest in collateral or title transfer arrangement), trust or similar arrangement, letter of credit, transfer of margin or any similar
arrangement.
9.
Arbitration.
(a) All
parties to this Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided
by the rules of the arbitration forum in which a claim is filed.
(b) Arbitration
awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.
(c) The
ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court
proceedings.
(d) The
arbitrators do not have to explain the reason(s) for their award.
(e) The
panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless
Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with
the securities industry.
(f) The
rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible
for arbitration may be brought in court.
(g) The
rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Confirmation.
(h) Counterparty
agrees that any and all controversies that may arise between Counterparty and Dealer, including, but not limited to, those arising out
of or relating to the Agreement or the Transaction hereunder, shall be determined by arbitration conducted before FINRA Dispute Resolution
(“FINRA-DR”), or, if the FINRA-DR declines to hear the matter, before the American Arbitration Association, in accordance
with their arbitration rules then in force. The award of the arbitrator shall be final, and judgment upon the award rendered may
be entered in any court, state or federal, having jurisdiction.
(i) No
person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class
with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the
class is decertified; or (iii) Counterparty is excluded from the class by the court.
(j) Such
forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Confirmation except to the extent
stated herein.
Counterparty hereby
agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified
and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the
agreement between Dealer and Counterparty with respect to the Transaction, by manually signing this Confirmation or this page hereof
as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy
to Goldman Sachs & Co. LLC, Equity Derivatives Documentation Department, Facsimile No. (212) 428-1980/83.
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Yours faithfully, |
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GOLDMAN SACHS & CO. LLC |
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By: |
/s/ Mike Voris |
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Name: Mike Voris |
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Title: Partner |
[Signature Page to Base Bond Hedge Confirmation]
Agreed and Accepted By: |
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WINNEBAGO industries, INC. |
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By: |
/s/ Bryan L. Hughes |
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Name: Bryan L. Hughes |
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Title: Chief Financial Officer and Senior Vice President |
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[Signature Page to GS Bond Hedge Confirmation]
Exhibit 10.3
Bank of Montreal
55 Bloor Street West, 18th Floor
Toronto, Ontario M4W 1A5
To: |
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, Minnesota 55347 |
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From: |
Bank of Montreal |
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Re: |
Base Convertible Bond Hedge Transaction |
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Date: |
January 18, 2024 |
Dear Ladies and Gentlemen:
The purpose of this communication
(this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on
the Trade Date specified below (the “Transaction”) between Bank of Montreal (“Dealer”) and Winnebago
Industries, Inc. (“Counterparty”). Dealer is acting as principal in this Transaction and BMO Capital Markets Corp.
(“Agent”), its affiliate, is acting as agent for this Transaction solely in connection with Rule 15a-6 of the
Exchange Act (as defined herein), as amended. This communication constitutes a “Confirmation” as referred to in the ISDA Master
Agreement specified below.
1. This
Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (the “2006 Definitions”)
and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together
with the 2006 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”). Certain defined terms used herein have the meanings assigned to them in the Indenture
to be dated as of January 23, 2024 between Counterparty and U.S. Bank Trust Company, National Association, as trustee (the “Indenture”),
relating to the USD 300,000,000 principal amount of 3.25% Convertible Senior Notes due 2030 (the “Base Convertible Securities”)
and the additional USD 50,000,000 principal amount of 3.25% Convertible Senior Notes due 2030 that may be issued pursuant to the option
to purchase additional convertible securities (the “Optional Convertible Securities” and, together with the Base Convertible
Securities, the “Convertible Securities”). In the event of any inconsistency between the terms defined in the Indenture
and this Confirmation, this Confirmation shall govern. For the avoidance of doubt, references herein to sections of, or definitions set
forth in, the Indenture are based on the draft of the Indenture most recently reviewed by the parties at the time of execution of this
Confirmation. If any relevant sections of, or definitions set forth in, the Indenture are changed, added or renumbered between the execution
of this Confirmation and the execution of the Indenture, the parties will amend this Confirmation in good faith to preserve the economic
intent of the parties, as evidenced by such draft of the Indenture. Subject to the foregoing, the parties acknowledge that references
to the Indenture herein are references to the Indenture as in effect on the date of its execution and if the Indenture is, or the Convertible
Securities are, amended, modified or supplemented following the date of their execution, any such amendment, modification or supplement
(other than any amendment, modification or supplement pursuant to a Merger Supplemental Indenture (as defined below)) will be disregarded
for purposes of this Confirmation unless the parties agree otherwise in writing.
Counterparty is hereby advised,
and Counterparty acknowledges, that Dealer has engaged in, or refrained from engaging in, substantial financial transactions and has taken
other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms
and conditions set forth below.
This Confirmation evidences
a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.
This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement
(Multicurrency—Cross Border) as if Dealer and Counterparty had executed an agreement in such form on the date hereof (but without
any Schedule except for (i) the election of Loss and Second Method and US Dollars (“USD”) as the Termination Currency,
(ii) the replacement of the word “third” in the last line of Section 5(a)(i) of the Agreement with the word
“first”, and (iii) (a) the election that the “Cross Default” provisions of Section 5(a)(vi) of
the Agreement shall apply to Counterparty with a “Threshold Amount” of USD35.0 million) (b) the
phrase “, or becoming capable at such time of being declared,” shall be deleted from clause (1) of such Section 5(a)(vi),
and (c) the following language shall be added to the end thereof: “Notwithstanding the foregoing, a default under subsection
(2) hereof shall not constitute an Event of Default if (x) the default was caused solely by error or omission of an administrative
or operational nature; (y) funds were available to enable the party to make the payment when due; and (z) the payment is made
within two Local Business Days of such party’s receipt of written notice of its failure to pay.”.
All provisions contained in,
or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event of any
inconsistency among this Confirmation, the Equity Definitions, the 2006 Definitions or the Agreement, the following shall prevail in the
order of precedence indicated: (i) this Confirmation; (ii) the Equity Definitions; (iii) the 2006 Definitions; and (iv) the
Agreement. For the avoidance of doubt, except to the extent of an express conflict, the application of any provision of this Confirmation,
the Agreement, the Equity Definitions or the 2006 Definitions shall not be construed to exclude or limit any other provision of this Confirmation,
the Agreement, the Equity Definitions or the 2006 Definitions.
The Transaction hereunder
shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Counterparty or any confirmation
or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Counterparty,
then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to
which Dealer and Counterparty are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such
existing or deemed ISDA Master Agreement.
2. The
Transaction constitutes a Share Option Transaction for purposes of the Equity Definitions. The terms of the particular Transaction to
which this Confirmation relates are as follows:
General Terms:
Trade Date: |
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January 18, 2024 |
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Effective Date: |
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The closing date of the initial
issuance of the Convertible Securities. |
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Option Style: |
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Modified American, as described
under “Procedures for Exercise” below. |
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Option Type: |
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Call |
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Seller: |
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Dealer |
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Buyer: |
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Counterparty |
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Shares: |
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The Common Stock of Counterparty,
par value USD0.50 (Ticker Symbol: “WGO”). |
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Applicable Percentage: |
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33 1/3% |
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Number of Options: |
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The number of Base Convertible
Securities in denominations of USD1,000 principal amount issued by Counterparty on the closing date for the initial |
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issuance of the Convertible
Securities. For the avoidance of doubt, the Number of Options outstanding shall be reduced by each exercise of Options hereunder. |
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Option
Entitlement: | |
11.3724 |
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Fundamental
Change Adjustment: | |
Any adjustment to the Conversion
Rate pursuant to Section 5.07 of the Indenture. |
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Discretionary
Adjustment: | |
Any adjustment to the Conversion
Rate pursuant to Section 5.06 of the Indenture. |
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Strike Price: | |
USD87.9322 |
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Rounding
of Strike Price/Option Entitlement: | |
In connection with any adjustment
to the Option Entitlement or Strike Price, the Option Entitlement or the Strike Price, as the case may be, shall be rounded by the
Calculation Agent in accordance with the provisions of the Indenture relating to rounding of the “Conversion Price” or
the “Conversion Rate” as applicable (each as defined in the Indenture). |
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Number
of Shares: | |
As of any date, a number
of Shares equal to the product of (i) the Applicable Percentage, (ii) the Number of Options and (iii) the Option Entitlement. |
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Premium: | |
USD19,620,000.00 |
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Premium
Payment Date: | |
The Effective Date |
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Exchange: | |
The New York Stock Exchange |
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Related
Exchange: | |
All Exchanges |
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Procedures for Exercise:
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Exercise Dates: | |
Each Conversion
Date. |
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Conversion
Date: | |
Each
“Conversion Date” (as defined in the Indenture) occurring during the Exercise Period for Convertible Securities each
in denominations of USD1,000 principal amount (such Convertible Securities, the “Relevant
Convertible Securities” for such Conversion Date). |
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Exercise Period: | |
The period from and excluding
the Effective Date to, and including, the Expiration Date. |
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Expiration
Date: | |
The earlier of (i) the
last day on which any Convertible Securities remain outstanding and (ii) the second “Scheduled Trading Day” (as
defined in the Indenture) immediately preceding the “Maturity Date” (as defined in the Indenture). |
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Automatic
Exercise on Conversion Dates: | |
Applicable; and means that
on each Conversion Date, a number of Options equal to the number of Relevant Convertible Securities for such Conversion Date in denominations
of USD1,000 principal amount shall be automatically exercised, subject to “Notice of Exercise” below. |
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Notice
Deadline: | |
In
respect of any exercise of Options hereunder on any Conversion Date, 5:00 P.M., New York City time, on (i) in the case the applicable
Relevant Convertible Securities will be settled by Counterparty by delivery of Shares only (together with cash in lieu of any fractional
Share), the “Trading Day” (as defined in the Indenture) immediately following the relevant Conversion Date, or (ii) otherwise,
the Scheduled Trading Day immediately preceding the first day of the relevant Cash Settlement Averaging Period; provided
that in the case of any exercise of Options hereunder in connection with the conversion of any Relevant
Convertible Securities for any Conversion Date occurring during the period from and including the 85th “Scheduled Trading Day”
(as defined in the Indenture) prior to the Maturity Date, to and including the Expiration Date (such period, the “Final
Conversion Period”), the Notice Deadline shall be 5:00 P.M., New York City time, on the “Scheduled
Trading Day” (as defined in the Indenture) immediately preceding the “Maturity Date” (as defined in the Indenture). |
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Notice
of Exercise: | |
Notwithstanding
anything to the contrary in the Equity Definitions, Dealer shall have no obligation to make any payment or delivery in respect of
any exercise of Options hereunder and such obligation in respect of such exercise shall be permanently extinguished unless Counterparty
notifies Dealer in writing prior to the Notice Deadline in respect of such exercise, of (i) the number of Relevant Convertible
Securities being converted on the related Conversion Date (specifying, if applicable, whether all or any portion of such Convertible
Securities are Convertible Securities as to which additional Shares would be added to the Conversion Rate (as defined in the Indenture)
pursuant to Section 5.07 of the Indenture), (ii) the scheduled settlement date under the Indenture for the Relevant Convertible
Securities for such Conversion Date, (iii) whether such Relevant Convertible Securities will be settled by Counterparty by delivery
of cash or a combination of cash and Shares and, if such a combination, the “Specified Dollar Amount” (as defined in
the Indenture) and (iv) the first day of the relevant “Observation Period” (as defined in the Indenture), if any;
provided that in
the case of any exercise of Options in connection with the conversion of any Relevant Convertible Securities for any Conversion Date
occurring during the Final Conversion Period, the contents of such notice shall be as set forth in clauses (i) and (ii) above.
Counterparty acknowledges its responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of
the Exchange Act (as defined below) and the rules and regulations thereunder, in respect of any election of a |
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settlement method with respect
to the Convertible Securities. For the avoidance of doubt, if Counterparty fails to give such notice when due in respect of any exercise
of Options hereunder, Dealer’s obligation to make any payment or delivery in respect of such exercise shall be permanently
extinguished, and late notice shall not cure such failure. If applicable, the Notice of Exercise shall also contain the Settlement
Method Election Provisions. |
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Notice
of Final Convertible Security Settlement
Method: | |
Counterparty
shall notify Dealer in writing before 5:00 P.M., New York City time, on the “Scheduled Trading Day” (as defined in the
Indenture) immediately preceding the 85th “Scheduled Trading Day” (as defined in the Indenture) prior to the Maturity
Date of the settlement method (and, if applicable, the Specified Dollar Amount) elected (or deemed to be elected) with respect to
Relevant Convertible Securities with a Conversion Date occurring during the Final Conversion Period (any such notice, a “Notice
of Final Convertible Security Settlement Method”). If applicable, the Notice of Final Convertible
Security Settlement Method shall also contain the Settlement Method Election Provisions. |
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Dealer’s
Telephone Number and Telex
and/or Facsimile Number and Contact
Details for purpose of Giving
Notice: | |
As specified in Section 6(b) below. |
Settlement Terms:
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Settlement
Date: | |
For
any Exercise Date, the date one Settlement Cycle following the final day of the relevant Cash Settlement Averaging Period; provided
that the Settlement Date shall not be prior to the Exchange Business Day immediately following the
date Counterparty provides the Notice of Delivery Obligation prior to 5:00 P.M., New York City time. |
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Delivery
Obligation: | |
In
lieu of the obligations set forth in Sections 8.1 and 9.1 of the Equity Definitions, and subject to “Notice of Exercise”
above and “Discretionary Adjustments” , “Dividends” and “Consequences of Merger Events”
below, in respect of an Exercise Date, Dealer will deliver to Counterparty on the related Settlement Date (the “Delivery
Obligation”), amounts equal to the product of the Applicable Percentage
and |
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(i) (I) a number of Shares equal to the aggregate number of Shares, if any, that Counterparty would be obligated to deliver to the holder(s) of the Relevant Convertible Securities for such Conversion Date pursuant to Section 5.03 of the Indenture (except that such number of Shares shall be determined without taking into |
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consideration
any rounding pursuant to Section 5.03(B)(ii) of the Indenture and shall be rounded down to the nearest whole number) and
(II) cash in lieu of any fractional Share resulting from such rounding; and/or |
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(ii) the
aggregate amount of cash, if any, in excess of the principal amount of the Relevant Convertible Securities that Counterparty would
be obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date pursuant to Section 5.03
of the Indenture, determined, for each of clauses (i) and (ii), by the Calculation Agent (by reference to such Sections of the
Indenture) |
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as
if Counterparty had elected to satisfy its conversion obligation in respect of such Relevant Convertible Securities by the Applicable
Settlement Method, notwithstanding any different actual election by Counterparty with respect to the settlement of such Relevant
Convertible Securities; provided
that the Delivery Obligation shall be determined excluding any Shares and/or cash that Counterparty
is obligated to deliver to holder(s) of the Relevant Convertible Securities as a direct or indirect result of any adjustments
to the Conversion Rate pursuant to a Fundamental Change Adjustment or a Discretionary Adjustment and any interest payment that Counterparty
is (or would have been) obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date. Notwithstanding
the foregoing, if, in respect of any Exercise Date, (x)(I) the number of Shares included in the Delivery Obligation multiplied
by the Share Obligation Value Price plus (II) the amount
of cash included in the Delivery Obligation, would otherwise exceed (y) the relevant Net Convertible Share Obligation Value,
such number of Shares and such amount of cash shall be proportionately reduced to the extent necessary to eliminate such excess. |
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Make-Whole
Adjustment: | |
Notwithstanding
anything to the contrary herein, in respect of any exercise of Options relating to a conversion of Relevant Convertible Securities
in connection with which holders of the Relevant Convertible Securities would be entitled to receive additional Shares and/or cash
as a result of adjustments to the Conversion Rate pursuant to a Fundamental Change Adjustment, the Delivery Obligation shall include
such additional Shares and/or cash; provided
that if the sum of (i) the product of (a) the number of Shares (if any) included in the
Delivery Obligation per exercised Option and (b) the Share Obligation Value Price and (ii) the amount of cash (if any)
included in the Delivery Obligation per exercised Option would otherwise |
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exceed the amount per Option,
as determined by the Calculation Agent, that would be payable by Dealer under Section 6 of the Agreement if (x) the
relevant Conversion Date were an Early Termination Date resulting from an Additional Termination Event with respect to which the
Transaction was the sole Affected Transaction and Counterparty was the sole Affected Party and (y) the provisions of the Indenture
relating to the Fundamental Change Adjustment were deleted, then such number of Shares and such amount of cash shall be proportionately
reduced to the extent necessary to eliminate such excess. |
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Applicable
Settlement Method: | |
For
any Relevant Convertible Securities, if such Notice of Exercise (or such Notice of Final Convertible Security Settlement Method,
as the case may be) contains all of the Settlement Method Election Provisions, the Applicable Settlement Method shall be the settlement
method actually so elected by Counterparty in respect of such Relevant Convertible Securities (the “Convertible
Securities Settlement Method”); otherwise, the Applicable Settlement
Method shall assume Counterparty had made a Cash Election with respect to such Relevant Convertible Securities (a “Deemed
Cash Election”) with a Specified Dollar Amount of USD1,000 per Relevant Convertible Security
and the Delivery Obligation shall be determined by the Calculation Agent as if the relevant “Observation Period” pursuant
to Section 5.03(B)(i) of the Indenture were the Cash Settlement Averaging Period. |
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Cash
Settlement Averaging Period: | |
The 40 “Trading Days”
(as defined in the Indenture) commencing on (I) the third “Trading Day” (as defined in the Indenture) after the
Conversion Date for conversions with a related Conversion Date occurring prior to the Final Conversion Period or (II) the 41st
“Scheduled Trading Day” (as defined in the Indenture) prior to the “Maturity Date” (as defined in the Indenture)
for conversions with a related Conversion Date occurring during the Final Conversion Period. |
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Settlement
Method Election Provisions: | |
In order for the Applicable
Settlement Method to be the Convertible Securities Settlement Method in accordance with “Applicable Settlement Method”
above, the related Notice of Exercise (or Notice of Final Convertible Security Settlement Method, as the case may be) must contain
in writing the following representations and warranties from Counterparty to Dealer as of such notice delivery date: |
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|
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(i) none
of Counterparty and its officers or directors, or any person that controls, potentially controls, or otherwise exercises influence
over, Counterparty’s decision to elect the Convertible Security Settlement Method is aware of any |
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material
nonpublic information regarding Counterparty or the Shares; |
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(ii) Counterparty
is electing the Convertible Security Settlement Method in good faith and not as part of a plan or scheme to evade compliance with
the U.S. federal securities laws; Counterparty is not electing the Convertible Security Settlement Method to create actual or apparent
trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise
manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the
Exchange Act; and Counterparty has not entered into or altered any hedging transaction relating to the Shares corresponding to or
offsetting the Transaction; |
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|
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(iii) Counterparty
has the power to make such election and to execute and deliver any documentation relating to such election that it is required by
this Confirmation to deliver and to perform its obligations under this Confirmation and has taken all necessary action to authorize
such election, execution, delivery and performance; |
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(iv) such
election and performance of its obligations under this Confirmation do not violate or conflict with any law applicable to it, any
provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any
of its assets or any contractual restriction binding on or affecting it or any of its assets; and |
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|
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(v) any
transaction that Dealer makes with respect to the Shares during the period beginning at the time that Counterparty delivers such
notice and ending at the close of business on the final day of the Cash Settlement Averaging Period shall be made by Dealer at Dealer’s
sole discretion for Dealer’s own account and Counterparty shall not have, and shall not attempt to exercise, any influence
over how, when, whether or at what price Dealer effects such transactions, including, without limitation, the prices paid or received
by Dealer per Share pursuant to such transactions, or whether such transactions are made on any securities exchange or privately. |
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|
Notice
of Delivery Obligation: | |
No
later than the Exchange Business Day immediately following the last day of the relevant Cash Settlement Averaging Period, Counterparty
shall give Dealer notice of the final number of Shares |
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and/or amount of cash included
in the Total Convertible Share Obligation Value (as defined below); provided that, with respect to any Exercise Date occurring
during the Final Conversion Period, Counterparty may provide Dealer with a single notice of the aggregate number of Shares
and/or amount of cash included in the Total Convertible Share Obligation Value for all Exercise Dates occurring during such period
(it being understood, for the avoidance of doubt, that the requirement of Counterparty to deliver such notice shall not limit Counterparty’s
obligations with respect to a Notice of Exercise or Notice of Final Convertible Security Settlement Method, as the case may be, as
set forth above, in any way). |
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Net
Convertible Share Obligation Value: | |
With
respect to Relevant Convertible Securities as to a Conversion Date, the product of (i) the Applicable Percentage and (ii)(A) the
Total Convertible Share Obligation Value of such Relevant Convertible Securities for such Conversion Date minus
(B) the aggregate principal amount of such Relevant Convertible Securities for such Conversion
Date. |
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|
Total
Convertible Share Obligation Value: | |
With
respect to Relevant Convertible Securities with respect to a Conversion Date, (i) (A) the number of Shares equal to the
aggregate number of Shares that Counterparty is obligated to deliver to the holder(s) of Relevant Convertible Securities for
such Conversion Date pursuant to the Indenture (it being understood that such number of Shares shall be determined taking into consideration
any rounding pursuant to Section 5.03(B)(ii) of the Indenture) multiplied
by (B) the Share Obligation Value Price plus (ii) an
amount of cash equal to the aggregate amount of cash that Counterparty is obligated to deliver to the holder(s) of Relevant
Convertible Securities for such Conversion Date pursuant to the Indenture (including, for the avoidance of doubt, any cash payable
by Counterparty in lieu of fractional Shares); provided that the Total Convertible Share Obligation
Value shall be determined excluding any Shares and/or cash that Counterparty is obligated to deliver to holder(s) of the Relevant
Convertible Securities as a direct or indirect result of any adjustments to the Conversion Rate pursuant to a Fundamental Change
Adjustment or a Discretionary Adjustment and any interest payment that Counterparty is (or would have been) obligated to deliver
to holder(s) of the Relevant Convertible Securities for such Conversion Date. |
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|
Share
Obligation Value Price: | |
The opening price as displayed
under the heading “Op” on Bloomberg page “WGO.N <Equity>” (or any successor thereto) on the applicable
Settlement Date or other date of delivery. |
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|
Other
Applicable Provisions: | |
To
the extent Dealer is obligated to deliver Shares hereunder, the provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions
will be applicable as if “Physical Settlement” applied to the Transaction; provided
that the Representation and Agreement contained in Section 9.11 of the Equity Definitions
shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under
applicable securities laws that exist as a result of the fact that Counterparty is the issuer of the Shares.
|
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Restricted
Certificated Shares: | |
Notwithstanding
anything to the contrary in the Equity Definitions, Dealer may, in whole or in part, deliver Shares required to be delivered to Counterparty
hereunder in certificated form in lieu of delivery through the Clearance System. With respect to such certificated Shares, the Representation
and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by deleting the remainder of the provision
after the word “encumbrance” in the fourth line thereof. |
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Adjustments:
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|
Method
of Adjustment: | |
Notwithstanding
Section 11.2 of the Equity Definitions, upon the occurrence of any event or condition set forth in Section 5.05(A)(i),
(ii), (iii), (iv) and (v) and Section 5.05(H) of the Indenture (a “Potential
Adjustment Event”) that results in an adjustment under the Indenture, the Calculation Agent
shall make a corresponding adjustment in respect of any one or more of the Strike Price, the Number of Options, the Option Entitlement
and any other term relevant to the exercise, settlement or payment of the Transaction, subject to “Discretionary Adjustments”
below. Promptly upon the occurrence of any Potential Adjustment Event, Counterparty shall notify the Calculation Agent of such Potential
Adjustment Event; and once the adjustments to be made to the terms of the Indenture and the Convertible Securities in respect of
such Potential Adjustment Event have been determined, Counterparty shall immediately notify the Calculation Agent in writing of the
details of such adjustments. |
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|
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Notwithstanding anything to
the contrary herein or in the Equity Definitions: |
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(i) in
connection with any Potential Adjustment Event as a result of an event or condition set forth in Section 5.05(A)(ii) of
the Indenture or Section 5.05(A)(iii)(1) of the Indenture where, in either case, the period for determining “Y”
(as such term is used in Section 5.05(A)(ii) of the Indenture) or “SP” (as such term is used in Section 5.05(A)(iii)(1) of
the Indenture), as the |
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|
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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 of 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 |
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(ii) 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 is otherwise not adjusted at the time or in
the manner contemplated by the Indenture based on such declaration or (c) the Conversion Rate 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 of 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. |
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Upon
the occurrence of any Potential Adjustment Event Change, Counterparty shall immediately notify the Calculation Agent in writing of
the details of such Potential Adjustment Event Change. |
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For
the avoidance of doubt, Dealer shall not have any payment or delivery obligation hereunder in respect of, 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 the holders of Convertible Securities (upon conversion or otherwise) or (y) any other transaction in which holders of Convertible
Securities are entitled to participate, in each case, in lieu of an adjustment under the Indenture in respect of a Potential Adjustment
Event (including, without limitation, under the proviso to the first sentence of Section 5.05(A)(iii)(1) of the Indenture
or the proviso to the first sentence of Section 5.05(A)(iv) of the |
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Indenture)1. |
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Discretionary
Adjustments: | |
Notwithstanding
anything to the contrary herein or in the Equity Definitions, if the Calculation Agent in good faith disagrees with any adjustment
under the Indenture that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation,
pursuant to Section 5.05(H) of the Indenture or pursuant to Section 5.08(A) of the Indenture or any supplemental
indenture entered into thereunder (a “Merger
Supplemental Indenture”) or in connection with the determination of the fair value of
any securities, property, rights or other assets), then the Calculation Agent will determine the adjustment to be made to any one
or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or
payment of or under the Transaction in a commercially reasonable manner and, for the avoidance of doubt, the Delivery Obligation
shall be calculated on the basis of such adjustments by the Calculation Agent; provided
that, notwithstanding the foregoing, in any Potential Adjustment Event occurs during the Cash
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 holder of the underlying Shares on the related Conversion Date,
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. |
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Dividends: | |
If
(i) at any time during the period from and including the Trade Date, to but excluding the Expiration Date, an ex-dividend date
for a regular quarterly cash dividend occurs with respect to the Shares (an “Ex-Dividend
Date”) and that dividend is less than the Regular Dividend on a per Share basis or (ii) no
Ex-Dividend Date for a regular quarterly cash dividend occurs with respect to the Shares in any quarterly dividend period of Counterparty,
then the Calculation Agent will make a corresponding adjustment in respect of any one or more of the Strike Price, the Number of
Options, the Option Entitlement and any other term relevant to the exercise, settlement or payment of the Transaction to account
for the economic effect on the Transaction of such dividend or lack thereof, and, for the avoidance of doubt, any such adjustments
shall be taken into |
1 Include references to provisions of Indenture providing for pass-through of cash
or Distributed Property in lieu of Conversion Rate adjustments.
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account in calculating the
Delivery Obligation. “Regular Dividend” shall mean USD 0.31 per Share. |
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|
Notice
of Certain Other Events: | |
Counterparty
shall give Dealer commercially reasonable advance (but in no event less than one Exchange Business Day) written notice of the section
or sections of the Indenture and, if applicable, the formula therein, pursuant to which any adjustment will be made to the Convertible
Securities in connection with any Potential Adjustment Event, Merger Event or Tender Offer. |
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Extraordinary Events:
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|
Merger
Events: | |
Notwithstanding
Section 12.1(b) of the Equity Definitions, “Merger Event” shall mean the occurrence of any event or condition
set forth in the definition of “Common Stock Change Event” set forth in Section 5.08(A) of the Indenture. |
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Consequences
of Merger Events: | |
Notwithstanding
Section 12.2 of the Equity Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall make an adjustment
to the terms relevant to the exercise, settlement or payment of the Transaction corresponding to the adjustment required under Section 5.08
of the Indenture in respect of such Merger Event, as determined by the Calculation Agent (by reference to such Section), subject
to “Discretionary Adjustments” above; provided
that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant
to a Fundamental Change Adjustment or a Discretionary Adjustment; and provided further that
the Calculation Agent may make such further adjustments to the terms of the Transaction as may be necessary to ensure that the fair
value of the Transaction to Dealer is not adversely affected as a result of any adjustment referenced in this paragraph and, for
the avoidance of doubt, any such further adjustments shall be taken into account in calculating the Delivery Obligation; and provided
further that if, with respect to a Merger Event, (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 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, will not be a corporation organized under the laws of the United States, any state thereof or the District of
Columbia and/or will not be the Issuer, Dealer may elect in its sole discretion that Cancellation and Payment (Calculation Agent
Determination) shall apply. |
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Notice of Merger Consideration and Consequences: | |
Upon the occurrence of a Merger Event, Counterparty shall reasonably promptly (but in any event prior to the relevant merger date) notify the |
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Calculation
Agent of (i) in the case of a Merger Event that causes the Shares to be converted into the right to receive more than a single
type of consideration (determined based in part upon any form of stockholder election), the types and amount of consideration actually
received by such holders, and (ii) the details of the adjustment to be made under the Indenture in respect of such Merger Event. |
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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 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. |
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|
Additional
Termination Event(s): | |
Notwithstanding
anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, the Transaction would be cancelled
or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event
(with the Transaction (or the cancelled or terminated portion thereof) being the Affected Transaction and Counterparty being the
sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6
of the Agreement shall apply to such Affected Transaction. |
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Additional Disruption Events: | |
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|
(a) Change in Law: | |
Applicable;
provided that
Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation”
in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) by
adding the phrase “and/or Hedge Position” after the word “Shares” in clause (X) thereof and (iii) by
immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated
by the Hedging Party on the Trade Date”; and provided further that Section 12.9(a)(ii) of
the Equity Definitions is hereby amended by (i) replacing the parenthetical beginning after the word “regulation”
in the second line thereof 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)” and (ii) adding the
words “, or holding, acquiring or disposing of Shares or any Hedge Positions relating to,” after the words |
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“obligations
under” in clause (Y) thereof. |
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(b)
Failure to Deliver: | |
Applicable |
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|
(c)
Insolvency Filing: | |
Applicable |
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|
(d)
Hedging Disruption: | |
Applicable;
provided that: |
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(i) |
Section 12.9(a)(v) of the Equity Definitions is hereby amended by: |
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|
(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 |
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|
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|
(b) |
inserting the following paragraphs
at the end of such Section: |
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|
“Such inability
described in clauses (A) or (B) above shall not constitute a “Hedging Disruption” if such inability results
from Hedging Party’s creditworthiness. |
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|
For the avoidance of doubt,
(i) the term “equity price risk” shall be deemed to include, but shall not be limited to, stock price and volatility
risk, and (ii) the transactions or assets referred to in phrases (A) or (B) above must be available on commercially
reasonable pricing and other terms.”; and |
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(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”. |
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|
(e)
Increased Cost of Hedging: | |
Applicable;
provided that
such increased cost described in Section 12.9(vi) of the Equity Definitions shall not constitute an “Increased Cost
of Hedging” if such increased cost results from Hedging Party’s creditworthiness. |
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|
Hedging
Party: | |
Dealer |
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|
Determining
Party: | |
Dealer.
All calculations and determinations by the Determining Party shall be made in good faith and in a commercially reasonable manner.
Following any calculation by the Determining Party hereunder, upon written request by Counterparty, the Determining Party will, within
five Exchange Business Days immediately following such request, provide to Counterparty 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; provided,
however, that in no event will the Determining Party be obligated to share with |
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Counterparty
any proprietary or confidential data or information or any proprietary or confidential models used by it. |
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Non-Reliance: | |
Applicable |
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|
Agreements
and Acknowledgments Regarding Hedging Activities: | |
Applicable |
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|
Additional
Acknowledgments: | |
Applicable |
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|
3. Calculation
Agent: | |
|
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|
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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, if the Calculation Agent fails to timely make any calculation,
adjustment or determination required to be made by the Calculation Agent hereunder or to perform any obligations of the Calculation
Agent hereunder and such failure continues for five Exchange Business Days following notice to the Calculation Agent by Counterparty
of such failure, Counterparty shall have the right to designate a nationally recognized third-party dealer in over-the-counter corporate
equity derivatives to act, during the period commencing on the first date the Calculation Agent fails to timely make such calculation,
adjustment or determination or to perform such obligation, as the case may be, and ending on the earlier of the Early Termination
Date with respect to such Event of Default and the date on which such Event of Default is no longer continuing, as Calculation Agent. |
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Following
any calculation by the Calculation Agent hereunder, upon written request by Counterparty, the Calculation Agent will, within five
Exchange Business Days immediately following such request, provide to Counterparty by email to the email 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 the basis for such calculation; provided
that in no event will Dealer be obligated to share with Counterparty any proprietary or confidential
data or information or any proprietary or confidential models used by it or any information that is subject to an obligation not
to disclose such information. |
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4. Account
Details: | |
|
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|
Dealer
Payment Instructions: | |
|
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|
Bank:
Bank of New York | |
|
ABA#:
021000018 | |
|
A/C#:
8661062712 | |
|
Acct Name – BMO Nesbitt Burns
Counterparty
Payment Instructions:
To be provided by Counterparty.
Dealer is a Multibranch Party and
for purposes of this Confirmation and each Transaction, may act through its London and Toronto Offices.
The Office
of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party.
| 6. | Notices:
For purposes of this Confirmation: |
| (a) | Address
for notices or communications to Counterparty: |
| | |
| | Winnebago Industries, Inc. |
| | 13200 Pioneer Trail,
Suite 150 |
| | Eden Prairie, MN
55347 |
| | Attention: Kathy
Hiebert, Treasurer |
| (b) | Address for notices or communications to Dealer: |
| To: | Bank
of Montreal |
| | 55 Bloor Street
West, 18th Floor |
| | Toronto, Ontario
M4W 1A5 |
| | Canada |
| Attn: | Manager, Derivatives
Operations |
| Telephone: | (416) 552-4177 |
Email: BMOEquityLinked@bmo.com
With a copy to:
| To: | Bank
of Montreal |
| | 100
King Street West, 20th Floor |
| | Toronto,
Ontario M5X 1A1 |
| | Canada |
| Attn: | Associate General Counsel & Managing
Director, Derivatives Legal Group |
| Facsimile: | (416) 956-2318 |
And a copy to:
| To: | BMO
Capital Markets Corp. |
| | 151 West 42nd
Street 32nd Floor |
| | New York, New York
10036 |
| Attn: | Brian
Riley |
| Telephone: | (212) 605-1414 |
| Email: | BMOEquityLinked@bmo.com |
| 7. | Representations,
Warranties and Agreements: |
(a) In
addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants
to and for the benefit of, and agrees with, Dealer as follows:
(i) On
the Trade Date and as of the date of any Notice of Share Termination under (and as defined in) Section 8(c) below, (A) none
of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and
(B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports
and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading.
(ii) (A) On
the Trade Date, the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not subject to a “restricted
period,” as such term is defined in Regulation M under the Exchange Act (“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 Trade Date.
(iii) 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).
(iv) Without
limiting the generality of Section 3(a)(iii) of the Agreement, the Transaction will not violate Rule 13e-1 or Rule 13e-4
under the Exchange Act.
(v) Prior
to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction
and such other certificate or certificates as Dealer shall reasonably request. Based on such resolutions, neither Dealer nor any of its
affiliates shall be subject to the restrictions under Section 302A.673 of the Minnesota Business Corporations Act as an “interested
shareholder” of Counterparty by virtue of (A) its role as initial purchaser of, or market-maker in, any securities of Counterparty
convertible into the Shares, (B) its entry into the Transaction and/or (C) any hedging transactions in Counterparty’s
securities in connection with the Transaction.
(vi) Counterparty
is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable
for Shares) or otherwise in violation of the Exchange Act.
(vii) 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.
(viii) On
each of the Trade Date and the Premium Payment Date, Counterparty is not “insolvent” (as such term is defined under Section 101(32)
of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be
able to purchase the Number of Shares in compliance with the laws of the jurisdiction of Counterparty’s incorporation.
(ix) The
representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement,
dated as of January 18, 2024, between Goldman Sachs & Co. LLC and BMO Capital Markets Corp. as the Representatives and Counterparty
(the “Purchase Agreement”) are true and correct as of the Trade Date and the Effective Date and are hereby deemed to
be repeated to Dealer as if set forth herein.
(x) No
state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise
to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval
from any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares; provided however,
that Counterparty makes no representation or warranty regarding any such requirement that is applicable generally to the ownership
of equity securities by Dealer or any of its affiliates as a result of it or any such affiliates being financial institutions or
broker-dealers .
(xi) 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, including, without limitation, the transaction that is the subject of this confirmation and any transactions
related hereto or contemplated hereby; (B) will exercise independent judgment in evaluating the recommendations of Dealer and its
affiliates or associated persons with regard to any such securities transactions or strategies unless it has otherwise notified Dealer
in writing; and (C) has total assets of at least $50 million. Counterparty will notify Dealer if the immediately preceding statement
contained in this Section 7(a)(xi) ceases to be true.
(xii) Without
limiting the generality of Section 3(a) of the Agreement, neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or
by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of
any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Counterparty’s Annual Report
on Form 10-K for the year ended August 26, 2023, as updated by any subsequent filings, to which Counterparty or any of its subsidiaries
is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject,
or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
(b) Each
of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18)
of the U.S. Commodity Exchange Act, as amended, and is entering into the Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise) and not for the benefit of any third party.
(c) Each
of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under
the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(a)(2) thereof. Accordingly,
Counterparty represents and warrants to Dealer that (i) it has the financial ability to bear the economic risk of its investment
in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in respect of the Transaction,
which it understands are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection
with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an “accredited investor”
as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its
own account and without a view to the distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction
has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state
securities laws, and (v) its financial condition is such that it has no need for liquidity with respect to its investment in the
Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is capable
of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts,
the terms, conditions and risks of the Transaction.
(d) Each
of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution” and “financial participant”
within the meaning of Sections 101(22) and 101(22A) of the Bankruptcy Code. The parties hereto further agree and acknowledge (A) that
this Confirmation is a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code,
with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment
amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement
payment” within the meaning of Section 546 of the Bankruptcy Code, and (B) that Dealer is
entitled to the protections
afforded by, among other sections, Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 548(d)(2), 555 and 561 of the Bankruptcy Code.
(e) As
a condition to the effectiveness of the Transaction, Counterparty shall deliver to Dealer (i) an incumbency certificate, dated as
of the Premium Payment Date, of Counterparty in customary form and (ii) an opinion of counsel, dated as of the Premium Payment Date
and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement,
Sections 7(a)(vii) and 7(a)(xii) hereof and such other matters as Dealer may reasonably request.
(f) Counterparty
understands that notwithstanding any other relationship between Counterparty and Dealer and its affiliates, in connection with this Transaction
and any other over-the-counter derivative transactions between Counterparty and Dealer or its affiliates, Dealer or its affiliates is
acting as principal and is not a fiduciary or advisor in respect of any such transaction, including any entry, exercise, amendment, unwind
or termination thereof.
(g) Counterparty
represents and warrants that it has received, read and understands the OTC Options Risk Disclosure Statement and a copy of the
most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled “Characteristics and Risks of Standardized
Options”.
(h) 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.
(i) Counterparty
represents and warrants that the assets used in the Transaction (i) 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 (ii) do not constitute “plan assets”
within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.
(j) On
the Trade Date, neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18
under 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.
(k) Counterparty
acknowledges that the Transaction may constitute a purchase of its equity securities or a capital distribution. Counterparty further acknowledges
that, pursuant to the provisions of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the Counterparty
will be required to agree to certain time-bound restrictions on its ability to purchase its equity securities or make capital distributions
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 or make capital distributions 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 or the U.S. Department
of Treasury for the purpose of providing liquidity to the financial system, and may be required to agree to similar restrictions under
programs or facilities established in the future. Accordingly, Counterparty represents and warrants that neither it nor any of its subsidiaries
has applied for, 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 (whether in existence as of the Trade Date or subsequently enacted, adopted
or amended), including without limitation the CARES Act and the Federal Reserve Act, as amended, and (b) requires under applicable
law (or any regulation, guidance, interpretation or other pronouncement thereunder), as a condition of such loan, loan guarantee, direct
loan (as that term is defined in the CARES Act), investment, financial assistance or relief, that Counterparty or any of its subsidiaries
agree, attest, certify or warrant that it has not, as of the date specified in such condition, repurchased, or will not repurchase, any
equity security of Counterparty, and
that it has not, as of the date specified in
such condition, made a capital distribution or will not make a capital distribution (collectively, “Restricted Financial Assistance”);
provided that Counterparty may apply for Restricted Financial Assistance if Counterparty either (a) determines, based on the advice
of outside counsel of national standing, that the terms of the Transaction would not cause Counterparty to fail to satisfy any condition
for application for or receipt or retention of such loan, loan guarantee, direct loan (as that term is defined in the CARES Act), investment,
financial assistance or relief based on the terms of the program or facility as of the date of such advice or (b) delivers to Dealer
evidence of a waiver or other guidance from a governmental authority with jurisdiction for such program or facility that the Transaction
is permitted under such program or facility (either by specific reference to the Transaction or by general reference to transactions
with attributes of the Transaction in all relevant respects). Counterparty further represents and warrants that the Premium is not being
paid, in whole or in part, directly or indirectly, with funds received under or pursuant to any program or facility, including the U.S.
Small Business Administration’s “Paycheck Protection Program”, that (a) is established under applicable law (whether
in existence as of the Trade Date or subsequently enacted, adopted or amended), including without limitation the CARES Act and the Federal
Reserve Act, as amended, and (b) requires under such applicable law (or any regulation, guidance, interpretation or other pronouncement
of a governmental authority with jurisdiction for such program or facility) that such funds be used for specified or enumerated purposes
that do not include the purchase of the Transaction (either by specific reference to the Transaction or by general reference to transactions
with the attributes of the Transaction in all relevant respects).
8. Other Provisions:
(a) Right
to Extend. Dealer may postpone or add, in whole or in part, any Exercise Date or Settlement Date or any other date of valuation or
delivery by Dealer, with respect to some or all of the relevant Options (in which event the Calculation Agent shall make appropriate adjustments
to the Delivery Obligation), if Dealer determines, in its commercially reasonable discretion, that such extension or addition is reasonably
necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in light of existing
liquidity conditions in the cash market, the stock borrow market or other relevant market or to enable Dealer to effect transactions with
respect to Shares or Share Termination Delivery Units 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 requirements, or with related policies and procedures (whether or not such requirements,
policies or procedures are imposed by law or have been voluntarily adopted by Dealer, and in the case of policies or procedures, so long
as such policies and procedures are consistently applied to transactions similar to the Transaction).
(b) Additional
Termination Events.
(A) The
occurrence of an event of default with respect to Counterparty under the terms of the Convertible Securities as set forth in Section 7.01
of the Indenture that results in the acceleration of the Convertible Notes, or (B) an Amendment Event, in each case, 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. “Amendment Event” means that
Counterparty amends, modifies, supplements, waives or obtains a waiver in respect of any term of the Indenture or the Convertible Securities
governing the principal amount, coupon, maturity, repurchase obligation of Counterparty, any term relating to conversion of the Convertible
Securities (including changes to the conversion rate, conversion rate adjustment provisions, conversion settlement dates or conversion
conditions), or any term that would require consent of the holders of not less than 100% of the principal amount of the Convertible Securities
to amend (other than, in each case, any amendment or supplement (x) pursuant to Section 8.01(I) of the Indenture that,
as determined by the Calculation Agent, conforms the Indenture to the description of Convertible Securities in the Offering Memorandum
or (y) pursuant to Section 5.08 of the Indenture), in each case, without the consent of Dealer.
(B) Within
3 Scheduled Trading Days promptly following any Repayment Event (as defined below), Counterparty shall notify Dealer of such Repayment
Event and the aggregate principal amount of Convertible Notes subject to such Repayment Event or the portion of such aggregate principal
amount that Counterparty elects to be subject to such Repayment Event) (any such notice, a “Repayment Notice”). Any
Repayment Notice shall contain a written representation by Counterparty to Dealer that Counterparty is not, on the date of such Repayment
Notice, in possession of any material non-public information with respect to Counterparty or the Shares. The receipt by Dealer from Counterparty
of any Repayment Notice shall constitute an Additional Termination Event as provided in this Section 8(b)(B). Upon receipt of any
such Repayment Notice, Dealer shall designate an Exchange Business Day following receipt of such Repayment Notice as an Early Termination
Date with respect to the portion of the Transaction corresponding to a number of Options (the “Repayment Options”)
equal to the lesser of (A) the aggregate principal amount of such Convertible Notes specified in such Repayment Notice, divided
by USD 1,000, and (B) the Number of Options as of the date Dealer designates such Early Termination Date and, as of such date,
the Number of Options shall be reduced by the number of Repayment Options. Any payment hereunder with respect to such termination (the
“Repayment Unwind Payment”) shall be calculated pursuant to Section 6 of the Agreement as if (1) an Early
Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal
to the number of Repayment Options, (2) Counterparty were the sole Affected Party with respect to such Additional Termination Event
and (3) the terminated portion of the Transaction were the sole Affected Transaction; provided that, in the event of a Repayment
Event pursuant to Section 4.02 of the Indenture or Section 4.03 of the Indenture, such payment shall not be greater than (x) the
number of Repayment Options multiplied by (y) the product of (A) the Applicable Percentage and (B) the excess, if any
of (I) the amount paid by Counterparty per Convertible Security pursuant to Section 4.02 of the Indenture or Section 4.03
of the Indenture, as the case may be, over (II) USD 1,000.” “Repayment Event” means that (i) any Convertible
Notes are repurchased or redeemed (whether pursuant to Section 4.02 of the Indenture, Section 4.03 of the Indenture or for
any other reason) by Counterparty or any of its subsidiaries, (ii) any Convertible Notes are delivered to Counterparty or any of
its subsidiaries in exchange for delivery of any property or assets of such party (howsoever described), (iii) any principal of
any of the Convertible Notes is repaid prior to the final maturity date of the Convertible Notes, or (iv) any Convertible Notes
are exchanged by or for the benefit of the Holders (as such term is defined in the Indenture) thereof for any other securities of Counterparty
or any of its subsidiaries (or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction.
For the avoidance of doubt, any conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute a Repayment
Event.
(c) Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Dealer shall owe Counterparty any amount pursuant
to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Counterparty shall have the right, in its
sole discretion, to require Dealer to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving
irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day (which written confirmation shall contain
the representation and warranty set forth in Section 7(a)(i)), no later than 9:30 A.M., New York City time, on the relevant merger
date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable
(“Notice of Share Termination”); provided that if Counterparty does not elect to require Dealer to satisfy its
Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to elect to satisfy its
Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s failure to elect or election to the contrary;
and provided further that Counterparty shall not have the right to so elect (but, for the avoidance of doubt, Dealer shall have
the right to so elect) in the event of (i) an Insolvency, a Nationalization or a Merger Event, in each case, in which the consideration
or proceeds to be paid to holders of Shares consists solely of cash or (ii) an Event of Default in which Counterparty is the Defaulting
Party or a Termination Event in which Counterparty is the Affected Party or an Extraordinary Event, which Event of Default, Termination
Event or Extraordinary Event resulted from an event or events within Counterparty’s control. Upon such Notice of Share Termination,
the following provisions shall apply on the Scheduled Trading Day immediately following the relevant merger date,
Announcement Date,
Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable:
Share
Termination Alternative: | |
If
applicable, means that Dealer shall deliver to Counterparty the Share Termination Delivery Property on the date on which the Payment
Obligation would otherwise be due pursuant to Section 6(d)(ii) of the Agreement or such later date or dates as Dealer may
commercially reasonably determine (the “Share Termination Payment Date”) taking into account commercially reasonable
hedging or hedge unwind activity, in satisfaction of the Payment Obligation. |
| |
|
Share
Termination Delivery Property: | |
A number of Share
Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination
Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of the
aggregate amount of a security therein with an amount of cash equal to the value of such fractional security based on the values
used to calculate the Share Termination Unit Price. |
| |
|
Share Termination
Unit Price: | |
The value of property contained
in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination
Delivery Property, as determined by the Calculation Agent and notified by the Calculation Agent to Dealer at the time of notification
of the Payment Obligation. |
| |
|
Share Termination
Delivery Unit: | |
In the case of a Termination
Event (other than on account of an Insolvency, Nationalization or Merger Event), Event of Default, Delisting or Additional Disruption
Event, one Share or, in the case of an Insolvency, Nationalization or Merger Event, one Share or a unit consisting of the number
or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other
consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization or Merger Event, as applicable.
If such Insolvency, Nationalization 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. |
| |
|
Failure
to Deliver: | |
Applicable |
| |
|
Other Applicable
Provisions: | |
If
Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable
as if “Physical Settlement” applied to the Transaction, except that all references to “Shares” shall be read
as references to “Share Termination Delivery Units”; provided
that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall
be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable
securities laws as a result of the fact that Counterparty is the issuer of any Share Termination Delivery Units (or any part thereof). |
(d) Disposition
of Hedge Shares. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer, the Shares (the “Hedge
Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction in a commercially reasonable
manner cannot be sold in the U.S. public market by Dealer without registration under the Securities Act, Counterparty shall, at its election:
(i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration
statement under the Securities Act to cover the resale of such Hedge Shares and (A) enter into an agreement, in form and substance
reasonably satisfactory to Dealer, substantially in
the form of an underwriting agreement for a registered offering, (B) provide
accountant’s “comfort” letters in customary form for registered offerings of equity securities, (C) provide disclosure
opinions of nationally recognized outside counsel to Counterparty reasonably acceptable to Dealer, (D) provide other customary opinions,
certificates and closing documents customary in form for registered offerings of equity securities and (E) afford Dealer a reasonable
opportunity to conduct a “due diligence” investigation with respect to Counterparty customary in scope for underwritten offerings
of equity securities; provided that if Counterparty elects clause (i) above but the items referred to therein are not completed
in a timely manner, or if Dealer, in its sole discretion, is not satisfied with access to due diligence materials, the results of its
due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or
clause (iii) of this Section 8(d) shall apply at the election of Counterparty; (ii) in order to allow Dealer to sell
the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase
agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to Dealer,
including customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer,
due diligence rights (for Dealer or any designated buyer of the Hedge Shares from Dealer), and best efforts obligations to provide opinions
and certificates and such other documentation as is customary for private placements agreements, all commercially reasonably acceptable
to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary to compensate
Dealer for any commercially reasonable discount from the public market price of the Shares incurred on the sale of Hedge Shares in a
private placement); or (iii) purchase the Hedge Shares from Dealer at the “Daily VWAP” (as defined in the Indenture)
on such Exchange Business Days, and in the amounts, commercially reasonably requested by Dealer. This Section 8(d) shall survive
the termination, expiration or early unwind of the Transaction.
(e) Repurchase
and Conversion Rate Adjustment Notices. Counterparty shall, at least two Exchange Business Days prior to any day on which Counterparty
effects any repurchase of Shares or consummates or otherwise engages in any transaction or event (a “Conversion Rate Adjustment
Event”) that could reasonably be expected to lead to an increase in the Conversion Rate, give Dealer a written notice of such
repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if, following such repurchase or
Conversion Rate Adjustment Event, the Notice Percentage would reasonably be expected to be (i) greater than 13.27% and (ii) greater
by 0.5% than the Notice Percentage included in the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase
Notice, greater than the Notice Percentage as of the date hereof). The “Notice Percentage” as of any day is the fraction,
expressed as a percentage, the numerator of which is the Number of Shares plus the number of shares underlying any other convertible bond
hedge transactions or call options sold by Dealer to Counterparty and the denominator of which is the number of Shares outstanding on
such day. In the event that Counterparty fails to provide Dealer with a Repurchase Notice on the day and in the manner specified in this
Section 8(e) then Counterparty agrees to indemnify and hold harmless Dealer, its affiliates and their respective directors,
officers, employees, agents and controlling persons (Dealer and each such person being an “Indemnified Party”) from
and against any and all losses (including losses relating to the Dealer’s hedging activities as a consequence of becoming, or of
the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or
cessation of hedging activities and any losses in connection therewith with respect to this Transaction), claims, damages and liabilities
(or actions in respect thereof), joint or several, to which such Indemnified Party may become subject under applicable securities laws,
including without limitation, Section 16 of the Exchange Act or under any state or federal law, regulation or regulatory order,
relating to or arising out of such failure. If for any reason the foregoing indemnification is unavailable to any Indemnified Party or
insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to the maximum extent permitted by law, to the
amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability. In addition, Counterparty will reimburse
any Indemnified Party for all reasonable, actual expenses (including reasonable counsel fees and expenses) as they are incurred (after
notice to Counterparty and supported by invoices or other documentation setting forth in reasonable detail such expenses) in connection
with the investigation of, preparation for or defense or settlement of any pending or threatened claim or any action, suit or proceeding
arising therefrom, whether or not such Indemnified Party is a party thereto and whether or not such claim, action, suit or proceeding
is initiated or brought by or on behalf of Counterparty. To the extent an Indemnified Party fails to provide notice of any action commenced
against
it in respect of which indemnity may be sought hereunder within a commercially reasonable period of time that would materially
prejudice Counterparty (it being understood that any such notice delivered within 30 calendar days of the commencement of any such action
shall be deemed to have been delivered within a commercially reasonable period of time for such purpose). Counterparty shall be relived
from liability. This indemnity shall survive the completion of the Transaction contemplated by this Confirmation and any assignment and
delegation of the Transaction made pursuant to this Confirmation or the Agreement and shall inure to the benefit of any permitted assignee
of Dealer.
(f) Transfer
and Assignment. Either party may transfer or assign any of its rights or obligations under the Transaction with the prior written
consent of the non-transferring party, such consent not to be unreasonably withheld or delayed; provided that Dealer may transfer
or assign without any consent of Counterparty its rights and obligations hereunder, in whole or in part, to (i) any affiliate of
Dealer or (ii) any person, or any person whose obligations hereunder would be guaranteed, pursuant to the terms of a customary guarantee
in a form generally used for similar transactions, by a person, in either case, of credit quality at least equivalent to Dealer’s
(or its ultimate parent’s). If at any time at which (1) the Equity Percentage exceeds 8.0% or (2) Dealer, Dealer Group
(as defined below) or any person whose ownership position would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer Group
or any such person, a “Dealer Person”) under the Minnesota Business Corporations Act or other federal, state or local
law, rule, regulation or regulatory order or organizational documents or contracts of Counterparty applicable to ownership of Shares
(“Applicable Restrictions”), 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, registration, filing or notification obligations or other requirements (including obtaining prior approval by a state or
federal regulator) of a Dealer Person under Applicable Restrictions and with respect to which such requirements have not been met or
the relevant approval has not been received or that would subject a Dealer Person to restrictions (including restrictions relating to
business combinations or other designated transactions), or have any other adverse effect on a Dealer Person, under Applicable Restrictions
minus (y) 1% of the number of Shares outstanding on the date of determination (either such condition described in clause
(1) or (2), an “Excess Ownership Position”), Dealer, in its discretion, is unable to effect a transfer or assignment
to a third party after its commercially reasonable efforts on pricing and terms and within a time period reasonably acceptable to Dealer
such that an Excess Ownership Position no longer exists, Dealer 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 would
no longer exist following the resulting partial termination of the Transaction (after taking into account commercially reasonable adjustments
to Dealer’s commercially reasonable Hedge Positions from such partial termination). In the event that Dealer so designates an Early
Termination Date with respect to a portion of the Transaction, a payment or delivery shall be made pursuant to Section 6 of the
Agreement or Section 8(c) of this Confirmation as if (i) an Early Termination Date had been designated in respect of a
Transaction having terms identical to the Terminated Portion of the Transaction, (ii) Counterparty were the sole Affected Party
with respect to such partial termination, (iii) such portion of the Transaction were the only Terminated Transaction and (iv) Dealer
were 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. 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 Dealer and any of its affiliates subject to aggregation
with Dealer for purposes of the “beneficial ownership” test under Section 13 of the Exchange Act and all persons who
may form a “group” (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) with Dealer (collectively, “Dealer
Group”) “beneficially own” (within the meaning of Section 13 of the Exchange Act) without duplication on such
day (or, to the extent that for any reason the equivalent calculation under Section 16 of the Exchange Act and the rules and
regulations thereunder results in a higher number, such higher number) and (B) the denominator of which is the number of Shares
outstanding on such day. In the case of a transfer or assignment by Counterparty of its rights and obligations hereunder and under the
Agreement, in whole or in part (any such Options so transferred or assigned, the “Transfer Options”), to any party,
withholding of such consent by Dealer shall not be considered unreasonable if such transfer or assignment does not meet the 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 8(e) or
any obligations under Section 2 (regarding Extraordinary Events) or 8(d) of this Confirmation;
(B) Any
Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended (the “Code”));
(C) Such
transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited
to, undertakings with respect to compliance with applicable securities laws in a manner that, in the 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 by, and reasonably satisfactory
to, Dealer;
(D) Dealer
shall not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of
the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment;
(E) An
Event of Default, Potential Event of Default or Termination Event shall not occur as a result of such transfer and assignment;
(F) Without
limiting the generality of clause (B), Counterparty shall have caused the transferee to make such Payee Tax Representations and to provide
such tax documentation 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 and assignment; and
(G) Counterparty
shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such
transfer or assignment.
(g) Delivery
of Shares. Notwithstanding anything to the contrary herein, Dealer may, by prior notice to Counterparty, satisfy its obligation to
deliver any Shares or other securities on any date due (an “Original Delivery Date”) by making separate deliveries
of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate
number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered
on such Original Delivery Date.
(h) 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.
(i) No
Netting and Set-off. The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party waives
any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any
delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between
parties hereto, by operation of law or otherwise.
(j) Equity
Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction
that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy. For the avoidance of doubt, the
parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim arising
as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement. For the avoidance of doubt,
the parties acknowledge that the obligations of Counterparty under this Confirmation are not secured by any collateral that would otherwise
secure the obligations of Counterparty herein under or pursuant to any other agreement.
(k) Early
Unwind. In the event the sale by Counterparty of the Firm Securities not consummated pursuant to the Purchase Agreement for any reason
by the close of business in New York on January 23, 2024 (or such later date as agreed upon by the parties) (January 23, 2024
or such later date being the “Early Unwind Date”), the Transaction shall automatically terminate (the “Early
Unwind”) on the Early Unwind Date and the Transaction and all of the respective rights and obligations of Dealer and Counterparty
hereunder shall be cancelled and terminated and Counterparty shall pay to Dealer an amount in cash equal to the aggregate amount of costs
and expenses relating to the unwinding of Dealer’s hedging activities in respect of the Transaction (including market losses incurred
in reselling any Shares purchased by Dealer or its affiliates in connection with such hedging activities, unless Counterparty agrees to
purchase any such Shares at the cost at which Dealer purchased such Shares). Following such termination, cancellation and payment, each
party shall be released and discharged by the other party from, and agrees not to make any claim against the other party with respect
to, any obligations or liabilities of either party arising out of, and to be performed in connection with, the Transaction either prior
to or after the Early Unwind Date. Dealer and Counterparty represent and acknowledge to the other that upon an Early Unwind and following
the payment referred to above, all obligations with respect to the Transaction shall be deemed fully and finally discharged.
(l) 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 Issuer 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 “Daily VWAP” (as defined in the Indenture); (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 “Daily VWAP” (as defined in the Indenture), each
in a manner that may be adverse to Counterparty; and (E) the Transaction is a derivatives transaction in which it has granted Dealer
an option, and Dealer may purchase shares for its own account at an average price that may be greater than, or less than, the price paid
by Counterparty under the terms of the Transaction.
(m) Wall
Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability
Act of 2010 (the “WSTAA”), the parties hereby agree that neither the enactment of the WSTAA (or any statute containing
any legal certainty provision similar to Section 739 of the WSTAA) or any regulation under the WSTAA (or any such statute), nor any
requirement under the WSTAA (or any statute containing any legal certainty provision similar to Section 739 of the WSTAA) or an amendment
made by the WSTAA (or any such statute), 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, Increased Cost of Hedging or
Illegality).
(n) Governing
Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE,
OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(o) Amendment.
This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty
and Dealer.
(p) 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.
(q) Tax
Matters.
(i) Withholding
Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act. “Indemnifiable Tax”
as defined in Section 14 of the Agreement, shall not include any 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.
(ii) HIRE
Act. To the extent that either party to the Agreement with respect to this Transaction is not an adhering party to the ISDA 2015 Section 871(m) Protocol
published by the International Swaps and Derivatives Association, Inc. on November 2, 2015 and available at www.isda.org, as
may be amended, supplemented, replaced or superseded from time to time (the “871(m) Protocol”), the parties agree
that the provisions and amendments contained in the Attachment to the 871(m) Protocol are incorporated into and apply to the Agreement
with respect to this Transaction as if set forth in full herein. The parties further agree that, solely for purposes of applying such
provisions and amendments to the Agreement with respect to this Transaction, references to “each Covered Master Agreement”
in the 871(m) Protocol will be deemed to be references to the Agreement with respect to this Transaction, and references to the
“Implementation Date” in the 871(m) Protocol will be deemed to be references to the Trade Date of this Transaction.
(iii) Tax
documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on
or before the date of execution of this Confirmation, (ii) upon reasonable request of Dealer and (iii) promptly upon learning
that any such tax form previously provided by Counterparty has become obsolete or incorrect. Dealer shall provide to Counterparty a valid
U.S. Internal Revenue Service Form W-8ECI “Certificate of Foreign Person’s Claim That Income Is Effectively Connected
With the Conduct of a Trade or Business in the United States”, or any successor thereto, (i) on or before the date of execution
of this Confirmation, (ii) upon reasonable request of Counterparty and (iii) promptly upon learning that any such tax form previously
provided by Dealer has become obsolete or incorrect.
(iv) Tax
Representations. For the purpose of Section 3(f) of the Agreement, Counterparty is a corporation for U.S. federal income tax
purposes and is organized under the laws of the State of Minnesota. Counterparty represents to Dealer that for U.S. federal income tax
purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations)
and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States Treasury Regulations).
For the purpose of Section 3(f) of the Agreement, Dealer represents to Counterparty that (A) it is a “foreign person”
(as that term is used in section 1.6041-4(a)(4) of the United States Treasury Regulations) for U.S. federal income tax purposes and
(B) each payment received or to be received by it under the Agreement will be effectively connected with its conduct of a trade or
business in the United States.
(r) Role
of Agent. Each of Dealer 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 Dealer under the Transactions pursuant to instructions from such party, (ii) the Agent is not a principal
or party to the Transactions, and may transfer its rights and obligations with respect to the Transactions, (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 Transactions, (iv) Dealer 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 Dealer 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 Transactions. 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 Dealer. Dealer will be acting for its own account in respect of this Confirmation and the
Transactions contemplated hereunder.
9. Arbitration.
(a) All
parties to this Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided
by the rules of the arbitration forum in which a claim is filed.
(b) Arbitration
awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.
(c) The
ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court
proceedings.
(d) The
arbitrators do not have to explain the reason(s) for their award.
(e) The
panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless
Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with
the securities industry.
(f) The
rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible
for arbitration may be brought in court.
(g) The
rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Confirmation.
(h) Counterparty
agrees that any and all controversies that may arise between Counterparty and Dealer, including, but not limited to, those arising out
of or relating to the Agreement or the Transaction hereunder, shall be determined by arbitration conducted before FINRA Dispute Resolution
(“FINRA-DR”), or, if the FINRA-DR declines to hear the matter, before the American Arbitration Association, in accordance
with their arbitration rules then in force. The award of the arbitrator shall be final, and judgment upon the award rendered may
be entered in any court, state or federal, having jurisdiction.
(i) No
person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class
with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class
is decertified; or (iii) Counterparty is excluded from the class by the court.
(j) Such
forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Confirmation except to the extent
stated herein.
Counterparty hereby agrees (a) to check this
Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to
confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Counterparty
with respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms
and providing the other information requested herein and immediately returning an executed copy to Dealer.
|
Yours
faithfully, |
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BMO
CAPITAL MARKETS CORP. |
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as
agent for BANK OF MONTREAL |
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By: |
/s/
Eric Benedict |
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Name: |
Eric Benedict |
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Title: |
Co-Head,
Global Equity Capital Markets |
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BANK
OF MONTREAL |
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By: |
/s/
Brian Riley |
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Name: |
Brian
Riley |
|
Title: |
Managing Director, Global Markets |
[Signature Page to Base
Bond Hedge Confirmation]
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Agreed and Accepted By: |
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WINNEBAGO
industries, INC. |
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|
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By: |
/s/
Bryan L. Hughes |
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Name: Bryan L. Hughes |
|
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Title: Chief Financial Officer and Senior Vice President |
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[Signature Page to BMO Bond Hedge Confirmation]
Exhibit 10.4
J.P. Morgan Securities LLC
383 Madison Avenue
New York, NY 10179
Opening Transaction
To: |
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, Minnesota 55347 |
|
|
From: |
J.P. Morgan Securities LLC |
|
|
Re: |
Base Convertible Bond Hedge
Transaction |
|
|
Date: |
January 18,
2024 |
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|
Dear Ladies and Gentlemen:
The
purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of the above-referenced
transaction entered into on the Trade Date specified below (the “Transaction”) between J.P. Morgan Securities LLC
(“Dealer”) and Winnebago Industries, Inc. (“Counterparty”). This communication constitutes
a “Confirmation” as referred to in the ISDA Master Agreement specified below.
1. This
Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (the “2006 Definitions”)
and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and
together with the 2006 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”). Certain defined terms used herein have the meanings assigned to them in the Indenture
to be dated as of January 23, 2024 between Counterparty and U.S. Bank Trust Company, National Association, as trustee (the “Indenture”),
relating to the USD 300,000,000 principal amount of 3.25% Convertible Senior Notes due 2030 (the “Base Convertible Securities”)
and the additional USD 50,000,000 principal amount of 3.25% Convertible Senior Notes due 2030 that may be issued pursuant to the option
to purchase additional convertible securities (the “Optional Convertible Securities” and, together with the Base Convertible
Securities, the “Convertible Securities”). In the event of any inconsistency between the terms defined in the Indenture
and this Confirmation, this Confirmation shall govern. For the avoidance of doubt, references herein to sections of, or definitions set
forth in, the Indenture are based on the draft of the Indenture most recently reviewed by the parties at the time of execution of this
Confirmation. If any relevant sections of, or definitions set forth in, the Indenture are changed, added or renumbered between the execution
of this Confirmation and the execution of the Indenture, the parties will amend this Confirmation in good faith to preserve the economic
intent of the parties, as evidenced by such draft of the Indenture. Subject to the foregoing, the parties acknowledge that references
to the Indenture herein are references to the Indenture as in effect on the date of its execution and if the Indenture is, or the Convertible
Securities are, amended, modified or supplemented following the date of their execution, any such amendment, modification or supplement
(other than any amendment, modification or supplement pursuant to a Merger Supplemental Indenture (as defined below)) will be disregarded
for purposes of this Confirmation unless the parties agree otherwise in writing.
Counterparty
is hereby advised, and Counterparty acknowledges, that Dealer has engaged in, or refrained from engaging in, substantial financial transactions
and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates
on the terms and conditions set forth below.
This
Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this
Confirmation relates. This Confirmation shall be subject to
an agreement (the
“Agreement”) in the form of the 1992 ISDA Master Agreement (Multicurrency—Cross Border) as if Dealer and Counterparty
had executed an agreement in such form on the date hereof (but without any Schedule except for (i) the election of Loss and Second
Method and US Dollars (“USD”) as the Termination Currency, (ii) the replacement of the word “third”
in the last line of Section 5(a)(i) of the Agreement with the word “first”, and (iii) (a) the election
that the “Cross Default” provisions of Section 5(a)(vi) of the Agreement shall apply to Counterparty with a “Threshold
Amount” of USD35.0 million) (b) the phrase “, or becoming capable at such
time of being declared,” shall be deleted from clause (1) of such Section 5(a)(vi), and (c) the following language
shall be added to the end thereof: “Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute
an Event of Default if (x) the default was caused solely by error or omission of an administrative or operational nature; (y) funds
were available to enable the party to make the payment when due; and (z) the payment is made within two Local Business Days of such
party’s receipt of written notice of its failure to pay.”.
All
provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein.
In the event of any inconsistency among this Confirmation, the Equity Definitions, the 2006 Definitions or the Agreement, the following
shall prevail in the order of precedence indicated: (i) this Confirmation; (ii) the Equity Definitions; (iii) the 2006
Definitions; and (iv) the Agreement. For the avoidance of doubt, except to the extent of an express conflict, the application of
any provision of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions shall not be construed to exclude or
limit any other provision of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions.
The
Transaction hereunder shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and
Counterparty or any confirmation or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed
to exist between Dealer and Counterparty, then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation
or agreement or any other agreement to which Dealer and Counterparty are parties, the Transaction shall not be considered a Transaction
under, or otherwise governed by, such existing or deemed ISDA Master Agreement.
2. The
Transaction constitutes a Share Option Transaction for purposes of the Equity Definitions. The terms of the particular Transaction to
which this Confirmation relates are as follows:
General Terms:
Trade Date: |
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January 18, 2024 |
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Effective Date: |
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The closing date of the initial
issuance of the Convertible Securities. |
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Option Style: |
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Modified American, as described
under “Procedures for Exercise” below. |
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Option Type: |
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Call |
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Seller: |
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Dealer |
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Buyer: |
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Counterparty |
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Shares: |
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The Common Stock of Counterparty,
par value USD0.50 (Ticker Symbol: “WGO”). |
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Applicable Percentage: |
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33 1/3% |
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Number of Options: |
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The number of Base
Convertible Securities in denominations of USD1,000 principal amount issued by Counterparty on the closing date for the initial issuance of the Convertible
Securities. For the avoidance of doubt, the Number of Options |
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| |
outstanding shall be reduced by each exercise of Options hereunder. |
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Option
Entitlement: | |
11.3724 |
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Fundamental
Change Adjustment: | |
Any adjustment to the Conversion
Rate pursuant to Section 5.07 of the Indenture. |
| |
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Discretionary
Adjustment: | |
Any adjustment to the Conversion
Rate pursuant to Section 5.06 of the Indenture. |
| |
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Strike Price: | |
USD87.9322 |
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Rounding
of Strike Price/Option Entitlement: | |
In connection with any adjustment
to the Option Entitlement or Strike Price, the Option Entitlement or the Strike Price, as the case may be, shall be rounded by the
Calculation Agent in accordance with the provisions of the Indenture relating to rounding of the “Conversion Price” or
the “Conversion Rate” as applicable (each as defined in the Indenture). |
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Number
of Shares: | |
As of any date, a number
of Shares equal to the product of (i) the Applicable Percentage, (ii) the Number of Options and (iii) the Option Entitlement. |
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Premium: | |
USD19,620,000.00 |
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Premium
Payment Date: | |
The Effective Date |
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Exchange: | |
The New York Stock Exchange |
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Related
Exchange: | |
All Exchanges |
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Procedures for Exercise:
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Exercise Dates: | |
Each Conversion
Date. |
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Conversion
Date: | |
Each
“Conversion Date” (as defined in the Indenture) occurring during the Exercise Period for Convertible Securities each
in denominations of USD1,000 principal amount (such Convertible Securities, the “Relevant
Convertible Securities” for such Conversion Date). |
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Exercise Period: | |
The period from and excluding
the Effective Date to, and including, the Expiration Date. |
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Expiration
Date: | |
The earlier of (i) the
last day on which any Convertible Securities remain outstanding and (ii) the second “Scheduled Trading Day” (as
defined in the Indenture) immediately preceding the “Maturity Date” (as defined in the Indenture). |
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Automatic
Exercise on Conversion Dates: | |
Applicable; and means that
on each Conversion Date, a number of Options equal to the number of Relevant Convertible Securities for such Conversion Date in denominations
of USD1,000 principal amount shall be automatically exercised, subject to “Notice of Exercise” below. |
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Notice
Deadline: | |
In
respect of any exercise of Options hereunder on any Conversion Date, 5:00 P.M., New York City |
| |
time,
on (i) in the case the applicable Relevant Convertible Securities will be settled by Counterparty by delivery of Shares only
(together with cash in lieu of any fractional Share), the “Trading Day” (as defined in the Indenture) immediately following
the relevant Conversion Date, or (ii) otherwise, the Scheduled Trading Day immediately preceding the first day of the relevant
Cash Settlement Averaging Period; provided
that in the case of any exercise of Options hereunder in connection with the conversion of any Relevant
Convertible Securities for any Conversion Date occurring during the period from and including the 85th “Scheduled Trading Day”
(as defined in the Indenture) prior to the Maturity Date, to and including the Expiration Date (such period, the “Final Conversion
Period”), the Notice Deadline shall be 5:00 P.M., New York City time, on the “Scheduled Trading Day” (as defined
in the Indenture) immediately preceding the “Maturity Date” (as defined in the Indenture). |
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Notice
of Exercise: | |
Notwithstanding
anything to the contrary in the Equity Definitions, Dealer shall have no obligation to make any payment or delivery in respect of
any exercise of Options hereunder and such obligation in respect of such exercise shall be permanently extinguished unless Counterparty
notifies Dealer in writing prior to the Notice Deadline in respect of such exercise, of (i) the number of Relevant Convertible
Securities being converted on the related Conversion Date (specifying, if applicable, whether all or any portion of such Convertible
Securities are Convertible Securities as to which additional Shares would be added to the Conversion Rate (as defined in the Indenture)
pursuant to Section 5.07 of the Indenture), (ii) the scheduled settlement date under the Indenture for the Relevant Convertible
Securities for such Conversion Date, (iii) whether such Relevant Convertible Securities will be settled by Counterparty by delivery
of cash or a combination of cash and Shares and, if such a combination, the “Specified Dollar Amount” (as defined in
the Indenture) and (iv) the first day of the relevant “Observation Period” (as defined in the Indenture), if any;
provided
that in the case of any exercise of Options in connection with the conversion of any Relevant Convertible
Securities for any Conversion Date occurring during the Final Conversion Period, the contents of such notice shall be as set forth
in clauses (i) and (ii) above. Counterparty acknowledges its responsibilities under applicable securities laws, and in
particular Section 9 and Section 10(b) of the Exchange Act (as defined below) and the rules and regulations thereunder,
in respect of any election of a settlement method with respect to the Convertible Securities. For the avoidance of doubt, if |
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Counterparty fails to give such notice when due in respect of any exercise
of Options hereunder, Dealer’s obligation to make any payment or delivery in respect of such exercise shall be permanently
extinguished, and late notice shall not cure such failure. If applicable, the Notice of Exercise shall also contain the Settlement
Method Election Provisions. |
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Notice
of Final Convertible Security Settlement
Method: | |
Counterparty
shall notify Dealer in writing before 5:00 P.M., New York City time, on the “Scheduled Trading Day” (as defined in the
Indenture) immediately preceding the 85th “Scheduled Trading Day” (as defined in the Indenture) prior to the Maturity
Date of the settlement method (and, if applicable, the Specified Dollar Amount) elected (or deemed to be elected) with respect to
Relevant Convertible Securities with a Conversion Date occurring during the Final Conversion Period (any such notice, a “Notice
of Final Convertible Security Settlement Method”). If applicable, the Notice of Final Convertible
Security Settlement Method shall also contain the Settlement Method Election Provisions. |
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Dealer’s
Telephone Number and Telex
and/or Facsimile Number and Contact
Details for purpose of Giving
Notice: | |
As specified in Section 6(b) below. |
Settlement Terms:
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Settlement
Date: | |
For
any Exercise Date, the date one Settlement Cycle following the final day of the relevant Cash Settlement Averaging Period; provided
that the Settlement Date shall not be prior to the Exchange Business Day immediately following the
date Counterparty provides the Notice of Delivery Obligation prior to 5:00 P.M., New York City time. |
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Delivery
Obligation: | |
In
lieu of the obligations set forth in Sections 8.1 and 9.1 of the Equity Definitions, and subject to “Notice of Exercise”
above and “Discretionary Adjustments” , “Dividends” and “Consequences of Merger Events”
below, in respect of an Exercise Date, Dealer will deliver to Counterparty on the related Settlement Date (the “Delivery
Obligation”), amounts equal to the product of the Applicable Percentage
and |
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| |
(i) (I) a number of Shares equal to the aggregate number of Shares, if any, that Counterparty would be obligated to deliver to the holder(s) of the Relevant Convertible Securities for such Conversion Date pursuant to Section 5.03 of the Indenture (except that such number of Shares shall be determined without taking into consideration
any rounding pursuant to Section 5.03(B)(ii) of the Indenture and shall be rounded |
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down to the nearest whole number) and
(II) cash in lieu of any fractional Share resulting from such rounding; and/or |
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(ii) the
aggregate amount of cash, if any, in excess of the principal amount of the Relevant Convertible Securities that Counterparty would
be obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date pursuant to Section 5.03
of the Indenture, determined, for each of clauses (i) and (ii), by the Calculation Agent (by reference to such Sections of the
Indenture) |
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as
if Counterparty had elected to satisfy its conversion obligation in respect of such Relevant Convertible Securities by the Applicable
Settlement Method, notwithstanding any different actual election by Counterparty with respect to the settlement of such Relevant
Convertible Securities; provided
that the Delivery Obligation shall be determined excluding any Shares and/or cash that Counterparty
is obligated to deliver to holder(s) of the Relevant Convertible Securities as a direct or indirect result of any adjustments
to the Conversion Rate pursuant to a Fundamental Change Adjustment or a Discretionary Adjustment and any interest payment that Counterparty
is (or would have been) obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date. Notwithstanding
the foregoing, if, in respect of any Exercise Date, (x)(I) the number of Shares included in the Delivery Obligation multiplied
by the Share Obligation Value Price plus (II) the amount of cash included in the Delivery Obligation, would otherwise exceed
(y) the relevant Net Convertible Share Obligation Value, such number of Shares and such amount of cash shall be proportionately
reduced to the extent necessary to eliminate such excess. |
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Make-Whole
Adjustment: | |
Notwithstanding
anything to the contrary herein, in respect of any exercise of Options relating to a conversion of Relevant Convertible Securities
in connection with which holders of the Relevant Convertible Securities would be entitled to receive additional Shares and/or cash
as a result of adjustments to the Conversion Rate pursuant to a Fundamental Change Adjustment, the Delivery Obligation shall include
such additional Shares and/or cash; provided
that if the sum of (i) the product of (a) the number of Shares (if any) included in the
Delivery Obligation per exercised Option and (b) the Share Obligation Value Price and (ii) the amount of cash (if any)
included in the Delivery Obligation per exercised Option would otherwise exceed the amount per Option, as determined by the Calculation
Agent, that would be payable by Dealer |
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under Section 6 of the Agreement if (x) the
relevant Conversion Date were an Early Termination Date resulting from an Additional Termination Event with respect to which the
Transaction was the sole Affected Transaction and Counterparty was the sole Affected Party and (y) the provisions of the Indenture
relating to the Fundamental Change Adjustment were deleted, then such number of Shares and such amount of cash shall be proportionately
reduced to the extent necessary to eliminate such excess. |
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Applicable
Settlement Method: | |
For
any Relevant Convertible Securities, if such Notice of Exercise (or such Notice of Final Convertible Security Settlement Method,
as the case may be) contains all of the Settlement Method Election Provisions, the Applicable Settlement Method shall be the settlement
method actually so elected by Counterparty in respect of such Relevant Convertible Securities (the “Convertible
Securities Settlement Method”); otherwise, the Applicable Settlement
Method shall assume Counterparty had made a Cash Election with respect to such Relevant Convertible Securities (a “Deemed
Cash Election”) with a Specified Dollar Amount of USD1,000 per Relevant Convertible Security
and the Delivery Obligation shall be determined by the Calculation Agent as if the relevant “Observation Period” pursuant
to Section 5.03(B)(i) of the Indenture were the Cash Settlement Averaging Period. |
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Cash
Settlement Averaging Period: | |
The 40 “Trading Days”
(as defined in the Indenture) commencing on (I) the third “Trading Day” (as defined in the Indenture) after the
Conversion Date for conversions with a related Conversion Date occurring prior to the Final Conversion Period or (II) the 41st
“Scheduled Trading Day” (as defined in the Indenture) prior to the “Maturity Date” (as defined in the Indenture)
for conversions with a related Conversion Date occurring during the Final Conversion Period. |
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Settlement
Method Election Provisions: | |
In order for the Applicable
Settlement Method to be the Convertible Securities Settlement Method in accordance with “Applicable Settlement Method”
above, the related Notice of Exercise (or Notice of Final Convertible Security Settlement Method, as the case may be) must contain
in writing the following representations and warranties from Counterparty to Dealer as of such notice delivery date: |
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(i) none
of Counterparty and its officers or directors, or any person that controls, potentially controls, or otherwise exercises influence
over, Counterparty’s decision to elect the Convertible Security Settlement Method is aware of any material
nonpublic information regarding Counterparty or the Shares; |
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(ii) Counterparty
is electing the Convertible Security Settlement Method in good faith and not as part of a plan or scheme to evade compliance with
the U.S. federal securities laws; Counterparty is not electing the Convertible Security Settlement Method to create actual or apparent
trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise
manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the
Exchange Act; and Counterparty has not entered into or altered any hedging transaction relating to the Shares corresponding to or
offsetting the Transaction; |
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(iii) Counterparty
has the power to make such election and to execute and deliver any documentation relating to such election that it is required by
this Confirmation to deliver and to perform its obligations under this Confirmation and has taken all necessary action to authorize
such election, execution, delivery and performance; |
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(iv) such
election and performance of its obligations under this Confirmation do not violate or conflict with any law applicable to it, any
provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any
of its assets or any contractual restriction binding on or affecting it or any of its assets; and |
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(v) any
transaction that Dealer makes with respect to the Shares during the period beginning at the time that Counterparty delivers such
notice and ending at the close of business on the final day of the Cash Settlement Averaging Period shall be made by Dealer at Dealer’s
sole discretion for Dealer’s own account and Counterparty shall not have, and shall not attempt to exercise, any influence
over how, when, whether or at what price Dealer effects such transactions, including, without limitation, the prices paid or received
by Dealer per Share pursuant to such transactions, or whether such transactions are made on any securities exchange or privately. |
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Notice
of Delivery Obligation: | |
No
later than the Exchange Business Day immediately following the last day of the relevant Cash Settlement Averaging Period, Counterparty
shall give Dealer notice of the final number of Shares and/or amount of cash included
in the Total Convertible Share Obligation Value (as defined |
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below); provided that,
with respect to any Exercise Date occurring during the Final Conversion Period, Counterparty may provide Dealer with a single
notice of the aggregate number of Shares and/or amount of cash included in the Total Convertible Share Obligation Value for all Exercise
Dates occurring during such period (it being understood, for the avoidance of doubt, that the requirement of Counterparty to deliver
such notice shall not limit Counterparty’s obligations with respect to a Notice of Exercise or Notice of Final Convertible
Security Settlement Method, as the case may be, as set forth above, in any way). |
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Net
Convertible Share Obligation Value: | |
With
respect to Relevant Convertible Securities as to a Conversion Date, the product of (i) the Applicable Percentage and (ii)(A) the
Total Convertible Share Obligation Value of such Relevant Convertible Securities for such Conversion Date minus (B) the aggregate
principal amount of such Relevant Convertible Securities for such Conversion Date. |
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Total
Convertible Share Obligation Value: | |
With
respect to Relevant Convertible Securities with respect to a Conversion Date, (i) (A) the number of Shares equal to the
aggregate number of Shares that Counterparty is obligated to deliver to the holder(s) of Relevant Convertible Securities for
such Conversion Date pursuant to the Indenture (it being understood that such number of Shares shall be determined taking into consideration
any rounding pursuant to Section 5.03(B)(ii) of the Indenture) multiplied by (B) the Share Obligation Value Price
plus (ii) an amount of cash equal to the aggregate amount of cash that Counterparty is obligated to deliver to the holder(s) of
Relevant Convertible Securities for such Conversion Date pursuant to the Indenture (including, for the avoidance of doubt, any cash
payable by Counterparty in lieu of fractional Shares); provided
that the Total Convertible Share Obligation Value shall be determined excluding any Shares and/or
cash that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Securities as a direct or indirect result
of any adjustments to the Conversion Rate pursuant to a Fundamental Change Adjustment or a Discretionary Adjustment and any interest
payment that Counterparty is (or would have been) obligated to deliver to holder(s) of the Relevant Convertible Securities for
such Conversion Date. |
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Share
Obligation Value Price: | |
The opening price as displayed
under the heading “Op” on Bloomberg page “WGO.N <Equity>” (or any successor thereto) on the applicable
Settlement Date or other date of delivery. |
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Other
Applicable Provisions: | |
To
the extent Dealer is obligated to deliver Shares hereunder, the provisions of Sections 9.8, 9.9 and |
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9.11
of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction; provided
that the Representation and Agreement contained in Section 9.11 of the Equity Definitions
shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under
applicable securities laws that exist as a result of the fact that Counterparty is the issuer of the Shares.
|
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Restricted
Certificated Shares: | |
Notwithstanding
anything to the contrary in the Equity Definitions, Dealer may, in whole or in part, deliver Shares required to be delivered to Counterparty
hereunder in certificated form in lieu of delivery through the Clearance System. With respect to such certificated Shares, the Representation
and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by deleting the remainder of the provision
after the word “encumbrance” in the fourth line thereof. |
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Adjustments:
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Method
of Adjustment: | |
Notwithstanding
Section 11.2 of the Equity Definitions, upon the occurrence of any event or condition set forth in Section 5.05(A)(i),
(ii), (iii), (iv) and (v) and Section 5.05(H) of the Indenture (a “Potential
Adjustment Event”) that results in an adjustment under the Indenture, the Calculation Agent
shall make a corresponding adjustment in respect of any one or more of the Strike Price, the Number of Options, the Option Entitlement
and any other term relevant to the exercise, settlement or payment of the Transaction, subject to “Discretionary Adjustments”
below. Promptly upon the occurrence of any Potential Adjustment Event, Counterparty shall notify the Calculation Agent of such Potential
Adjustment Event; and once the adjustments to be made to the terms of the Indenture and the Convertible Securities in respect of
such Potential Adjustment Event have been determined, Counterparty shall immediately notify the Calculation Agent in writing of the
details of such adjustments. |
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Notwithstanding anything to
the contrary herein or in the Equity Definitions: |
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(i) in
connection with any Potential Adjustment Event as a result of an event or condition set forth in Section 5.05(A)(ii) of
the Indenture or Section 5.05(A)(iii)(1) of the Indenture where, in either case, the period for determining “Y”
(as such term is used in Section 5.05(A)(ii) of the Indenture) or “SP” (as such term is used in Section 5.05(A)(iii)(1) of
the Indenture), as the case
may be, begins before Counterparty has publicly announced the event or condition giving |
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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 of 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 |
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(ii) 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 is otherwise not adjusted at the time or in
the manner contemplated by the Indenture based on such declaration or (c) the Conversion Rate 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 of 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. |
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Upon
the occurrence of any Potential Adjustment Event Change, Counterparty shall immediately notify the Calculation Agent in writing of
the details of such Potential Adjustment Event Change. |
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For
the avoidance of doubt, Dealer shall not have any payment or delivery obligation hereunder in respect of, 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 the holders of Convertible Securities (upon conversion or otherwise) or (y) any other transaction in which holders of Convertible
Securities are entitled to participate, in each case, in lieu of an adjustment under the Indenture in respect of a Potential Adjustment
Event (including, without limitation, under the proviso to the first sentence of Section 5.05(A)(iii)(1) of the Indenture
or the proviso to the first sentence of Section 5.05(A)(iv) of the Indenture). |
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Discretionary
Adjustments: | |
Notwithstanding anything to the contrary herein or in the Equity Definitions,
if the Calculation Agent in good faith disagrees with any adjustment under the |
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Indenture
that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation, pursuant to Section 5.05(H) of
the Indenture or pursuant to Section 5.08(A) of the Indenture or any supplemental indenture entered into thereunder (a
“Merger
Supplemental Indenture”) or in connection with the determination of the fair value of
any securities, property, rights or other assets), then the Calculation Agent will determine the adjustment to be made to any one
or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or
payment of or under the Transaction in a commercially reasonable manner and, for the avoidance of doubt, the Delivery Obligation
shall be calculated on the basis of such adjustments by the Calculation Agent; provided
that, notwithstanding the foregoing, in any Potential Adjustment Event occurs during the Cash
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 holder of the underlying Shares on the related Conversion Date,
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. |
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Dividends: | |
If
(i) at any time during the period from and including the Trade Date, to but excluding the Expiration Date, an ex-dividend date
for a regular quarterly cash dividend occurs with respect to the Shares (an “Ex-Dividend
Date”) and that dividend is less than the Regular Dividend on a per Share basis or (ii) no
Ex-Dividend Date for a regular quarterly cash dividend occurs with respect to the Shares in any quarterly dividend period of Counterparty,
then the Calculation Agent will make a corresponding adjustment in respect of any one or more of the Strike Price, the Number of
Options, the Option Entitlement and any other term relevant to the exercise, settlement or payment of the Transaction to account
for the economic effect on the Transaction of such dividend or lack thereof, and, for the avoidance of doubt, any such adjustments
shall be taken into account in calculating the
Delivery Obligation. “Regular Dividend” shall mean USD 0.31 per Share. |
Notice
of Certain Other Events: | |
Counterparty
shall give Dealer commercially reasonable advance (but in no event less than one Exchange Business Day) written notice of the section
or sections of the Indenture and, if applicable, the formula therein, pursuant to which any adjustment will be made to the Convertible
Securities in connection with any Potential Adjustment Event, Merger Event or Tender Offer. |
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Extraordinary Events:
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Merger
Events: | |
Notwithstanding
Section 12.1(b) of the Equity Definitions, “Merger Event” shall mean the occurrence of any event or condition
set forth in the definition of “Common Stock Change Event” set forth in Section 5.08(A) of the Indenture. |
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Consequences
of Merger Events: | |
Notwithstanding
Section 12.2 of the Equity Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall make an adjustment
to the terms relevant to the exercise, settlement or payment of the Transaction corresponding to the adjustment required under Section 5.08
of the Indenture in respect of such Merger Event, as determined by the Calculation Agent (by reference to such Section), subject
to “Discretionary Adjustments” above; provided
that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant
to a Fundamental Change Adjustment or a Discretionary Adjustment; and provided further that
the Calculation Agent may make such further adjustments to the terms of the Transaction as may be necessary to ensure that the fair
value of the Transaction to Dealer is not adversely affected as a result of any adjustment referenced in this paragraph and, for
the avoidance of doubt, any such further adjustments shall be taken into account in calculating the Delivery Obligation; and provided
further that if, with respect to a Merger Event, (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 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, will not be a corporation organized under the laws of the United States, any state thereof or the District of
Columbia and/or will not be the Issuer, Dealer may elect in its sole discretion that Cancellation and Payment (Calculation Agent
Determination) shall apply. |
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Notice of Merger Consideration and Consequences: | |
Upon the occurrence of a Merger Event,
Counterparty shall reasonably promptly (but in any event prior to the relevant merger date) notify the Calculation
Agent of (i) in the case of a Merger Event that causes the Shares to be converted into the right to receive more than a single
type of consideration (determined based in part upon any form of stockholder election), the types and amount of consideration actually
received by such holders, and (ii) the details of the adjustment to be made under the Indenture in respect of such Merger Event. |
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Nationalization, Insolvency or
Delisting: | |
Cancellation
and Payment (Calculation Agent |
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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 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. |
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Additional
Termination Event(s): | |
Notwithstanding
anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, the Transaction would be cancelled
or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event
(with the Transaction (or the cancelled or terminated portion thereof) being the Affected Transaction and Counterparty being the
sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6
of the Agreement shall apply to such Affected Transaction. |
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Additional Disruption Events: | |
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(a) Change in Law: | |
Applicable;
provided that
Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation”
in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) by
adding the phrase “and/or Hedge Position” after the word “Shares” in clause (X) thereof and (iii) by
immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated
by the Hedging Party on the Trade Date”; and provided further that Section 12.9(a)(ii) of
the Equity Definitions is hereby amended by (i) replacing the parenthetical beginning after the word “regulation”
in the second line thereof 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)” and (ii) adding the
words “, or holding, acquiring or disposing of Shares or any Hedge Positions relating to,” after the words “obligations
under” in clause (Y) thereof. |
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(b)
Failure to Deliver: | |
Applicable |
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(c)
Insolvency Filing: | |
Applicable |
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(d)
Hedging Disruption: | |
Applicable;
provided
that: |
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(i) |
Section 12.9(a)(v) of the Equity Definitions is hereby amended by: |
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|
(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 |
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|
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|
(b) |
inserting the following paragraphs
at the end of such Section: |
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“Such inability
described in clauses (A) or (B) above shall not constitute a “Hedging Disruption” if such inability results
from Hedging Party’s creditworthiness. |
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For the avoidance of doubt,
(i) the term “equity price risk” shall be deemed to include, but shall not be limited to, stock price and volatility
risk, and (ii) the transactions or assets referred to in phrases (A) or (B) above must be available on commercially
reasonable pricing and other terms.”; and |
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(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”. |
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(e)
Increased Cost of Hedging: | |
Applicable;
provided that such increased cost described in Section 12.9(vi) of the Equity Definitions shall not constitute an “Increased
Cost of Hedging” if such increased cost results from Hedging Party’s creditworthiness. |
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Hedging
Party: | |
Dealer |
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|
Determining
Party: | |
Dealer.
All calculations and determinations by the Determining Party shall be made in good faith and in a commercially reasonable manner.
Following any calculation by the Determining Party hereunder, upon written request by Counterparty, the Determining Party will, within
five Exchange Business Days immediately following such request, provide to Counterparty 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; provided,
however, that in no event will the Determining Party be obligated to share with Counterparty any proprietary or confidential data
or information or any proprietary or confidential models used by it. |
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Non-Reliance: | |
Applicable |
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|
Agreements
and Acknowledgments Regarding Hedging Activities: | |
Applicable |
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Additional
Acknowledgments: | |
Applicable |
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3. Calculation
Agent: | |
|
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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, if the Calculation
Agent fails to timely make any calculation, adjustment or determination required to be made by the Calculation Agent hereunder or
to perform any obligations of the Calculation Agent hereunder and such failure continues for five Exchange Business Days following
notice to the Calculation Agent by Counterparty of such failure, Counterparty shall have the right to designate a nationally recognized
third-party dealer in over-the-counter corporate equity derivatives to act, during the period commencing on the first date the Calculation
Agent fails to timely make such calculation, adjustment or determination or to perform such obligation, as the case may be, and ending
on the earlier of the Early Termination Date with respect to such Event of Default and the date on which such Event of Default is
no longer continuing, as Calculation Agent. |
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Following
any calculation by the Calculation Agent hereunder, upon written request by Counterparty, the Calculation Agent will, within five
Exchange Business Days immediately following such request, provide to Counterparty by email to the email 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 the basis for such calculation; provided
that in no event will Dealer be obligated to share with Counterparty any proprietary or confidential
data or information or any proprietary or confidential models used by it or any information that is subject to an obligation not
to disclose such information. |
4. Account
Details:
Dealer
Payment Instructions:
Bank: |
JPMorgan Chase Bank, N.A. |
ABA#: |
021000021 |
Acct No.: |
066914272 |
Beneficiary: |
J.P. Morgan Securities LLC |
Ref: |
Derivatives |
Counterparty
Payment Instructions:
To
be provided by Counterparty.
5. Offices:
The
Office of Dealer for the Transaction is: New York, New York
J.P.
Morgan Securities LLC
383
Madison Avenue
New
York, NY 10179
The
Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party.
6. Notices:
For purposes of this Confirmation:
(a) Address
for notices or communications to Counterparty:
Winnebago
Industries, Inc.
13200
Pioneer Trail, Suite 150
Eden
Prairie, MN 55347
Attention:
Kathy Hiebert, Treasurer
(b) Address for notices or communications to Dealer:
J.P. Morgan
Securities LLC
EDG Marketing
Support
|
Email: |
edg_notices@jpmorgan.com |
edg.us.flow.corporates.mo@jpmorgan.com
With a copy
to:
|
Attention: |
Mr. Gaurav Maria |
|
Title: |
Managing Director |
|
Email: |
gaurav.x.maria@jpmorgan.com |
7. Representations,
Warranties and Agreements:
(a) In
addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants
to and for the benefit of, and agrees with, Dealer as follows:
(i) On
the Trade Date and as of the date of any Notice of Share Termination under (and as defined in) Section 8(c) below, (A) none
of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and
(B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports
and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading.
(ii) (A) On
the Trade Date, the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not subject to a “restricted
period,” as such term is defined in Regulation M under the Exchange Act (“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 Trade Date.
(iii) 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).
(iv) Without
limiting the generality of Section 3(a)(iii) of the Agreement, the Transaction will not violate Rule 13e-1 or Rule 13e-4
under the Exchange Act.
(v) Prior
to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the
Transaction and such other certificate or certificates as Dealer shall reasonably request. Based on such resolutions, neither Dealer
nor any of its affiliates shall be subject to the restrictions under Section 302A.673 of the Minnesota Business Corporations
Act as an “interested shareholder” of Counterparty by virtue of (A) its role as initial purchaser of, or
market-maker in, any securities of Counterparty convertible into the Shares, (B) its entry into the Transaction and/or
(C) any hedging transactions in Counterparty’s securities in connection with the Transaction.
(vi) Counterparty
is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into
or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into
or exchangeable for Shares) or otherwise in violation of the Exchange Act.
(vii) 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.
(viii) On
each of the Trade Date and the Premium Payment Date, Counterparty is not “insolvent” (as such term is defined under Section 101(32)
of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be
able to purchase the Number of Shares in compliance with the laws of the jurisdiction of Counterparty’s incorporation.
(ix) The
representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement,
dated as of January 18, 2024, between Goldman Sachs & Co. LLC and BMO Capital Markets Corp. as the Representatives and
Counterparty (the “Purchase Agreement”) are true and correct as of the Trade Date and the Effective Date and are hereby
deemed to be repeated to Dealer as if set forth herein.
(x) No
state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise
to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from
any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares; provided however, that Counterparty
makes no representation or warranty regarding any such requirement that is applicable generally to the ownership of equity securities
by Dealer or any of its affiliates as a result of it or any such affiliates being financial institutions or broker-dealers .
(xi) 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, including, without limitation, the transaction that is the subject of this confirmation
and any transactions related hereto or contemplated hereby; (B) will exercise independent judgment in evaluating the recommendations
of Dealer and its affiliates or associated persons with regard to any such securities transactions or strategies unless it has otherwise
notified Dealer in writing; and (C) has total assets of at least $50 million. Counterparty will notify Dealer if the immediately
preceding statement contained in this Section 7(a)(xi) ceases to be true.
(xii) Without
limiting the generality of Section 3(a) of the Agreement, neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation
or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree
of any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Counterparty’s Annual Report
on Form 10-K for the year ended August 26, 2023, as updated by any subsequent filings, to which Counterparty or any of its
subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries
is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
(b) Each
of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18)
of the U.S. Commodity Exchange Act, as amended, and is entering into the Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise) and not for the benefit of any third party.
(c) Each
of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration
under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of
Section 4(a)(2) thereof. Accordingly, Counterparty represents and warrants to Dealer that (i) it has the financial
ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment and its
investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not
disproportionate to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its
entire investment in the Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation D
as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account and without a view to
the distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction has not been and will
not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws,
and (v) its financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and
no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is capable of
assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and
accepts, the terms, conditions and risks of the Transaction.
(d) Each
of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution” and “financial participant”
within the meaning of Sections 101(22) and 101(22A) of the Bankruptcy Code. The parties hereto further agree and acknowledge (A) that
this Confirmation is a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code,
with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment
amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement
payment” within the meaning of Section 546 of the Bankruptcy Code, and (B) that Dealer is entitled to the protections
afforded by, among other sections, Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 548(d)(2), 555 and 561 of the Bankruptcy Code.
(e) As
a condition to the effectiveness of the Transaction, Counterparty shall deliver to Dealer (i) an incumbency certificate, dated as
of the Premium Payment Date, of Counterparty in customary form and (ii) an opinion of counsel, dated as of the Premium Payment Date
and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement,
Sections 7(a)(vii) and 7(a)(xii) hereof and such other matters as Dealer may reasonably request.
(f) Counterparty
understands that notwithstanding any other relationship between Counterparty and Dealer and its affiliates, in connection with this Transaction
and any other over-the-counter derivative transactions between Counterparty and Dealer or its affiliates, Dealer or its affiliates is
acting as principal and is not a fiduciary or advisor in respect of any such transaction, including any entry, exercise, amendment, unwind
or termination thereof.
(g) Counterparty
represents and warrants that it has received, read and understands the OTC Options Risk Disclosure Statement and a copy of the
most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled “Characteristics and Risks of Standardized
Options”.
(h) 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.
(i) Counterparty
represents and warrants that the assets used in the Transaction (i) 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 (ii) do not constitute “plan assets”
within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.
(j) On
the Trade Date, neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18
under 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.
(k) Counterparty
acknowledges that the Transaction may constitute a purchase of its equity securities or a capital distribution. Counterparty further
acknowledges that, pursuant to the provisions of the Coronavirus Aid, Relief and Economic Security Act (the “CARES
Act”), the Counterparty will be required to agree to certain time-bound restrictions on its ability to purchase its equity
securities or make capital distributions 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 or make capital distributions 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 or the U.S. Department of Treasury for the purpose of providing liquidity to the financial
system, and may be required to agree to similar restrictions under programs or facilities established in the future. Accordingly,
Counterparty represents and warrants that neither it nor any of its subsidiaries has applied for, 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 (whether in existence as of the Trade Date or subsequently enacted, adopted or amended), including without
limitation the CARES Act and the Federal Reserve Act, as amended, and (b) requires under applicable law (or any regulation,
guidance, interpretation or other pronouncement thereunder), as a condition of such loan, loan guarantee, direct loan (as that term
is defined in the CARES Act), investment, financial assistance or relief, that Counterparty or any of its subsidiaries agree,
attest, certify or warrant that it has not, as of the date specified in such condition, repurchased, or will not repurchase, any
equity security of Counterparty, and that it has not, as of the date specified in such condition, made a capital distribution or
will not make a capital distribution (collectively, “Restricted Financial Assistance”); provided that
Counterparty may apply for Restricted Financial Assistance if Counterparty either (a) determines, based on the advice of
outside counsel of national standing, that the terms of the Transaction would not cause Counterparty to fail to satisfy any
condition for application for or receipt or retention of such loan, loan guarantee, direct loan (as that term is defined in the
CARES Act), investment, financial assistance or relief based on the terms of the program or facility as of the date of such advice
or (b) delivers to Dealer evidence of a waiver or other guidance from a governmental authority with jurisdiction for such
program or facility that the Transaction is permitted under such program or facility (either by specific reference to the
Transaction or by general reference to transactions with attributes of the Transaction in all relevant respects). Counterparty
further represents and warrants that the Premium is not being paid, in whole or in part, directly or indirectly, with funds received
under or pursuant to any program or facility, including the U.S. Small Business Administration’s “Paycheck Protection
Program”, that (a) is established under applicable law (whether in existence as of the Trade Date or subsequently
enacted, adopted or amended), including without limitation the CARES Act and the Federal Reserve Act, as amended, and
(b) requires under such applicable law (or any regulation, guidance, interpretation or other pronouncement of a governmental
authority with jurisdiction for such program or facility) that such funds be used for specified or enumerated purposes that do not
include the purchase of the Transaction (either by specific reference to the Transaction or by general reference to transactions
with the attributes of the Transaction in all relevant respects).
8.
Other Provisions:
(a) Right
to Extend. Dealer may postpone or add, in whole or in part, any Exercise Date or Settlement Date or any other date of valuation or
delivery by Dealer, with respect to some or all of the relevant Options (in which event the Calculation Agent shall make appropriate
adjustments to the Delivery Obligation), if Dealer determines, in its commercially reasonable discretion, that such extension or addition
is reasonably necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder
in light of existing liquidity conditions in the cash market, the stock borrow
market or other relevant market or to enable Dealer to
effect transactions with respect to Shares or Share Termination Delivery Units 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 requirements, or with related policies and procedures (whether
or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer, and in the case of policies
or procedures, so long as such policies and procedures are consistently applied to transactions similar to the Transaction).
(b) Additional
Termination Events.
(A) The
occurrence of an event of default with respect to Counterparty under the terms of the Convertible Securities as set forth in Section 7.01
of the Indenture that results in the acceleration of the Convertible Notes, or (B) an Amendment Event, in each case, 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. “Amendment Event” means that
Counterparty amends, modifies, supplements, waives or obtains a waiver in respect of any term of the Indenture or the Convertible Securities
governing the principal amount, coupon, maturity, repurchase obligation of Counterparty, any term relating to conversion of the Convertible
Securities (including changes to the conversion rate, conversion rate adjustment provisions, conversion settlement dates or conversion
conditions), or any term that would require consent of the holders of not less than 100% of the principal amount of the Convertible Securities
to amend (other than, in each case, any amendment or supplement (x) pursuant to Section 8.01(I) of the Indenture that,
as determined by the Calculation Agent, conforms the Indenture to the description of Convertible Securities in the Offering Memorandum
or (y) pursuant to Section 5.08 of the Indenture), in each case, without the consent of Dealer.
(B) Within
3 Scheduled Trading Days promptly following any Repayment Event (as defined below), Counterparty shall notify Dealer of such Repayment
Event and the aggregate principal amount of Convertible Notes subject to such Repayment Event or the portion of such aggregate principal
amount that Counterparty elects to be subject to such Repayment Event) (any such notice, a “Repayment Notice”). Any
Repayment Notice shall contain a written representation by Counterparty to Dealer that Counterparty is not, on the date of such Repayment
Notice, in possession of any material non-public information with respect to Counterparty or the Shares. The receipt by Dealer from Counterparty
of any Repayment Notice shall constitute an Additional Termination Event as provided in this Section 8(b)(B). Upon receipt of any
such Repayment Notice, Dealer shall designate an Exchange Business Day following receipt of such Repayment Notice as an Early Termination
Date with respect to the portion of the Transaction corresponding to a number of Options (the “Repayment Options”)
equal to the lesser of (A) the aggregate principal amount of such Convertible Notes specified in such Repayment Notice, divided
by USD 1,000, and (B) the Number of Options as of the date Dealer designates such Early Termination Date and, as of such date,
the Number of Options shall be reduced by the number of Repayment Options. Any payment hereunder with respect to such termination (the
“Repayment Unwind Payment”) shall be calculated pursuant to Section 6 of the Agreement as if (1) an Early
Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal
to the number of Repayment Options, (2) Counterparty were the sole Affected Party with respect to such Additional Termination Event
and (3) the terminated portion of the Transaction were the sole Affected Transaction; provided that, in the event of a Repayment
Event pursuant to Section 4.02 of the Indenture or Section 4.03 of the Indenture, such payment shall not be greater than (x) the
number of Repayment Options multiplied by (y) the product of (A) the Applicable Percentage and (B) the excess, if any
of (I) the amount paid by Counterparty per Convertible Security pursuant to Section 4.02 of the Indenture or Section 4.03
of the Indenture, as the case may be, over (II) USD 1,000.” “Repayment Event” means that (i) any Convertible
Notes are repurchased or redeemed (whether pursuant to Section 4.02 of the Indenture, Section 4.03 of the Indenture or for
any other reason) by Counterparty or any of its subsidiaries, (ii) any Convertible Notes are delivered to Counterparty or any of
its subsidiaries in
exchange for delivery of any property or assets of such party (howsoever described), (iii) any principal of
any of the Convertible Notes is repaid prior to the final maturity date of the Convertible Notes, or (iv) any Convertible Notes
are exchanged by or for the benefit of the Holders (as such term is defined in the Indenture) thereof for any other securities of Counterparty
or any of its subsidiaries (or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction.
For the avoidance of doubt, any conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute a Repayment
Event.
(c) Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Dealer shall owe Counterparty any amount
pursuant to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Counterparty shall have the
right, in its sole discretion, to require Dealer to satisfy any such Payment Obligation by the Share Termination Alternative (as
defined below) by giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day (which
written confirmation shall contain the representation and warranty set forth in Section 7(a)(i)), no later than 9:30 A.M., New
York City time, on the relevant merger date, Announcement Date, Early Termination Date or date of cancellation or termination in
respect of an Extraordinary Event, as applicable (“Notice of Share Termination”); provided that if
Counterparty does not elect to require Dealer to satisfy its Payment Obligation by the Share Termination Alternative, Dealer shall
have the right, in its sole discretion, to elect to satisfy its Payment Obligation by the Share Termination Alternative,
notwithstanding Counterparty’s failure to elect or election to the contrary; and provided further that Counterparty
shall not have the right to so elect (but, for the avoidance of doubt, Dealer shall have the right to so elect) in the event of
(i) an Insolvency, a Nationalization or a Merger Event, in each case, in which the consideration or proceeds to be paid to
holders of Shares consists solely of cash or (ii) an Event of Default in which Counterparty is the Defaulting Party or a
Termination Event in which Counterparty is the Affected Party or an Extraordinary Event, which Event of Default, Termination Event
or Extraordinary Event resulted from an event or events within Counterparty’s control. Upon such Notice of Share Termination,
the following provisions shall apply on the Scheduled Trading Day immediately following the relevant merger date, Announcement Date,
Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable:
Share Termination Alternative: |
If applicable, means that Dealer shall deliver to Counterparty the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to Section 6(d)(ii) of the Agreement or such later date or dates as Dealer may commercially reasonably determine (the “Share Termination Payment Date”) taking into account commercially reasonable hedging or hedge unwind activity, in satisfaction of the Payment Obligation. |
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Share Termination Delivery Property: |
A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of the aggregate amount of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price. |
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Share Termination Unit Price: |
The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. |
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Share Termination Delivery Unit: |
In the case of a Termination Event (other than on account of an Insolvency, Nationalization or Merger Event), Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization or Merger Event, one Share or a unit consisting of the number or amount of each type of property received |
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by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization or Merger Event, as applicable. If such Insolvency, Nationalization 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. |
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Failure to Deliver: |
Applicable |
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Other Applicable Provisions: |
If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares” shall be read as references to “Share Termination Delivery Units”; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Counterparty is the issuer of any Share Termination Delivery Units (or any part thereof). |
(d) Disposition
of Hedge Shares. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer, the Shares (the “Hedge
Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction in a commercially reasonable
manner cannot be sold in the U.S. public market by Dealer without registration under the Securities Act, Counterparty shall, at its election:
(i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration
statement under the Securities Act to cover the resale of such Hedge Shares and (A) enter into an agreement, in form and substance
reasonably satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered offering, (B) provide
accountant’s “comfort” letters in customary form for registered offerings of equity securities, (C) provide disclosure
opinions of nationally recognized outside counsel to Counterparty reasonably acceptable to Dealer, (D) provide other customary opinions,
certificates and closing documents customary in form for registered offerings of equity securities and (E) afford Dealer a reasonable
opportunity to conduct a “due diligence” investigation with respect to Counterparty customary in scope for underwritten offerings
of equity securities; provided that if Counterparty elects clause (i) above but the items referred to therein are not completed
in a timely manner, or if Dealer, in its sole discretion, is not satisfied with access to due diligence materials, the results of its
due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or
clause (iii) of this Section 8(d) shall apply at the election of Counterparty; (ii) in order to allow Dealer to sell
the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase
agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to Dealer,
including customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer,
due diligence rights (for Dealer or any designated buyer of the Hedge Shares from Dealer), and best efforts obligations to provide opinions
and certificates and such other documentation as is customary for private placements agreements, all commercially reasonably acceptable
to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary to compensate
Dealer for any commercially reasonable discount from the public market price of the Shares incurred on the sale of Hedge Shares in a
private placement); or (iii) purchase the Hedge Shares from Dealer at the “Daily VWAP” (as defined in the Indenture)
on such Exchange Business Days, and in the amounts, commercially reasonably requested by Dealer. This Section 8(d) shall survive
the termination, expiration or early unwind of the Transaction.
(e) Repurchase
and Conversion Rate Adjustment Notices. Counterparty shall, at least two Exchange Business Days prior to any day on which Counterparty
effects any repurchase of Shares or consummates or otherwise engages in any transaction or event (a “Conversion Rate Adjustment
Event”) that could reasonably be expected to lead to an increase in the Conversion Rate, give Dealer a written notice of such
repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if, following such repurchase or
Conversion Rate Adjustment Event, the Notice Percentage would reasonably
be
expected to be (i) greater than 13.27% and (ii) greater by 0.5% than the Notice Percentage included in the immediately
preceding Repurchase Notice (or, in the case of the first such Repurchase Notice, greater than the Notice Percentage as of the date
hereof). The “Notice Percentage” as of any day is the fraction, expressed as a percentage, the numerator of which
is the Number of Shares plus the number of shares underlying any other convertible bond hedge transactions or call options sold by
Dealer to Counterparty and the denominator of which is the number of Shares outstanding on such day. In the event that Counterparty
fails to provide Dealer with a Repurchase Notice on the day and in the manner specified in this Section 8(e) then
Counterparty agrees to indemnify and hold harmless Dealer, its affiliates and their respective directors, officers, employees,
agents and controlling persons (Dealer and each such person being an “Indemnified Party”) from and against any
and all losses (including losses relating to the Dealer’s hedging activities as a consequence of becoming, or of the risk of
becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or
cessation of hedging activities and any losses in connection therewith with respect to this Transaction), claims, damages and
liabilities (or actions in respect thereof), joint or several, to which such Indemnified Party may become subject under applicable
securities laws, including without limitation, Section 16 of the Exchange Act or under any state or federal law,
regulation or regulatory order, relating to or arising out of such failure. If for any reason the foregoing indemnification is
unavailable to any Indemnified Party or insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to
the maximum extent permitted by law, to the amount paid or payable by the Indemnified Party as a result of such loss, claim, damage
or liability. In addition, Counterparty will reimburse any Indemnified Party for all reasonable, actual expenses (including
reasonable counsel fees and expenses) as they are incurred (after notice to Counterparty and supported by invoices or other
documentation setting forth in reasonable detail such expenses) in connection with the investigation of, preparation for or defense
or settlement of any pending or threatened claim or any action, suit or proceeding arising therefrom, whether or not such
Indemnified Party is a party thereto and whether or not such claim, action, suit or proceeding is initiated or brought by or on
behalf of Counterparty. To the extent an Indemnified Party fails to provide notice of any action commenced against it in respect of
which indemnity may be sought hereunder within a commercially reasonable period of time that would materially prejudice Counterparty
(it being understood that any such notice delivered within 30 calendar days of the commencement of any such action shall be deemed
to have been delivered within a commercially reasonable period of time for such purpose). Counterparty shall be relived from
liability. This indemnity shall survive the completion of the Transaction contemplated by this Confirmation and any assignment and
delegation of the Transaction made pursuant to this Confirmation or the Agreement and shall inure to the benefit of any permitted
assignee of Dealer.
(f) Transfer
and Assignment. Either party may transfer or assign any of its rights or obligations under the Transaction with the prior written
consent of the non-transferring party, such consent not to be unreasonably withheld or delayed; provided that Dealer may transfer
or assign without any consent of Counterparty its rights and obligations hereunder, in whole or in part, to (i) any affiliate of
Dealer or (ii) any person, or any person whose obligations hereunder would be guaranteed, pursuant to the terms of a customary guarantee
in a form generally used for similar transactions, by a person, in either case, of credit quality at least equivalent to Dealer’s
(or its ultimate parent’s). If at any time at which (1) the Equity Percentage exceeds 8.0% or (2) Dealer, Dealer Group
(as defined below) or any person whose ownership position would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer Group
or any such person, a “Dealer Person”) under the Minnesota Business Corporations Act or other federal, state or local
law, rule, regulation or regulatory order or organizational documents or contracts of Counterparty applicable to ownership of Shares
(“Applicable Restrictions”), 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, registration, filing or notification obligations or other requirements (including obtaining prior approval by a state or
federal regulator) of a Dealer Person under Applicable Restrictions and with respect to which such requirements have not been met or
the relevant approval has not been received or that would subject a Dealer Person to restrictions (including restrictions relating to
business combinations or other designated transactions), or have any other adverse effect on a Dealer Person, under Applicable Restrictions
minus (y) 1% of the number of Shares outstanding on the date of determination (either such condition described in clause
(1) or (2), an “Excess Ownership Position”), Dealer, in its discretion, is unable to effect a transfer or assignment
to a third party after its commercially reasonable efforts on pricing and terms and within a time period
reasonably
acceptable to Dealer such that an Excess Ownership Position no longer exists, Dealer 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 would no longer exist following the resulting partial termination of the Transaction (after taking into
account commercially reasonable adjustments to Dealer’s commercially reasonable Hedge Positions from such partial
termination). In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a
payment or delivery shall be made pursuant to Section 6 of the Agreement or Section 8(c) of this Confirmation as if
(i) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Terminated Portion
of the Transaction, (ii) Counterparty were the sole Affected Party with respect to such partial termination, (iii) such
portion of the Transaction were the only Terminated Transaction and (iv) Dealer were 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. 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 Dealer and any of its affiliates subject to aggregation
with Dealer for purposes of the “beneficial ownership” test under Section 13 of the Exchange Act and all persons
who may form a “group” (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) with Dealer
(collectively, “Dealer Group”) “beneficially own” (within the meaning of Section 13 of the
Exchange Act) without duplication on such day (or, to the extent that for any reason the equivalent calculation under
Section 16 of the Exchange Act and the rules and regulations thereunder results in a higher number, such higher number)
and (B) the denominator of which is the number of Shares outstanding on such day. In the case of a transfer or assignment by
Counterparty of its rights and obligations hereunder and under the Agreement, in whole or in part (any such Options so transferred
or assigned, the “Transfer Options”), to any party, withholding of such consent by Dealer shall not be considered
unreasonable if such transfer or assignment does not meet the 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 8(e) or
any obligations under Section 2 (regarding Extraordinary Events) or 8(d) of this Confirmation;
(B) Any
Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended (the “Code”));
(C) Such
transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited
to, undertakings with respect to compliance with applicable securities laws in a manner that, in the 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 by, and reasonably satisfactory
to, Dealer;
(D) Dealer
shall not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of
the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and
assignment;
(E) An
Event of Default, Potential Event of Default or Termination Event shall not occur as a result of such transfer and assignment;
(F) Without
limiting the generality of clause (B), Counterparty shall have caused the transferee to make such Payee Tax Representations and to provide
such tax documentation 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 and assignment; and
(G) Counterparty
shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with
such transfer or assignment
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 to 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.
(g) Delivery
of Shares. Notwithstanding anything to the contrary herein, Dealer may, by prior notice to Counterparty, satisfy its obligation to
deliver any Shares or other securities on any date due (an “Original Delivery Date”) by making separate deliveries
of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate
number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered
on such Original Delivery Date.
(h) 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.
(i) No
Netting and Set-off. The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party waives
any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any
delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between
parties hereto, by operation of law or otherwise.
(j) Equity
Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction
that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy. For the avoidance of doubt, the
parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim
arising as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement. For the avoidance
of doubt, the parties acknowledge that the obligations of Counterparty under this Confirmation are not secured by any collateral that
would otherwise secure the obligations of Counterparty herein under or pursuant to any other agreement.
(k) Early
Unwind. In the event the sale by Counterparty of the Firm Securities not consummated pursuant to the Purchase Agreement for any reason
by the close of business in New York on January 23, 2024 (or such later date as agreed upon by the parties) (January 23, 2024
or such later date being the “Early Unwind Date”), the Transaction shall automatically terminate (the “Early
Unwind”) on the Early Unwind Date and the Transaction and all of the respective rights and obligations of Dealer and Counterparty
hereunder shall be cancelled and terminated and Counterparty shall pay to Dealer an amount in cash
equal to the aggregate amount of costs and expenses relating to the unwinding of Dealer’s hedging activities in respect of the
Transaction (including market losses incurred in reselling any Shares purchased by Dealer or its affiliates in connection with such hedging
activities, unless Counterparty agrees to purchase any such Shares at the cost at which Dealer purchased such Shares). Following such
termination, cancellation and payment, each party shall be released and discharged by the other party from, and agrees not to make any
claim against the other party with respect to, any obligations or liabilities of either party arising out of, and to be performed in
connection with, the Transaction either prior to or after the Early Unwind Date. Dealer and Counterparty represent and acknowledge to
the other that upon an Early Unwind and following the payment referred to above, all obligations with respect to the Transaction shall
be deemed fully and finally discharged.
(l) 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 Issuer 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 “Daily VWAP” (as defined in the Indenture); (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 “Daily VWAP” (as defined in the Indenture),
each in a manner that may be adverse to Counterparty; and (E) the Transaction is a derivatives transaction in which it has granted
Dealer an option, and Dealer may purchase shares for its own account at an average price that may be greater than, or less than, the
price paid by Counterparty under the terms of the Transaction.
(m) Wall
Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability
Act of 2010 (the “WSTAA”), the parties hereby agree that neither the enactment of the WSTAA (or any statute containing
any legal certainty provision similar to Section 739 of the WSTAA) or any regulation under the WSTAA (or any such statute), nor
any requirement under the WSTAA (or any statute containing any legal certainty provision similar to Section 739 of the WSTAA) or
an amendment made by the WSTAA (or any such statute), 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, Increased
Cost of Hedging or Illegality).
(n) Governing
Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL
BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF
LAW DOCTRINE, OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(o) Amendment.
This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty
and Dealer.
(p) 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.
(q) Tax
Matters.
(i) Withholding
Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act. “Indemnifiable Tax”
as defined in Section 14 of the Agreement, shall not include any 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.
(ii) HIRE
Act. To the extent that either party to the Agreement with respect to this Transaction is not an
adhering party to the ISDA 2015 Section 871(m) Protocol published by the International Swaps and Derivatives Association, Inc.
on November 2, 2015 and available at www.isda.org, as may be amended, supplemented, replaced or superseded from time to time (the
“871(m) Protocol”), the parties agree that the provisions and amendments contained in the Attachment to the 871(m) Protocol
are incorporated into and apply to the Agreement with respect to this Transaction as if set forth in full herein. The parties further
agree that, solely for purposes of applying such provisions and amendments to the Agreement with respect to this Transaction, references
to “each Covered Master Agreement” in the 871(m) Protocol will be deemed to be references to the Agreement with respect
to this Transaction, and references to the “Implementation Date” in the 871(m) Protocol will be deemed to be references
to the Trade Date of this Transaction.
(iii) Tax
documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on
or before the date of execution of this Confirmation, (ii) upon reasonable request of Dealer and (iii) promptly upon learning
that any such tax form previously provided by Counterparty has become obsolete or incorrect. Dealer shall provide to Counterparty a valid
U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on or before the date of execution of this Confirmation,
(ii) upon reasonable request of Counterparty and (iii) promptly upon learning that any such tax form previously provided by
Dealer has become obsolete or incorrect.
(iv) Tax
Representations. For the purpose of Section 3(f) of the Agreement, Counterparty is a corporation
for U.S. federal income tax purposes and is organized under the laws of the State of Minnesota. Counterparty represents to Dealer that
for U.S. federal income tax purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the
United States Treasury Regulations) and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the
United States Treasury Regulations). For the purpose of Section 3(f) of the Agreement, Dealer represents to Counterparty that
for U.S. federal income tax purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the
United States Treasury Regulations) and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the
United States Treasury Regulations).
(r) QFC
Stay Provisions.
(i) (A) In
the event that Dealer becomes subject to a proceeding under (i) the Federal Deposit Insurance Act and the regulations promulgated
thereunder or (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder
(a “U.S. Special Resolution Regime”) the transfer from Dealer of this Confirmation, and any interest and obligation
in or under, and any property securing, this Confirmation, will be effective to the same extent as the transfer would be effective under
the U.S. Special Resolution Regime if this Confirmation, and any interest and obligation in or under, and any property securing, this
Confirmation were governed by the laws of the United States or a state of the United States. (B) In the event that Dealer or an
Affiliate becomes subject to a proceeding under a U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§
252.81, 47.2 or 382.1, as applicable (“Default Right”)) under this Confirmation that may be exercised against Dealer are
permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if
this Confirmation were governed by the laws of the United States or a state of the United States.
(ii) Notwithstanding
anything to the contrary in this Confirmation, the parties expressly acknowledge and agree that: (A) Counterparty shall not be permitted
to exercise any Default Right with respect to this Confirmation or any Affiliate Credit Enhancement that is related, directly or indirectly,
to an Affiliate of Dealer becoming subject to receivership, insolvency, liquidation, resolution, or similar proceeding (an “Insolvency
Proceeding”), except to the extent that the exercise of such Default Right would be permitted under the provisions of 12 C.F.R.
252.84, 12 C.F.R. 47.5 or 12 C.F.R. 382.4, as applicable; and (B) Nothing in this Confirmation shall prohibit the transfer of any
Affiliate Credit Enhancement, any interest or obligation in or under such Affiliate Credit Enhancement, or any property securing such
Affiliate Credit Enhancement, to a transferee upon or following an Affiliate of Dealer becoming subject to an Insolvency Proceeding,
unless the transfer would result in the Counterparty being the beneficiary of such Affiliate Credit Enhancement in violation of any law
applicable to the Counterparty.
(iii) If
Counterparty has previously adhered to, or subsequently adheres to, the ISDA 2018 U.S. Resolution Stay Protocol as published by the International
Swaps and Derivatives Association, Inc. as of July 31, 2018 (the “ISDA U.S. Protocol”), the terms
of such
protocol shall be incorporated into and form a part of this Confirmation and the terms of the ISDA U.S. Protocol shall supersede and
replace the terms of this Section 8(r). For purposes of incorporating the ISDA U.S. Protocol, Dealer shall be deemed to be a Regulated
Entity, Counterparty shall be deemed to be an Adhering Party, and this Confirmation shall be deemed to be a Protocol Covered Agreement.
Capitalized terms used but not defined in this paragraph shall have the meanings given to them in the ISDA U.S. Protocol.
(iv) Dealer
and Counterparty agree that to the extent there are any outstanding “in-scope QFCs,” as defined in 12 C.F.R. § 252.82(d),
that are not excluded under 12 C.F.R. § 252.88, between Dealer and Counterparty that do not otherwise comply with the requirements
of 12 C.F.R. § 252.2, 252.81–8 (each such agreement, a “Preexisting In-Scope Agreement”), then each such
Preexisting In-Scope Agreement is hereby amended to include the foregoing provisions in this Section 8(r), with references to “this
Confirmation” being understood to be references to the applicable Preexisting In-Scope Agreement.
(a) For purposes of this Section 8(r):
(b) “Affiliate”
is defined in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Credit
Enhancement” means any credit enhancement or credit support arrangement in support of the obligations of Dealer under or with
respect to this Confirmation, including any guarantee, collateral arrangement (including any pledge, charge, mortgage or other security
interest in collateral or title transfer arrangement), trust or similar arrangement, letter of credit, transfer of margin or any similar
arrangement.
(s) Exclusive
Jurisdiction; Waiver of Jury.
(i) Section 13(b) of
the Agreement is deleted in its entirety and replaced by the following:
“The
courts of the United States of America for the Southern District of New York and appellate courts from thereof will have the sole and
exclusive jurisdiction over any and all claims, disputes or causes of action arising out of, in connection with, or relating to this
Agreement or the transactions and relationships between the parties contemplated by this Agreement. If such courts lack federal subject
matter jurisdiction, the Supreme Court of the State of New York, sitting in New York County and any appellate court from thereof, will
have sole and exclusive jurisdiction. Subject to the foregoing, either of these courts will be the proper venue and the parties waive
any objection to venue or their convenience as a forum. The parties agree to submit to the jurisdiction of any of the courts specified
and to accept service of process to vest personal jurisdiction over them in any of these courts.”
(ii) EACH
OF COUNTERPARTY AND DEALER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF
ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS CONFIRMATION OR THE AGREEMENT.
Please
confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to J.P. Morgan
Securities LLC, 383 Madison Ave, New York, NY 10179, and by email to EDG_Notices@jpmorgan.com and edg.us.flow.corporates.mo@jpmorgan.com.
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Yours faithfully, |
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J.P. Morgan Securities LLC |
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By: |
/s/ Gaurav Maria |
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Name: |
Gaurav Maria |
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Title: |
Managing Director |
[Signature Page to Base Bond Hedge Confirmation]
Agreed and Accepted By:
WINNEBAGO
industries, INC.
By: |
/s/ Bryan L. Hughes |
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Name: |
Bryan L. Hughes |
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Title: |
Chief Financial Officer and |
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Senior Vice President |
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[Signature Page to JPM Bond Hedge Confirmation]
Exhibit 10.5
GOLDMAN SACHS & CO. LLC | 200 WEST STREET | NEW YORK,
NEW YORK 10282-2198 | TEL: 212-902-1000
Opening Transaction
To: |
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, Minnesota 55347 |
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From: |
Goldman Sachs & Co. LLC |
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Re: |
Additional Convertible Bond Hedge Transaction |
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Date: |
January 19, 2024 |
Dear Ladies and Gentlemen:
The purpose of this communication
(this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on
the Trade Date specified below (the “Transaction”) between Goldman Sachs & Co. LLC (“Dealer”)
and Winnebago Industries, Inc. (“Counterparty”). Dealer is acting as principal in this Transaction and BMO Capital
Markets Corp. (“Agent”), its affiliate, is acting as agent for this Transaction solely in connection with Rule 15a-6
of the Exchange Act (as defined herein), as amended. This communication constitutes a “Confirmation” as referred to in the
ISDA Master Agreement specified below.
1. This
Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (the “2006 Definitions”)
and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together
with the 2006 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”). Certain defined terms used herein have the meanings assigned to them in the Indenture
to be dated as of January 23, 2024 between Counterparty and U.S. Bank Trust Company, National Association, as trustee (the “Indenture”),
relating to the USD 300,000,000 principal amount of 3.25% Convertible Senior Notes due 2030 (the “Base Convertible Securities”)
and the additional USD 50,000,000 principal amount of 3.25% Convertible Senior Notes due 2030 issued pursuant to the option to purchase
additional convertible securities exercised on the date hereof (the “Optional Convertible Securities” and, together
with the Base Convertible Securities, the “Convertible Securities”). In the event of any inconsistency between the
terms defined in the Indenture and this Confirmation, this Confirmation shall govern. For the avoidance of doubt, references herein to
sections of, or definitions set forth in, the Indenture are based on the draft of the Indenture most recently reviewed by the parties
at the time of execution of this Confirmation. If any relevant sections of, or definitions set forth in, the Indenture are changed, added
or renumbered between the execution of this Confirmation and the execution of the Indenture, the parties will amend this Confirmation
in good faith to preserve the economic intent of the parties, as evidenced by such draft of the Indenture. Subject to the foregoing, the
parties acknowledge that references to the Indenture herein are references to the Indenture as in effect on the date of its execution
and if the Indenture is, or the Convertible Securities are, amended, modified or supplemented following the date of their execution, any
such amendment, modification or supplement (other than any amendment, modification or supplement pursuant to a Merger Supplemental Indenture
(as defined below)) will be disregarded for purposes of this Confirmation unless the parties agree otherwise in writing.
Counterparty is hereby advised,
and Counterparty acknowledges, that Dealer has engaged in, or refrained from engaging in, substantial financial transactions and has taken
other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms
and conditions set forth below.
This Confirmation evidences
a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.
This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement
(Multicurrency—Cross Border) as if Dealer and Counterparty had executed an agreement in such form on the date hereof (but without
any Schedule except for (i) the election of Loss and Second Method and US Dollars (“USD”) as the Termination Currency,
(ii) the replacement of the word “third” in the last line of Section 5(a)(i) of the Agreement with the word
“first”, and (iii) (a) the election that the “Cross Default” provisions of Section 5(a)(vi) of
the Agreement shall apply to Counterparty with a “Threshold Amount” of USD35.0 million) (b) the
phrase “, or becoming capable at such time of being declared,” shall be deleted from clause (1) of such Section 5(a)(vi),
and (c) the following language shall be added to the end thereof: “Notwithstanding the foregoing, a default under subsection
(2) hereof shall not constitute an Event of Default if (x) the default was caused solely by error or omission of an administrative
or operational nature; (y) funds were available to enable the party to make the payment when due; and (z) the payment is made
within two Local Business Days of such party’s receipt of written notice of its failure to pay.”.
All provisions contained in,
or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event of any
inconsistency among this Confirmation, the Equity Definitions, the 2006 Definitions or the Agreement, the following shall prevail in the
order of precedence indicated: (i) this Confirmation; (ii) the Equity Definitions; (iii) the 2006 Definitions; and (iv) the
Agreement. For the avoidance of doubt, except to the extent of an express conflict, the application of any provision of this Confirmation,
the Agreement, the Equity Definitions or the 2006 Definitions shall not be construed to exclude or limit any other provision of this Confirmation,
the Agreement, the Equity Definitions or the 2006 Definitions.
The Transaction hereunder
shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Counterparty or any confirmation
or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Counterparty,
then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to
which Dealer and Counterparty are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such
existing or deemed ISDA Master Agreement.
2. The
Transaction constitutes a Share Option Transaction for purposes of the Equity Definitions. The terms of the particular Transaction to
which this Confirmation relates are as follows:
General Terms:
Trade Date: |
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January 19, 2024 |
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Effective Date: |
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The closing date of the issuance of the Convertible Securities issued pursuant to the option to purchase additional Convertible Securities
exercised on the date hereof. |
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Option Style: |
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Modified American, as described
under “Procedures for Exercise” below. |
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Option Type: |
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Call |
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Seller: |
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Dealer |
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Buyer: |
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Counterparty |
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Shares: |
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The Common Stock of Counterparty,
par value USD0.50 (Ticker Symbol: “WGO”). |
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Applicable Percentage: |
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33 1/3% |
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Number of Options: |
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The number of Optional Convertible Securities in |
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denominations of USD1,000 principal amount purchased by the Initial Purchasers (as defined in the Purchase Agreement), at their option
pursuant to Section 2 of the Purchase Agreement (as defined below). For the avoidance of doubt, the Number of Options outstanding shall
be reduced by each exercise of Options hereunder. |
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Option
Entitlement: | |
11.3724 |
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Fundamental
Change Adjustment: | |
Any adjustment to the Conversion
Rate pursuant to Section 5.07 of the Indenture. |
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Discretionary
Adjustment: | |
Any adjustment to the Conversion
Rate pursuant to Section 5.06 of the Indenture. |
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Strike Price: | |
USD87.9322 |
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Rounding
of Strike Price/Option Entitlement: | |
In connection with any adjustment
to the Option Entitlement or Strike Price, the Option Entitlement or the Strike Price, as the case may be, shall be rounded by the
Calculation Agent in accordance with the provisions of the Indenture relating to rounding of the “Conversion Price” or
the “Conversion Rate” as applicable (each as defined in the Indenture). |
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Number
of Shares: | |
As of any date, a number
of Shares equal to the product of (i) the Applicable Percentage, (ii) the Number of Options and (iii) the Option Entitlement. |
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Premium: | |
USD3,270,000 |
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Premium
Payment Date: | |
The Effective Date |
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Exchange: | |
The New York Stock Exchange |
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Related
Exchange: | |
All Exchanges |
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Procedures for Exercise:
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Exercise Dates: | |
Each Conversion
Date. |
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Conversion
Date: | |
Each “Conversion Date” (as defined in the Indenture)
occurring during the Exercise Period for Convertible Securities each in denominations of USD1,000 principal amount that are not “Relevant
Convertible Securities” under (and as defined in) the confirmation between the parties hereto regarding the Base Convertible
Bond Hedge Transaction dated January 18, 2024 (the “Base Convertible Bond Hedge Transaction Confirmation”) (such
Convertible Securities, the “Relevant Convertible Securities” for such Conversion Date). For the purposes of determining
whether any Convertible Securities will be Relevant Convertible Securities hereunder or “Relevant Convertible Securities”
under the Base Convertible Bond Hedge Transaction Confirmation, Convertible Securities that are converted pursuant to the Indenture
shall be allocated first to the Base Convertible Bond Hedge Transaction Confirmation until all Options thereunder are exercised or |
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terminated.Exercise Period: The period from and excluding the Effective Date to, and including, the Expiration Date. |
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Expiration
Date: | |
The earlier of (i) the
last day on which any Convertible Securities remain outstanding and (ii) the second “Scheduled Trading Day” (as
defined in the Indenture) immediately preceding the “Maturity Date” (as defined in the Indenture). |
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Automatic
Exercise on Conversion Dates: | |
Applicable; and means that
on each Conversion Date, a number of Options equal to the number of Relevant Convertible Securities for such Conversion Date in denominations
of USD1,000 principal amount shall be automatically exercised, subject to “Notice of Exercise” below. |
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Notice
Deadline: | |
In
respect of any exercise of Options hereunder on any Conversion Date, 5:00 P.M., New York City time, on (i) in the case the applicable
Relevant Convertible Securities will be settled by Counterparty by delivery of Shares only (together with cash in lieu of any fractional
Share), the “Trading Day” (as defined in the Indenture) immediately following the relevant Conversion Date, or (ii) otherwise,
the Scheduled Trading Day immediately preceding the first day of the relevant Cash Settlement Averaging Period; provided that in
the case of any exercise of Options hereunder in connection with the conversion of any Relevant Convertible Securities for any Conversion
Date occurring during the period from and including the 85th “Scheduled Trading Day” (as defined in the Indenture) prior
to the Maturity Date, to and including the Expiration Date (such period, the “Final
Conversion Period”), the Notice Deadline shall be 5:00 P.M., New York City time, on the “Scheduled
Trading Day” (as defined in the Indenture) immediately preceding the “Maturity Date” (as defined in the Indenture). |
Notice
of Exercise: | |
Notwithstanding anything to the contrary in the Equity Definitions, Dealer shall have no obligation to make any payment or delivery in
respect of any exercise of Options hereunder and such obligation in respect of such exercise shall be permanently extinguished unless
Counterparty notifies Dealer in writing prior to the Notice Deadline in respect of such exercise, of (i) the number of Relevant Convertible
Securities being converted on the related Conversion Date (specifying, if applicable, whether all or any portion of such Convertible Securities
are Convertible Securities as to which additional Shares would be added to the Conversion Rate (as defined in the Indenture) pursuant
to Section 5.07 of the Indenture), (ii) the scheduled settlement date under the Indenture for the Relevant Convertible Securities |
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for such Conversion Date, (iii) whether such
Relevant Convertible Securities will be settled by Counterparty by delivery of cash or a combination of cash and Shares and, if such
a combination, the “Specified Dollar Amount” (as defined in the Indenture) and (iv) the first day of the relevant “Observation
Period” (as defined in the Indenture), if any; provided that in the case of any exercise of Options in connection with the
conversion of any Relevant Convertible Securities for any Conversion Date occurring during the Final Conversion Period, the contents
of such notice shall be as set forth in clauses (i) and (ii) above; provided, further, that any “Notice of Exercise”
delivered to Dealer pursuant to the Base Convertible Bond Hedge Transaction Confirmation shall be deemed to be a Notice of Exercise
pursuant to this Confirmation and the terms of such Notice of Exercise shall apply, mutatis mutandis, to this Confirmation. Counterparty
acknowledges its responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of the Exchange
Act (as defined below) and the rules and regulations thereunder, in respect of any election of a settlement method with respect to
the Convertible Securities. For the avoidance of doubt, if Counterparty fails to give such notice when due in respect of any exercise
of Options hereunder, Dealer’s obligation to make any payment or delivery in respect of such exercise shall be permanently
extinguished, and late notice shall not cure such failure. If applicable, the Notice of Exercise shall also contain the Settlement
Method Election Provisions. |
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|
Notice
of Final Convertible Security Settlement
Method: | |
Counterparty
shall notify Dealer in writing before 5:00 P.M., New York City time, on the “Scheduled Trading Day” (as defined in the
Indenture) immediately preceding the 85th “Scheduled Trading Day” (as defined in the Indenture) prior to the Maturity
Date of the settlement method (and, if applicable, the Specified Dollar Amount) elected (or deemed to be elected) with respect to
Relevant Convertible Securities with a Conversion Date occurring during the Final Conversion Period (any such notice, a “Notice
of Final Convertible Security Settlement Method”). If applicable, the Notice of Final Convertible
Security Settlement Method shall also contain the Settlement Method Election Provisions. |
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|
Dealer’s
Telephone Number and Telex
and/or Facsimile Number and Contact
Details for purpose of Giving
Notice: | |
As specified in Section 6(b) below. |
Settlement Terms:
| |
|
Settlement
Date: | |
For
any Exercise Date, the date one Settlement Cycle following the final day of the relevant Cash Settlement Averaging Period; provided
that the Settlement Date shall not be prior to the Exchange Business Day immediately following the date Counterparty provides the
Notice of Delivery Obligation prior to 5:00 P.M., New York City time. |
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|
Delivery
Obligation: | |
In
lieu of the obligations set forth in Sections 8.1 and 9.1 of the Equity Definitions, and subject to “Notice of Exercise”
above and “Discretionary Adjustments” , “Dividends” and “Consequences of Merger Events”
below, in respect of an Exercise Date, Dealer will deliver to Counterparty on the related Settlement Date (the “Delivery
Obligation”), amounts equal to the product of the Applicable Percentage
and |
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|
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(i) (I) a number of Shares equal to the aggregate number of Shares, if any, that Counterparty would be obligated to deliver to the holder(s) of the Relevant Convertible Securities for such Conversion Date pursuant to Section 5.03 of the Indenture (except that such number of Shares shall be determined without taking into consideration
any rounding pursuant to Section 5.03(B)(ii) of the Indenture and shall be rounded down to the nearest whole number) and
(II) cash in lieu of any fractional Share resulting from such rounding; and/or |
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|
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(ii) the
aggregate amount of cash, if any, in excess of the principal amount of the Relevant Convertible Securities that Counterparty would
be obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date pursuant to Section 5.03
of the Indenture, determined, for each of clauses (i) and (ii), by the Calculation Agent (by reference to such Sections of the
Indenture) |
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|
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as
if Counterparty had elected to satisfy its conversion obligation in respect of such Relevant Convertible Securities by the Applicable
Settlement Method, notwithstanding any different actual election by Counterparty with respect to the settlement of such Relevant Convertible
Securities; provided that the Delivery Obligation shall be determined excluding any Shares and/or cash that Counterparty is obligated
to deliver to holder(s) of the Relevant Convertible Securities as a direct or indirect result of any adjustments to the Conversion
Rate pursuant to a Fundamental Change Adjustment or a Discretionary Adjustment and any interest payment that Counterparty is (or would
have been) obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date. |
| |
Notwithstanding
the foregoing, if, in respect of any Exercise Date, (x)(I) the number of Shares included in the Delivery Obligation multiplied
by the Share Obligation Value Price plus (II) the amount of cash included in the Delivery Obligation, would otherwise exceed
(y) the relevant Net Convertible Share Obligation Value, such number of Shares and such amount of cash shall be proportionately
reduced to the extent necessary to eliminate such excess. |
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|
Make-Whole
Adjustment: | |
Notwithstanding
anything to the contrary herein, in respect of any exercise of Options relating to a conversion of Relevant Convertible Securities
in connection with which holders of the Relevant Convertible Securities would be entitled to receive additional Shares and/or cash
as a result of adjustments to the Conversion Rate pursuant to a Fundamental Change Adjustment, the Delivery Obligation shall include
such additional Shares and/or cash; provided that if the sum of (i) the product of (a) the number of Shares (if any) included
in the Delivery Obligation per exercised Option and (b) the Share Obligation Value Price and (ii) the amount of cash (if
any) included in the Delivery Obligation per exercised Option would otherwise exceed the amount per Option,
as determined by the Calculation Agent, that would be payable by Dealer under Section 6 of the Agreement if (x) the
relevant Conversion Date were an Early Termination Date resulting from an Additional Termination Event with respect to which the
Transaction was the sole Affected Transaction and Counterparty was the sole Affected Party and (y) the provisions of the Indenture
relating to the Fundamental Change Adjustment were deleted, then such number of Shares and such amount of cash shall be proportionately
reduced to the extent necessary to eliminate such excess. |
Applicable
Settlement Method: | |
For
any Relevant Convertible Securities, if such Notice of Exercise (or such Notice of Final Convertible Security Settlement Method,
as the case may be) contains all of the Settlement Method Election Provisions, the Applicable Settlement Method shall be the settlement
method actually so elected by Counterparty in respect of such Relevant Convertible Securities (the “Convertible
Securities Settlement Method”); otherwise, the Applicable Settlement
Method shall assume Counterparty had made a Cash Election with respect to such Relevant Convertible Securities (a “Deemed
Cash Election”) with a Specified Dollar Amount of USD1,000 per Relevant Convertible Security
and the Delivery Obligation shall be determined by the Calculation Agent as if the relevant “Observation Period” pursuant
to Section 5.03(B)(i) of the Indenture were the Cash Settlement Averaging Period. |
Cash
Settlement Averaging Period: | |
The 40 “Trading Days”
(as defined in the Indenture) commencing on (I) the third “Trading Day” (as defined in the Indenture) after the
Conversion Date for conversions with a related Conversion Date occurring prior to the Final Conversion Period or (II) the 41st
“Scheduled Trading Day” (as defined in the Indenture) prior to the “Maturity Date” (as defined in the Indenture)
for conversions with a related Conversion Date occurring during the Final Conversion Period. |
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|
Settlement
Method Election Provisions: | |
In order for the Applicable
Settlement Method to be the Convertible Securities Settlement Method in accordance with “Applicable Settlement Method”
above, the related Notice of Exercise (or Notice of Final Convertible Security Settlement Method, as the case may be) must contain
in writing the following representations and warranties from Counterparty to Dealer as of such notice delivery date: |
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|
| |
(i) none
of Counterparty and its officers or directors, or any person that controls, potentially controls, or otherwise exercises influence
over, Counterparty’s decision to elect the Convertible Security Settlement Method is aware of any material
nonpublic information regarding Counterparty or the Shares; |
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|
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(ii) Counterparty
is electing the Convertible Security Settlement Method in good faith and not as part of a plan or scheme to evade compliance with
the U.S. federal securities laws; Counterparty is not electing the Convertible Security Settlement Method to create actual or apparent
trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise
manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the
Exchange Act; and Counterparty has not entered into or altered any hedging transaction relating to the Shares corresponding to or
offsetting the Transaction; |
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|
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(iii) Counterparty
has the power to make such election and to execute and deliver any documentation relating to such election that it is required by
this Confirmation to deliver and to perform its obligations under this Confirmation and has taken all necessary action to authorize
such election, execution, delivery and performance; |
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|
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(iv) such
election and performance of its obligations under this Confirmation do not violate or conflict with any law applicable to it, any
provision of its constitutional documents, |
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any order or judgment of any court or other agency of government applicable to it or any
of its assets or any contractual restriction binding on or affecting it or any of its assets; and |
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|
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(v) any
transaction that Dealer makes with respect to the Shares during the period beginning at the time that Counterparty delivers such
notice and ending at the close of business on the final day of the Cash Settlement Averaging Period shall be made by Dealer at Dealer’s
sole discretion for Dealer’s own account and Counterparty shall not have, and shall not attempt to exercise, any influence
over how, when, whether or at what price Dealer effects such transactions, including, without limitation, the prices paid or received
by Dealer per Share pursuant to such transactions, or whether such transactions are made on any securities exchange or privately. |
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|
Notice
of Delivery Obligation: | |
No
later than the Exchange Business Day immediately following the last day of the relevant Cash Settlement Averaging Period, Counterparty
shall give Dealer notice of the final number of Shares and/or amount of cash included
in the Total Convertible Share Obligation Value (as defined below); provided that, with respect to any Exercise Date occurring during
the Final Conversion Period, Counterparty may provide Dealer with a single notice of the aggregate number of Shares and/or
amount of cash included in the Total Convertible Share Obligation Value for all Exercise Dates occurring during such period (it being
understood, for the avoidance of doubt, that the requirement of Counterparty to deliver such notice shall not limit Counterparty’s
obligations with respect to a Notice of Exercise or Notice of Final Convertible Security Settlement Method, as the case may be, as
set forth above, in any way). |
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|
Net
Convertible Share Obligation Value: | |
With
respect to Relevant Convertible Securities as to a Conversion Date, the product of (i) the Applicable Percentage and (ii)(A) the
Total Convertible Share Obligation Value of such Relevant Convertible Securities for such Conversion Date minus (B) the aggregate
principal amount of such Relevant Convertible Securities for such Conversion Date. |
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|
Total
Convertible Share Obligation Value: | |
With
respect to Relevant Convertible Securities with respect to a Conversion Date, (i) (A) the number of Shares equal to the
aggregate number of Shares that Counterparty is obligated to deliver to the holder(s) of Relevant Convertible Securities for
such Conversion Date pursuant to the Indenture (it being understood that such number of Shares shall be determined taking into consideration
any rounding |
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|
| |
pursuant
to Section 5.03(B)(ii) of the Indenture) multiplied by (B) the
Share Obligation Value Price plus (ii) an amount of cash equal to the aggregate amount of cash that Counterparty is obligated
to deliver to the holder(s) of Relevant Convertible Securities for such Conversion Date pursuant to the Indenture (including,
for the avoidance of doubt, any cash payable by Counterparty in lieu of fractional Shares); provided that
the Total Convertible Share Obligation Value shall be determined excluding any Shares and/or cash that Counterparty is obligated
to deliver to holder(s) of the Relevant Convertible Securities as a direct or indirect result of any adjustments to the Conversion
Rate pursuant to a Fundamental Change Adjustment or a Discretionary Adjustment and any interest payment that Counterparty is (or
would have been) obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date. |
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|
Share
Obligation Value Price: | |
The opening price as displayed
under the heading “Op” on Bloomberg page “WGO.N <Equity>” (or any successor thereto) on the applicable
Settlement Date or other date of delivery. |
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|
Other
Applicable Provisions: | |
To the extent Dealer is obligated to deliver Shares hereunder,
the provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable as if “Physical Settlement”
applied to the Transaction; provided that the Representation and Agreement contained in Section 9.11 of the Equity
Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements
under applicable securities laws that exist as a result of the fact that Counterparty is the issuer of the Shares. |
Restricted
Certificated Shares: | |
Notwithstanding
anything to the contrary in the Equity Definitions, Dealer may, in whole or in part, deliver Shares required to be delivered to Counterparty
hereunder in certificated form in lieu of delivery through the Clearance System. With respect to such certificated Shares, the Representation
and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by deleting the remainder of the provision
after the word “encumbrance” in the fourth line thereof. |
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|
Adjustments:
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|
Method
of Adjustment: | |
Notwithstanding
Section 11.2 of the Equity Definitions, upon the occurrence of any event or condition set forth in Section 5.05(A)(i),
(ii), (iii), (iv) and (v) and Section 5.05(H) of the Indenture (a “Potential
Adjustment Event”) that results in an adjustment under the Indenture, the Calculation Agent
shall make a corresponding adjustment in respect of any one or more of the Strike Price, the |
| |
Number of Options, the Option Entitlement
and any other term relevant to the exercise, settlement or payment of the Transaction, subject to “Discretionary Adjustments”
below. Promptly upon the occurrence of any Potential Adjustment Event, Counterparty shall notify the Calculation Agent of such Potential
Adjustment Event; and once the adjustments to be made to the terms of the Indenture and the Convertible Securities in respect of
such Potential Adjustment Event have been determined, Counterparty shall immediately notify the Calculation Agent in writing of the
details of such adjustments. |
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|
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Notwithstanding anything to
the contrary herein or in the Equity Definitions: |
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|
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(i) in
connection with any Potential Adjustment Event as a result of an event or condition set forth in Section 5.05(A)(ii) of
the Indenture or Section 5.05(A)(iii)(1) of the Indenture where, in either case, the period for determining “Y”
(as such term is used in Section 5.05(A)(ii) of the Indenture) or “SP” (as such term is used in Section 5.05(A)(iii)(1) 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 of 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 |
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(ii) 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 is otherwise not adjusted at the time or in
the manner contemplated by the Indenture based on such declaration or (c) the Conversion Rate 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 of 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 |
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hedging activities
as a result of such Potential Adjustment Event Change. |
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|
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Upon
the occurrence of any Potential Adjustment Event Change, Counterparty shall immediately notify the Calculation Agent in writing of
the details of such Potential Adjustment Event Change. |
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|
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For
the avoidance of doubt, Dealer shall not have any payment or delivery obligation hereunder in respect of, 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 the holders of Convertible Securities (upon conversion or otherwise) or (y) any other transaction in which holders of Convertible
Securities are entitled to participate, in each case, in lieu of an adjustment under the Indenture in respect of a Potential Adjustment
Event (including, without limitation, under the proviso to the first sentence of Section 5.05(A)(iii)(1) of the Indenture
or the proviso to the first sentence of Section 5.05(A)(iv) of the Indenture)1. |
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|
Discretionary
Adjustments: | |
Notwithstanding anything to the contrary herein or in the Equity Definitions,
if the Calculation Agent in good faith disagrees with any adjustment under the Indenture that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation,
pursuant to Section 5.05(H) of the Indenture or pursuant to Section 5.08(A) of the Indenture or any supplemental
indenture entered into thereunder (a “Merger
Supplemental Indenture”) or in connection with the determination of the fair value of
any securities, property, rights or other assets), then the Calculation Agent will determine the adjustment to be made to any one
or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or
payment of or under the Transaction in a commercially reasonable manner and, for the avoidance of doubt, the Delivery Obligation
shall be calculated on the basis of such adjustments by the Calculation Agent; provided that, notwithstanding the foregoing, in any
Potential Adjustment Event occurs during the Cash 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 holder of the
underlying Shares on the related Conversion Date, then the Calculation Agent shall make an adjustment, as determined by it, to the
terms |
1 Include references to provisions of Indenture providing for pass-through of cash or Distributed Property
in lieu of Conversion Rate adjustments.
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hereof in order to account for such Potential Adjustment Event. |
Dividends: | |
If
(i) at any time during the period from and including the Trade Date, to but excluding the Expiration Date, an ex-dividend date
for a regular quarterly cash dividend occurs with respect to the Shares (an “Ex-Dividend
Date”) and that dividend is less than the Regular Dividend on a per Share basis or (ii) no
Ex-Dividend Date for a regular quarterly cash dividend occurs with respect to the Shares in any quarterly dividend period of Counterparty,
then the Calculation Agent will make a corresponding adjustment in respect of any one or more of the Strike Price, the Number of
Options, the Option Entitlement and any other term relevant to the exercise, settlement or payment of the Transaction to account
for the economic effect on the Transaction of such dividend or lack thereof, and, for the avoidance of doubt, any such adjustments
shall be taken into account in calculating the Delivery Obligation. “Regular Dividend”
shall mean USD 0.31 per Share. |
Notice
of Certain Other Events: | |
Counterparty
shall give Dealer commercially reasonable advance (but in no event less than one Exchange Business Day) written notice of the section
or sections of the Indenture and, if applicable, the formula therein, pursuant to which any adjustment will be made to the Convertible
Securities in connection with any Potential Adjustment Event, Merger Event or Tender Offer. |
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|
Extraordinary Events:
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|
Merger
Events: | |
Notwithstanding
Section 12.1(b) of the Equity Definitions, “Merger Event” shall mean the occurrence of any event or condition
set forth in the definition of “Common Stock Change Event” set forth in Section 5.08(A) of the Indenture. |
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|
Consequences
of Merger Events: | |
Notwithstanding
Section 12.2 of the Equity Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall make an adjustment
to the terms relevant to the exercise, settlement or payment of the Transaction corresponding to the adjustment required under Section 5.08
of the Indenture in respect of such Merger Event, as determined by the Calculation Agent (by reference to such Section), subject
to “Discretionary Adjustments” above; provided
that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant
to a Fundamental Change Adjustment or a Discretionary Adjustment; and provided further that
the Calculation Agent may make such further adjustments to the terms of the Transaction as may be necessary to ensure that the fair
value of the Transaction to Dealer is not adversely affected as a result of any adjustment referenced in this paragraph and, for
the avoidance of |
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doubt, any such further adjustments shall be
taken into account in calculating the Delivery Obligation; and provided further that if, with respect to a Merger Event, (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 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, will not be a corporation organized under the laws of the United States,
any state thereof or the District of Columbia and/or will not be the Issuer, Dealer may elect in its sole discretion that Cancellation
and Payment (Calculation Agent Determination) shall apply. |
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|
Notice of Merger Consideration and Consequences: | |
Upon the occurrence of a Merger Event,
Counterparty shall reasonably promptly (but in any event prior to the relevant merger date) notify the Calculation
Agent of (i) in the case of a Merger Event that causes the Shares to be converted into the right to receive more than a single
type of consideration (determined based in part upon any form of stockholder election), the types and amount of consideration actually
received by such holders, and (ii) the details of the adjustment to be made under the Indenture in respect of such Merger Event. |
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|
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 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. |
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|
Additional
Termination Event(s): | |
Notwithstanding
anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, the Transaction would be cancelled
or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event
(with the Transaction (or the cancelled or terminated portion thereof) being the Affected Transaction and Counterparty being the
sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6
of the Agreement shall apply to such Affected Transaction. |
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|
Additional Disruption Events: | |
|
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|
(a) Change in Law: | |
Applicable;
provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the
interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”,
(ii) by adding the phrase “and/or Hedge Position” after the word “Shares” in clause (X) thereof
and (iii) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in
the manner contemplated by the Hedging Party on the Trade Date”; and provided
further that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing
the parenthetical beginning after the word “regulation” in the second line thereof 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)” and (ii) adding the words “, or holding, acquiring or disposing of Shares or
any Hedge Positions relating to,” after the words “obligations under”
in clause (Y) thereof. |
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(b)
Failure to Deliver: | |
Applicable |
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|
(c)
Insolvency Filing: | |
Applicable |
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|
(d)
Hedging Disruption: | |
Applicable;
provided
that: |
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(i) |
Section 12.9(a)(v) of the Equity Definitions is hereby amended by: |
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|
(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 |
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|
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|
(b) |
inserting the following paragraphs
at the end of such Section: |
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|
|
“Such inability
described in clauses (A) or (B) above shall not constitute a “Hedging Disruption” if such inability results
from Hedging Party’s creditworthiness. |
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|
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|
|
For the avoidance of doubt,
(i) the term “equity price risk” shall be deemed to include, but shall not be limited to, stock price and volatility
risk, and (ii) the transactions or assets referred to in phrases (A) or (B) above must be available on commercially
reasonable pricing and other terms.”; and |
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(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”. |
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|
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(e)
Increased Cost of Hedging: | |
Applicable;
provided
that such increased cost described in Section 12.9(vi) of the Equity Definitions shall
not constitute an “Increased Cost of Hedging” if such increased cost results from Hedging Party’s creditworthiness. |
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|
Hedging
Party: | |
Dealer |
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|
Determining
Party: | |
Dealer.
All calculations and determinations by the Determining Party shall be made in good faith and in a commercially reasonable manner.
Following any calculation by the Determining Party hereunder, upon written request by Counterparty, the Determining Party will, within
five Exchange Business Days immediately following such request, provide to Counterparty 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; provided,
however, that in no event will the Determining Party be obligated to share with Counterparty any
proprietary or confidential data or information or any proprietary or confidential models used by it. |
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|
Non-Reliance: | |
Applicable |
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|
Agreements
and Acknowledgments Regarding Hedging Activities: | |
Applicable |
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|
Additional
Acknowledgments: | |
Applicable |
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|
3. Calculation
Agent: | |
|
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|
| |
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, if the Calculation Agent fails to timely make any calculation,
adjustment or determination required to be made by the Calculation Agent hereunder or to perform any obligations of the Calculation
Agent hereunder and such failure continues for five Exchange Business Days following notice to the Calculation Agent by Counterparty
of such failure, Counterparty shall have the right to designate a nationally recognized third-party dealer in over-the-counter corporate
equity derivatives to act, during the period commencing on the first date the Calculation Agent fails to timely make such calculation,
adjustment or determination or to perform such obligation, as the case may be, and ending on the earlier of the Early Termination
Date with respect to such Event of Default and the date on which such Event of Default is no longer continuing, as Calculation Agent. |
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|
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Following
any calculation by the Calculation Agent hereunder, upon written request by Counterparty, the |
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|
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Calculation Agent will, within five Exchange
Business Days immediately following such request, provide to Counterparty by email to the email 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 the basis for such calculation; provided that in no event will Dealer be obligated to share with Counterparty
any proprietary or confidential data or information or any proprietary or confidential models used by it or any information that
is subject to an obligation not to disclose such information. |
4. Account
Details:
Dealer Payment
Instructions:
Chase Manhattan Bank New York
For A/C Goldman, Sachs & Co.
A/C #930-1-011483
ABA: 021-000021
Counterparty
Payment Instructions:
To be provided by Counterparty.
5. Offices:
The Office of
Dealer for the Transaction is: 200 West Street, New York, New York 10282-2198
The Office of Counterparty for the
Transaction is: Inapplicable, Counterparty is not a Multibranch Party.
6. Notices:
For purposes of this Confirmation:
(a) Address
for notices or communications to Counterparty:
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, MN
55347
Attention: Kathy
Hiebert, Treasurer
| (b) | Address for notices or communications to Dealer: |
| To: | Goldman Sachs & Co. LLC |
200 West Street
New York, NY 10282-2198
Attn: Michael Voris, Equity Capital
Markets Telephone: 212-902-4895
Facsimile: 212-256-5738
E-mail: michael.voris@gs.com With a
copy to:
Attn: Jan Debeuckelaer Telephone: 212-934-0893
Facsimile: 212-256-5738
Email: jan.debeuckelaer@gs.com And
Attn: Garrett Cohen Telephone: 212-357-3427
Facsimile: 212-256-5738
Email: garrett.cohen@gs.com
And email notification to the following
address: Eq-derivs-notifications@ny.ibd.gs.com
7. Representations,
Warranties and Agreements:
(a) In
addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants
to and for the benefit of, and agrees with, Dealer as follows:
(i) On
the Trade Date and as of the date of any Notice of Share Termination under (and as defined in) Section 8(c) below, (A) none
of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and
(B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports
and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading.
(ii) (A) On
the Trade Date, the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not subject to a “restricted
period,” as such term is defined in Regulation M under the Exchange Act (“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 Trade Date.
(iii) 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).
(iv) Without
limiting the generality of Section 3(a)(iii) of the Agreement, the Transaction will not violate Rule 13e-1 or Rule 13e-4
under the Exchange Act.
(v) Prior
to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction
and such other certificate or certificates as Dealer shall reasonably request. Based on such resolutions, neither Dealer nor any of its
affiliates shall be subject to the restrictions under Section 302A.673 of the Minnesota Business Corporations Act as an “interested
shareholder” of Counterparty by virtue of (A) its role as initial purchaser of, or market-maker in, any securities of Counterparty
convertible into the Shares, (B) its entry into the Transaction and/or (C) any hedging transactions in Counterparty’s
securities in connection with the Transaction.
(vi) Counterparty
is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable
for Shares) or otherwise in violation of the Exchange Act.
(vii) 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.
(viii) On
each of the Trade Date and the Premium Payment Date, Counterparty is not “insolvent” (as such term is defined under Section 101(32)
of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be
able to purchase the Number of Shares in compliance with the laws of the jurisdiction of Counterparty’s incorporation.
(ix) The
representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement,
dated as of January 18, 2024, between Goldman Sachs & Co. LLC and BMO Capital Markets Corp. as the Representatives and Counterparty
(the “Purchase Agreement”) are true and correct as of the Trade Date and the Effective Date and are hereby deemed to
be repeated to Dealer as if set forth herein.
(x) No
state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise to
any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any
person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares; provided however, that Counterparty
makes no representation or warranty regarding any such requirement that is applicable generally to the ownership of equity securities
by Dealer or any of its affiliates as a result of it or any such affiliates being financial institutions or broker-dealers .
(xi) 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, including, without limitation, the transaction that is the subject of this confirmation and any transactions
related hereto or contemplated hereby; (B) will exercise independent judgment in evaluating the recommendations of Dealer and its
affiliates or associated persons with regard to any such securities transactions or strategies unless it has otherwise notified Dealer
in writing; and (C) has total assets of at least $50 million. Counterparty will notify Dealer if the immediately preceding statement
contained in this Section 7(a)(xi) ceases to be true.
(xii) Without
limiting the generality of Section 3(a) of the Agreement, neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or
by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of
any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Counterparty’s Annual Report
on Form 10-K for the year ended August 26, 2023, as updated by any subsequent filings, to which Counterparty or any of its subsidiaries
is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject,
or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
(b) Each
of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18)
of the U.S. Commodity Exchange Act, as amended, and is entering into the Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise) and not for the benefit of any third party.
(c) Each
of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under
the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(a)(2) thereof. Accordingly,
Counterparty represents and warrants to Dealer that (i) it has the financial ability to bear the economic risk of its investment
in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in respect of the Transaction,
which it understands are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection
with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an “accredited investor”
as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its
own account and without a view to the distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction
has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state
securities laws, and (v) its financial condition is such that it has no need for liquidity with respect to its investment in the
Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is capable
of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts,
the terms, conditions and risks of the Transaction.
(d) Each
of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution” and “financial participant”
within the meaning of Sections 101(22) and 101(22A) of the Bankruptcy Code. The parties hereto further agree and acknowledge (A) that
this Confirmation is a
“securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code,
with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment
amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement
payment” within the meaning of Section 546 of the Bankruptcy Code, and (B) that Dealer is entitled to the protections
afforded by, among other sections, Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 548(d)(2), 555 and 561 of the Bankruptcy Code.
(e) As
a condition to the effectiveness of the Transaction, Counterparty shall deliver to Dealer (i) an incumbency certificate, dated as
of the Premium Payment Date, of Counterparty in customary form and (ii) an opinion of counsel, dated as of the Premium Payment Date
and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement,
Sections 7(a)(vii) and 7(a)(xii) hereof and such other matters as Dealer may reasonably request.
(f) Counterparty
understands that notwithstanding any other relationship between Counterparty and Dealer and its affiliates, in connection with this Transaction
and any other over-the-counter derivative transactions between Counterparty and Dealer or its affiliates, Dealer or its affiliates is
acting as principal and is not a fiduciary or advisor in respect of any such transaction, including any entry, exercise, amendment, unwind
or termination thereof.
(g) Counterparty
represents and warrants that it has received, read and understands the OTC Options Risk Disclosure Statement and a copy of the
most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled “Characteristics and Risks of Standardized
Options”.
(h) 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.
(i) Counterparty
represents and warrants that the assets used in the Transaction (i) 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 (ii) do not constitute “plan assets”
within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.
(j) On
the Trade Date, neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18
under 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.
(k) Counterparty
acknowledges that the Transaction may constitute a purchase of its equity securities or a capital distribution. Counterparty further acknowledges
that, pursuant to the provisions of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the Counterparty
will be required to agree to certain time-bound restrictions on its ability to purchase its equity securities or make capital distributions
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 or make capital distributions 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 or the U.S. Department
of Treasury for the purpose of providing liquidity to the financial system, and may be required to agree to similar restrictions under
programs or facilities established in the future. Accordingly, Counterparty represents and warrants that neither it nor any of its subsidiaries
has applied for, 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 (whether in existence as of the Trade Date or subsequently enacted, adopted
or amended), including without limitation the CARES Act and the Federal Reserve Act, as amended, and (b) requires under applicable
law (or any
regulation, guidance, interpretation or other pronouncement thereunder), as a condition of such loan, loan guarantee, direct
loan (as that term is defined in the CARES Act), investment, financial assistance or relief, that Counterparty or any of its subsidiaries
agree, attest, certify or warrant that it has not, as of the date specified in such condition, repurchased, or will not repurchase, any
equity security of Counterparty, and that it has not, as of the date specified in such condition, made a capital distribution or will
not make a capital distribution (collectively, “Restricted Financial Assistance”); provided that Counterparty may apply
for Restricted Financial Assistance if Counterparty either (a) determines, based on the advice of outside counsel of national standing,
that the terms of the Transaction would not cause Counterparty to fail to satisfy any condition for application for or receipt or retention
of such loan, loan guarantee, direct loan (as that term is defined in the CARES Act), investment, financial assistance or relief based
on the terms of the program or facility as of the date of such advice or (b) delivers to Dealer evidence of a waiver or other guidance
from a governmental authority with jurisdiction for such program or facility that the Transaction is permitted under such program or facility
(either by specific reference to the Transaction or by general reference to transactions with attributes of the Transaction in all relevant
respects). Counterparty further represents and warrants that the Premium is not being paid, in whole or in part, directly or indirectly,
with funds received under or pursuant to any program or facility, including the U.S. Small Business Administration’s “Paycheck
Protection Program”, that (a) is established under applicable law (whether in existence as of the Trade Date or subsequently
enacted, adopted or amended), including without limitation the CARES Act and the Federal Reserve Act, as amended, and (b) requires
under such applicable law (or any regulation, guidance, interpretation or other pronouncement of a governmental authority with jurisdiction
for such program or facility) that such funds be used for specified or enumerated purposes that do not include the purchase of the Transaction
(either by specific reference to the Transaction or by general reference to transactions with the attributes of the Transaction in all
relevant respects).
8. Other Provisions:
(a) Right
to Extend. Dealer may postpone or add, in whole or in part, any Exercise Date or Settlement Date or any other date of valuation or
delivery by Dealer, with respect to some or all of the relevant Options (in which event the Calculation Agent shall make appropriate adjustments
to the Delivery Obligation), if Dealer determines, in its commercially reasonable discretion, that such extension or addition is reasonably
necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in light of existing
liquidity conditions in the cash market, the stock borrow market or other relevant market or to enable Dealer to effect transactions with
respect to Shares or Share Termination Delivery Units 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 requirements, or with related policies and procedures (whether or not such requirements,
policies or procedures are imposed by law or have been voluntarily adopted by Dealer, and in the case of policies or procedures, so long
as such policies and procedures are consistently applied to transactions similar to the Transaction).
(b) Additional
Termination Events.
(A) The
occurrence of an event of default with respect to Counterparty under the terms of the Convertible Securities as set forth in Section 7.01
of the Indenture that results in the acceleration of the Convertible Notes, or (B) an Amendment Event, in each case, 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. “Amendment Event” means that
Counterparty amends, modifies, supplements, waives or obtains a waiver in respect of any term of the Indenture or the Convertible Securities
governing the principal amount, coupon, maturity, repurchase obligation of Counterparty, any term relating to conversion of the Convertible
Securities (including changes to the conversion rate, conversion rate adjustment provisions, conversion settlement dates or conversion
conditions), or any term that would require consent of the holders of not less than 100% of the principal amount of the Convertible Securities
to amend (other than, in each case, any amendment or supplement (x) pursuant to Section 8.01(I) of the
Indenture that,
as determined by the Calculation Agent, conforms the Indenture to the description of Convertible Securities in the Offering Memorandum
or (y) pursuant to Section 5.08 of the Indenture), in each case, without the consent of Dealer.
(B) Within
3 Scheduled Trading Days promptly following any Repayment Event (as defined below), Counterparty shall notify Dealer of such Repayment
Event and the aggregate principal amount of Convertible Notes subject to such Repayment Event or the portion of such aggregate principal
amount that Counterparty elects to be subject to such Repayment Event) (any such notice, a “Repayment Notice”); provided
that any “Convertible Securities Repurchase Notice” delivered to Dealer pursuant to the Base Call Option Transaction Confirmation
shall be deemed to be a Convertible Securities Repurchase Notice pursuant to this Confirmation and the terms of such Convertible Securities
Repurchase Notice shall apply, mutatis mutandis, to this Confirmation. Any Repayment Notice shall contain a written representation by
Counterparty to Dealer that Counterparty is not, on the date of such Repayment Notice, in possession of any material non-public information
with respect to Counterparty or the Shares. The receipt by Dealer from Counterparty of any Repayment Notice shall constitute an Additional
Termination Event as provided in this Section 8(b)(B). Upon receipt of any such Repayment Notice, Dealer shall designate an Exchange
Business Day following receipt of such Repayment Notice as an Early Termination Date with respect to the portion of the Transaction corresponding
to a number of Options (the “Repayment Options”) equal to the lesser of (A) (x) the aggregate principal amount
of such Convertible Notes specified in such Repayment Notice, divided by USD 1,000, minus (y) the number of Repurchase Options
(as defined in the Base Call Option Transaction Confirmation), if any, that relate to such Convertible Securities (and for purposes of
determining whether any Options under this Confirmation or under the Base Call Option Transaction Confirmation will be among the Repurchase
Options hereunder or under, and as defined in, the Base Call Option Transaction Confirmation, the Convertible Securities specified in
such Convertible Securities Repurchase Notice shall be allocated first to the Base Call Option Transaction Confirmation until all Options
thereunder are exercised or terminated) and (B) the Number of Options as of the date Dealer designates such Early Termination Date
and, as of such date, the Number of Options shall be reduced by the number of Repayment Options. Any payment hereunder with respect to
such termination (the “Repayment Unwind Payment”) shall be calculated pursuant to Section 6 of the Agreement as
if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a
Number of Options equal to the number of Repayment Options, (2) Counterparty were the sole Affected Party with respect to such Additional
Termination Event and (3) the terminated portion of the Transaction were the sole Affected Transaction; provided that, in
the event of a Repayment Event pursuant to Section 4.02 of the Indenture or Section 4.03 of the Indenture, such payment shall
not be greater than (x) the number of Repayment Options multiplied by (y) the product of (A) the Applicable Percentage
and (B) the excess, if any of (I) the amount paid by Counterparty per Convertible Security pursuant to Section 4.02 of
the Indenture or Section 4.03 of the Indenture, as the case may be, over (II) USD 1,000.” “Repayment Event”
means that (i) any Convertible Notes are repurchased or redeemed (whether pursuant to Section 4.02 of the Indenture, Section 4.03
of the Indenture or for any other reason) by Counterparty or any of its subsidiaries, (ii) any Convertible Notes are delivered to
Counterparty or any of its subsidiaries in exchange for delivery of any property or assets of such party (howsoever described), (iii) any
principal of any of the Convertible Notes is repaid prior to the final maturity date of the Convertible Notes, or (iv) any Convertible
Notes are exchanged by or for the benefit of the Holders (as such term is defined in the Indenture) thereof for any other securities of
Counterparty or any of its subsidiaries (or any other property, or any combination thereof) pursuant to any exchange offer or similar
transaction. For the avoidance of doubt, any conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute
a Repayment Event.
(c) Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Dealer shall owe Counterparty any amount pursuant
to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Counterparty shall have the right, in its
sole discretion, to require Dealer to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving
irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day
(which written confirmation shall contain
the representation and warranty set forth in Section 7(a)(i)), no later than 9:30 A.M., New York City time, on the relevant merger
date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable
(“Notice of Share Termination”); provided that if Counterparty does not elect to require Dealer to satisfy its
Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to elect to satisfy its
Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s failure to elect or election to the contrary;
and provided further that Counterparty shall not have the right to so elect (but, for the avoidance of doubt, Dealer shall have
the right to so elect) in the event of (i) an Insolvency, a Nationalization or a Merger Event, in each case, in which the consideration
or proceeds to be paid to holders of Shares consists solely of cash or (ii) an Event of Default in which Counterparty is the Defaulting
Party or a Termination Event in which Counterparty is the Affected Party or an Extraordinary Event, which Event of Default, Termination
Event or Extraordinary Event resulted from an event or events within Counterparty’s control. Upon such Notice of Share Termination,
the following provisions shall apply on the Scheduled Trading Day immediately following the relevant merger date, Announcement Date, Early
Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable:
|
Share Termination Alternative: |
If applicable, means that Dealer shall deliver to Counterparty the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to Section 6(d)(ii) of the Agreement or such later date or dates as Dealer may commercially reasonably determine (the “Share Termination Payment Date”) taking into account commercially reasonable hedging or hedge unwind activity, in satisfaction of the Payment Obligation. |
| Share Termination Delivery Property: | A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment
Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by
replacing any fractional portion of the aggregate amount of a security therein with an amount of cash equal to the value of such fractional
security based on the values used to calculate the Share Termination Unit Price. |
Share Termination Unit Price: |
The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. |
|
|
Share Termination Delivery Unit: |
In the case of a Termination Event (other than on account of an Insolvency, Nationalization or Merger Event), Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization or Merger Event, one Share or a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization or Merger Event, as applicable. If such Insolvency, Nationalization 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. |
|
|
Failure to Deliver: |
Applicable |
|
|
Other Applicable Provisions: |
If Share Termination Alternative is applicable, the
provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable as if “Physical Settlement” applied
to the Transaction, except that all references to “Shares” shall be read as references to “Share |
Termination Delivery Units”; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Counterparty is the issuer of any Share Termination Delivery Units (or any part thereof).
(d) Disposition
of Hedge Shares. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer, the Shares (the “Hedge
Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction in a commercially reasonable
manner cannot be sold in the U.S. public market by Dealer without registration under the Securities Act, Counterparty shall, at its election:
(i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration
statement under the Securities Act to cover the resale of such Hedge Shares and (A) enter into an agreement, in form and substance
reasonably satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered offering, (B) provide
accountant’s “comfort” letters in customary form for registered offerings of equity securities, (C) provide disclosure
opinions of nationally recognized outside counsel to Counterparty reasonably acceptable to Dealer, (D) provide other customary opinions,
certificates and closing documents customary in form for registered offerings of equity securities and (E) afford Dealer a reasonable
opportunity to conduct a “due diligence” investigation with respect to Counterparty customary in scope for underwritten offerings
of equity securities; provided that if Counterparty elects clause (i) above but the items referred to therein are not completed
in a timely manner, or if Dealer, in its sole discretion, is not satisfied with access to due diligence materials, the results of its
due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or
clause (iii) of this Section 8(d) shall apply at the election of Counterparty; (ii) in order to allow Dealer to sell
the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase
agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to Dealer,
including customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due
diligence rights (for Dealer or any designated buyer of the Hedge Shares from Dealer), and best efforts obligations to provide opinions
and certificates and such other documentation as is customary for private placements agreements, all commercially reasonably acceptable
to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary to compensate
Dealer for any commercially reasonable discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private
placement); or (iii) purchase the Hedge Shares from Dealer at the “Daily VWAP” (as defined in the Indenture) on such
Exchange Business Days, and in the amounts, commercially reasonably requested by Dealer. This Section 8(d) shall survive the
termination, expiration or early unwind of the Transaction.
(e) Repurchase
and Conversion Rate Adjustment Notices. Counterparty shall, at least two Exchange Business Days prior to any day on which Counterparty
effects any repurchase of Shares or consummates or otherwise engages in any transaction or event (a “Conversion Rate Adjustment
Event”) that could reasonably be expected to lead to an increase in the Conversion Rate, give Dealer a written notice of such
repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if, following such repurchase or
Conversion Rate Adjustment Event, the Notice Percentage would reasonably be expected to be (i) greater than 13.27% and (ii) greater
by 0.5% than the Notice Percentage included in the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase
Notice, greater than the Notice Percentage as of the date hereof). The “Notice Percentage” as of any day is the fraction,
expressed as a percentage, the numerator of which is the Number of Shares plus the number of shares underlying any other convertible bond
hedge transactions or call options sold by Dealer to Counterparty and the denominator of which is the number of Shares outstanding on
such day. In the event that Counterparty fails to provide Dealer with a Repurchase Notice on the day and in the manner specified in this
Section 8(e) then Counterparty agrees to indemnify and hold harmless Dealer, its affiliates and their respective directors,
officers, employees, agents and controlling persons (Dealer and each such person being an “Indemnified Party”) from
and against any and all losses (including losses relating to the Dealer’s hedging activities as a consequence of becoming, or of
the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or
cessation of hedging activities and any losses in connection therewith with respect to this Transaction), claims, damages and
liabilities
(or actions in respect thereof), joint or several, to which such Indemnified Party may become subject under applicable securities laws,
including without limitation, Section 16 of the Exchange Act or under any state or federal law, regulation or regulatory order,
relating to or arising out of such failure. If for any reason the foregoing indemnification is unavailable to any Indemnified Party or
insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to the maximum extent permitted by law, to the
amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability. In addition, Counterparty will reimburse
any Indemnified Party for all reasonable, actual expenses (including reasonable counsel fees and expenses) as they are incurred (after
notice to Counterparty and supported by invoices or other documentation setting forth in reasonable detail such expenses) in connection
with the investigation of, preparation for or defense or settlement of any pending or threatened claim or any action, suit or proceeding
arising therefrom, whether or not such Indemnified Party is a party thereto and whether or not such claim, action, suit or proceeding
is initiated or brought by or on behalf of Counterparty. To the extent an Indemnified Party fails to provide notice of any action commenced
against it in respect of which indemnity may be sought hereunder within a commercially reasonable period of time that would materially
prejudice Counterparty (it being understood that any such notice delivered within 30 calendar days of the commencement of any such action
shall be deemed to have been delivered within a commercially reasonable period of time for such purpose). Counterparty shall be relived
from liability. This indemnity shall survive the completion of the Transaction contemplated by this Confirmation and any assignment and
delegation of the Transaction made pursuant to this Confirmation or the Agreement and shall inure to the benefit of any permitted assignee
of Dealer.
(f) Transfer
and Assignment. Either party may transfer or assign any of its rights or obligations under the Transaction with the prior written
consent of the non-transferring party, such consent not to be unreasonably withheld or delayed; provided that Dealer may transfer
or assign without any consent of Counterparty its rights and obligations hereunder, in whole or in part, to (i) any affiliate of
Dealer or (ii) any person, or any person whose obligations hereunder would be guaranteed, pursuant to the terms of a customary guarantee
in a form generally used for similar transactions, by a person, in either case, of credit quality at least equivalent to Dealer’s
(or its ultimate parent’s). If at any time at which (1) the Equity Percentage exceeds 8.0% or (2) Dealer, Dealer Group
(as defined below) or any person whose ownership position would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer Group
or any such person, a “Dealer Person”) under the Minnesota Business Corporations Act or other federal, state or local
law, rule, regulation or regulatory order or organizational documents or contracts of Counterparty applicable to ownership of Shares (“Applicable
Restrictions”), 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, registration,
filing or notification obligations or other requirements (including obtaining prior approval by a state or federal regulator) of a Dealer
Person under Applicable Restrictions and with respect to which such requirements have not been met or the relevant approval has not been
received or that would subject a Dealer Person to restrictions (including restrictions relating to business combinations or other designated
transactions), or have any other adverse effect on a Dealer Person, under Applicable Restrictions minus (y) 1% of the number
of Shares outstanding on the date of determination (either such condition described in clause (1) or (2), an “Excess Ownership
Position”), Dealer, in its discretion, is unable to effect a transfer or assignment to a third party after its commercially
reasonable efforts on pricing and terms and within a time period reasonably acceptable to Dealer such that an Excess Ownership Position
no longer exists, Dealer 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 would no longer exist following the resulting partial termination
of the Transaction (after taking into account commercially reasonable adjustments to Dealer’s commercially reasonable Hedge Positions
from such partial termination). In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction,
a payment or delivery shall be made pursuant to Section 6 of the Agreement or Section 8(c) of this Confirmation as if (i) an
Early Termination Date had been designated in respect of a Transaction having terms identical to the Terminated Portion of the Transaction,
(ii) Counterparty were the sole Affected Party with respect to such partial termination, (iii) such portion of the Transaction
were the only Terminated Transaction and (iv) Dealer were 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. 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 Dealer and any
of its affiliates subject to aggregation with Dealer for purposes of the “beneficial ownership” test under Section 13
of the Exchange Act and all persons who may form a “group” (within the meaning of Rule 13d-5(b)(1) under the Exchange
Act) with Dealer (collectively, “Dealer Group”) “beneficially own” (within the meaning of Section 13
of the Exchange Act) without duplication on such day (or, to the extent that for any reason the equivalent calculation under Section 16
of the Exchange Act and the rules and regulations thereunder results in a higher number, such higher number) and (B) the denominator
of which is the number of Shares outstanding on such day. In the case of a transfer or assignment by Counterparty of its rights and obligations
hereunder and under the Agreement, in whole or in part (any such Options so transferred or assigned, the “Transfer Options”),
to any party, withholding of such consent by Dealer shall not be considered unreasonable if such transfer or assignment does not meet
the 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 8(e) or
any obligations under Section 2 (regarding Extraordinary Events) or 8(d) of this Confirmation;
(B) Any
Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended (the “Code”));
(C) Such
transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited
to, undertakings with respect to compliance with applicable securities laws in a manner that, in the 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 by, and reasonably satisfactory
to, Dealer;
(D) Dealer
shall not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of
the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment;
(E) An
Event of Default, Potential Event of Default or Termination Event shall not occur as a result of such transfer and assignment;
(F) Without
limiting the generality of clause (B), Counterparty shall have caused the transferee to make such Payee Tax Representations and to provide
such tax documentation 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 and assignment; and
(G) Counterparty
shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such
transfer or assignment.
(g) Delivery
of Shares. Notwithstanding anything to the contrary herein, Dealer may, by prior notice to Counterparty, satisfy its obligation to
deliver any Shares or other securities on any date due (an “Original Delivery Date”) by making separate deliveries
of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate
number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered
on such Original Delivery Date.
(h) 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.
(i) No
Netting and Set-off. The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party waives
any and all rights it may have to set-off delivery or payment obligations it
owes to the other party under the Transaction against any
delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between
parties hereto, by operation of law or otherwise.
(j) Equity
Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction
that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy. For the avoidance of doubt, the
parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim arising
as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement. For the avoidance of doubt,
the parties acknowledge that the obligations of Counterparty under this Confirmation are not secured by any collateral that would otherwise
secure the obligations of Counterparty herein under or pursuant to any other agreement.
(k) Early
Unwind. In the event the sale by Counterparty of the Optional Securities not consummated pursuant to the Purchase Agreement for any
reason by the close of business in New York on January 23, 2024 (or such later date as agreed upon by the parties) (January 23,
2024 or such later date being the “Early Unwind Date”), the Transaction shall automatically terminate (the “Early
Unwind”) on the Early Unwind Date and the Transaction and all of the respective rights and obligations of Dealer and Counterparty
hereunder shall be cancelled and terminated and Counterparty shall pay to Dealer an amount in cash equal to the aggregate amount of costs
and expenses relating to the unwinding of Dealer’s hedging activities in respect of the Transaction (including market losses incurred
in reselling any Shares purchased by Dealer or its affiliates in connection with such hedging activities, unless Counterparty agrees to
purchase any such Shares at the cost at which Dealer purchased such Shares). Following such termination, cancellation and payment, each
party shall be released and discharged by the other party from, and agrees not to make any claim against the other party with respect
to, any obligations or liabilities of either party arising out of, and to be performed in connection with, the Transaction either prior
to or after the Early Unwind Date. Dealer and Counterparty represent and acknowledge to the other that upon an Early Unwind and following
the payment referred to above, all obligations with respect to the Transaction shall be deemed fully and finally discharged.
(l) 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 Issuer 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 “Daily VWAP” (as defined in the Indenture); (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 “Daily VWAP” (as defined in the Indenture), each
in a manner that may be adverse to Counterparty; and (E) the Transaction is a derivatives transaction in which it has granted Dealer
an option, and Dealer may purchase shares for its own account at an average price that may be greater than, or less than, the price paid
by Counterparty under the terms of the Transaction.
(m) Wall
Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability
Act of 2010 (the “WSTAA”), the parties hereby agree that neither the enactment of the WSTAA (or any statute containing
any legal certainty provision similar to Section 739 of the WSTAA) or any regulation under the WSTAA (or any such statute), nor any
requirement under the WSTAA (or any statute containing any legal certainty provision similar to Section 739 of the WSTAA) or an amendment
made by the WSTAA (or any such statute), 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, Increased Cost of Hedging or
Illegality).
(n) Governing
Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE,
OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(o) Amendment.
This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty
and Dealer.
(p) 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.
(q) Tax
Matters.
(i) Withholding
Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act. “Indemnifiable Tax”
as defined in Section 14 of the Agreement, shall not include any 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.
(ii) HIRE
Act. To the extent that either party to the Agreement with respect to this Transaction is not an adhering party to the ISDA 2015 Section 871(m) Protocol
published by the International Swaps and Derivatives Association, Inc. on November 2, 2015 and available at www.isda.org, as
may be amended, supplemented, replaced or superseded from time to time (the “871(m) Protocol”), the parties agree
that the provisions and amendments contained in the Attachment to the 871(m) Protocol are incorporated into and apply to the Agreement
with respect to this Transaction as if set forth in full herein. The parties further agree that, solely for purposes of applying such
provisions and amendments to the Agreement with respect to this Transaction, references to “each Covered Master Agreement”
in the 871(m) Protocol will be deemed to be references to the Agreement with respect to this Transaction, and references to the “Implementation
Date” in the 871(m) Protocol will be deemed to be references to the Trade Date of this Transaction.
(iii) Tax
documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on
or before the date of execution of this Confirmation, (ii) upon reasonable request of Dealer and (iii) promptly upon learning
that any such tax form previously provided by Counterparty has become obsolete or incorrect. Dealer shall provide to Counterparty a valid
U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on or before the date of execution of this Confirmation,
(ii) upon reasonable request of Counterparty and (iii) promptly upon learning that any such tax form previously provided by
Dealer has become obsolete or incorrect.
(iv) Tax
Representations. For the purpose of Section 3(f) of the Agreement, Counterparty is a corporation for U.S. federal income tax
purposes and is organized under the laws of the State of Minnesota. Counterparty represents to Dealer that for U.S. federal income tax
purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations)
and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States Treasury Regulations).
For the purpose of Section 3(f) of the Agreement, Dealer represents to Counterparty that for U.S. federal income tax purposes
it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations)
and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States Treasury Regulations)
(r) QFC
Stay Provisions.
(i) (A) In
the event that Dealer becomes subject to a proceeding under (i) the Federal Deposit Insurance Act and the regulations promulgated
thereunder or (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder
(a “U.S. Special Resolution Regime”) the transfer from Dealer of this Confirmation, and any interest and obligation
in or under, and any property securing, this Confirmation, will be effective to the same extent as the transfer would be effective under
the U.S. Special Resolution Regime if this Confirmation, and any interest and obligation in or under, and any property securing, this
Confirmation were governed by the laws of the United States or a state of the United States. (B) In the event that Dealer or an Affiliate
becomes subject to a proceeding under a U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§ 252.81,
47.2 or 382.1, as applicable (“Default Right”)) under this Confirmation that may be exercised against Dealer are permitted
to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Confirmation
were governed by the laws of the United States or a state of the United States.
(ii) Notwithstanding
anything to the contrary in this Confirmation, the parties expressly acknowledge and agree that: (A) Counterparty shall not be permitted
to exercise any Default Right with respect to this Confirmation or any Affiliate Credit Enhancement that is related, directly or indirectly,
to an Affiliate of Dealer becoming subject to receivership, insolvency, liquidation, resolution, or similar proceeding (an “Insolvency
Proceeding”), except to the extent that the exercise of such Default Right would be permitted under the provisions of 12 C.F.R.
252.84, 12 C.F.R. 47.5 or 12 C.F.R. 382.4, as applicable; and (B) Nothing in this Confirmation shall prohibit the transfer of any
Affiliate Credit Enhancement, any interest or obligation in or under such Affiliate Credit Enhancement, or any property securing such
Affiliate Credit Enhancement, to a transferee upon or following an Affiliate of Dealer becoming subject to an Insolvency Proceeding, unless
the transfer would result in the Counterparty being the beneficiary of such Affiliate Credit Enhancement in violation of any law applicable
to the Counterparty.
(iii) If
Counterparty has previously adhered to, or subsequently adheres to, the ISDA 2018 U.S. Resolution Stay Protocol as published by the International
Swaps and Derivatives Association, Inc. as of July 31, 2018 (the “ISDA U.S. Protocol”), the terms of such
protocol shall be incorporated into and form a part of this Confirmation and the terms of the ISDA U.S. Protocol shall supersede and replace
the terms of this Section 8(r). For purposes of incorporating the ISDA U.S. Protocol, Dealer shall be deemed to be a Regulated Entity,
Counterparty shall be deemed to be an Adhering Party, and this Confirmation shall be deemed to be a Protocol Covered Agreement. Capitalized
terms used but not defined in this paragraph shall have the meanings given to them in the ISDA U.S. Protocol.
(iv) Dealer
and Counterparty agree that to the extent there are any outstanding “in-scope QFCs,” as defined in 12 C.F.R. § 252.82(d),
that are not excluded under 12 C.F.R. § 252.88, between Dealer and Counterparty that do not otherwise comply with the requirements
of 12 C.F.R. § 252.2, 252.81–8 (each such agreement, a “Preexisting In-Scope Agreement”), then each such
Preexisting In-Scope Agreement is hereby amended to include the foregoing provisions in this Section 8(r), with references to “this
Confirmation” being understood to be references to the applicable Preexisting In-Scope Agreement.
For purposes of this Section 8(r):
“Affiliate” is defined
in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Credit Enhancement”
means any credit enhancement or credit support arrangement in support of the obligations of Dealer under or with respect to this Confirmation,
including any guarantee, collateral arrangement (including any pledge, charge, mortgage or other security interest in collateral or title
transfer arrangement), trust or similar arrangement, letter of credit, transfer of margin or any similar arrangement.
9. Arbitration.
(a) All
parties to this Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided
by the rules of the arbitration forum in which a claim is filed.
(b) Arbitration
awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.
(c) The
ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court
proceedings.
(d) The
arbitrators do not have to explain the reason(s) for their award.
(e) The
panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless
Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with
the securities industry.
(f) The
rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible
for arbitration may be brought in court.
(g) The
rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Confirmation.
(h) Counterparty
agrees that any and all controversies that may arise between Counterparty and Dealer, including, but not limited to, those arising out
of or relating to the Agreement or the Transaction hereunder, shall be determined by arbitration conducted before FINRA Dispute Resolution
(“FINRA-DR”), or, if the FINRA-DR declines to hear the matter, before the American Arbitration Association, in accordance
with their arbitration rules then in force. The award of the arbitrator shall be final, and judgment upon the award rendered may
be entered in any court, state or federal, having jurisdiction.
(i) No
person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class
with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class
is decertified; or (iii) Counterparty is excluded from the class by the court.
(j) Such
forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Confirmation except to the extent
stated herein.
Counterparty hereby agrees (a) to check this
Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to
confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Counterparty
with respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms
and providing the other information requested herein and immediately returning an executed copy to Goldman Sachs & Co. LLC, Equity
Derivatives Documentation Department, Facsimile No. (212) 428-1980/83.
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Yours faithfully, |
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GOLDMAN SACHS & CO. LLC |
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By: |
/s/ Mike Voris |
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Name: Mike Voris |
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Title: Partner |
[Signature Page to Additional
Bond Hedge Confirmation]
Agreed and Accepted By:
WINNEBAGO industries, INC.
By: |
/s/ Bryan L. Hughes |
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Name: |
Bryan L. Hughes |
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Title: |
Chief Financial Officer and |
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Senior Vice President |
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[Signature Page to GS
Additional Bond Hedge Confirmation]
Exhibit 10.6
Bank of Montreal
55 Bloor Street West, 18th Floor
Toronto, Ontario M4W 1A5
To: |
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, Minnesota 55347 |
From: |
Bank of Montreal |
Re: |
Additional Convertible Bond
Hedge Transaction |
Date: |
January 19,
2024 |
Dear Ladies and Gentlemen:
The purpose of this communication
(this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on
the Trade Date specified below (the “Transaction”) between Bank of Montreal (“Dealer”) and Winnebago
Industries, Inc. (“Counterparty”). Dealer is acting as principal in this Transaction and BMO Capital Markets
Corp. (“Agent”), its affiliate, is acting as agent for this Transaction solely in connection with Rule 15a-6
of the Exchange Act (as defined herein), as amended. This communication constitutes a “Confirmation” as referred to in the
ISDA Master Agreement specified below.
1. This
Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (the “2006 Definitions”)
and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and
together with the 2006 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”). Certain defined terms used herein have the meanings assigned to them in the Indenture
to be dated as of January 23, 2024 between Counterparty and U.S. Bank Trust Company, National Association, as trustee (the “Indenture”),
relating to the USD 300,000,000 principal amount of 3.25% Convertible Senior Notes due 2030 (the “Base Convertible Securities”)
and the additional USD 50,000,000 principal amount of 3.25% Convertible Senior Notes due 2030 issued pursuant to the option to purchase
additional convertible securities exercised on the date hereof (the “Optional Convertible Securities” and, together
with the Base Convertible Securities, the “Convertible Securities”). In the event of any inconsistency between the
terms defined in the Indenture and this Confirmation, this Confirmation shall govern. For the avoidance of doubt, references herein to
sections of, or definitions set forth in, the Indenture are based on the draft of the Indenture most recently reviewed by the parties
at the time of execution of this Confirmation. If any relevant sections of, or definitions set forth in, the Indenture are changed, added
or renumbered between the execution of this Confirmation and the execution of the Indenture, the parties will amend this Confirmation
in good faith to preserve the economic intent of the parties, as evidenced by such draft of the Indenture. Subject to the foregoing,
the parties acknowledge that references to the Indenture herein are references to the Indenture as in effect on the date of its execution
and if the Indenture is, or the Convertible Securities are, amended, modified or supplemented following the date of their execution,
any such amendment, modification or supplement (other than any amendment, modification or supplement pursuant to a Merger Supplemental
Indenture (as defined below)) will be disregarded for purposes of this Confirmation unless the parties agree otherwise in writing.
Counterparty is hereby advised,
and Counterparty acknowledges, that Dealer has engaged in, or refrained from engaging in, substantial financial transactions and has
taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the
terms and conditions set forth below.
This Confirmation evidences
a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.
This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement
(Multicurrency—Cross Border) as if Dealer and Counterparty had executed an agreement in such form on the date hereof (but without
any Schedule except for (i) the election of Loss and Second Method and US Dollars (“USD”) as the Termination
Currency, (ii) the replacement of the word “third” in the last line of Section 5(a)(i) of the Agreement with
the word “first”, and (iii) (a) the election that the “Cross Default” provisions of Section 5(a)(vi) of
the Agreement shall apply to Counterparty with a “Threshold Amount” of USD35.0 million) (b) the
phrase “, or becoming capable at such time of being declared,” shall be deleted from clause (1) of such Section 5(a)(vi),
and (c) the following language shall be added to the end thereof: “Notwithstanding the foregoing, a default under subsection
(2) hereof shall not constitute an Event of Default if (x) the default was caused solely by error or omission of an administrative
or operational nature; (y) funds were available to enable the party to make the payment when due; and (z) the payment is made
within two Local Business Days of such party’s receipt of written notice of its failure to pay.”.
All provisions contained
in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event of
any inconsistency among this Confirmation, the Equity Definitions, the 2006 Definitions or the Agreement, the following shall prevail
in the order of precedence indicated: (i) this Confirmation; (ii) the Equity Definitions; (iii) the 2006 Definitions;
and (iv) the Agreement. For the avoidance of doubt, except to the extent of an express conflict, the application of any provision
of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions shall not be construed to exclude or limit any other
provision of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions.
The Transaction hereunder
shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Counterparty or any confirmation
or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Counterparty,
then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to
which Dealer and Counterparty are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such
existing or deemed ISDA Master Agreement.
2. The
Transaction constitutes a Share Option Transaction for purposes of the Equity Definitions. The terms of the particular Transaction to
which this Confirmation relates are as follows:
General Terms:
Trade Date: |
January 19, 2024 |
Effective Date: |
The closing date of the issuance of the Convertible Securities issued pursuant
to the option to purchase additional Convertible Securities exercised on the date hereof. |
Option Style: |
Modified American, as described under “Procedures for Exercise”
below. |
Option Type: |
Call |
Seller: |
Dealer |
Buyer: |
Counterparty |
Shares: |
The Common Stock of Counterparty, par value USD0.50 (Ticker Symbol: “WGO”). |
Applicable Percentage: |
33 1/3% |
Number of Options: |
The number of Optional Convertible Securities in |
|
denominations of USD1,000 principal amount purchased by the Initial
Purchasers (as defined in the Purchase Agreement), at their option pursuant to Section 2 of the Purchase Agreement (as defined below).
For the avoidance of doubt, the Number of Options outstanding shall be reduced by each exercise of Options hereunder. |
Option Entitlement: |
11.3724 |
Fundamental Change Adjustment: |
Any adjustment to the Conversion Rate pursuant to Section 5.07 of the Indenture. |
Discretionary Adjustment: |
Any adjustment to the Conversion Rate pursuant to Section 5.06 of the Indenture. |
Strike Price: |
USD87.9322 |
Rounding of Strike Price/Option Entitlement: |
In connection with any adjustment to the Option Entitlement or Strike Price,
the Option Entitlement or the Strike Price, as the case may be, shall be rounded by the Calculation Agent in accordance with the
provisions of the Indenture relating to rounding of the “Conversion Price” or the “Conversion Rate” as applicable
(each as defined in the Indenture). |
Number of Shares: |
As of any date, a number of Shares equal to the product of (i) the Applicable
Percentage, (ii) the Number of Options and (iii) the Option Entitlement. |
Premium: |
USD3,270,000 |
Premium Payment Date: |
The Effective Date |
Exchange: |
The New York Stock Exchange |
Related Exchange: |
All Exchanges |
Procedures for Exercise: |
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Exercise Dates: |
Each Conversion Date. |
Conversion Date: |
Each “Conversion Date” (as defined in the Indenture) occurring during the Exercise Period
for Convertible Securities each in denominations of USD1,000 principal amount that are not “Relevant Convertible Securities”
under (and as defined in) the confirmation between the parties hereto regarding the Base Convertible Bond Hedge Transaction dated
January 18, 2024 (the “Base Convertible Bond Hedge Transaction Confirmation”) (such Convertible Securities, the
“Relevant Convertible Securities” for such Conversion Date). For the purposes of determining whether
any Convertible Securities will be Relevant Convertible Securities hereunder or “Relevant Convertible Securities” under
the Base Convertible Bond Hedge Transaction Confirmation, Convertible Securities that are converted pursuant to the Indenture shall
be allocated first to the Base Convertible Bond Hedge Transaction Confirmation until all Options thereunder are exercised or |
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terminated. |
Exercise Period: |
The period from and excluding the Effective Date to, and including, the Expiration
Date. |
Expiration Date: |
The earlier of (i) the last day on which any Convertible Securities remain
outstanding and (ii) the second “Scheduled Trading Day” (as defined in the Indenture) immediately preceding the “Maturity
Date” (as defined in the Indenture). |
Automatic Exercise on Conversion Dates: |
Applicable; and means that on each Conversion Date, a number of Options equal
to the number of Relevant Convertible Securities for such Conversion Date in denominations of USD1,000 principal amount shall be
automatically exercised, subject to “Notice of Exercise” below. |
Notice Deadline: |
In respect of any exercise of Options hereunder on any Conversion Date, 5:00
P.M., New York City time, on (i) in the case the applicable Relevant Convertible Securities will be settled by Counterparty by delivery
of Shares only (together with cash in lieu of any fractional Share), the “Trading Day” (as defined in the Indenture)
immediately following the relevant Conversion Date, or (ii) otherwise, the Scheduled Trading Day immediately preceding the first
day of the relevant Cash Settlement Averaging Period; provided that in the case of any exercise of Options hereunder in connection
with the conversion of any Relevant Convertible Securities for any Conversion Date occurring during the period from and including
the 85th “Scheduled Trading Day” (as defined in the Indenture) prior to the Maturity Date, to and including the Expiration
Date (such period, the “Final Conversion Period”), the Notice Deadline shall be 5:00 P.M., New York City time,
on the “Scheduled Trading Day” (as defined in the Indenture) immediately preceding the “Maturity Date” (as
defined in the Indenture). |
Notice of Exercise: |
Notwithstanding anything to the contrary in the Equity Definitions, Dealer shall have no obligation
to make any payment or delivery in respect of any exercise of Options hereunder and such obligation in respect of such exercise shall
be permanently extinguished unless Counterparty notifies Dealer in writing prior to the Notice Deadline in respect of such exercise,
of (i) the number of Relevant Convertible Securities being converted on the related Conversion Date (specifying, if applicable,
whether all or any portion of such Convertible Securities are Convertible Securities as to which additional Shares would be added
to the Conversion Rate (as defined in the Indenture) pursuant to Section 5.07 of the Indenture), (ii) the scheduled settlement
date under the Indenture for the Relevant Convertible Securities |
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for such Conversion Date, (iii) whether such Relevant Convertible
Securities will be settled by Counterparty by delivery of cash or a combination of cash and Shares and, if such a combination, the
“Specified Dollar Amount” (as defined in the Indenture) and (iv) the first day of the relevant “Observation
Period” (as defined in the Indenture), if any; provided that in the case of any exercise of Options in connection with
the conversion of any Relevant Convertible Securities for any Conversion Date occurring during the Final Conversion Period, the contents
of such notice shall be as set forth in clauses (i) and (ii) above; provided, further, that any “Notice of Exercise”
delivered to Dealer pursuant to the Base Convertible Bond Hedge Transaction Confirmation shall be deemed to be a Notice of Exercise
pursuant to this Confirmation and the terms of such Notice of Exercise shall apply, mutatis mutandis, to this Confirmation.
Counterparty acknowledges its responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of
the Exchange Act (as defined below) and the rules and regulations thereunder, in respect of any election of a settlement method with
respect to the Convertible Securities. For the avoidance of doubt, if Counterparty fails to give such notice when due
in respect of any exercise of Options hereunder, Dealer’s obligation to make any payment or delivery in respect of such exercise
shall be permanently extinguished, and late notice shall not cure such failure. If applicable, the Notice of Exercise shall
also contain the Settlement Method Election Provisions. |
Notice of Final Convertible Security
Settlement Method: |
Counterparty shall notify Dealer in writing before 5:00 P.M., New York City
time, on the “Scheduled Trading Day” (as defined in the Indenture) immediately preceding the 85th “Scheduled
Trading Day” (as defined in the Indenture) prior to the Maturity Date of the settlement method (and, if applicable, the Specified
Dollar Amount) elected (or deemed to be elected) with respect to Relevant Convertible Securities with a Conversion Date occurring
during the Final Conversion Period (any such notice, a “Notice of Final Convertible Security Settlement Method”).
If applicable, the Notice of Final Convertible Security Settlement Method shall also contain the Settlement Method Election Provisions. |
Dealer’s Telephone Number and Telex and/or
Facsimile Number and Contact Details for purpose of Giving Notice: |
As specified in Section 6(b) below. |
Settlement
Terms: |
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Settlement
Date: |
For
any Exercise Date, the date one Settlement Cycle following the final day of the relevant Cash Settlement Averaging Period; provided
that the Settlement Date shall not be prior to the Exchange Business Day immediately following the date Counterparty provides
the Notice of Delivery Obligation prior to 5:00 P.M., New York City time. |
Delivery
Obligation: |
In
lieu of the obligations set forth in Sections 8.1 and 9.1 of the Equity Definitions, and subject to “Notice of Exercise”
above and “Discretionary Adjustments” , “Dividends” and “Consequences of Merger Events”
below, in respect of an Exercise Date, Dealer will deliver to Counterparty on the related Settlement Date (the “Delivery
Obligation”), amounts equal to the product of the Applicable Percentage and |
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(i)
(I) a number of Shares equal to the aggregate number of Shares, if any, that Counterparty would be obligated to deliver to the holder(s)
of the Relevant Convertible Securities for such Conversion Date pursuant to Section 5.03 of the Indenture (except that such number
of Shares shall be determined without taking into consideration any rounding pursuant to Section 5.03(B)(ii) of the Indenture and
shall be rounded down to the nearest whole number) and (II) cash in lieu of any fractional Share resulting from such rounding; and/or |
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(ii)
the aggregate amount of cash, if any, in excess of the principal amount of the Relevant Convertible Securities that Counterparty
would be obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date pursuant to Section 5.03
of the Indenture, determined, for each of clauses (i) and (ii), by the Calculation Agent (by reference to such Sections of the Indenture) |
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as
if Counterparty had elected to satisfy its conversion obligation in respect of such Relevant Convertible
Securities by the Applicable Settlement Method, notwithstanding any different actual election by
Counterparty with respect to the settlement of such Relevant Convertible Securities; provided
that the Delivery Obligation shall be determined excluding any Shares and/or cash that Counterparty
is obligated to deliver to holder(s) of the Relevant Convertible Securities as a direct or indirect
result of any adjustments to the Conversion Rate pursuant to a Fundamental Change Adjustment or a
Discretionary Adjustment and any interest payment that Counterparty is (or would have been) obligated
to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date. |
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Notwithstanding the foregoing, if, in respect of any Exercise Date,
(x)(I) the number of Shares included in the Delivery Obligation multiplied by the Share Obligation Value Price plus
(II) the amount of cash included in the Delivery Obligation, would otherwise exceed (y) the relevant Net Convertible Share Obligation
Value, such number of Shares and such amount of cash shall be proportionately reduced to the extent necessary to eliminate such excess. |
Make-Whole
Adjustment: |
Notwithstanding
anything to the contrary herein, in respect of any exercise of Options relating to a conversion of Relevant Convertible Securities
in connection with which holders of the Relevant Convertible Securities would be entitled to receive additional Shares and/or cash
as a result of adjustments to the Conversion Rate pursuant to a Fundamental Change Adjustment, the Delivery Obligation shall include
such additional Shares and/or cash; provided that if the sum of (i) the product of (a) the number of Shares (if
any) included in the Delivery Obligation per exercised Option and (b) the Share Obligation Value Price and (ii) the amount
of cash (if any) included in the Delivery Obligation per exercised Option would otherwise exceed the amount per Option, as determined
by the Calculation Agent, that would be payable by Dealer under Section 6 of the Agreement if (x) the relevant Conversion
Date were an Early Termination Date resulting from an Additional Termination Event with respect to which the Transaction was the
sole Affected Transaction and Counterparty was the sole Affected Party and (y) the provisions of the Indenture relating to the
Fundamental Change Adjustment were deleted, then such number of Shares and such amount of cash shall be proportionately reduced to
the extent necessary to eliminate such excess. |
Applicable
Settlement Method: |
For any Relevant Convertible
Securities, if such Notice of Exercise (or such Notice of Final Convertible Security Settlement Method, as the case may be) contains
all of the Settlement Method Election Provisions, the Applicable Settlement Method shall be the settlement method actually so elected
by Counterparty in respect of such Relevant Convertible Securities (the “Convertible Securities Settlement Method”);
otherwise, the Applicable Settlement Method shall assume Counterparty had made a Cash Election with respect to such Relevant Convertible
Securities (a “Deemed Cash Election”) with a Specified Dollar Amount of USD1,000 per Relevant Convertible Security
and the Delivery Obligation shall be determined by the Calculation Agent as if the relevant “Observation Period” pursuant
to Section 5.03(B)(i) of the Indenture were the Cash Settlement Averaging Period. |
Cash
Settlement Averaging Period: |
The
40 “Trading Days” (as defined in the Indenture) commencing on (I) the third “Trading Day” (as defined in
the Indenture) after the Conversion Date for conversions with a related Conversion Date occurring prior to the Final Conversion Period
or (II) the 41st “Scheduled Trading Day” (as defined in the Indenture) prior to the “Maturity Date” (as defined
in the Indenture) for conversions with a related Conversion Date occurring during the Final Conversion Period. |
Settlement
Method Election Provisions: |
In
order for the Applicable Settlement Method to be the Convertible Securities Settlement Method in accordance with “Applicable
Settlement Method” above, the related Notice of Exercise (or Notice of Final Convertible Security Settlement Method, as the
case may be) must contain in writing the following representations and warranties from Counterparty to Dealer as of such notice delivery
date: |
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(i)
none of Counterparty and its officers or directors, or any person that controls, potentially controls, or otherwise exercises influence
over, Counterparty’s decision to elect the Convertible Security Settlement Method is aware of any material nonpublic information
regarding Counterparty or the Shares; |
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(ii)
Counterparty is electing the Convertible Security Settlement Method in good faith and not as part of a plan or scheme to evade compliance
with the U.S. federal securities laws; Counterparty is not electing the Convertible Security Settlement Method to create actual or
apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise
manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the
Exchange Act; and Counterparty has not entered into or altered any hedging transaction relating to the Shares corresponding to or
offsetting the Transaction; |
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(iii)
Counterparty has the power to make such election and to execute and deliver any documentation relating to such election that it is
required by this Confirmation to deliver and to perform its obligations under this Confirmation and has taken all necessary action
to authorize such election, execution, delivery and performance; |
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(iv)
such election and performance of its obligations under this Confirmation do not violate or conflict with any law applicable to it,
any provision of its constitutional documents, |
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any order or judgment of any court or other
agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its
assets; and |
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(v) any transaction that Dealer makes with respect to
the Shares during the period beginning at the time that Counterparty delivers such notice and ending at the close of business on
the final day of the Cash Settlement Averaging Period shall be made by Dealer at Dealer’s sole discretion for Dealer’s
own account and Counterparty shall not have, and shall not attempt to exercise, any influence over how, when, whether or at what
price Dealer effects such transactions, including, without limitation, the prices paid or received by Dealer per Share pursuant to
such transactions, or whether such transactions are made on any securities exchange or privately. |
Notice
of Delivery Obligation: |
No
later than the Exchange Business Day immediately following the last day of the relevant Cash Settlement Averaging Period, Counterparty
shall give Dealer notice of the final number of Shares and/or amount of cash included in the Total Convertible Share Obligation Value
(as defined below); provided that, with respect to any Exercise Date occurring during the Final Conversion Period, Counterparty
may provide Dealer with a single notice of the aggregate number of Shares and/or amount of cash included in the Total Convertible
Share Obligation Value for all Exercise Dates occurring during such period (it being understood, for the avoidance of doubt, that
the requirement of Counterparty to deliver such notice shall not limit Counterparty’s obligations with respect to a Notice
of Exercise or Notice of Final Convertible Security Settlement Method, as the case may be, as set forth above, in any way). |
Net
Convertible Share Obligation Value: |
With
respect to Relevant Convertible Securities as to a Conversion Date, the product of (i) the Applicable Percentage and (ii)(A) the
Total Convertible Share Obligation Value of such Relevant Convertible Securities for such Conversion Date minus (B) the aggregate
principal amount of such Relevant Convertible Securities for such Conversion Date. |
Total
Convertible Share Obligation Value: |
With respect to Relevant
Convertible Securities with respect to a Conversion Date, (i) (A) the number of Shares equal to the aggregate number of Shares that
Counterparty is obligated to deliver to the holder(s) of Relevant Convertible Securities for such Conversion Date pursuant to the
Indenture (it being understood that such number of Shares shall be determined taking into consideration any rounding |
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pursuant to Section 5.03(B)(ii) of the Indenture) multiplied
by (B) the Share Obligation Value Price plus (ii) an amount of cash equal to the aggregate amount of cash that Counterparty
is obligated to deliver to the holder(s) of Relevant Convertible Securities for such Conversion Date pursuant to the Indenture (including,
for the avoidance of doubt, any cash payable by Counterparty in lieu of fractional Shares); provided that the Total Convertible
Share Obligation Value shall be determined excluding any Shares and/or cash that Counterparty is obligated to deliver to holder(s)
of the Relevant Convertible Securities as a direct or indirect result of any adjustments to the Conversion Rate pursuant to a Fundamental
Change Adjustment or a Discretionary Adjustment and any interest payment that Counterparty is (or would have been) obligated to deliver
to holder(s) of the Relevant Convertible Securities for such Conversion Date. |
Share
Obligation Value Price: |
The
opening price as displayed under the heading “Op” on Bloomberg page “WGO.N <Equity>” (or any successor
thereto) on the applicable Settlement Date or other date of delivery. |
Other
Applicable Provisions: |
To
the extent Dealer is obligated to deliver Shares hereunder, the provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions
will be applicable as if “Physical Settlement” applied to the Transaction; provided that the Representation and
Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating
to restrictions, obligations, limitations or requirements under applicable securities laws that exist as a result of the fact that
Counterparty is the issuer of the Shares. |
Restricted
Certificated Shares: |
Notwithstanding
anything to the contrary in the Equity Definitions, Dealer may, in whole or in part, deliver Shares required to be delivered to Counterparty
hereunder in certificated form in lieu of delivery through the Clearance System. With respect to such certificated Shares,
the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by deleting the remainder
of the provision after the word “encumbrance” in the fourth line thereof. |
Adjustments: |
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Method
of Adjustment: |
Notwithstanding Section
11.2 of the Equity Definitions, upon the occurrence of any event or condition set forth in Section 5.05(A)(i), (ii), (iii), (iv)
and (v) and Section 5.05(H) of the Indenture (a “Potential Adjustment Event”) that results in an adjustment under
the Indenture, the Calculation Agent shall make a corresponding adjustment in respect of any one or more of the Strike Price, the
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Number of Options, the Option Entitlement and any other term relevant
to the exercise, settlement or payment of the Transaction, subject to “Discretionary Adjustments” below. Promptly
upon the occurrence of any Potential Adjustment Event, Counterparty shall notify the Calculation Agent of such Potential Adjustment
Event; and once the adjustments to be made to the terms of the Indenture and the Convertible Securities in respect of such Potential
Adjustment Event have been determined, Counterparty shall immediately notify the Calculation Agent in writing of the details of such
adjustments. |
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Notwithstanding
anything to the contrary herein or in the Equity Definitions: |
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(i) in
connection with any Potential Adjustment Event as a result of an event or condition set forth in Section 5.05(A)(ii) of the Indenture
or Section 5.05(A)(iii)(1) of the Indenture where, in either case, the period for determining “Y” (as such term is used
in Section 5.05(A)(ii) of the Indenture) or “SP” (as such term is used in Section 5.05(A)(iii)(1) 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 of
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 |
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(ii)
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 is otherwise not adjusted at the time or in the manner contemplated
by the Indenture based on such declaration or (c) the Conversion Rate 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 of
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 |
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hedging activities as a result of such Potential
Adjustment Event Change. |
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Upon
the occurrence of any Potential Adjustment Event Change, Counterparty shall immediately notify the Calculation Agent in writing of
the details of such Potential Adjustment Event Change. |
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For
the avoidance of doubt, Dealer shall not have any payment or delivery obligation hereunder in respect of, 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 the
holders of Convertible Securities (upon conversion or otherwise) or (y) any other transaction in which holders of Convertible Securities
are entitled to participate, in each case, in lieu of an adjustment under the Indenture in respect of a Potential Adjustment Event
(including, without limitation, under the proviso to the first sentence of Section 5.05(A)(iii)(1) of the Indenture or the proviso
to the first sentence of Section 5.05(A)(iv) of the Indenture)1. |
Discretionary
Adjustments: |
Notwithstanding anything
to the contrary herein or in the Equity Definitions, if the Calculation Agent in good faith disagrees with any adjustment under the
Indenture that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation, pursuant
to Section 5.05(H) of the Indenture or pursuant to Section 5.08(A) of the Indenture or any supplemental indenture entered
into thereunder (a “Merger Supplemental Indenture”) or in connection with the determination of the fair value
of any securities, property, rights or other assets), then the Calculation Agent will determine the adjustment to be made to any
one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement
or payment of or under the Transaction in a commercially reasonable manner and, for the avoidance of doubt, the Delivery Obligation
shall be calculated on the basis of such adjustments by the Calculation Agent; provided that, notwithstanding the foregoing,
in any Potential Adjustment Event occurs during the Cash 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 holder
of the underlying Shares on the related Conversion Date, then the Calculation Agent shall make an adjustment, as determined by it,
to the terms |
1 Include references to provisions of Indenture providing for pass-through of cash or Distributed Property
in lieu of Conversion Rate adjustments.
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hereof in order to account for such Potential Adjustment Event. |
Dividends: |
If
(i) at any time during the period from and including the Trade Date, to but excluding the Expiration Date, an ex-dividend date for
a regular quarterly cash dividend occurs with respect to the Shares (an “Ex-Dividend Date”) and that dividend
is less than the Regular Dividend on a per Share basis or (ii) no Ex-Dividend Date for a regular quarterly cash dividend occurs with
respect to the Shares in any quarterly dividend period of Counterparty, then the Calculation Agent will make a corresponding adjustment
in respect of any one or more of the Strike Price, the Number of Options, the Option Entitlement and any other term relevant to the
exercise, settlement or payment of the Transaction to account for the economic effect on the Transaction of such dividend or lack
thereof, and, for the avoidance of doubt, any such adjustments shall be taken into account in calculating the Delivery Obligation. “Regular
Dividend” shall mean USD 0.31 per Share. |
Notice
of Certain Other Events: |
Counterparty
shall give Dealer commercially reasonable advance (but in no event less than one Exchange Business Day) written notice of the section
or sections of the Indenture and, if applicable, the formula therein, pursuant to which any adjustment will be made to the Convertible
Securities in connection with any Potential Adjustment Event, Merger Event or Tender Offer. |
Extraordinary
Events: |
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Merger
Events: |
Notwithstanding
Section 12.1(b) of the Equity Definitions, “Merger Event” shall mean the occurrence of any event or condition set forth
in the definition of “Common Stock Change Event” set forth in Section 5.08(A) of the Indenture. |
Consequences
of Merger Events: |
Notwithstanding Section
12.2 of the Equity Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall make an adjustment to the terms
relevant to the exercise, settlement or payment of the Transaction corresponding to the adjustment required under Section 5.08 of
the Indenture in respect of such Merger Event, as determined by the Calculation Agent (by reference to such Section), subject to
“Discretionary Adjustments” above; provided that such adjustment shall be made without regard to any adjustment
to the Conversion Rate pursuant to a Fundamental Change Adjustment or a Discretionary Adjustment; and provided further that
the Calculation Agent may make such further adjustments to the terms of the Transaction as may be necessary to ensure that the fair
value of the Transaction to Dealer is not adversely affected as a result of any adjustment referenced in this paragraph and, for
the avoidance of |
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doubt, any such further adjustments shall be taken into account
in calculating the Delivery Obligation; and provided further that if, with respect to a Merger Event, (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
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, will not be a corporation organized under the laws of the United States, any state thereof or the District
of Columbia and/or will not be the Issuer, Dealer may elect in its sole discretion that Cancellation and Payment (Calculation Agent
Determination) shall apply. |
Notice
of Merger Consideration and Consequences: |
Upon
the occurrence of a Merger Event, Counterparty shall reasonably promptly (but in any event prior to the relevant merger date) notify
the Calculation Agent of (i) in the case of a Merger Event that causes the Shares to be converted into the right to receive more
than a single type of consideration (determined based in part upon any form of stockholder election), the types and amount of consideration
actually received by such holders, and (ii) the details of the adjustment to be made under the Indenture in respect of such Merger
Event. |
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 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
Termination Event(s): |
Notwithstanding
anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, the Transaction would be cancelled
or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event (with
the Transaction (or the cancelled or terminated portion thereof) being the Affected Transaction and Counterparty being the sole Affected
Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement
shall apply to such Affected Transaction. |
Additional Disruption Events: |
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(a) |
Change in Law: |
Applicable; provided that Section 12.9(a)(ii) of the Equity
Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase
“, or public announcement of, the formal or informal interpretation”, (ii) by adding the phrase “and/or Hedge Position”
after the word “Shares” in clause (X) thereof and (iii) by immediately following the word “Transaction” in
clause (X) thereof, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date”; and provided
further that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the parenthetical beginning after
the word “regulation” in the second line thereof 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)”
and (ii) adding the words “, or holding, acquiring or disposing of Shares or any Hedge Positions relating to,” after
the words “obligations under” in clause (Y) thereof. |
(b) |
Failure to Deliver: |
Applicable |
(c) |
Insolvency Filing: |
Applicable |
(d) |
Hedging Disruption: |
Applicable; provided that: |
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(i) |
Section 12.9(a)(v) of the Equity Definitions is hereby amended
by: |
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(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 |
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(b) |
inserting the following paragraphs at the end of such Section: |
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“Such inability described in clauses (A) or (B) above shall not constitute
a “Hedging Disruption” if such inability results from Hedging Party’s creditworthiness. |
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For the avoidance of doubt, (i) the term “equity price risk” shall be deemed to include,
but shall not be limited to, stock price and volatility risk, and (ii) the transactions or assets referred to in phrases (A) or (B)
above must be available on commercially reasonable pricing and other terms.”; and |
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(ii) |
Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in the
third line thereof, after the words “to terminate the Transaction”, the words “or a portion of the Transaction
affected by such Hedging Disruption”. |
(e) |
Increased Cost of Hedging: |
Applicable; provided that such increased cost described
in Section 12.9(vi) of the Equity Definitions shall not constitute an “Increased Cost of Hedging” if such increased cost
results from Hedging Party’s creditworthiness. |
Hedging Party: |
Dealer |
Determining Party: |
Dealer. All calculations and determinations
by the Determining Party shall be made in good faith and in a commercially reasonable manner. Following any calculation by the Determining
Party hereunder, upon written request by Counterparty, the Determining Party will, within five Exchange Business Days immediately
following such request, provide to Counterparty 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; provided,
however, that in no event will the Determining Party be obligated to share with Counterparty any proprietary or confidential
data or information or any proprietary or confidential models used by it. |
Non-Reliance: |
Applicable |
Agreements and Acknowledgments Regarding Hedging Activities: |
Applicable |
Additional Acknowledgments: |
Applicable |
3.
Calculation Agent: |
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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, if the Calculation Agent fails to timely make any calculation, adjustment or determination required to be made by the Calculation
Agent hereunder or to perform any obligations of the Calculation Agent hereunder and such failure continues for five Exchange Business
Days following notice to the Calculation Agent by Counterparty of such failure, Counterparty shall have the right to designate a
nationally recognized third-party dealer in over-the-counter corporate equity derivatives to act, during the period commencing on
the first date the Calculation Agent fails to timely make such calculation, adjustment or determination or to perform such obligation,
as the case may be, and ending on the earlier of the Early Termination Date with respect to such Event of Default and the date on
which such Event of Default is no longer continuing, as Calculation Agent. |
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Following any calculation by the Calculation Agent hereunder, upon written request by Counterparty,
the |
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Calculation Agent will, within five Exchange Business Days immediately following such
request, provide to Counterparty by email to the email 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 the basis for such calculation;
provided that in no event will Dealer be obligated to share with Counterparty any proprietary or confidential data or information
or any proprietary or confidential models used by it or any information that is subject to an obligation not to disclose such information. |
4. Account
Details:
Dealer Payment Instructions:
Bank: Bank of New York
ABA#: 021000018
A/C#: 8661062712
Acct Name – BMO Nesbitt Burns
Counterparty Payment Instructions:
To be provided by Counterparty.
5. Offices:
Dealer is a Multibranch Party and for
purposes of this Confirmation and each Transaction, may act through its London and Toronto Offices.
The Office of Counterparty for the
Transaction is: Inapplicable, Counterparty is not a Multibranch Party.
6. Notices:
For purposes of this Confirmation:
|
(a) |
Address for notices or communications to Counterparty: |
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Winnebago Industries, Inc. |
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13200 Pioneer Trail |
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Eden Prairie, MN 55347 |
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Attention: Kathy Hiebert, Treasurer |
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(b) |
Address for notices or communications to Dealer: |
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To: |
Bank of Montreal |
|
55 Bloor Street West, 18th Floor |
|
Toronto, Ontario M4W 1A5 |
|
Canada |
| Attn: | Manager,
Derivatives Operations |
| Telephone: | (416)
552-4177 |
| Email: BMOEquityLinked@bmo.com |
| |
| With a copy to: |
| |
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To: |
Bank of Montreal |
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100 King Street West, 20th
Floor |
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Toronto, Ontario M5X 1A1 |
|
Canada |
|
Attn: |
Associate General Counsel & Managing Director, Derivatives Legal Group |
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Facsimile: |
(416) 956-2318 |
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And a copy to: |
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To: |
BMO Capital Markets Corp. |
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151 West 42nd Street 32nd Floor |
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New York, New York 10036 |
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Attn: |
Brian Riley |
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Telephone: |
(212) 605-1414 |
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Email: |
BMOEquityLinked@bmo.com |
7. Representations,
Warranties and Agreements:
(a) In
addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants
to and for the benefit of, and agrees with, Dealer as follows:
(i) On
the Trade Date and as of the date of any Notice of Share Termination under (and as defined in) Section 8(c) below, (A) none
of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and
(B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports
and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading.
(ii) (A) On
the Trade Date, the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not subject to a “restricted
period,” as such term is defined in Regulation M under the Exchange Act (“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 Trade Date.
(iii) 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).
(iv) Without
limiting the generality of Section 3(a)(iii) of the Agreement, the Transaction will not violate Rule 13e-1 or Rule 13e-4
under the Exchange Act.
(v) Prior
to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction
and such other certificate or certificates as Dealer shall reasonably request. Based on such resolutions, neither Dealer nor any of its
affiliates shall be subject to the restrictions under Section 302A.673 of the Minnesota Business Corporations Act as an “interested
shareholder” of Counterparty by virtue of (A) its role as initial purchaser of, or market-maker in, any securities of Counterparty
convertible into the Shares, (B) its entry into the Transaction and/or (C) any hedging transactions in Counterparty’s
securities in connection with the Transaction.
(vi) Counterparty
is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable
for Shares) or otherwise in violation of the Exchange Act.
(vii) 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.
(viii) On
each of the Trade Date and the Premium Payment Date, Counterparty is not “insolvent” (as such term is defined under Section 101(32)
of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be
able to purchase the Number of Shares in compliance with the laws of the jurisdiction of Counterparty’s incorporation.
(ix) The
representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement,
dated as of January 18, 2024, between Goldman Sachs & Co. LLC and BMO Capital Markets Corp. as the Representatives and Counterparty
(the “Purchase Agreement”) are true and correct as of the Trade Date and the Effective Date and are hereby deemed to
be repeated to Dealer as if set forth herein.
(x) No
state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise to
any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any
person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares; provided however, that Counterparty
makes no representation or warranty regarding any such requirement that is applicable generally to the ownership of equity securities
by Dealer or any of its affiliates as a result of it or any such affiliates being financial institutions or broker-dealers .
(xi) 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, including, without limitation, the transaction that is the subject of this confirmation and any transactions
related hereto or contemplated hereby; (B) will exercise independent judgment in evaluating the recommendations of Dealer and its
affiliates or associated persons with regard to any such securities transactions or strategies unless it has otherwise notified Dealer
in writing; and (C) has total assets of at least $50 million. Counterparty will notify Dealer if the immediately preceding statement
contained in this Section 7(a)(xi) ceases to be true.
(xii) Without
limiting the generality of Section 3(a) of the Agreement, neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or
by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of
any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Counterparty’s Annual Report
on Form 10-K for the year ended August 26, 2023, as updated by any subsequent filings, to which Counterparty or any of its subsidiaries
is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject,
or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
(b) Each
of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18)
of the U.S. Commodity Exchange Act, as amended, and is entering into the Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise) and not for the benefit of any third party.
(c) Each
of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under
the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(a)(2) thereof. Accordingly,
Counterparty represents and warrants to Dealer that (i) it has the financial ability to bear the economic risk of its investment
in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in respect of the Transaction,
which it understands are not readily marketable, are not disproportionate to its net worth, and
it is able to bear any loss
in connection with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an
“accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is
entering into the Transaction for its own account and without a view to the distribution or resale thereof, (iv) the
assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is
restricted under this Confirmation, the Securities Act and state securities laws, and (v) its financial condition is such that
it has no need for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to
satisfy any existing or contemplated undertaking or indebtedness and is capable of assessing the merits of and understanding (on its
own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the
Transaction.
(d) Each
of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution” and “financial participant”
within the meaning of Sections 101(22) and 101(22A) of the Bankruptcy Code. The parties hereto further agree and acknowledge (A) that
this Confirmation is a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code,
with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment
amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement
payment” within the meaning of Section 546 of the Bankruptcy Code, and (B) that Dealer is entitled to the protections
afforded by, among other sections, Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 548(d)(2), 555 and 561 of the Bankruptcy Code.
(e) As
a condition to the effectiveness of the Transaction, Counterparty shall deliver to Dealer (i) an incumbency certificate, dated as
of the Premium Payment Date, of Counterparty in customary form and (ii) an opinion of counsel, dated as of the Premium Payment Date
and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement,
Sections 7(a)(vii) and 7(a)(xii) hereof and such other matters as Dealer may reasonably request.
(f) Counterparty
understands that notwithstanding any other relationship between Counterparty and Dealer and its affiliates, in connection with this Transaction
and any other over-the-counter derivative transactions between Counterparty and Dealer or its affiliates, Dealer or its affiliates is
acting as principal and is not a fiduciary or advisor in respect of any such transaction, including any entry, exercise, amendment, unwind
or termination thereof.
(g) Counterparty
represents and warrants that it has received, read and understands the OTC Options Risk Disclosure Statement and a copy of the
most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled “Characteristics and Risks of Standardized
Options”.
(h) 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.
(i) Counterparty
represents and warrants that the assets used in the Transaction (i) 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 (ii) do not constitute “plan assets”
within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.
(j) On
the Trade Date, neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18
under 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.
(k) Counterparty
acknowledges that the Transaction may constitute a purchase of its equity securities or a capital distribution. Counterparty further acknowledges
that, pursuant to the provisions of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the Counterparty
will be required to agree to certain time-bound restrictions on its ability to purchase its equity securities or make
capital distributions 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 or make capital distributions 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 or the
U.S. Department of Treasury for the purpose of providing liquidity to the financial system, and may be required to agree to similar
restrictions under programs or facilities established in the future. Accordingly, Counterparty represents and warrants that neither
it nor any of its subsidiaries has applied for, 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 (whether in existence as
of the Trade Date or subsequently enacted, adopted or amended), including without limitation the CARES Act and the Federal Reserve
Act, as amended, and (b) requires under applicable law (or any regulation, guidance, interpretation or other pronouncement
thereunder), as a condition of such loan, loan guarantee, direct loan (as that term is defined in the CARES Act), investment,
financial assistance or relief, that Counterparty or any of its subsidiaries agree, attest, certify or warrant that it has not, as
of the date specified in such condition, repurchased, or will not repurchase, any equity security of Counterparty, and that it has
not, as of the date specified in such condition, made a capital distribution or will not make a capital distribution (collectively,
“Restricted Financial Assistance”); provided that Counterparty may apply for Restricted Financial Assistance if
Counterparty either (a) determines, based on the advice of outside counsel of national standing, that the terms of the
Transaction would not cause Counterparty to fail to satisfy any condition for application for or receipt or retention of such loan,
loan guarantee, direct loan (as that term is defined in the CARES Act), investment, financial assistance or relief based on the
terms of the program or facility as of the date of such advice or (b) delivers to Dealer evidence of a waiver or other guidance
from a governmental authority with jurisdiction for such program or facility that the Transaction is permitted under such program or
facility (either by specific reference to the Transaction or by general reference to transactions with attributes of the Transaction
in all relevant respects). Counterparty further represents and warrants that the Premium is not being paid, in whole or in part,
directly or indirectly, with funds received under or pursuant to any program or facility, including the U.S. Small Business
Administration’s “Paycheck Protection Program”, that (a) is established under applicable law (whether in
existence as of the Trade Date or subsequently enacted, adopted or amended), including without limitation the CARES Act and the
Federal Reserve Act, as amended, and (b) requires under such applicable law (or any regulation, guidance, interpretation or
other pronouncement of a governmental authority with jurisdiction for such program or facility) that such funds be used for
specified or enumerated purposes that do not include the purchase of the Transaction (either by specific reference to the
Transaction or by general reference to transactions with the attributes of the Transaction in all relevant respects).
8. Other Provisions:
(a) Right
to Extend. Dealer may postpone or add, in whole or in part, any Exercise Date or Settlement Date or any other date of valuation or
delivery by Dealer, with respect to some or all of the relevant Options (in which event the Calculation Agent shall make appropriate adjustments
to the Delivery Obligation), if Dealer determines, in its commercially reasonable discretion, that such extension or addition is reasonably
necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in light of existing
liquidity conditions in the cash market, the stock borrow market or other relevant market or to enable Dealer to effect transactions with
respect to Shares or Share Termination Delivery Units 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 requirements, or with related policies and procedures (whether or not such requirements,
policies or procedures are imposed by law or have been voluntarily adopted by Dealer, and in the case of policies or procedures, so long
as such policies and procedures are consistently applied to transactions similar to the Transaction).
(b) Additional
Termination Events.
(A) The
occurrence of an event of default with respect to Counterparty under the
terms of the
Convertible Securities as set forth in Section 7.01 of the Indenture that results in the acceleration of the Convertible Notes,
or (B) an Amendment Event, in each case, 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. “Amendment Event” means that Counterparty amends, modifies, supplements,
waives or obtains a waiver in respect of any term of the Indenture or the Convertible Securities governing the principal amount,
coupon, maturity, repurchase obligation of Counterparty, any term relating to conversion of the Convertible Securities (including
changes to the conversion rate, conversion rate adjustment provisions, conversion settlement dates or conversion conditions), or any
term that would require consent of the holders of not less than 100% of the principal amount of the Convertible Securities to amend
(other than, in each case, any amendment or supplement (x) pursuant to Section 8.01(I) of the Indenture that, as
determined by the Calculation Agent, conforms the Indenture to the description of Convertible Securities in the Offering Memorandum
or (y) pursuant to Section 5.08 of the Indenture), in each case, without the consent of Dealer.
(B) Within
3 Scheduled Trading Days promptly following any Repayment Event (as defined below), Counterparty shall notify Dealer of such Repayment
Event and the aggregate principal amount of Convertible Notes subject to such Repayment Event or the portion of such aggregate principal
amount that Counterparty elects to be subject to such Repayment Event) (any such notice, a “Repayment Notice”); provided
that any “Convertible Securities Repurchase Notice” delivered to Dealer pursuant to the Base Call Option Transaction Confirmation
shall be deemed to be a Convertible Securities Repurchase Notice pursuant to this Confirmation and the terms of such Convertible Securities
Repurchase Notice shall apply, mutatis mutandis, to this Confirmation. Any Repayment Notice shall contain a written representation by
Counterparty to Dealer that Counterparty is not, on the date of such Repayment Notice, in possession of any material non-public information
with respect to Counterparty or the Shares. The receipt by Dealer from Counterparty of any Repayment Notice shall constitute an Additional
Termination Event as provided in this Section 8(b)(B). Upon receipt of any such Repayment Notice, Dealer shall designate an Exchange
Business Day following receipt of such Repayment Notice as an Early Termination Date with respect to the portion of the Transaction corresponding
to a number of Options (the “Repayment Options”) equal to the lesser of (A) (x) the aggregate principal amount
of such Convertible Notes specified in such Repayment Notice, divided by USD 1,000, minus (y) the number of Repurchase Options
(as defined in the Base Call Option Transaction Confirmation), if any, that relate to such Convertible Securities (and for purposes of
determining whether any Options under this Confirmation or under the Base Call Option Transaction Confirmation will be among the Repurchase
Options hereunder or under, and as defined in, the Base Call Option Transaction Confirmation, the Convertible Securities specified in
such Convertible Securities Repurchase Notice shall be allocated first to the Base Call Option Transaction Confirmation until all Options
thereunder are exercised or terminated) and (B) the Number of Options as of the date Dealer designates such Early Termination Date
and, as of such date, the Number of Options shall be reduced by the number of Repayment Options. Any payment hereunder with respect to
such termination (the “Repayment Unwind Payment”) shall be calculated pursuant to Section 6 of the Agreement as
if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a
Number of Options equal to the number of Repayment Options, (2) Counterparty were the sole Affected Party with respect to such Additional
Termination Event and (3) the terminated portion of the Transaction were the sole Affected Transaction; provided that, in
the event of a Repayment Event pursuant to Section 4.02 of the Indenture or Section 4.03 of the Indenture, such payment shall
not be greater than (x) the number of Repayment Options multiplied by (y) the product of (A) the Applicable Percentage
and (B) the excess, if any of (I) the amount paid by Counterparty per Convertible Security pursuant to Section 4.02 of
the Indenture or Section 4.03 of the Indenture, as the case may be, over (II) USD 1,000.” “Repayment Event”
means that (i) any Convertible Notes are repurchased or redeemed (whether pursuant to Section 4.02 of the Indenture, Section 4.03
of the Indenture or for any other reason) by Counterparty or any of its subsidiaries, (ii) any Convertible Notes are delivered to
Counterparty or
any of its subsidiaries in exchange for delivery of any property or assets of such party (howsoever described), (iii) any
principal of any of the Convertible Notes is repaid prior to the final maturity date of the Convertible Notes, or (iv) any Convertible
Notes are exchanged by or for the benefit of the Holders (as such term is defined in the Indenture) thereof for any other securities of
Counterparty or any of its subsidiaries (or any other property, or any combination thereof) pursuant to any exchange offer or similar
transaction. For the avoidance of doubt, any conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute
a Repayment Event.
(c) Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Dealer shall owe Counterparty any amount pursuant
to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Counterparty shall have the right, in its
sole discretion, to require Dealer to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by
giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day (which written confirmation shall
contain the representation and warranty set forth in Section 7(a)(i)), no later than 9:30 A.M., New York City time, on the relevant
merger date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as
applicable (“Notice of Share Termination”); provided that if Counterparty does not elect to require Dealer
to satisfy its Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to elect
to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s failure to elect or election
to the contrary; and provided further that Counterparty shall not have the right to so elect (but, for the avoidance of doubt,
Dealer shall have the right to so elect) in the event of (i) an Insolvency, a Nationalization or a Merger Event, in each case, in
which the consideration or proceeds to be paid to holders of Shares consists solely of cash or (ii) an Event of Default in which
Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party or an Extraordinary Event, which
Event of Default, Termination Event or Extraordinary Event resulted from an event or events within Counterparty’s control. Upon
such Notice of Share Termination, the following provisions shall apply on the Scheduled Trading Day immediately following the relevant
merger date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as
applicable:
Share Termination Alternative: |
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If applicable, means that Dealer shall deliver to Counterparty the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to Section 6(d)(ii) of the Agreement or such later date or dates as Dealer may commercially reasonably determine (the “Share Termination Payment Date”) taking into account commercially reasonable hedging or hedge unwind activity, in satisfaction of the Payment Obligation. |
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Share Termination Delivery Property: |
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A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of the aggregate amount of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price. |
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Share Termination Unit Price: |
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The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. |
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Share Termination Delivery Unit: |
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In the case of a Termination Event (other than on account of an Insolvency, Nationalization or Merger Event), Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization or Merger Event, one Share or a unit |
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consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization or Merger Event, as applicable. If such Insolvency, Nationalization 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. |
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Failure to Deliver: |
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Applicable |
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Other Applicable Provisions: |
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If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares” shall be read as references to “Share Termination Delivery Units”; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Counterparty is the issuer of any Share Termination Delivery Units (or any part thereof). |
(d) Disposition
of Hedge Shares. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer, the Shares (the “Hedge
Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction in a commercially reasonable
manner cannot be sold in the U.S. public market by Dealer without registration under the Securities Act, Counterparty shall, at its election:
(i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration
statement under the Securities Act to cover the resale of such Hedge Shares and (A) enter into an agreement, in form and substance
reasonably satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered offering, (B) provide
accountant’s “comfort” letters in customary form for registered offerings of equity securities, (C) provide disclosure
opinions of nationally recognized outside counsel to Counterparty reasonably acceptable to Dealer, (D) provide other customary opinions,
certificates and closing documents customary in form for registered offerings of equity securities and (E) afford Dealer a reasonable
opportunity to conduct a “due diligence” investigation with respect to Counterparty customary in scope for underwritten offerings
of equity securities; provided that if Counterparty elects clause (i) above but the items referred to therein are not completed
in a timely manner, or if Dealer, in its sole discretion, is not satisfied with access to due diligence materials, the results of its
due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or
clause (iii) of this Section 8(d) shall apply at the election of Counterparty; (ii) in order to allow Dealer to sell
the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase
agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to Dealer,
including customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due
diligence rights (for Dealer or any designated buyer of the Hedge Shares from Dealer), and best efforts obligations to provide opinions
and certificates and such other documentation as is customary for private placements agreements, all commercially reasonably acceptable
to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary to compensate
Dealer for any commercially reasonable discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private
placement); or (iii) purchase the Hedge Shares from Dealer at the “Daily VWAP” (as defined in the Indenture) on such
Exchange Business Days, and in the amounts, commercially reasonably requested by Dealer. This Section 8(d) shall survive the
termination, expiration or early unwind of the Transaction.
(e) Repurchase
and Conversion Rate Adjustment Notices. Counterparty shall, at least two Exchange Business Days prior to any day on which Counterparty
effects any repurchase of Shares or consummates or otherwise engages in any transaction or event (a “Conversion Rate Adjustment
Event”) that could reasonably be expected to lead to an increase in the Conversion Rate, give Dealer a written notice of such
repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if,
following such repurchase or
Conversion Rate Adjustment Event, the Notice Percentage would reasonably be expected to be (i) greater than 13.27% and
(ii) greater by 0.5% than the Notice Percentage included in the immediately preceding Repurchase Notice (or, in the case of the
first such Repurchase Notice, greater than the Notice Percentage as of the date hereof). The “Notice Percentage”
as of any day is the fraction, expressed as a percentage, the numerator of which is the Number of Shares plus the number of shares
underlying any other convertible bond hedge transactions or call options sold by Dealer to Counterparty and the denominator of which
is the number of Shares outstanding on such day. In the event that Counterparty fails to provide Dealer with a Repurchase Notice on
the day and in the manner specified in this Section 8(e) then Counterparty agrees to indemnify and hold harmless Dealer,
its affiliates and their respective directors, officers, employees, agents and controlling persons (Dealer and each such person
being an “Indemnified Party”) from and against any and all losses (including losses relating to the
Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”,
including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in
connection therewith with respect to this Transaction), claims, damages and liabilities (or actions in respect thereof), joint or
several, to which such Indemnified Party may become subject under applicable securities laws, including without limitation,
Section 16 of the Exchange Act or under any state or federal law, regulation or regulatory order, relating to or arising
out of such failure. If for any reason the foregoing indemnification is unavailable to any Indemnified Party or insufficient to hold
harmless any Indemnified Party, then Counterparty shall contribute, to the maximum extent permitted by law, to the amount paid or
payable by the Indemnified Party as a result of such loss, claim, damage or liability. In addition, Counterparty will reimburse any
Indemnified Party for all reasonable, actual expenses (including reasonable counsel fees and expenses) as they are incurred (after
notice to Counterparty and supported by invoices or other documentation setting forth in reasonable detail such expenses) in
connection with the investigation of, preparation for or defense or settlement of any pending or threatened claim or any action,
suit or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto and whether or not such claim,
action, suit or proceeding is initiated or brought by or on behalf of Counterparty. To the extent an Indemnified Party fails to
provide notice of any action commenced against it in respect of which indemnity may be sought hereunder within a commercially
reasonable period of time that would materially prejudice Counterparty (it being understood that any such notice delivered within 30
calendar days of the commencement of any such action shall be deemed to have been delivered within a commercially reasonable period
of time for such purpose). Counterparty shall be relived from liability. This indemnity shall survive the completion of the
Transaction contemplated by this Confirmation and any assignment and delegation of the Transaction made pursuant to this
Confirmation or the Agreement and shall inure to the benefit of any permitted assignee of Dealer.
(f) Transfer
and Assignment. Either party may transfer or assign any of its rights or obligations under the Transaction with the prior written
consent of the non-transferring party, such consent not to be unreasonably withheld or delayed; provided that Dealer may transfer
or assign without any consent of Counterparty its rights and obligations hereunder, in whole or in part, to (i) any affiliate of
Dealer or (ii) any person, or any person whose obligations hereunder would be guaranteed, pursuant to the terms of a customary guarantee
in a form generally used for similar transactions, by a person, in either case, of credit quality at least equivalent to Dealer’s
(or its ultimate parent’s). If at any time at which (1) the Equity Percentage exceeds 8.0% or (2) Dealer, Dealer Group
(as defined below) or any person whose ownership position would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer Group
or any such person, a “Dealer Person”) under the Minnesota Business Corporations Act or other federal, state or local
law, rule, regulation or regulatory order or organizational documents or contracts of Counterparty applicable to ownership of Shares (“Applicable
Restrictions”), 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, registration,
filing or notification obligations or other requirements (including obtaining prior approval by a state or federal regulator) of a Dealer
Person under Applicable Restrictions and with respect to which such requirements have not been met or the relevant approval has not been
received or that would subject a Dealer Person to restrictions (including restrictions relating to business combinations or other designated
transactions), or have any other adverse effect on a Dealer Person, under Applicable Restrictions minus (y) 1% of the number
of Shares outstanding on the date of determination (either such condition described in clause (1) or (2), an “Excess Ownership
Position”), Dealer, in its discretion, is unable to effect a transfer or assignment
to a third party after its
commercially reasonable efforts on pricing and terms and within a time period reasonably acceptable to Dealer such that an Excess
Ownership Position no longer exists, Dealer 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 would no longer
exist following the resulting partial termination of the Transaction (after taking into account commercially reasonable adjustments
to Dealer’s commercially reasonable Hedge Positions from such partial termination). In the event that Dealer so designates an
Early Termination Date with respect to a portion of the Transaction, a payment or delivery shall be made pursuant to Section 6
of the Agreement or Section 8(c) of this Confirmation as if (i) an Early Termination Date had been designated in
respect of a Transaction having terms identical to the Terminated Portion of the Transaction, (ii) Counterparty were the sole
Affected Party with respect to such partial termination, (iii) such portion of the Transaction were the only Terminated
Transaction and (iv) Dealer were 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. 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 Dealer and any of its affiliates subject to aggregation with Dealer for purposes of the “beneficial
ownership” test under Section 13 of the Exchange Act and all persons who may form a “group” (within the
meaning of Rule 13d-5(b)(1) under the Exchange Act) with Dealer (collectively, “Dealer Group”)
“beneficially own” (within the meaning of Section 13 of the Exchange Act) without duplication on such day (or, to
the extent that for any reason the equivalent calculation under Section 16 of the Exchange Act and the rules and
regulations thereunder results in a higher number, such higher number) and (B) the denominator of which is the number of Shares
outstanding on such day. In the case of a transfer or assignment by Counterparty of its rights and obligations hereunder and under
the Agreement, in whole or in part (any such Options so transferred or assigned, the “Transfer Options”), to any
party, withholding of such consent by Dealer shall not be considered unreasonable if such transfer or assignment does not meet the
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 8(e) or
any obligations under Section 2 (regarding Extraordinary Events) or 8(d) of this Confirmation;
(B) Any
Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended (the “Code”));
(C) Such
transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited
to, undertakings with respect to compliance with applicable securities laws in a manner that, in the 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 by, and reasonably satisfactory
to, Dealer;
(D) Dealer
shall not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of
the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment;
(E) An
Event of Default, Potential Event of Default or Termination Event shall not occur as a result of such transfer and assignment;
(F) Without
limiting the generality of clause (B), Counterparty shall have caused the transferee to make such Payee Tax Representations and to provide
such tax documentation 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 and assignment; and
(G) Counterparty
shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such
transfer or assignment.
(g) Delivery
of Shares. Notwithstanding anything to the contrary herein, Dealer may, by prior notice to Counterparty, satisfy its obligation to
deliver any Shares or other securities on any date due (an “Original Delivery Date”) by making separate deliveries
of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate
number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered
on such Original Delivery Date.
(h) 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.
(i) No
Netting and Set-off. The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party
waives any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction
against any delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other
agreement between parties hereto, by operation of law or otherwise.
(j) Equity
Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction
that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy. For the avoidance of doubt, the
parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim arising
as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement. For the avoidance of doubt,
the parties acknowledge that the obligations of Counterparty under this Confirmation are not secured by any collateral that would otherwise
secure the obligations of Counterparty herein under or pursuant to any other agreement.
(k) Early
Unwind. In the event the sale by Counterparty of the Optional Securities not consummated pursuant to the Purchase Agreement for any
reason by the close of business in New York on January 23, 2024 (or such later date as agreed upon by the parties) (January 23,
2024 or such later date being the “Early Unwind Date”), the Transaction shall automatically terminate (the “Early
Unwind”) on the Early Unwind Date and the Transaction and all of the respective rights and obligations of Dealer and Counterparty
hereunder shall be cancelled and terminated and Counterparty shall pay to Dealer an amount in cash equal to the aggregate amount
of costs and expenses relating to the unwinding of Dealer’s hedging activities in respect of the Transaction (including market losses
incurred in reselling any Shares purchased by Dealer or its affiliates in connection with such hedging activities, unless Counterparty
agrees to purchase any such Shares at the cost at which Dealer purchased such Shares). Following such termination, cancellation and payment,
each party shall be released and discharged by the other party from, and agrees not to make any claim against the other party with respect
to, any obligations or liabilities of either party arising out of, and to be performed in connection with, the Transaction either prior
to or after the Early Unwind Date. Dealer and Counterparty represent and acknowledge to the other that upon an Early Unwind and following
the payment referred to above, all obligations with respect to the Transaction shall be deemed fully and finally discharged.
(l) 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 Issuer 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 “Daily VWAP” (as defined in the Indenture); (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 “Daily VWAP” (as defined in the Indenture), each
in a manner that may be adverse to Counterparty; and (E) the Transaction is a derivatives transaction in which it has granted Dealer
an option, and Dealer may purchase shares for its own account at an average
price that may be greater than, or less than, the price paid
by Counterparty under the terms of the Transaction.
(m) Wall
Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability
Act of 2010 (the “WSTAA”), the parties hereby agree that neither the enactment of the WSTAA (or any statute containing
any legal certainty provision similar to Section 739 of the WSTAA) or any regulation under the WSTAA (or any such statute), nor any
requirement under the WSTAA (or any statute containing any legal certainty provision similar to Section 739 of the WSTAA) or an amendment
made by the WSTAA (or any such statute), 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, Increased Cost of Hedging or
Illegality).
(n) Governing
Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF
LAW DOCTRINE, OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(o) Amendment.
This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty
and Dealer.
(p) 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.
(q) Tax
Matters.
(i) Withholding
Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act. “Indemnifiable Tax”
as defined in Section 14 of the Agreement, shall not include any 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.
(ii) HIRE
Act. To the extent that either party to the Agreement with respect to this Transaction is not an adhering party to the ISDA 2015
Section 871(m) Protocol published by the International Swaps and Derivatives Association, Inc. on November 2, 2015
and available at www.isda.org, as may be amended, supplemented, replaced or superseded from time to time (the “871(m) Protocol”),
the parties agree that the provisions and amendments contained in the Attachment to the 871(m) Protocol are incorporated into and
apply to the Agreement with respect to this Transaction as if set forth in full herein. The parties further agree that, solely for purposes
of applying such provisions and amendments to the Agreement with respect to this Transaction, references to “each Covered Master
Agreement” in the 871(m) Protocol will be deemed to be references to the Agreement with respect to this Transaction, and references
to the “Implementation Date” in the 871(m) Protocol will be deemed to be references to the Trade Date of this Transaction.
(iii) Tax
documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on
or before the date of execution of this Confirmation, (ii) upon reasonable request of Dealer and (iii) promptly upon learning
that any such tax form previously provided by Counterparty has become obsolete or incorrect. Dealer shall provide to Counterparty a valid
U.S. Internal Revenue Service Form W-8ECI “Certificate of
Foreign Person’s Claim That Income Is Effectively Connected
With the Conduct of a Trade or Business in the United States”, or any successor thereto, (i) on or before the date of execution
of this Confirmation, (ii) upon reasonable request of Counterparty and (iii) promptly upon learning that any such tax form previously
provided by Dealer has become obsolete or incorrect.
(iv) Tax
Representations. For the purpose of Section 3(f) of the Agreement, Counterparty is a corporation for U.S. federal income
tax purposes and is organized under the laws of the State of Minnesota. Counterparty represents to Dealer that for U.S. federal income
tax purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury
Regulations) and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States Treasury
Regulations). For the purpose of Section 3(f) of the Agreement, Dealer represents to Counterparty that (A) it is a “foreign
person” (as that term is used in section 1.6041-4(a)(4) of the United States Treasury Regulations) for U.S. federal income
tax purposes and (B) each payment received or to be received by it under the Agreement will be effectively connected with its conduct
of a trade or business in the United States.
(r) Role
of Agent. Each of Dealer 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 Dealer under the Transactions pursuant to instructions from such party,
(ii) the Agent is not a principal or party to the Transactions, and may transfer its rights and obligations with respect to the
Transactions, (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 Transactions, (iv) Dealer 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 Dealer 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 Transactions. 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 Dealer.
Dealer will be acting for its own account in respect of this Confirmation and the Transactions contemplated hereunder.
9. Arbitration.
(a) All
parties to this Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided
by the rules of the arbitration forum in which a claim is filed.
(b) Arbitration
awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.
(c) The
ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court
proceedings.
(d) The
arbitrators do not have to explain the reason(s) for their award.
(e) The
panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless
Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with
the securities industry.
(f) The
rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible
for arbitration may be brought in court.
(g) The
rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Confirmation.
(h) Counterparty
agrees that any and all controversies that may arise between Counterparty and Dealer, including, but not limited to, those arising out
of or relating to the Agreement or the Transaction hereunder, shall be determined by arbitration conducted before FINRA Dispute Resolution
(“FINRA-DR”), or, if the FINRA-DR declines to hear the matter, before the American Arbitration Association, in accordance
with their arbitration rules then in force. The award of the arbitrator shall be final, and judgment upon the award rendered may
be entered in any court, state or federal, having jurisdiction.
(i) No
person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class
with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class
is decertified; or (iii) Counterparty is excluded from the class by the court.
(j) Such
forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Confirmation except to the extent
stated herein.
Counterparty hereby agrees (a) to check this
Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to
confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Counterparty
with respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms
and providing the other information requested herein and immediately returning an executed copy to Dealer.
|
Yours faithfully, |
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BMO CAPITAL MARKETS CORP. |
|
as agent for BANK OF MONTREAL |
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|
|
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By: |
/s/ Eric Benedict |
|
Name: |
Eric Benedict |
|
Title: |
Co-Head, Global Equity Capital Markets |
|
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BANK OF MONTREAL |
|
|
|
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By: |
/s/
Brian Riley |
|
Name: |
Brian Riley |
|
Title: |
Managing Director, Global Markets |
[Signature Page to Additional
Bond Hedge Confirmation]
Agreed and Accepted By: |
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|
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WINNEBAGO industries, INC. |
|
|
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By: |
/s/ Bryan L. Hughes |
|
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Name: |
Bryan L. Hughes |
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Title: |
Chief Financial Officer and |
|
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Senior Vice President |
|
[Signature Page to BMO
Additional Bond Hedge Confirmation]
Exhibit 10.7
J.P. Morgan Securities LLC
383 Madison Avenue
New York, NY 10179
Opening Transaction
To: |
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, Minnesota 55347 |
|
|
From: |
J.P. Morgan Securities LLC |
|
|
Re: |
Additional Convertible Bond Hedge Transaction |
|
|
Date: |
January 19, 2024 |
Dear Ladies and Gentlemen:
The purpose of this communication
(this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on
the Trade Date specified below (the “Transaction”) between J.P. Morgan Securities LLC (“Dealer”)
and Winnebago Industries, Inc. (“Counterparty”). This communication constitutes a “Confirmation” as
referred to in the ISDA Master Agreement specified below.
1. This
Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (the “2006 Definitions”)
and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together
with the 2006 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”). Certain defined terms used herein have the meanings assigned to them in the Indenture
to be dated as of January 23, 2024 between Counterparty and U.S. Bank Trust Company, National Association, as trustee (the “Indenture”),
relating to the USD 300,000,000 principal amount of 3.25% Convertible Senior Notes due 2030 (the “Base Convertible Securities”)
and the additional USD 50,000,000 principal amount of 3.25% Convertible Senior Notes due 2030 issued pursuant to the option to purchase
additional convertible securities exercised on the date hereof (the “Optional Convertible Securities” and, together
with the Base Convertible Securities, the “Convertible Securities”). In the event of any inconsistency between the
terms defined in the Indenture and this Confirmation, this Confirmation shall govern. For the avoidance of doubt, references herein to
sections of, or definitions set forth in, the Indenture are based on the draft of the Indenture most recently reviewed by the parties
at the time of execution of this Confirmation. If any relevant sections of, or definitions set forth in, the Indenture are changed, added
or renumbered between the execution of this Confirmation and the execution of the Indenture, the parties will amend this Confirmation
in good faith to preserve the economic intent of the parties, as evidenced by such draft of the Indenture. Subject to the foregoing, the
parties acknowledge that references to the Indenture herein are references to the Indenture as in effect on the date of its execution
and if the Indenture is, or the Convertible Securities are, amended, modified or supplemented following the date of their execution, any
such amendment, modification or supplement (other than any amendment, modification or supplement pursuant to a Merger Supplemental Indenture
(as defined below)) will be disregarded for purposes of this Confirmation unless the parties agree otherwise in writing.
Counterparty is hereby advised,
and Counterparty acknowledges, that Dealer has engaged in, or refrained from engaging in, substantial financial transactions and has taken
other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms
and conditions set forth below.
This Confirmation evidences
a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.
This Confirmation shall be subject to
an agreement (the “Agreement”)
in the form of the 1992 ISDA Master Agreement (Multicurrency—Cross Border) as if Dealer and Counterparty had executed an agreement
in such form on the date hereof (but without any Schedule except for (i) the election of Loss and Second Method and US Dollars (“USD”)
as the Termination Currency, (ii) the replacement of the word “third” in the last line of Section 5(a)(i) of
the Agreement with the word “first”, and (iii) (a) the election that the “Cross Default” provisions
of Section 5(a)(vi) of the Agreement shall apply to Counterparty with a “Threshold Amount” of USD35.0 million) (b) the
phrase “, or becoming capable at such time of being declared,” shall be deleted from clause (1) of such Section 5(a)(vi),
and (c) the following language shall be added to the end thereof: “Notwithstanding the foregoing, a default under subsection
(2) hereof shall not constitute an Event of Default if (x) the default was caused solely by error or omission of an administrative
or operational nature; (y) funds were available to enable the party to make the payment when due; and (z) the payment is made
within two Local Business Days of such party’s receipt of written notice of its failure to pay.”.
All provisions contained in,
or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event of any
inconsistency among this Confirmation, the Equity Definitions, the 2006 Definitions or the Agreement, the following shall prevail in the
order of precedence indicated: (i) this Confirmation; (ii) the Equity Definitions; (iii) the 2006 Definitions; and (iv) the
Agreement. For the avoidance of doubt, except to the extent of an express conflict, the application of any provision of this Confirmation,
the Agreement, the Equity Definitions or the 2006 Definitions shall not be construed to exclude or limit any other provision of this Confirmation,
the Agreement, the Equity Definitions or the 2006 Definitions.
The Transaction hereunder
shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Counterparty or any confirmation
or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Counterparty,
then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to
which Dealer and Counterparty are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such
existing or deemed ISDA Master Agreement.
2. The
Transaction constitutes a Share Option Transaction for purposes of the Equity Definitions. The terms of the particular Transaction to
which this Confirmation relates are as follows:
General Terms:
Trade Date: |
| January 19,
2024 |
|
| |
Effective Date: |
| The
closing date of the issuance of the Convertible Securities issued pursuant to the option to purchase additional Convertible Securities
exercised on the date hereof. |
|
| |
Option Style: |
| Modified
American, as described under “Procedures for Exercise” below. |
|
| |
Option Type: |
| Call |
|
| |
Seller: |
| Dealer |
|
| |
Buyer: |
| Counterparty |
|
| |
Shares: |
| The Common Stock of Counterparty, par value USD0.50 (Ticker Symbol: “WGO”). |
|
| |
Applicable Percentage: |
| 33
1/3% |
|
| |
Number of Options: |
| The
number of Optional Convertible Securities in denominations of USD1,000 principal amount purchased by the Initial Purchasers (as defined
in the |
| |
Purchase Agreement), at their option pursuant to Section 2 of the Purchase Agreement (as defined below). For the avoidance of doubt, the Number of Options outstanding shall be reduced by each exercise of Options hereunder. |
| |
|
Option Entitlement: | |
11.3724 |
| |
|
Fundamental Change Adjustment: | |
Any adjustment to the Conversion Rate pursuant to Section 5.07 of the Indenture. |
| |
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Discretionary Adjustment: | |
Any adjustment to the Conversion Rate pursuant to Section 5.06 of the Indenture. |
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Strike Price: | |
USD87.9322 |
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Rounding of Strike Price/ Option Entitlement: | |
In connection with any adjustment to the Option Entitlement or Strike Price, the Option Entitlement or the Strike Price, as the case may be, shall be rounded by the Calculation Agent in accordance with the provisions of the Indenture relating to rounding of the “Conversion Price” or the “Conversion Rate” as applicable (each as defined in the Indenture). |
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Number of Shares: | |
As of any date, a number of Shares equal to the product of (i) the Applicable Percentage, (ii) the Number of Options and (iii) the Option Entitlement. |
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Premium: | |
USD3,270,000 |
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Premium Payment Date: | |
The Effective Date |
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Exchange: | |
The New York Stock Exchange |
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Related Exchange: | |
All Exchanges |
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Procedures for Exercise: | |
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Exercise Dates: | |
Each Conversion Date. |
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Conversion Date: | |
Each “Conversion Date” (as defined in the Indenture)
occurring during the Exercise Period for Convertible Securities each in denominations of USD1,000 principal amount that are not “Relevant
Convertible Securities” under (and as defined in) the confirmation between the parties hereto regarding the Base Convertible
Bond Hedge Transaction dated January 18, 2024 (the “Base Convertible Bond Hedge Transaction Confirmation”)
(such Convertible Securities, the “Relevant Convertible Securities” for such Conversion Date). For the purposes
of determining whether any Convertible Securities will be Relevant Convertible Securities hereunder or “Relevant Convertible
Securities” under the Base Convertible Bond Hedge Transaction Confirmation, Convertible Securities that are converted pursuant
to the Indenture shall be allocated first to the Base Convertible Bond Hedge Transaction Confirmation until all Options thereunder
are exercised or terminated. |
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Exercise Period: | |
The period from and excluding the Effective Date to, |
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and including, the Expiration Date. |
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Expiration Date: | |
The earlier of (i) the last day on which any Convertible Securities remain outstanding and (ii) the second “Scheduled Trading Day” (as defined in the Indenture) immediately preceding the “Maturity Date” (as defined in the Indenture). |
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Automatic Exercise on Conversion Dates: | |
Applicable; and means that on each Conversion Date, a number of Options equal to the number of Relevant Convertible Securities for such Conversion Date in denominations of USD1,000 principal amount shall be automatically exercised, subject to “Notice of Exercise” below. |
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Notice Deadline: | |
In respect of any exercise of Options hereunder on any Conversion
Date, 5:00 P.M., New York City time, on (i) in the case the applicable Relevant Convertible Securities will be settled by Counterparty
by delivery of Shares only (together with cash in lieu of any fractional Share), the “Trading Day” (as defined in the
Indenture) immediately following the relevant Conversion Date, or (ii) otherwise, the Scheduled Trading Day immediately preceding
the first day of the relevant Cash Settlement Averaging Period; provided that in the case of any exercise of Options hereunder in
connection with the conversion of any Relevant Convertible Securities for any Conversion Date occurring during the period from and
including the 85th “Scheduled Trading Day” (as defined in the Indenture) prior to the Maturity Date, to and including
the Expiration Date (such period, the “Final Conversion Period”), the Notice Deadline shall be 5:00 P.M., New
York City time, on the “Scheduled Trading Day” (as defined in the Indenture) immediately preceding the “Maturity
Date” (as defined in the Indenture). |
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Notice of Exercise: | |
Notwithstanding anything to the contrary in the Equity Definitions, Dealer shall have no obligation to make any payment or delivery in respect of any exercise of Options hereunder and such obligation in respect of such exercise shall be permanently extinguished unless Counterparty notifies Dealer in writing prior to the Notice Deadline in respect of such exercise, of (i) the number of Relevant Convertible Securities being converted on the related Conversion Date (specifying, if applicable, whether all or any portion of such Convertible Securities are Convertible Securities as to which additional Shares would be added to the Conversion Rate (as defined in the Indenture) pursuant to Section 5.07 of the Indenture), (ii) the scheduled settlement date under the Indenture for the Relevant Convertible Securities for such Conversion Date, (iii) whether such Relevant Convertible Securities will be settled by |
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Counterparty by delivery of cash or a combination of cash and Shares and, if such a combination, the “Specified Dollar Amount” (as defined in the Indenture) and (iv) the first day of the relevant “Observation Period” (as defined in the Indenture), if any; provided that in the case of any exercise of Options in connection with the conversion of any Relevant Convertible Securities for any Conversion Date occurring during the Final Conversion Period, the contents of such notice shall be as set forth in clauses (i) and (ii) above; provided, further, that any “Notice of Exercise” delivered to Dealer pursuant to the Base Convertible Bond Hedge Transaction Confirmation shall be deemed to be a Notice of Exercise pursuant to this Confirmation and the terms of such Notice of Exercise shall apply, mutatis mutandis, to this Confirmation.. Counterparty acknowledges its responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of the Exchange Act (as defined below) and the rules and regulations thereunder, in respect of any election of a settlement method with respect to the Convertible Securities. For the avoidance of doubt, if Counterparty fails to give such notice when due in respect of any exercise of Options hereunder, Dealer’s obligation to make any payment or delivery in respect of such exercise shall be permanently extinguished, and late notice shall not cure such failure. If applicable, the Notice of Exercise shall also contain the Settlement Method Election Provisions. |
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Notice of Final Convertible Security Settlement Method: | |
Counterparty shall notify Dealer in writing before
5:00 P.M., New York City time, on the “Scheduled Trading Day” (as defined in the Indenture) immediately preceding the
85th “Scheduled Trading Day” (as defined in the Indenture) prior to the Maturity Date of the settlement method (and,
if applicable, the Specified Dollar Amount) elected (or deemed to be elected) with respect to Relevant Convertible Securities with
a Conversion Date occurring during the Final Conversion Period (any such notice, a “Notice of Final Convertible Security
Settlement Method”). If applicable, the Notice of Final Convertible Security Settlement Method shall also contain the Settlement
Method Election Provisions. |
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Dealer’s Telephone Number and Telex and/or Facsimile Number and Contact Details for purpose of Giving Notice: | |
As specified in Section 6(b) below. |
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Settlement Terms: | |
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Settlement Date: | |
For any Exercise Date, the date one Settlement Cycle following the final day of the relevant Cash |
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Settlement Averaging Period; provided that the Settlement Date shall not be prior to the Exchange Business Day immediately following the date Counterparty provides the Notice of Delivery Obligation prior to 5:00 P.M., New York City time. |
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Delivery Obligation: |
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In lieu of the obligations set forth in Sections 8.1 and 9.1 of the Equity Definitions, and subject to “Notice of Exercise” above and “Discretionary Adjustments” , “Dividends” and “Consequences of Merger Events” below, in respect of an Exercise Date, Dealer will deliver to Counterparty on the related Settlement Date (the “Delivery Obligation”), amounts equal to the product of the Applicable Percentage and |
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(i) (I) a number of Shares equal to the aggregate number of Shares, if any, that Counterparty would be obligated to deliver to the holder(s) of the Relevant Convertible Securities for such Conversion Date pursuant to Section 5.03 of the Indenture (except that such number of Shares shall be determined without taking into consideration any rounding pursuant to Section 5.03(B)(ii) of the Indenture and shall be rounded down to the nearest whole number) and (II) cash in lieu of any fractional Share resulting from such rounding; and/or |
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(ii) the aggregate amount of cash, if any, in excess of the principal amount of the Relevant Convertible Securities that Counterparty would be obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date pursuant to Section 5.03 of the Indenture, determined, for each of clauses (i) and (ii), by the Calculation Agent (by reference to such Sections of the Indenture) |
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as if Counterparty had elected to satisfy its conversion obligation in respect of such Relevant Convertible Securities by the Applicable Settlement Method, notwithstanding any different actual election by Counterparty with respect to the settlement of such Relevant Convertible Securities; provided that the Delivery Obligation shall be determined excluding any Shares and/or cash that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Securities as a direct or indirect result of any adjustments to the Conversion Rate pursuant to a Fundamental Change Adjustment or a Discretionary Adjustment and any interest payment that Counterparty is (or would have been) obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date. Notwithstanding the foregoing, if, in respect of any Exercise Date, (x)(I) the number of Shares included in the Delivery Obligation multiplied by the Share Obligation Value Price plus (II) the amount of cash |
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included in the Delivery Obligation, would otherwise exceed (y) the relevant Net Convertible Share Obligation Value, such number of Shares and such amount of cash shall be proportionately reduced to the extent necessary to eliminate such excess. |
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Make-Whole Adjustment: |
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Notwithstanding anything to the contrary herein, in respect of any exercise of Options relating to a conversion of Relevant Convertible Securities in connection with which holders of the Relevant Convertible Securities would be entitled to receive additional Shares and/or cash as a result of adjustments to the Conversion Rate pursuant to a Fundamental Change Adjustment, the Delivery Obligation shall include such additional Shares and/or cash; provided that if the sum of (i) the product of (a) the number of Shares (if any) included in the Delivery Obligation per exercised Option and (b) the Share Obligation Value Price and (ii) the amount of cash (if any) included in the Delivery Obligation per exercised Option would otherwise exceed the amount per Option, as determined by the Calculation Agent, that would be payable by Dealer under Section 6 of the Agreement if (x) the relevant Conversion Date were an Early Termination Date resulting from an Additional Termination Event with respect to which the Transaction was the sole Affected Transaction and Counterparty was the sole Affected Party and (y) the provisions of the Indenture relating to the Fundamental Change Adjustment were deleted, then such number of Shares and such amount of cash shall be proportionately reduced to the extent necessary to eliminate such excess. |
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Applicable Settlement Method: |
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For any Relevant Convertible Securities, if such Notice of Exercise (or such Notice of Final Convertible Security Settlement Method, as the case may be) contains all of the Settlement Method Election Provisions, the Applicable Settlement Method shall be the settlement method actually so elected by Counterparty in respect of such Relevant Convertible Securities (the “Convertible Securities Settlement Method”); otherwise, the Applicable Settlement Method shall assume Counterparty had made a Cash Election with respect to such Relevant Convertible Securities (a “Deemed Cash Election”) with a Specified Dollar Amount of USD1,000 per Relevant Convertible Security and the Delivery Obligation shall be determined by the Calculation Agent as if the relevant “Observation Period” pursuant to Section 5.03(B)(i) of the Indenture were the Cash Settlement Averaging Period. |
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Cash Settlement Averaging Period: |
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The 40 “Trading Days” (as defined in the Indenture) commencing on (I) the third “Trading Day” (as defined in the Indenture) after the Conversion Date for conversions with a related Conversion Date |
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occurring prior to the Final Conversion Period or (II) the 41st “Scheduled Trading Day” (as defined in the Indenture) prior to the “Maturity Date” (as defined in the Indenture) for conversions with a related Conversion Date occurring during the Final Conversion Period. |
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Settlement Method Election Provisions: |
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In order for the Applicable Settlement Method to be the Convertible Securities Settlement Method in accordance with “Applicable Settlement Method” above, the related Notice of Exercise (or Notice of Final Convertible Security Settlement Method, as the case may be) must contain in writing the following representations and warranties from Counterparty to Dealer as of such notice delivery date: |
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(i) none of Counterparty and its officers or directors, or any person that controls, potentially controls, or otherwise exercises influence over, Counterparty’s decision to elect the Convertible Security Settlement Method is aware of any material nonpublic information regarding Counterparty or the Shares; |
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(ii) Counterparty is electing the Convertible Security Settlement Method in good faith and not as part of a plan or scheme to evade compliance with the U.S. federal securities laws; Counterparty is not electing the Convertible Security Settlement Method to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the Exchange Act; and Counterparty has not entered into or altered any hedging transaction relating to the Shares corresponding to or offsetting the Transaction; |
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(iii) Counterparty has the power to make such election and to execute and deliver any documentation relating to such election that it is required by this Confirmation to deliver and to perform its obligations under this Confirmation and has taken all necessary action to authorize such election, execution, delivery and performance; |
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(iv) such election and performance of its obligations under this Confirmation do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets; and |
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(v) any transaction that Dealer makes with respect to the Shares during the period beginning at the time that Counterparty delivers such notice and ending at the close of business on the final day of the Cash Settlement Averaging Period shall be made by Dealer at Dealer’s sole discretion for Dealer’s own account and Counterparty shall not have, and shall not attempt to exercise, any influence over how, when, whether or at what price Dealer effects such transactions, including, without limitation, the prices paid or received by Dealer per Share pursuant to such transactions, or whether such transactions are made on any securities exchange or privately. |
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Notice of Delivery Obligation: |
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No later than the Exchange Business Day immediately following the last day of the relevant Cash Settlement Averaging Period, Counterparty shall give Dealer notice of the final number of Shares and/or amount of cash included in the Total Convertible Share Obligation Value (as defined below); provided that, with respect to any Exercise Date occurring during the Final Conversion Period, Counterparty may provide Dealer with a single notice of the aggregate number of Shares and/or amount of cash included in the Total Convertible Share Obligation Value for all Exercise Dates occurring during such period (it being understood, for the avoidance of doubt, that the requirement of Counterparty to deliver such notice shall not limit Counterparty’s obligations with respect to a Notice of Exercise or Notice of Final Convertible Security Settlement Method, as the case may be, as set forth above, in any way). |
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Net Convertible Share Obligation Value: |
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With respect to Relevant Convertible Securities as to a Conversion Date, the product of (i) the Applicable Percentage and (ii)(A) the Total Convertible Share Obligation Value of such Relevant Convertible Securities for such Conversion Date minus (B) the aggregate principal amount of such Relevant Convertible Securities for such Conversion Date. |
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Total Convertible Share Obligation Value: |
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With respect to Relevant Convertible Securities with respect to a Conversion Date, (i) (A) the number of Shares equal to the aggregate number of Shares that Counterparty is obligated to deliver to the holder(s) of Relevant Convertible Securities for such Conversion Date pursuant to the Indenture (it being understood that such number of Shares shall be determined taking into consideration any rounding pursuant to Section 5.03(B)(ii) of the Indenture) multiplied by (B) the Share Obligation Value Price plus (ii) an amount of cash equal to the aggregate amount of cash that Counterparty is obligated to |
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deliver to the holder(s) of Relevant Convertible Securities for such Conversion Date pursuant to the Indenture (including, for the avoidance of doubt, any cash payable by Counterparty in lieu of fractional Shares); provided that the Total Convertible Share Obligation Value shall be determined excluding any Shares and/or cash that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Securities as a direct or indirect result of any adjustments to the Conversion Rate pursuant to a Fundamental Change Adjustment or a Discretionary Adjustment and any interest payment that Counterparty is (or would have been) obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date. |
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Share Obligation Value Price: |
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The opening price as displayed under the heading “Op” on Bloomberg page “WGO.N <Equity>” (or any successor thereto) on the applicable Settlement Date or other date of delivery. |
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Other Applicable Provisions: |
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To the extent Dealer is obligated to deliver Shares hereunder, the provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws that exist as a result of the fact that Counterparty is the issuer of the Shares. |
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Restricted Certificated Shares: |
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Notwithstanding anything to the contrary in the Equity Definitions, Dealer may, in whole or in part, deliver Shares required to be delivered to Counterparty hereunder in certificated form in lieu of delivery through the Clearance System. With respect to such certificated Shares, the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by deleting the remainder of the provision after the word “encumbrance” in the fourth line thereof. |
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Adjustments: |
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Method of Adjustment: |
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Notwithstanding Section 11.2 of the Equity Definitions, upon the occurrence of any event or condition set forth in Section 5.05(A)(i), (ii), (iii), (iv) and (v) and Section 5.05(H) of the Indenture (a “Potential Adjustment Event”) that results in an adjustment under the Indenture, the Calculation Agent shall make a corresponding adjustment in respect of any one or more of the Strike Price, the Number of Options, the Option Entitlement and any other term relevant to the exercise, settlement or payment of the Transaction, subject to “Discretionary Adjustments” below. Promptly upon the occurrence |
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of any Potential Adjustment Event, Counterparty shall notify the Calculation Agent of such Potential Adjustment Event; and once the adjustments to be made to the terms of the Indenture and the Convertible Securities in respect of such Potential Adjustment Event have been determined, Counterparty shall immediately notify the Calculation Agent in writing of the details of such adjustments. |
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Notwithstanding anything to the contrary herein or in the Equity Definitions: |
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(i) in connection with any Potential Adjustment Event as a result of an event or condition set forth in Section 5.05(A)(ii) of the Indenture or Section 5.05(A)(iii)(1) of the Indenture where, in either case, the period for determining “Y” (as such term is used in Section 5.05(A)(ii) of the Indenture) or “SP” (as such term is used in Section 5.05(A)(iii)(1) 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 of 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 |
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(ii) 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 is otherwise not adjusted at the time or in the manner contemplated by the Indenture based on such declaration or (c) the Conversion Rate 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 of 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. |
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Upon the occurrence of any Potential Adjustment Event Change, Counterparty shall immediately notify the Calculation Agent in writing of the details of such |
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Potential Adjustment Event Change. |
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For the avoidance of doubt, Dealer shall not have any payment or delivery obligation hereunder in respect of, 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 the holders of Convertible Securities (upon conversion or otherwise) or (y) any other transaction in which holders of Convertible Securities are entitled to participate, in each case, in lieu of an adjustment under the Indenture in respect of a Potential Adjustment Event (including, without limitation, under the proviso to the first sentence of Section 5.05(A)(iii)(1) of the Indenture or the proviso to the first sentence of Section 5.05(A)(iv) of the Indenture). |
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Discretionary Adjustments: |
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Notwithstanding anything to the contrary herein or in the Equity Definitions, if the Calculation Agent in good faith disagrees with any adjustment under the Indenture that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation, pursuant to Section 5.05(H) of the Indenture or pursuant to Section 5.08(A) of the Indenture or any supplemental indenture entered into thereunder (a “Merger Supplemental Indenture”) or in connection with the determination of the fair value of any securities, property, rights or other assets), then the Calculation Agent will determine the adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment of or under the Transaction in a commercially reasonable manner and, for the avoidance of doubt, the Delivery Obligation shall be calculated on the basis of such adjustments by the Calculation Agent; provided that, notwithstanding the foregoing, in any Potential Adjustment Event occurs during the Cash 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 holder of the underlying Shares on the related Conversion Date, 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. |
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Dividends: |
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If (i) at any time during the period from and including the Trade Date, to but excluding the Expiration Date, an ex-dividend date for a regular quarterly cash dividend occurs with respect to the Shares (an “Ex-Dividend Date”) and that dividend is less than the Regular Dividend on a per Share basis or (ii) no Ex-Dividend Date for a regular quarterly |
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cash dividend occurs with respect to the Shares in any quarterly dividend period of Counterparty, then the Calculation Agent will make a corresponding adjustment in respect of any one or more of the Strike Price, the Number of Options, the Option Entitlement and any other term relevant to the exercise, settlement or payment of the Transaction to account for the economic effect on the Transaction of such dividend or lack thereof, and, for the avoidance of doubt, any such adjustments shall be taken into account in calculating the Delivery Obligation. “Regular Dividend” shall mean USD 0.31 per Share. |
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Notice of Certain Other Events: |
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Counterparty shall give Dealer commercially reasonable advance (but in no event less than one Exchange Business Day) written notice of the section or sections of the Indenture and, if applicable, the formula therein, pursuant to which any adjustment will be made to the Convertible Securities in connection with any Potential Adjustment Event, Merger Event or Tender Offer. |
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Extraordinary Events: |
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Merger Events: |
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Notwithstanding Section 12.1(b) of the Equity Definitions, “Merger Event” shall mean the occurrence of any event or condition set forth in the definition of “Common Stock Change Event” set forth in Section 5.08(A) of the Indenture. |
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Consequences of Merger Events: |
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Notwithstanding Section 12.2 of the Equity Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall make an adjustment to the terms relevant to the exercise, settlement or payment of the Transaction corresponding to the adjustment required under Section 5.08 of the Indenture in respect of such Merger Event, as determined by the Calculation Agent (by reference to such Section), subject to “Discretionary Adjustments” above; provided that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to a Fundamental Change Adjustment or a Discretionary Adjustment; and provided further that the Calculation Agent may make such further adjustments to the terms of the Transaction as may be necessary to ensure that the fair value of the Transaction to Dealer is not adversely affected as a result of any adjustment referenced in this paragraph and, for the avoidance of doubt, any such further adjustments shall be taken into account in calculating the Delivery Obligation; and provided further that if, with respect to a Merger Event, (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 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 |
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Merger Event, will not be a corporation organized under the laws of the United States, any state thereof or the District of Columbia and/or will not be the Issuer, Dealer may elect in its sole discretion that Cancellation and Payment (Calculation Agent Determination) shall apply. |
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Notice of Merger Consideration and Consequences: |
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Upon the occurrence of a Merger Event, Counterparty shall reasonably promptly (but in any event prior to the relevant merger date) notify the Calculation Agent of (i) in the case of a Merger Event that causes the Shares to be converted into the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), the types and amount of consideration actually received by such holders, and (ii) the details of the adjustment to be made under the Indenture in respect of such Merger Event. |
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Nationalization, Insolvency or Delisting: |
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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 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. |
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Additional Termination Event(s): |
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Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, the Transaction would be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event (with the Transaction (or the cancelled or terminated portion thereof) being the Affected Transaction and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to such Affected Transaction. |
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Additional Disruption Events: |
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(a) Change in Law: |
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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”, (ii) by adding the phrase “and/or Hedge Position” after the word “Shares” in clause (X) thereof and (iii) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner |
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contemplated by the Hedging Party on the Trade Date”; and provided further that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the parenthetical beginning after the word “regulation” in the second line thereof 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)” and (ii) adding the words “, or holding, acquiring or disposing of Shares or any Hedge Positions relating to,” after the words “obligations under” in clause (Y) thereof. |
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(b) Failure to Deliver: |
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Applicable |
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(c) Insolvency Filing: |
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Applicable |
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(d) Hedging Disruption: |
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Applicable; provided that: |
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(i) Section 12.9(a)(v) of the Equity Definitions is hereby amended by: |
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(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 |
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(b) inserting the following paragraphs at the end of such Section: |
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“Such inability described in clauses (A) or (B) above shall not constitute a “Hedging Disruption” if such inability results from Hedging Party’s creditworthiness. |
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For the avoidance of doubt, (i) the term “equity price risk” shall be deemed to include, but shall not be limited to, stock price and volatility risk, and (ii) the transactions or assets referred to in phrases (A) or (B) above must be available on commercially reasonable pricing and other terms.”; and |
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(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”. |
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(e) Increased Cost of Hedging: |
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Applicable; provided that such increased cost described in Section 12.9(vi) of the Equity Definitions shall not constitute an “Increased Cost of Hedging” if such increased cost results from Hedging Party’s creditworthiness. |
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Hedging Party: |
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Dealer |
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Determining Party: |
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Dealer. All calculations and determinations by the |
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Determining Party shall be made in good faith and in a commercially reasonable manner. Following any calculation by the Determining Party hereunder, upon written request by Counterparty, the Determining Party will, within five Exchange Business Days immediately following such request, provide to Counterparty 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; provided, however, that in no event will the Determining Party be obligated to share with Counterparty any proprietary or confidential data or information or any proprietary or confidential models used by it. |
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Non-Reliance: |
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Applicable |
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Agreements and Acknowledgments Regarding Hedging Activities: |
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Applicable |
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Additional Acknowledgments: |
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Applicable |
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3. Calculation
Agent: |
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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, if the Calculation Agent fails to timely make any calculation, adjustment or determination required to be made by the Calculation Agent hereunder or to perform any obligations of the Calculation Agent hereunder and such failure continues for five Exchange Business Days following notice to the Calculation Agent by Counterparty of such failure, Counterparty shall have the right to designate a nationally recognized third-party dealer in over-the-counter corporate equity derivatives to act, during the period commencing on the first date the Calculation Agent fails to timely make such calculation, adjustment or determination or to perform such obligation, as the case may be, and ending on the earlier of the Early Termination Date with respect to such Event of Default and the date on which such Event of Default is no longer continuing, as Calculation Agent. |
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Following any calculation by the Calculation Agent hereunder, upon written request by Counterparty, the Calculation Agent will, within five Exchange Business Days immediately following such request, provide to Counterparty by email to the email 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 the basis for such calculation; provided that in no event will Dealer be obligated to |
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share with Counterparty any proprietary or confidential data or information or any proprietary or confidential models used by it or any information that is subject to an obligation not to disclose such information. |
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| | Dealer Payment
Instructions: |
Bank: |
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JPMorgan Chase Bank, N.A. |
ABA#: |
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021000021 |
Acct No.: |
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066914272 |
Beneficiary: |
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J.P. Morgan Securities LLC |
Ref: |
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Derivatives |
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Counterparty Payment Instructions: |
To be provided by Counterparty.
5. Offices:
The Office of
Dealer for the Transaction is: New York, New York
J.P. Morgan Securities
LLC
383 Madison Avenue
New
York, NY 10179
The Office of Counterparty for the
Transaction is: Inapplicable, Counterparty is not a Multibranch Party.
6. Notices:
For purposes of this Confirmation:
(a) Address
for notices or communications to Counterparty:
13200
Pioneer Trail
Eden
Prairie, MN 55347
Attention: Kathy
Hiebert, Treasurer
(b) Address for notices or communications to Dealer:
J.P.
Morgan Securities LLC
EDG
Marketing Support
|
Email: |
edg_notices@jpmorgan.com |
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edg.us.flow.corporates.mo@jpmorgan.com |
With a copy to:
Attention:
Mr.Gaurav Maria
Title:
Managing Director
| Email: | gaurav.x.maria@jpmorgan.com |
7. Representations,
Warranties and Agreements:
(a) In
addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants
to and for the benefit of, and agrees with, Dealer as follows:
(i) On
the Trade Date and as of the date of any Notice of Share Termination under (and as defined in) Section 8(c) below, (A) none
of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and
(B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), when
considered as a whole (with the more recent such reports
and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading.
(ii) (A) On
the Trade Date, the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not subject to a “restricted
period,” as such term is defined in Regulation M under the Exchange Act (“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 Trade Date.
(iii) 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).
(iv) Without
limiting the generality of Section 3(a)(iii) of the Agreement, the Transaction will not violate Rule 13e-1 or Rule 13e-4
under the Exchange Act.
(v) Prior
to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction
and such other certificate or certificates as Dealer shall reasonably request. Based on such resolutions, neither Dealer nor any of its
affiliates shall be subject to the restrictions under Section 302A.673 of the Minnesota Business Corporations Act as an “interested
shareholder” of Counterparty by virtue of (A) its role as initial purchaser of, or market-maker in, any securities of Counterparty
convertible into the Shares, (B) its entry into the Transaction and/or (C) any hedging transactions in Counterparty’s
securities in connection with the Transaction.
(vi) Counterparty
is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable
for Shares) or otherwise in violation of the Exchange Act.
(vii) 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.
(viii) On
each of the Trade Date and the Premium Payment Date, Counterparty is not “insolvent” (as such term is defined under Section 101(32)
of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be
able to purchase the Number of Shares in compliance with the laws of the jurisdiction of Counterparty’s incorporation.
(ix) The
representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement,
dated as of January 18, 2024, between Goldman Sachs & Co. LLC and BMO Capital Markets Corp. as the Representatives and Counterparty
(the “Purchase Agreement”) are true and correct as of the Trade Date and the Effective Date and are hereby deemed to
be repeated to Dealer as if set forth herein.
(x) No
state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise to
any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any
person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares; provided however, that Counterparty
makes no representation or warranty regarding any such
requirement that is applicable generally to the ownership of equity securities
by Dealer or any of its affiliates as a result of it or any such affiliates being financial institutions or broker-dealers .
(xi) 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, including, without limitation, the transaction that is the subject of this confirmation and any transactions
related hereto or contemplated hereby; (B) will exercise independent judgment in evaluating the recommendations of Dealer and its
affiliates or associated persons with regard to any such securities transactions or strategies unless it has otherwise notified Dealer
in writing; and (C) has total assets of at least $50 million. Counterparty will notify Dealer if the immediately preceding statement
contained in this Section 7(a)(xi) ceases to be true.
(xii) Without
limiting the generality of Section 3(a) of the Agreement, neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation
or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree
of any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Counterparty’s Annual Report
on Form 10-K for the year ended August 26, 2023, as updated by any subsequent filings, to which Counterparty or any of its
subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries
is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
(b) Each
of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18)
of the U.S. Commodity Exchange Act, as amended, and is entering into the Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise) and not for the benefit of any third party.
(c) Each
of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under
the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(a)(2) thereof. Accordingly,
Counterparty represents and warrants to Dealer that (i) it has the financial ability to bear the economic risk of its investment
in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in respect of the Transaction,
which it understands are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection
with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an “accredited investor”
as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its
own account and without a view to the distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction
has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state
securities laws, and (v) its financial condition is such that it has no need for liquidity with respect to its investment in the
Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is capable
of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts,
the terms, conditions and risks of the Transaction.
(d) Each
of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution” and “financial participant”
within the meaning of Sections 101(22) and 101(22A) of the Bankruptcy Code. The parties hereto further agree and acknowledge (A) that
this Confirmation is a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code,
with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment
amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement
payment” within the meaning of Section 546 of the Bankruptcy Code, and (B) that Dealer is entitled to the protections
afforded by, among other sections, Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 548(d)(2), 555 and 561 of the Bankruptcy Code.
(e) As
a condition to the effectiveness of the Transaction, Counterparty shall deliver to Dealer (i) an incumbency certificate, dated as
of the Premium Payment Date, of Counterparty in customary form and (ii) an opinion of counsel, dated as of the Premium Payment Date
and reasonably acceptable to
Dealer in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement,
Sections 7(a)(vii) and 7(a)(xii) hereof and such other matters as Dealer may reasonably request.
(f) Counterparty
understands that notwithstanding any other relationship between Counterparty and Dealer and its affiliates, in connection with this Transaction
and any other over-the-counter derivative transactions between Counterparty and Dealer or its affiliates, Dealer or its affiliates is
acting as principal and is not a fiduciary or advisor in respect of any such transaction, including any entry, exercise, amendment, unwind
or termination thereof.
(g) Counterparty
represents and warrants that it has received, read and understands the OTC Options Risk Disclosure Statement and a copy of the
most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled “Characteristics and Risks of Standardized
Options”.
(h) 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.
(i) Counterparty
represents and warrants that the assets used in the Transaction (i) 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 (ii) do not constitute “plan assets”
within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.
(j) On
the Trade Date, neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18
under 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.
(k) Counterparty
acknowledges that the Transaction may constitute a purchase of its equity securities or a capital distribution. Counterparty further acknowledges
that, pursuant to the provisions of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the Counterparty
will be required to agree to certain time-bound restrictions on its ability to purchase its equity securities or make capital distributions
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 or make capital distributions 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 or the U.S. Department
of Treasury for the purpose of providing liquidity to the financial system, and may be required to agree to similar restrictions under
programs or facilities established in the future. Accordingly, Counterparty represents and warrants that neither it nor any of its subsidiaries
has applied for, 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 (whether in existence as of the Trade Date or subsequently enacted, adopted
or amended), including without limitation the CARES Act and the Federal Reserve Act, as amended, and (b) requires under applicable
law (or any regulation, guidance, interpretation or other pronouncement thereunder), as a condition of such loan, loan guarantee, direct
loan (as that term is defined in the CARES Act), investment, financial assistance or relief, that Counterparty or any of its subsidiaries
agree, attest, certify or warrant that it has not, as of the date specified in such condition, repurchased, or will not repurchase, any
equity security of Counterparty, and that it has not, as of the date specified in such condition, made a capital distribution or will
not make a capital distribution (collectively, “Restricted Financial Assistance”); provided that Counterparty may apply
for Restricted Financial Assistance if Counterparty either (a) determines, based on the advice of outside counsel of national standing,
that the terms of the Transaction would not cause Counterparty to fail to satisfy any condition for application for or receipt or retention
of such loan, loan guarantee, direct loan (as that term is defined in the CARES Act), investment, financial assistance or relief based
on the terms of
the program or facility as of the date of such
advice or (b) delivers to Dealer evidence of a waiver or other guidance from a governmental authority with jurisdiction for such
program or facility that the Transaction is permitted under such program or facility (either by specific reference to the Transaction
or by general reference to transactions with attributes of the Transaction in all relevant respects). Counterparty further represents
and warrants that the Premium is not being paid, in whole or in part, directly or indirectly, with funds received under or pursuant to
any program or facility, including the U.S. Small Business Administration’s “Paycheck Protection Program”, that (a) is
established under applicable law (whether in existence as of the Trade Date or subsequently enacted, adopted or amended), including without
limitation the CARES Act and the Federal Reserve Act, as amended, and (b) requires under such applicable law (or any regulation,
guidance, interpretation or other pronouncement of a governmental authority with jurisdiction for such program or facility) that such
funds be used for specified or enumerated purposes that do not include the purchase of the Transaction (either by specific reference
to the Transaction or by general reference to transactions with the attributes of the Transaction in all relevant respects).
8. Other Provisions:
(a) Right
to Extend. Dealer may postpone or add, in whole or in part, any Exercise Date or Settlement Date or any other date of valuation or
delivery by Dealer, with respect to some or all of the relevant Options (in which event the Calculation Agent shall make appropriate adjustments
to the Delivery Obligation), if Dealer determines, in its commercially reasonable discretion, that such extension or addition is reasonably
necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in light of existing
liquidity conditions in the cash market, the stock borrow market or other relevant market or to enable Dealer to effect transactions with
respect to Shares or Share Termination Delivery Units 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 requirements, or with related policies and procedures (whether or not such requirements,
policies or procedures are imposed by law or have been voluntarily adopted by Dealer, and in the case of policies or procedures, so long
as such policies and procedures are consistently applied to transactions similar to the Transaction).
(b) Additional
Termination Events.
(A) The
occurrence of an event of default with respect to Counterparty under the terms of the Convertible Securities as set forth in Section 7.01
of the Indenture that results in the acceleration of the Convertible Notes, or (B) an Amendment Event, in each case, 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. “Amendment Event” means that
Counterparty amends, modifies, supplements, waives or obtains a waiver in respect of any term of the Indenture or the Convertible Securities
governing the principal amount, coupon, maturity, repurchase obligation of Counterparty, any term relating to conversion of the Convertible
Securities (including changes to the conversion rate, conversion rate adjustment provisions, conversion settlement dates or conversion
conditions), or any term that would require consent of the holders of not less than 100% of the principal amount of the Convertible Securities
to amend (other than, in each case, any amendment or supplement (x) pursuant to Section 8.01(I) of the Indenture that,
as determined by the Calculation Agent, conforms the Indenture to the description of Convertible Securities in the Offering Memorandum
or (y) pursuant to Section 5.08 of the Indenture), in each case, without the consent of Dealer.
(B) Within
3 Scheduled Trading Days promptly following any Repayment Event (as defined below), Counterparty shall notify Dealer of such Repayment
Event and the aggregate principal amount of Convertible Notes subject to such Repayment Event or the portion of such aggregate principal
amount that Counterparty elects to be subject to such Repayment Event) (any such notice, a “Repayment Notice”); provided
that any “Convertible Securities Repurchase Notice” delivered to Dealer pursuant to the Base Call Option Transaction Confirmation
shall be deemed to be a Convertible Securities Repurchase Notice pursuant to this Confirmation and the terms of such Convertible Securities
Repurchase Notice shall apply, mutatis mutandis, to this
Confirmation. Any Repayment Notice
shall contain a written representation by Counterparty to Dealer that Counterparty is not, on the date of such Repayment Notice, in possession
of any material non-public information with respect to Counterparty or the Shares. The receipt by Dealer from Counterparty of any Repayment
Notice shall constitute an Additional Termination Event as provided in this Section 8(b)(B). Upon receipt of any such Repayment
Notice, Dealer shall designate an Exchange Business Day following receipt of such Repayment Notice as an Early Termination Date with
respect to the portion of the Transaction corresponding to a number of Options (the “Repayment Options”) equal to
the lesser of (A) (x) the aggregate principal amount of such Convertible Notes specified in such Repayment Notice, divided
by USD 1,000, minus (y) the number of Repurchase Options (as defined in the Base Call Option Transaction Confirmation), if any,
that relate to such Convertible Securities (and for purposes of determining whether any Options under this Confirmation or under
the Base Call Option Transaction Confirmation will be among the Repurchase Options hereunder or under, and as defined in, the Base Call
Option Transaction Confirmation, the Convertible Securities specified in such Convertible Securities Repurchase Notice shall be allocated
first to the Base Call Option Transaction Confirmation until all Options thereunder are exercised or terminated) and (B) the Number
of Options as of the date Dealer designates such Early Termination Date and, as of such date, the Number of Options shall be reduced
by the number of Repayment Options. Any payment hereunder with respect to such termination (the “Repayment Unwind Payment”)
shall be calculated pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect
of a Transaction having terms identical to the Transaction and a Number of Options equal to the number of Repayment Options, (2) Counterparty
were the sole Affected Party with respect to such Additional Termination Event and (3) the terminated portion of the Transaction
were the sole Affected Transaction; provided that, in the event of a Repayment Event pursuant to Section 4.02 of the Indenture
or Section 4.03 of the Indenture, such payment shall not be greater than (x) the number of Repayment Options multiplied by
(y) the product of (A) the Applicable Percentage and (B) the excess, if any of (I) the amount paid by Counterparty
per Convertible Security pursuant to Section 4.02 of the Indenture or Section 4.03 of the Indenture, as the case may be, over
(II) USD 1,000.” “Repayment Event” means that (i) any Convertible Notes are repurchased or redeemed
(whether pursuant to Section 4.02 of the Indenture, Section 4.03 of the Indenture or for any other reason) by Counterparty
or any of its subsidiaries, (ii) any Convertible Notes are delivered to Counterparty or any of its subsidiaries in exchange for
delivery of any property or assets of such party (howsoever described), (iii) any principal of any of the Convertible Notes is repaid
prior to the final maturity date of the Convertible Notes, or (iv) any Convertible Notes are exchanged by or for the benefit of
the Holders (as such term is defined in the Indenture) thereof for any other securities of Counterparty or any of its subsidiaries (or
any other property, or any combination thereof) pursuant to any exchange offer or similar transaction. For the avoidance of doubt, any
conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute a Repayment Event.
(c) Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Dealer shall owe Counterparty any amount pursuant
to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Counterparty shall have the right, in its
sole discretion, to require Dealer to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving
irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day (which written confirmation shall contain
the representation and warranty set forth in Section 7(a)(i)), no later than 9:30 A.M., New York City time, on the relevant merger
date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable
(“Notice of Share Termination”); provided that if Counterparty does not elect to require Dealer to satisfy its
Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to elect to satisfy its
Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s failure to elect or election to the contrary;
and provided further that Counterparty shall not have the right to so elect (but, for the avoidance of doubt, Dealer shall have
the right to so elect) in the event of (i) an Insolvency, a Nationalization or a Merger Event, in each case, in which the consideration
or proceeds to be paid to holders of Shares consists solely of cash or (ii) an Event of Default in which Counterparty is the Defaulting
Party or a Termination Event in which Counterparty is the Affected Party or
an Extraordinary Event, which
Event of Default, Termination Event or Extraordinary Event resulted from an event or events within Counterparty’s control. Upon
such Notice of Share Termination, the following provisions shall apply on the Scheduled Trading Day immediately following the relevant
merger date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as
applicable:
Share Termination Alternative: |
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If applicable, means that Dealer shall deliver to Counterparty the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to Section 6(d)(ii) of the Agreement or such later date or dates as Dealer may commercially reasonably determine (the “Share Termination Payment Date”) taking into account commercially reasonable hedging or hedge unwind activity, in satisfaction of the Payment Obligation. |
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Share Termination Delivery Property: |
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A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of the aggregate amount of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price. |
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Share Termination Unit Price: |
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The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. |
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Share Termination Delivery Unit: |
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In the case of a Termination Event (other than on account of an Insolvency, Nationalization or Merger Event), Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization or Merger Event, one Share or a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization or Merger Event, as applicable. If such Insolvency, Nationalization 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. |
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Failure to Deliver: |
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Applicable |
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Other Applicable Provisions: |
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If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares” shall be read as references to “Share Termination Delivery Units”; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Counterparty is the issuer of any Share Termination Delivery Units (or any part thereof). |
(d) Disposition
of Hedge Shares. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer, the Shares (the “Hedge
Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction in a commercially reasonable
manner cannot be sold in the U.S. public market by Dealer without registration under the Securities Act, Counterparty shall, at its
election: (i) in order to allow Dealer to
sell the Hedge Shares in a registered offering, make available to Dealer an effective registration statement under the Securities Act
to cover the resale of such Hedge Shares and (A) enter into an agreement, in form and substance reasonably satisfactory to Dealer,
substantially in the form of an underwriting agreement for a registered offering, (B) provide accountant’s “comfort”
letters in customary form for registered offerings of equity securities, (C) provide disclosure opinions of nationally recognized
outside counsel to Counterparty reasonably acceptable to Dealer, (D) provide other customary opinions, certificates and closing
documents customary in form for registered offerings of equity securities and (E) afford Dealer a reasonable opportunity to conduct
a “due diligence” investigation with respect to Counterparty customary in scope for underwritten offerings of equity securities;
provided that if Counterparty elects clause (i) above but the items referred to therein are not completed in a timely manner,
or if Dealer, in its sole discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation,
or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this
Section 8(d) shall apply at the election of Counterparty; (ii) in order to allow Dealer to sell the Hedge Shares
in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary
for private placements of equity securities, in form and substance commercially reasonably satisfactory to Dealer, including customary
representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights
(for Dealer or any designated buyer of the Hedge Shares from Dealer), and best efforts obligations to provide opinions and certificates
and such other documentation as is customary for private placements agreements, all commercially reasonably acceptable to Dealer (in
which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary to compensate Dealer
for any commercially reasonable discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private
placement); or (iii) purchase the Hedge Shares from Dealer at the “Daily VWAP” (as defined in the Indenture) on such
Exchange Business Days, and in the amounts, commercially reasonably requested by Dealer. This Section 8(d) shall survive the
termination, expiration or early unwind of the Transaction.
(e) Repurchase
and Conversion Rate Adjustment Notices. Counterparty shall, at least two Exchange Business Days prior to any day on which Counterparty
effects any repurchase of Shares or consummates or otherwise engages in any transaction or event (a “Conversion Rate Adjustment
Event”) that could reasonably be expected to lead to an increase in the Conversion Rate, give Dealer a written notice of such
repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if, following such repurchase or
Conversion Rate Adjustment Event, the Notice Percentage would reasonably be expected to be (i) greater than 13.27% and (ii) greater
by 0.5% than the Notice Percentage included in the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase
Notice, greater than the Notice Percentage as of the date hereof). The “Notice Percentage” as of any day is the fraction,
expressed as a percentage, the numerator of which is the Number of Shares plus the number of shares underlying any other convertible bond
hedge transactions or call options sold by Dealer to Counterparty and the denominator of which is the number of Shares outstanding on
such day. In the event that Counterparty fails to provide Dealer with a Repurchase Notice on the day and in the manner specified in this
Section 8(e) then Counterparty agrees to indemnify and hold harmless Dealer, its affiliates and their respective directors,
officers, employees, agents and controlling persons (Dealer and each such person being an “Indemnified Party”) from
and against any and all losses (including losses relating to the Dealer’s hedging activities as a consequence of becoming, or of
the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or
cessation of hedging activities and any losses in connection therewith with respect to this Transaction), claims, damages and liabilities
(or actions in respect thereof), joint or several, to which such Indemnified Party may become subject under applicable securities laws,
including without limitation, Section 16 of the Exchange Act or under any state or federal law, regulation or regulatory order,
relating to or arising out of such failure. If for any reason the foregoing indemnification is unavailable to any Indemnified Party or
insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to the maximum extent permitted by law, to the
amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability. In addition, Counterparty will reimburse
any Indemnified Party for all reasonable, actual expenses (including reasonable counsel fees and expenses) as they are incurred (after
notice to Counterparty and supported by invoices or other documentation setting forth in reasonable detail such expenses) in connection
with the investigation of, preparation for or defense or settlement of any pending or threatened
claim or any action, suit or proceeding
arising therefrom, whether or not such Indemnified Party is a party thereto and whether or not such claim, action, suit or proceeding
is initiated or brought by or on behalf of Counterparty. To the extent an Indemnified Party fails to provide notice of any action commenced
against it in respect of which indemnity may be sought hereunder within a commercially reasonable period of time that would materially
prejudice Counterparty (it being understood that any such notice delivered within 30 calendar days of the commencement of any such action
shall be deemed to have been delivered within a commercially reasonable period of time for such purpose). Counterparty shall be relived
from liability. This indemnity shall survive the completion of the Transaction contemplated by this Confirmation and any assignment and
delegation of the Transaction made pursuant to this Confirmation or the Agreement and shall inure to the benefit of any permitted assignee
of Dealer.
(f) Transfer
and Assignment. Either party may transfer or assign any of its rights or obligations under the Transaction with the prior written
consent of the non-transferring party, such consent not to be unreasonably withheld or delayed; provided that Dealer may transfer
or assign without any consent of Counterparty its rights and obligations hereunder, in whole or in part, to (i) any affiliate of
Dealer or (ii) any person, or any person whose obligations hereunder would be guaranteed, pursuant to the terms of a customary guarantee
in a form generally used for similar transactions, by a person, in either case, of credit quality at least equivalent to Dealer’s
(or its ultimate parent’s). If at any time at which (1) the Equity Percentage exceeds 8.0% or (2) Dealer, Dealer Group
(as defined below) or any person whose ownership position would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer Group
or any such person, a “Dealer Person”) under the Minnesota Business Corporations Act or other federal, state or local
law, rule, regulation or regulatory order or organizational documents or contracts of Counterparty applicable to ownership of Shares
(“Applicable Restrictions”), 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, registration, filing or notification obligations or other requirements (including obtaining prior approval by a state or
federal regulator) of a Dealer Person under Applicable Restrictions and with respect to which such requirements have not been met or
the relevant approval has not been received or that would subject a Dealer Person to restrictions (including restrictions relating to
business combinations or other designated transactions), or have any other adverse effect on a Dealer Person, under Applicable Restrictions
minus (y) 1% of the number of Shares outstanding on the date of determination (either such condition described in clause
(1) or (2), an “Excess Ownership Position”), Dealer, in its discretion, is unable to effect a transfer or assignment
to a third party after its commercially reasonable efforts on pricing and terms and within a time period reasonably acceptable to Dealer
such that an Excess Ownership Position no longer exists, Dealer 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 would
no longer exist following the resulting partial termination of the Transaction (after taking into account commercially reasonable adjustments
to Dealer’s commercially reasonable Hedge Positions from such partial termination). In the event that Dealer so designates an Early
Termination Date with respect to a portion of the Transaction, a payment or delivery shall be made pursuant to Section 6 of the
Agreement or Section 8(c) of this Confirmation as if (i) an Early Termination Date had been designated in respect of a
Transaction having terms identical to the Terminated Portion of the Transaction, (ii) Counterparty were the sole Affected Party
with respect to such partial termination, (iii) such portion of the Transaction were the only Terminated Transaction and (iv) Dealer
were 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. 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 Dealer and any of its affiliates subject to aggregation
with Dealer for purposes of the “beneficial ownership” test under Section 13 of the Exchange Act and all persons who
may form a “group” (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) with Dealer (collectively, “Dealer
Group”) “beneficially own” (within the meaning of Section 13 of the Exchange Act) without duplication on such
day (or, to the extent that for any reason the equivalent calculation under Section 16 of the Exchange Act and the rules and
regulations thereunder results in a higher number, such higher number) and (B) the denominator of which is the number of Shares
outstanding on such day. In the case of a transfer or assignment by Counterparty of its rights and obligations hereunder and under the
Agreement, in whole or in part (any such Options so transferred or assigned, the “Transfer Options”), to any party,
withholding of such consent by Dealer shall not be considered unreasonable if
such transfer or assignment does not meet the
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 8(e) or
any obligations under Section 2 (regarding Extraordinary Events) or 8(d) of this Confirmation;
(B) Any
Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended (the “Code”));
(C) Such
transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited
to, undertakings with respect to compliance with applicable securities laws in a manner that, in the 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 by, and reasonably satisfactory
to, Dealer;
(D) Dealer
shall not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of
the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment;
(E) An
Event of Default, Potential Event of Default or Termination Event shall not occur as a result of such transfer and assignment;
(F) Without
limiting the generality of clause (B), Counterparty shall have caused the transferee to make such Payee Tax Representations and to provide
such tax documentation 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 and assignment; and
(G) Counterparty
shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such
transfer or assignment
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 to 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.
(g) Delivery
of Shares. Notwithstanding anything to the contrary herein, Dealer may, by prior notice to Counterparty, satisfy its obligation to
deliver any Shares or other securities on any date due (an “Original Delivery Date”) by making separate deliveries
of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate
number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered
on such Original Delivery Date.
(h) 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.
(i) No
Netting and Set-off. The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party waives
any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any
delivery or payment obligations owed to it by the
other party, whether arising under the Agreement, under any other agreement between
parties hereto, by operation of law or otherwise.
(j) Equity
Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction
that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy. For the avoidance of doubt, the
parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim arising
as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement. For the avoidance of doubt,
the parties acknowledge that the obligations of Counterparty under this Confirmation are not secured by any collateral that would otherwise
secure the obligations of Counterparty herein under or pursuant to any other agreement.
(k) Early
Unwind. In the event the sale by Counterparty of the Optional Securities not consummated pursuant to the Purchase Agreement for any
reason by the close of business in New York on January 23, 2024 (or such later date as agreed upon by the parties) (January 23,
2024 or such later date being the “Early Unwind Date”), the Transaction shall automatically terminate (the “Early
Unwind”) on the Early Unwind Date and the Transaction and all of the respective rights and obligations of Dealer and Counterparty
hereunder shall be cancelled and terminated and Counterparty shall pay to Dealer an amount in cash equal to the aggregate amount of costs
and expenses relating to the unwinding of Dealer’s hedging activities in respect of the Transaction (including market losses incurred
in reselling any Shares purchased by Dealer or its affiliates in connection with such hedging activities, unless Counterparty agrees
to purchase any such Shares at the cost at which Dealer purchased such Shares). Following such termination, cancellation and payment,
each party shall be released and discharged by the other party from, and agrees not to make any claim against the other party with respect
to, any obligations or liabilities of either party arising out of, and to be performed in connection with, the Transaction either prior
to or after the Early Unwind Date. Dealer and Counterparty represent and acknowledge to the other that upon an Early Unwind and following
the payment referred to above, all obligations with respect to the Transaction shall be deemed fully and finally discharged.
(l) 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 Issuer 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 “Daily VWAP” (as defined in the Indenture); (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 “Daily VWAP” (as defined in the Indenture), each
in a manner that may be adverse to Counterparty; and (E) the Transaction is a derivatives transaction in which it has granted Dealer
an option, and Dealer may purchase shares for its own account at an average price that may be greater than, or less than, the price paid
by Counterparty under the terms of the Transaction.
(m) Wall
Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability
Act of 2010 (the “WSTAA”), the parties hereby agree that neither the enactment of the WSTAA (or any statute containing
any legal certainty provision similar to Section 739 of the WSTAA) or any regulation under the WSTAA (or any such statute), nor any
requirement under the WSTAA (or any statute containing any legal certainty provision similar to Section 739 of the WSTAA) or an amendment
made by the WSTAA (or any such statute), 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, Increased Cost of Hedging or
Illegality).
(n) Governing
Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL
BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW
DOCTRINE, OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(o) Amendment.
This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty
and Dealer.
(p) 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.
(q) Tax
Matters.
(i) Withholding
Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act. “Indemnifiable Tax”
as defined in Section 14 of the Agreement, shall not include any 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.
(ii) HIRE
Act. To the extent that either party to the Agreement with respect to this Transaction is not an adhering party to the ISDA 2015 Section 871(m) Protocol
published by the International Swaps and Derivatives Association, Inc. on November 2, 2015 and available at www.isda.org, as
may be amended, supplemented, replaced or superseded from time to time (the “871(m) Protocol”), the parties agree
that the provisions and amendments contained in the Attachment to the 871(m) Protocol are incorporated into and apply to the Agreement
with respect to this Transaction as if set forth in full herein. The parties further agree that, solely for purposes of applying such
provisions and amendments to the Agreement with respect to this Transaction, references to “each Covered Master Agreement”
in the 871(m) Protocol will be deemed to be references to the Agreement with respect to this Transaction, and references to the
“Implementation Date” in the 871(m) Protocol will be deemed to be references to the Trade Date of this Transaction.
(iii) Tax
documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on
or before the date of execution of this Confirmation, (ii) upon reasonable request of Dealer and (iii) promptly upon learning
that any such tax form previously provided by Counterparty has become obsolete or incorrect. Dealer shall provide to Counterparty a valid
U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on or before the date of execution of this Confirmation,
(ii) upon reasonable request of Counterparty and (iii) promptly upon learning that any such tax form previously provided by
Dealer has become obsolete or incorrect.
(iv) Tax
Representations. For the purpose of Section 3(f) of the Agreement, Counterparty is a corporation for U.S. federal income tax
purposes and is organized under the laws of the State of Minnesota. Counterparty represents to Dealer that for U.S. federal income tax
purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations)
and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States Treasury Regulations).
For the purpose of Section 3(f) of the Agreement, Dealer represents to Counterparty that for U.S. federal income tax purposes
it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations)
and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States Treasury Regulations).
(r) QFC
Stay Provisions.
(i) (A) In
the event that Dealer becomes subject to a proceeding under (i) the Federal Deposit Insurance Act and the regulations promulgated
thereunder or (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder
(a “U.S. Special Resolution Regime”) the transfer from Dealer of this Confirmation, and any interest and obligation
in or under, and any property securing, this Confirmation, will be effective to the same extent as the transfer would be effective under
the U.S. Special Resolution Regime if this Confirmation, and any interest and obligation in or under, and any property securing, this
Confirmation were governed by the laws of the United States or a state of the United States. (B) In the event that Dealer or an Affiliate
becomes subject to a proceeding under a U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§ 252.81,
47.2 or 382.1, as applicable (“Default Right”)) under this Confirmation that may be exercised against Dealer are permitted
to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Confirmation
were governed by the laws of the United States or a state of the United States.
(ii) Notwithstanding
anything to the contrary in this Confirmation, the parties expressly acknowledge and agree that: (A) Counterparty shall not be permitted
to exercise any Default Right with respect to this Confirmation or any Affiliate Credit Enhancement that is related, directly or indirectly,
to an Affiliate of Dealer becoming subject to receivership, insolvency, liquidation, resolution, or similar proceeding (an “Insolvency
Proceeding”), except to the extent that the exercise of such Default Right would be permitted under the provisions of 12 C.F.R.
252.84, 12 C.F.R. 47.5 or 12 C.F.R. 382.4, as applicable; and (B) Nothing in this Confirmation shall prohibit the transfer of any
Affiliate Credit Enhancement, any interest or obligation in or under such Affiliate Credit Enhancement, or any property securing such
Affiliate Credit Enhancement, to a transferee upon or following an Affiliate of Dealer becoming subject to an Insolvency Proceeding,
unless the transfer would result in the Counterparty being the beneficiary of such Affiliate Credit Enhancement in violation of any law
applicable to the Counterparty.
(iii) If
Counterparty has previously adhered to, or subsequently adheres to, the ISDA 2018 U.S. Resolution Stay Protocol as published by the International
Swaps and Derivatives Association, Inc. as of July 31, 2018 (the “ISDA U.S. Protocol”), the terms of such
protocol shall be incorporated into and form a part of this Confirmation and the terms of the ISDA U.S. Protocol shall supersede and replace
the terms of this Section 8(r). For purposes of incorporating the ISDA U.S. Protocol, Dealer shall be deemed to be a Regulated Entity,
Counterparty shall be deemed to be an Adhering Party, and this Confirmation shall be deemed to be a Protocol Covered Agreement. Capitalized
terms used but not defined in this paragraph shall have the meanings given to them in the ISDA U.S. Protocol.
(iv) Dealer
and Counterparty agree that to the extent there are any outstanding “in-scope QFCs,” as defined in 12 C.F.R. § 252.82(d),
that are not excluded under 12 C.F.R. § 252.88, between Dealer and Counterparty that do not otherwise comply with the requirements
of 12 C.F.R. § 252.2, 252.81–8 (each such agreement, a “Preexisting In-Scope Agreement”), then each such
Preexisting In-Scope Agreement is hereby amended to include the foregoing provisions in this Section 8(r), with references to “this
Confirmation” being understood to be references to the applicable Preexisting In-Scope Agreement.
(a) For purposes
of this Section 8(r):
(b) “Affiliate”
is defined in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Credit Enhancement” means any
credit enhancement or credit support arrangement in support of the obligations of Dealer under or with respect to this Confirmation, including
any guarantee, collateral arrangement (including any pledge, charge, mortgage or other security interest in collateral or title transfer
arrangement), trust or similar arrangement, letter of credit, transfer of margin or any similar arrangement.
(s) Exclusive
Jurisdiction; Waiver of Jury.
(i) Section 13(b) of
the Agreement is deleted in its entirety and replaced by the following:
“The courts
of the United States of America for the Southern District of New York and appellate courts from thereof will have the sole and exclusive
jurisdiction over any and all claims, disputes or causes of action arising out of, in connection with, or relating to this Agreement or
the transactions and relationships between the parties contemplated by this Agreement. If such courts lack federal subject matter jurisdiction,
the Supreme Court of the State of New York, sitting in New York County and any appellate court from thereof, will have sole and exclusive
jurisdiction. Subject to the foregoing, either of these courts will be the proper venue and the parties waive any objection to venue or
their convenience as a forum. The parties agree to submit to the jurisdiction of any of the courts specified and to accept service of
process to vest personal jurisdiction over them in any of these courts.”
(ii) EACH
OF COUNTERPARTY AND DEALER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS
STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS CONFIRMATION OR THE AGREEMENT.
Please confirm that the foregoing
correctly sets forth the terms of our agreement by executing this Confirmation and returning it to J.P. Morgan Securities LLC, 383 Madison
Ave, New York, NY 10179, and by email to EDG_Notices@jpmorgan.com and edg.us.flow.corporates.mo@jpmorgan.com.
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Yours faithfully, |
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J.P. Morgan Securities LLC |
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By: |
/s/
Gaurav Maria |
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Name: Gaurav Maria |
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Title: Managing Director |
[Signature Page to Additional Bond Hedge Confinnation]
Agreed and Accepted By: |
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WINNEBAGO industries, INC. |
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By: |
/s/ Bryan L. Hughes |
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Name: Bryan L. Hughes |
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Title: Chief Financial Officer and |
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Senior Vice President |
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[Signature Page to JPM Additional Bond Hedge Confinnation]
Exhibit 10.8
GOLDMAN SACHS & CO. LLC | 200 WEST STREET | NEW YORK,
NEW YORK 10282-2198 |TEL: 212-902-1000
To: |
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, Minnesota 55347 |
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From: |
Goldman Sachs & Co. LLC |
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Re: |
Base Issuer Warrant Transaction |
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Date: |
January 18, 2024 |
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Dear Ladies and Gentlemen:
The purpose of this communication
(this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on
the Trade Date specified below (the “Transaction”) between Goldman Sachs & Co. LLC (“Dealer”)
and Winnebago Industries, Inc. (“Counterparty”). This communication constitutes a “Confirmation” as
referred to in the Agreement specified below.
1. This
Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (the “2006 Definitions”)
and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together
with the 2006 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”). For purposes of the Equity Definitions, each reference herein to a Warrant shall be
deemed to be a reference to a Call Option or an Option, as context requires.
Counterparty is hereby advised,
and Counterparty acknowledges, that Dealer has engaged in, or refrained from engaging in, substantial financial transactions and has taken
other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms
and conditions set forth below.
This Confirmation evidences
a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.
This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement
(Multicurrency—Cross Border) as if Dealer and Counterparty had executed an agreement in such form on the date hereof (but without
any Schedule except for (i) the election of Loss and Second Method and US Dollars (“USD”) as the Termination Currency,
(ii) the replacement of the word “third” in the last line of Section 5(a)(i) of the Agreement with the word
“first” and (iii) (a) the election that the “Cross Default” provisions of Section 5(a)(vi) of
the Agreement shall apply to Counterparty with a “Threshold Amount” of USD35.0 million), (b) (b) the
phrase “, or becoming capable at such time of being declared,” shall be deleted from clause (1) of such Section 5(a)(vi),
and (c) the following language shall be added to the end thereof: “Notwithstanding the foregoing, a default under subsection
(2) hereof shall not constitute an Event of Default if (x) the default was caused solely by error or omission of an administrative
or operational nature; (y) funds were available to enable the party to make the payment when due; and (z) the payment is made
within two Local Business Days of such party’s receipt of written notice of its failure to pay.”.
All provisions contained in,
or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event of any
inconsistency among this Confirmation, the Equity Definitions, the 2006
Definitions or
the Agreement, the following shall prevail in the order of precedence indicated: (i) this Confirmation; (ii) the Equity
Definitions; (iii) the 2006 Definitions; and (iv) the Agreement. For the avoidance of doubt, except to the extent of an
express conflict, the application of any provision of this Confirmation, the Agreement, the Equity Definitions or the 2006
Definitions shall not be construed to exclude or limit any other provision of this Confirmation, the Agreement, the Equity
Definitions or the 2006 Definitions.
The Transaction hereunder
shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Counterparty or any confirmation
or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Counterparty,
then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to
which Dealer and Counterparty are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such
existing or deemed ISDA Master Agreement.
2. The
Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of the Equity Definitions. The
terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms:
Trade Date: |
January 18, 2023 |
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Effective Date: |
January 23, 2023, or such other date as agreed between the parties, subject to Section 8(l) below |
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Components: |
The Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with the Number of Warrants and Expiration Date set forth in this Confirmation. The payments and deliveries to be made upon settlement of the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement. |
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Warrant Style: |
European |
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Warrant Type: |
Call |
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Seller: |
Counterparty |
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Buyer: |
Dealer |
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Shares: |
The Common Stock of Counterparty, par value USD0.50 (Ticker Symbol: “WGO”). |
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Number of Warrants: |
For each Component, as provided in Annex A to this Confirmation. |
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Warrant Entitlement: |
One Share per Warrant |
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Strike Price: |
USD135.2800 |
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Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Strike Price be subject to adjustment to the extent that, after giving effect to such adjustment, the Strike Price would be less than USD 67.2580, except for any adjustment pursuant to the terms of this Confirmation and the Equity Definitions in connection with a stock split or similar change to Counterparty’s capitalization. |
Number of Shares: |
As of any date, a number of Shares equal to the product of the Number of Warrants and the Warrant Entitlement. |
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Premium: |
USD8,940,000 |
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Premium Payment Date: |
The Effective Date |
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Exchange: |
New York Stock Exchange |
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Related Exchange: |
All Exchanges |
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Procedures for Exercise: |
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In respect of any Component: |
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Expiration Time: |
Valuation Time |
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Expiration Date: |
As provided in Annex A to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for another Component); provided that if that date is a Disrupted Day, the Expiration Date for such Component shall be the first succeeding Scheduled Trading Day that is not a Disrupted Day and is not and 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 an Expiration Date in respect of any other Component for the Transaction). Notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date, the Calculation Agent may determine that such Expiration Date is a Disrupted Day only in part, in which case the Calculation Agent shall make adjustments to the Number of Warrants for the relevant Component for which such day shall be the Expiration Date, 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 may determine the VWAP Price for such Expiration Date based on transactions in the Shares taking into account the nature and duration of such Market Disruption Event. Any Scheduled Trading Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be a Scheduled Trading Day; if a closure of the Exchange prior to its normal close of trading on any Scheduled Trading Day is scheduled following the date hereof, then such Scheduled Trading Day shall be deemed to be a Disrupted Day in full. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date |
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occurring on an Expiration Date. “Final Disruption Date” means September 20, 2030. |
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Market Disruption Event: |
Section 6.3(a) of the Equity Definitions is hereby amended by (A) deleting
the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or
Knock-out Valuation Time, as the case may be,” in clause (ii) thereof and (B) by replacing the words “or (iii) an Early Closure.”
therein with “(iii) an Early Closure, or (iv) a Regulatory Disruption.”
Section 6.3(d) of the Equity Definitions is hereby amended by deleting
the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof. |
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Regulatory Disruption: |
Any event that Dealer, in its reasonable discretion, determines makes it appropriate, with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements or related policies and procedures are imposed by law or have been voluntarily adopted by Dealer and provided any such policies and procedures are related to legal, regulatory or self-regulatory issues generally applicable to the Transaction and are applied to the Transaction in a non-discriminatory manner), for Dealer to refrain from or decrease any market activity connected with the Transaction. Dealer shall notify Counterparty as soon as reasonably practicable that a Regulatory Disruption has occurred and the Expiration Dates affected by it. |
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Automatic Exercise: |
Applicable; and means that the Number of Warrants for the corresponding Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date unless Dealer notifies Seller (by telephone or in writing) prior to the Expiration Time on such Expiration Date that it does not wish Automatic Exercise to occur, in which case Automatic Exercise will not apply to such Expiration Date.
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Counterparty’s Telephone Number and Telex and/or Facsimile Number and Contact Details for purpose of Giving Notice: |
As provided in Section 6(a) below.
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Settlement Terms: |
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In respect of any Component: |
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Settlement Currency: |
USD |
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Net Share Settlement: |
On each Settlement Date, Counterparty shall deliver to Dealer a number of Shares equal to the Number of Shares to be Delivered for such Settlement Date to the account specified by Dealer and cash in lieu of any fractional Share valued at the Relevant Price on |
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the Valuation Date corresponding to such Settlement Date. If, in the
reasonable opinion of Dealer, based on advice of counsel, for any reason, the Shares deliverable upon Net Share Settlement would not be
immediately freely transferable by Dealer under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”),
then Dealer may elect to either (x) accept delivery of such Shares notwithstanding any restriction on transfer or (y) have the provisions
set forth in Section 8(c) below apply.
The Number of Shares to be Delivered shall be delivered by Counterparty
to Dealer no later than 12:00 noon (local time in New York City) on the relevant Settlement Date. |
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Number of Shares to be Delivered: |
In respect of any Exercise Date, the product of (i) the number of Warrants exercised or deemed exercised on such Exercise Date, (ii) the Warrant Entitlement and (iii) (A) the excess of the VWAP Price on the Valuation Date occurring in respect of such Exercise Date over the Strike Price (or, if there is no such excess, zero) divided by (B) such VWAP Price. |
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VWAP Price: |
For any Exchange Business Day, as determined by the Calculation Agent based on the New York Volume Weighted Average Price per Share for the regular trading session (including any extensions thereof) of the Exchange on such Exchange Business Day (without regard to pre-open or after hours trading outside of such regular trading session), as published by Bloomberg at 4:15 P.M., New York City time (or 15 minutes following the end of any extension of the regular trading session), on such Exchange Business Day, on Bloomberg page “WGO.N <Equity> AQR” (or any successor thereto) (or if such published volume weighted average price is unavailable or is manifestly incorrect, the market value of one Share on such Exchange Business Day, as determined by the Calculation Agent using, if practicable, a volume weighted method). |
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Other Applicable Provisions: |
The provisions of Sections 9.1(c), 9.4, 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws that exist as a result of the fact that Counterparty is the issuer of the Shares. |
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Adjustments: |
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In respect of any Component: |
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Method of Adjustment: |
Calculation Agent Adjustment. For the avoidance of doubt, Calculation Agent Adjustment shall continue to apply until the obligations of the parties (including any obligations of Counterparty pursuant to Section 8(f) below) under the Transaction have been satisfied in full. |
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Extraordinary Dividend: |
For any regular dividend period of Counterparty, any dividend or distribution on the Shares with an ex-dividend date occurring during such regular dividend period (other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity Definitions) (a “Dividend”) the amount or value of which (as determined by the Calculation Agent), when aggregated with the amount or value (as determined by the Calculation Agent) of any and all previous Dividends with ex-dividend dates occurring in the same regular dividend period, exceeds the Ordinary Dividend Amount. |
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Ordinary Dividend Amount: |
For the first Dividend on the Shares for which the ex-dividend date occurs during any regular quarterly dividend period of Counterparty, USD 0.31, and for any other Dividend on the Shares for which the ex-dividend date occurs during the same regular quarterly dividend period, USD 0.00. |
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Extraordinary Events: |
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New Shares: |
In the definition of New Shares in Section 12.1(i) of the Equity Definitions, the text in clause (i) thereof shall be deleted in its entirety and replaced with “publicly quoted, traded or listed on any of The New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or their respective successors) and of an entity or person that is a corporation organized under the laws of the United States, any State thereof or the District of Columbia”. |
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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 an Additional Termination Event under Section 8(k)(iv) of this Confirmation, Dealer may elect, in its sole discretion, whether the provisions of Section 12.2 of the Equity Definitions or Section 8(k)(iv) will apply. |
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Consequences of Merger Events: |
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(a) Share-for-Share: |
Modified Calculation Agent Adjustment |
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(b) Share-for-Other: |
Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its sole discretion, that Modified Calculation Agent Adjustment shall apply for all or part of the Transaction. |
(c) Share-for-Combined: |
Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its sole discretion, that Modified Calculation Agent Adjustment or Component Adjustment shall apply for all or part of the Transaction. |
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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 an Additional Termination Event under Section 8(k)(iii) of this Confirmation, Dealer may elect, in its sole discretion, whether the provisions of Section 12.3 of the Equity Definitions or Section 8(k)(iii) will apply. |
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Consequences of Tender Offers: |
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(a) Share-for-Share: |
Modified Calculation Agent Adjustment |
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(b) Share-for-Other: |
Modified Calculation Agent Adjustment |
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(c) Share-for-Combined: |
Modified Calculation Agent Adjustment |
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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, (x) 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”, (y) the word “shall” in the second line shall be replaced with “may”, and (z) for the avoidance of doubt, the Calculation Agent may determine whether the relevant Announcement Event has had an economic effect on any Component (and, if so, adjust the terms of such Component accordingly) 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 thereof, 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. |
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Announcement Event: |
(i) The public announcement by any 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 paid and/or delivered exceeds 15% of the market capitalization of Issuer as of the date of such announcement (an “Transformative Transaction”) or (z) the intention to enter into a Merger Event or Tender Offer or an Transformative Transaction, (ii) the public announcement by Issuer of an intention to solicit or enter into, or to explore strategic |
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alternatives or other similar undertaking that may include, a Merger Event or Tender Offer or an Transformative Transaction or (iii) any subsequent public announcement by any 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, whether or not by the same party, 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,” 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. |
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Modified Calculation Agent Adjustment: |
If, in respect of a Merger Event, the Counterparty under the Transaction following such Merger Event will not be the issuer of the New Shares, the Dealer may elect (in its sole discretion) for Cancellation and Payment (Calculation Agent Determination) to apply. In addition, if, in respect of any Merger Event to which Modified Calculation Agent Adjustment applies, the adjustments to be made in accordance with Section 12.2(e)(i) of the Equity Definitions would result in Counterparty being different from the issuer of the Shares, then with respect to such Merger Event, as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity Definitions, Counterparty and the issuer of the Shares shall, prior to the Merger Date, have entered into such documentation containing representations, warranties and agreements relating to securities law and other issues as requested by Dealer that Dealer has determined, in its reasonable discretion, to be reasonably necessary or appropriate to allow Dealer to continue as a party to the Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions, and to preserve its hedging or hedge unwind activities in connection with the Transaction in a manner compliant with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer (whether or not such requirements or related policies and procedures are imposed by law or have been voluntarily adopted by Dealer), and if such conditions are not met or if the Calculation Agent determines that no adjustment that it could make under Section 12.2(e)(i) of the |
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Equity Definitions will produce a commercially reasonable result, then the consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall apply. |
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Composition of Combined Consideration: |
Notwithstanding anything to the contrary in the Equity Definitions, if the composition of Combined Consideration in respect of any Share-for-Combined Merger Event could be determined by a holder of Shares, Dealer shall determine the composition of such Combined Consideration assumed for purposes of adjustments and deliveries hereunder in its sole discretion. |
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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 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. |
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Additional Termination Event(s): |
Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, the Transaction would be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event (with the Transaction (or the cancelled or terminated portion thereof) being the Affected Transaction and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to such Affected Transaction. |
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Additional Disruption Events: |
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(a) Change in Law: |
Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) by adding the phrase “and/or Hedge Position” after the word “Shares” in clause (X) thereof and (iii) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date”; and provided further that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the parenthetical beginning after the word “regulation” in the second line thereof with the phrase “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or |
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promulgation of new regulations authorized or mandated by existing statute)” and (ii) adding the words “, or holding, acquiring or disposing of Shares or any Hedge Positions relating to,” after the words “obligations under” in clause (Y) thereof. |
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(b) Failure to Deliver: |
Not Applicable |
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(c) Insolvency Filing: |
Applicable |
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(d) 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 paragraphs at the end of such Section:
“Such inability described in clauses (A) or (B) above
shall not constitute a “Hedging Disruption” if such inability results from Hedging Party’s creditworthiness.
For the avoidance of doubt, (i) the term “equity price
risk” shall be deemed to include, but shall not be limited to, stock price and volatility risk, and (ii) the transactions or assets
referred to in phrases (A) or (B) above must be available on commercially reasonable pricing and other 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”. |
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(e) Increased Cost of Hedging: |
Applicable; provided that (i) that such increased cost described in Section 12.9(vi) of the Equity Definitions shall not constitute an “Increased Cost of Hedging” if such increased cost results from Hedging Party’s creditworthiness or financial position, and (ii) the following parenthetical shall be inserted immediately following the word “expense” in the third line of Section 12.9(a)(vi) of the Equity Definitions: “(including, for the avoidance of doubt, the incurrence of any stock borrow expense in excess of Hedging Party’s expectation as of the Trade Date, other than to the extent resulting from an Increased Cost of Stock Borrow)”. |
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(f) Loss of Stock Borrow: |
Applicable |
Maximum Stock Loan Rate: |
2.00 % per annum |
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(g) Increased Cost of Stock Borrow: |
Applicable |
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Initial Stock Loan Rate: |
Prior to January 16, 2030, 0% per annum, and thereafter, 0.25 % per annum. |
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Hedging Party: |
Dealer for all applicable Additional Disruption Events. |
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Determining Party: |
Dealer for all applicable Additional Disruption Events. All calculations and determinations by the Determining Party shall be made in good faith and in a commercially reasonable manner. Following any calculation by the Determining Party hereunder, upon written request by Counterparty, the Determining Party will, within five Exchange Business Days immediately following such request, provide to Counterparty 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; provided, however, that in no event will the Determining Party be obligated to share with Counterparty any proprietary or confidential data or information or any proprietary or confidential models used by it. |
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Non-Reliance: |
Applicable |
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Agreements and Acknowledgments Regarding Hedging Activities: |
Applicable |
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Additional Acknowledgments: |
Applicable |
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3. 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, if the Calculation Agent fails to timely make any calculation, adjustment or determination required to be made by the Calculation Agent hereunder or to perform any obligations of the Calculation Agent hereunder and such failure continues for five Exchange Business Days following notice to the Calculation Agent by Counterparty of such failure, Counterparty shall have the right to designate a nationally recognize third-party dealer in over-the-counter corporate equity derivatives to act, during the period commencing on the first date the Calculation Agent fails to timely make such calculation, adjustment or determination or to perform such obligation, as the case may be, and ending on the earlier of the Early Termination Date with respect to such Event of Default and the date on which such Event of Default is no longer continuing, as Calculation Agent. |
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Following any calculation by the Calculation Agent hereunder, upon written request by Counterparty, the Calculation Agent will, within five Exchange Business Days immediately following such request, provide to Counterparty by email to the email 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 the basis for such calculation; provided that in no event will Dealer be obligated to share with Counterparty any proprietary or confidential data or information or any proprietary or confidential models used by it or any information that is subject to an obligation not to disclose such information.. |
4. Account
Details:
Dealer Payment Instructions:
Chase Manhattan Bank New York
For A/C Goldman, Sachs & Co.
A/C #930-1-011483
ABA: 021-000021
Account for delivery of Shares to Dealer:
To be provided by Dealer
Counterparty Payment Instructions: To be provided by Counterparty.
5. Offices:
The Office of Dealer for the Transaction
is: 200 West Street, New York, New York 10282-2198
The Office of Counterparty for the
Transaction is: Inapplicable, Counterparty is not a Multibranch Party.
6. Notices:
For purposes of this Confirmation:
(a)
Address for notices or communications to Counterparty:
Winnebago Industries, Inc.
13200 Pioneer Trail,
Suite 150
Eden Prairie, MN
55347
Attention: Kathy
Hiebert, Treasurer
(b) Address
for notices or communications to Dealer:
To: Goldman
Sachs & Co. LLC
200 West Street
New
York, NY 10282-2198
Attn: Michael Voris, Equity Capital
Markets Telephone: 212-902-4895
Facsimile: 212-256-5738
E-mail: michael.voris@gs.com With a copy
to:
Attn: Jan Debeuckelaer Telephone: 212-934-0893
Facsimile: 212-256-5738
Email: jan.debeuckelaer@gs.com And
Attn: Garrett Cohen Telephone: 212-357-3427
Facsimile: 212-256-5738
Email: garrett.cohen@gs.com
And email notification
to the following address: Eq-derivs-notifications@ny.ibd.gs.com
7. Representations,
Warranties and Agreements:
(a) In
addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants
to and for the benefit of, and agrees with, Dealer as follows:
(i) On
the Trade Date and as of the date of any Notice of Share Termination under (and as defined in) Section 8(b) below, (A) none
of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and
(B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports
and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading.
(ii) Without
limiting the generality of Section 13.1 of the Equity Definitions, 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).
(iii) Prior
to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction
and such other certificate or certificates as Dealer shall reasonably request. Based on such resolutions, neither Dealer nor any of its
affiliates shall be subject to the restrictions under Section 302A.673 of the Minnesota Business Corporations Act as an “interested
shareholder” of Counterparty by virtue of (A) its role as initial purchaser of, or market-maker in, any securities of Counterparty
convertible into the Shares, (B) its entry into the Transaction and/or (C) any hedging transactions in Counterparty’s
securities in connection with the Transaction.
(iv) Counterparty
is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable
for Shares) or otherwise in violation of the Exchange Act.
(v) 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.
(vi) On
the Trade Date and the Premium Payment Date (A) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty,
including contingent liabilities, (B) the capital of Counterparty is adequate to conduct the business of Counterparty and (C) Counterparty
has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur
debt beyond its ability to pay as such debts mature.
(vii) Counterparty
shall not take any action to decrease the number of Available Shares below the Capped Number (each as defined below, but without giving
effect to the limitation on adjustments to the Capped Number set forth in the proviso in the first sentence of Section 8(f)).
(viii) The
representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement
dated as of the Trade Date between Goldman Sachs & Co. LLC and BMO Capital Markets Corp. as the representatives (the “Representatives”)
of the Initial Purchasers and Counterparty (the “Purchase Agreement”) are true and correct as of the Trade Date and
the Effective Date and are hereby deemed to be repeated to Dealer as if set forth herein.
(ix) (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”) 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 until the second Exchange Business Day immediately following the Settlement Period.
(x) (x) On
the Trade Date, (y) during the Settlement Period and (z) 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 Dealer.
(xi) Counterparty
agrees that it (A) will not during the Settlement Period make, or permit to be made, any public announcement (as defined in Rule 165(f) under
the Securities Act) of any Merger Transaction or potential Merger Transaction unless such public announcement is made prior to the opening
or after the close of the regular trading session on the Exchange for the Shares; (B) shall promptly (but in any event prior to the
next opening of the regular trading session on the Exchange) notify Dealer following any such announcement that such announcement has
been made; and (C) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide
Dealer with written notice specifying (i) 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 Dealer or its affiliates
and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three
full calendar months preceding the announcement date. Such written notice shall be deemed to be a certification by Counterparty to Dealer
that such information is true and correct. In addition, Counterparty shall promptly notify Dealer of the earlier to occur of the completion
of 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.
(xii) (A) Any
issuance of Shares upon exercise or termination of the Transaction has been, and throughout the Transaction will continue to be, duly
authorized and, upon issuance, such Shares will be validly issued, fully paid and non-assessable, and the issuance or delivery thereof
shall not be subject to any preemptive or similar rights and such Shares shall, upon issuance, be accepted for listing or quotation on
the Exchange; (B) a number of Shares of Counterparty equal to the Capped Number have been reserved for issuance upon exercise or
termination of the Warrants by all required corporate action of the Counterparty and (C) the Shares issuable upon exercise of the
Warrants shall upon issuance be accepted for listing or quotation on the Exchange, subject to notice that the listing of the Shares issuable
upon exercise or termination of the Warrants on the Exchange has been approved by the Exchange.
(xiii) No
state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise to
any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any
person or entity) as a result of Dealer or its affiliates owning, holding (however defined) or having a right to acquire Shares; provided
however, that Counterparty makes no representation or warranty regarding any such requirement that is applicable generally to the ownership
of equity securities by Dealer or any of its affiliates as a result of it or any such affiliates being financial institutions or broker-dealers.
(xiv) 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, including, without limitation, the transaction that is the subject of this confirmation and any transactions
related hereto or contemplated hereby; (B) will exercise independent judgment in evaluating the recommendations of Dealer and its
affiliates or associated persons with regard to any such securities transactions or strategies unless it has otherwise notified Dealer
in writing; and (C) has total assets of at least $50 million. Counterparty will notify Dealer if the immediately preceding statement
contained in this Section 7(a)(xiv) ceases to be true.
(xv) Without
limiting the generality of Section 3(a) of the Agreement, neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or
by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of
any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Counterparty’s Annual Report
on Form 10-K for the year ended August 26, 2023, as updated by any subsequent filings, to which Counterparty or any of its subsidiaries
is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject,
or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
(b) Each
of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18)
of the U.S. Commodity Exchange Act, as amended, and is entering into the Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise) and not for the benefit of any third party.
(c) Each
of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under
the Securities Act, by virtue of Section 4(a)(2) thereof. Accordingly, Dealer represents and warrants to Counterparty that (i) it
has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment
and its investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not disproportionate
to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the
Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities
Act, (iii) it is entering into the Transaction for its own account and without a view to the distribution or resale thereof, (iv) the
assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted
under this Confirmation, the Securities Act and state securities laws, and (v) its financial condition is such that it has no need
for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing
or contemplated undertaking or indebtedness and is capable of assessing the merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction.
(d) Each
of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution” and “financial participant”
within the meaning of Sections 101(22) and 101(22A) of Title 11 of the United States Code (the “Bankruptcy Code”).
The parties hereto further agree and acknowledge (A) that this Confirmation is a “securities contract,” as such term
is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection
herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning
of Section 362 of the Bankruptcy Code and a “settlement payment” within the meaning of Section 546 of the
Bankruptcy Code, and (B) that Dealer is
entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 548(d)(2),
555 and 561 of the Bankruptcy Code.
(e) Counterparty
shall deliver to Dealer (i) an incumbency certificate, dated as of the Trade Date, of Counterparty in customary form and (ii) an
opinion of counsel, dated as of the Trade Date and reasonably acceptable to Dealer in form and substance, with respect to the matters
set forth in Section 3(a) of the Agreement and Sections 7(a)(v), 7(a)(xii) and 7(a)(xv) of this Confirmation and such
other matters as Dealer may reasonably request and (iii) evidence that the listing of the Shares issuable upon exercise or termination
of the Warrants on the Exchange has been approved by the Exchange, subject only to official notice of issuance.
(f) Counterparty
understands that notwithstanding any other relationship between Counterparty and Dealer and its affiliates, in connection with this Transaction
and any other over-the-counter derivative transactions between Counterparty and Dealer or its affiliates, Dealer or its affiliate is acting
as principal and is not a fiduciary or advisor in respect of any such transaction, including any entry, exercise, amendment, unwind or
termination thereof.
(g) Counterparty
represents and warrants that it has received, read and understands the OTC Options Risk Disclosure Statement and a copy of the
most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled “Characteristics and Risks of Standardized
Options”.
(h) 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.
8. Other
Provisions:
(a) Right
to Extend. Dealer may postpone or add, in whole or in part, any Expiration Date or Settlement Date or any other date of valuation
or delivery by Counterparty, with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate
adjustments to the relevant delivery obligation), if Dealer determines, in its commercially reasonable discretion, that such extension
is reasonably necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in
light of existing liquidity conditions in the cash market, the stock borrow market or other relevant market or to enable Dealer to effect
transactions with respect to Shares or Share Termination Delivery Units 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 requirements, or with related policies and procedures (whether or
not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer, and in the case of policies
or procedures, so long as such policies and procedures are consistently applied to transactions similar to the Transaction).
(b) Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Counterparty shall owe Dealer any amount pursuant
to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Counterparty shall have the right, in its
sole discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable
telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day (which written confirmation shall contain the representation
and warranty set forth in Section 7(a)(i)), no later than 9:30 A.M., New York City time, on the Merger Date, Tender Offer Date, Announcement
Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable (“Notice
of Share Termination”); provided that if Counterparty does not elect to satisfy its Payment Obligation by the Share Termination
Alternative, Dealer shall have the right, in its sole discretion, to elect to require Counterparty to satisfy its Payment Obligation by
the Share Termination Alternative, notwithstanding Counterparty’s failure to elect or election to the contrary; and provided
further that Counterparty shall not have the right to so elect (but, for the avoidance of doubt, Dealer shall have the right to so
elect) in the event of (i) an Insolvency, a Nationalization or a Merger Event, in each case, in which the consideration or proceeds
to be paid to holders of Shares consists solely of cash or (ii) an Event of Default in which Counterparty is the Defaulting Party
or a Termination Event in which Counterparty is the Affected Party or an Extraordinary
Event, which Event of Default, Termination Event
or Extraordinary Event resulted from an event or events within Counterparty’s control. Upon such Notice of Share Termination,
the following provisions shall apply on the Scheduled Trading Day immediately following the Merger Date, the Tender Offer Date, Announcement
Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable:
Share Termination
Alternative: |
If
applicable, means that Counterparty shall deliver to Dealer the Share Termination Delivery Property on the date on which the Payment
Obligation would otherwise be due pursuant to Section 6(d)(ii) of the Agreement, or such later date or dates as the Calculation
Agent may reasonably determine (the “Share Termination Payment Date”), in satisfaction of the Payment Obligation. |
|
|
Share Termination
Delivery Property: |
A number of Share Termination Delivery Units, as calculated
by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall
adjust the Share Termination Delivery Property by replacing any fractional portion of the aggregate amount of a security therein
with an amount of cash in the Settlement Currency equal to the value of such fractional security based on the values used to calculate
the Share Termination Unit Price. | |
|
|
Share Termination
Unit Price: |
The value of property contained
in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination
Delivery Property, as determined by the Calculation Agent and notified by the Calculation Agent to Counterparty at the time of notification
of the Payment Obligation. |
|
|
Share
Termination Delivery Unit: |
In the case of a Termination
Event (other than on account of an Insolvency, Nationalization or Merger Event), Event of Default, Delisting or Additional Disruption
Event, one Share or, in the case of an Insolvency, Nationalization or Merger Event, one Share or a unit consisting of the number
or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other
consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization or Merger Event, as applicable.
If such Insolvency, Nationalization 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. |
|
|
Failure
to Deliver: |
Not Applicable |
|
|
Other
Applicable Provisions: |
If
Share Termination Alternative is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 and 9.12 of the Equity Definitions
will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares”
shall be read as references to “Share Termination Delivery Units”; provided
that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall
be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable
securities laws as a result of the fact that Counterparty is the issuer of any Share Termination Delivery Units (or any security
forming a part thereof). If, in the reasonable opinion of Dealer, based on advice of counsel, for any reason, any securities comprising
the Share Termination Delivery Units deliverable pursuant to this Section 8(b) would not be immediately freely transferable
by Dealer under Rule 144 under the Securities Act, then Dealer may elect to either (x) permit delivery of such securities
notwithstanding any restriction on transfer or |
|
(y) have the provisions set forth in Section 8(c) below apply. |
(c) Registration/Private
Placement Procedures. (i) With respect to the Transaction, the following provisions shall apply to the extent provided for above
opposite the caption “Net Share Settlement” in Section 2 or in paragraph (b) of this Section 8. If so applicable,
then, at the election of Counterparty by notice to Dealer within one Exchange Business Day after the relevant delivery obligation arises,
but in any event at least one Exchange Business Day prior to the date on which such delivery obligation is due, either (A) all Shares
or Share Termination Delivery Units, as the case may be, delivered by Counterparty to Dealer shall be, at the time of such delivery, covered
by an effective registration statement of Counterparty for immediate resale by Dealer (such registration statement and the corresponding
prospectus (the “Prospectus”) (including, without limitation, any sections describing the plan of distribution) in
form and content commercially reasonably satisfactory to Dealer) or (B) Counterparty shall deliver additional Shares or Share Termination
Delivery Units, as the case may be, so that the value of such Shares or Share Termination Delivery Units, as determined by the Calculation
Agent to reflect a commercially reasonable liquidity discount, equals the value of the number of Shares or Share Termination Delivery
Units that would otherwise be deliverable if such Shares or Share Termination Delivery Units were freely tradeable (without prospectus
delivery) upon receipt by Dealer (such value, the “Freely Tradeable Value”); provided that, if requested by
Dealer, Counterparty shall make the election described in this clause (B) with respect to Shares delivered on all Settlement Dates
no later than one Exchange Business Day prior to the first Exercise Date, and the applicable procedures described below shall apply to
all Shares delivered on the Settlement Dates on an aggregate basis. (For the avoidance of doubt, as used in this paragraph (c) only,
the term “Counterparty” shall mean the issuer of the relevant securities, as the context shall require.)
(ii) It
shall be a condition to Counterparty’s right to make the election described in clause (c)(i)(A) that:
(A) Dealer
(or an affiliate of Dealer designated by Dealer) shall be afforded a reasonable opportunity to conduct a due diligence investigation with
respect to Counterparty that is customary in scope for underwritten offerings of equity securities and that yields results that are satisfactory
to Dealer or such affiliate, as the case may be, in its discretion; and
(B) Dealer
(or an affiliate of Dealer designated by Dealer) and Counterparty shall enter into an agreement (a “Registration Agreement”)
on commercially reasonable terms in connection with the public resale of such Shares or Share Termination Delivery Units, as the case
may be, by Dealer or such affiliate substantially similar to underwriting agreements customary for underwritten offerings of equity securities,
in form and substance commercially reasonably satisfactory to Dealer or such affiliate and Counterparty, which Registration Agreement
shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating to the
indemnification of, and contribution in connection with the liability of, Dealer and its affiliates and Counterparty, shall provide for
the payment by Counterparty of all expenses in connection with such resale, including all registration costs and all fees and expenses
of counsel for Dealer, and shall provide for the delivery of accountants’ “comfort letters” to Dealer or such affiliate
with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus.
(iii) If
Counterparty makes the election described in clause (c)(i)(B) above:
(A) Dealer
(or an affiliate of Dealer designated by Dealer) and any potential institutional purchaser of any such Shares or Share Termination Delivery
Units, as the case may be, from Dealer or such affiliate identified by Dealer shall be afforded a commercially reasonable opportunity
to conduct a due diligence investigation in compliance with applicable law with respect to Counterparty customary in scope for private
placements of equity securities (including, without limitation, the right to have made available to them for inspection all financial
and other records, pertinent corporate documents and other information reasonably requested by them), subject to execution by such recipients
of customary confidentiality agreements reasonably acceptable to Counterparty;
(B) Dealer
(or an affiliate of Dealer designated by Dealer) and Counterparty shall enter into an agreement (a “Private Placement Agreement”)
on commercially reasonable terms in connection with the private placement of such Shares or Share Termination Delivery Units, as the
case may be, by Counterparty to Dealer or such affiliate and the private resale of such shares by Dealer or such affiliate, substantially
similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially
reasonably satisfactory to Dealer and Counterparty, which Private Placement Agreement shall include, without limitation, provisions substantially
similar to those contained in such private placement purchase agreements relating to the indemnification of, and contribution in connection
with the liability of, Dealer and its affiliates and Counterparty, shall provide for the payment by Counterparty of all expenses in connection
with such resale, including all fees and expenses of counsel for Dealer, shall contain representations, warranties and agreements of
Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements
of the Securities Act for such resales, and shall use best efforts to provide for the delivery of accountants’ “comfort letters”
to Dealer or such affiliate with respect to the financial statements and certain financial information contained in or incorporated by
reference into the offering memorandum prepared for the resale of such Shares;
(C) Counterparty
agrees that (i) any Shares or Share Termination Delivery Units so delivered to Dealer may be transferred by and among Dealer and
its affiliates, and Counterparty shall effect such transfer without any further action by Dealer and (ii) after the minimum “holding
period” within the meaning of Rule 144(d) under the Securities Act has elapsed with respect to such Shares or any securities
issued by Counterparty comprising such Share Termination Delivery Units, Counterparty shall promptly remove, or cause the transfer agent
for such Shares or securities to remove, any legends referring to any such restrictions or requirements from such Shares or securities,
without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document,
any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer); and
(D) Counterparty
shall not take, or cause to be taken, any action that would make unavailable either the exemption pursuant to Section 4(a)(2) of
the Securities Act for the sale by Counterparty to Dealer (or any affiliate designated by Dealer) of the Shares or Share Termination Delivery
Units, as the case may be, or the exemption pursuant to Section 4(a)(1) or Section 4(a)(3) of the Securities Act for
resales of the Shares or Share Termination Delivery Units, as the case may be, by Dealer (or any such affiliate of Dealer).
(d) Make-whole
Shares. If Counterparty makes the election described in clause (i)(B) of paragraph (c) of this Section 8, then Dealer
or its affiliates may sell (which sale shall be made in a commercially reasonable manner) such Shares or Share Termination Delivery Units,
as the case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery
of such Shares or Share Termination Delivery Units, as the case may be, and ending on the Exchange Business Day on which Dealer or its
affiliates completes the sale of a sufficient number of Shares or Share Termination Delivery Units, as the case may be, so that the realized
net proceeds of such sales exceed the Freely Tradeable Value. If any of such delivered Shares or Share Termination Delivery Units remain
after such realized net proceeds exceed the Freely Tradeable Value, Dealer shall return such remaining Shares or Share Termination Delivery
Units to Counterparty. If the Freely Tradeable Value exceeds the realized net proceeds from such resale, Counterparty shall transfer to
Dealer by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the final day of the
Resale Period (without giving effect to any extension thereof pursuant to the immediately succeeding sentence), the amount of such excess
(the “Additional Amount”) in cash or in a number of additional Shares or Share Termination Delivery Units, as the case
may be, (“Make-whole Shares”) in an amount that, based on the Relevant Price on such final day of the Resale Period
(as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a dollar value equal to the Additional
Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares in the manner contemplated by this Section 8(d).
This provision shall be applied successively until the Additional Amount is equal to zero, subject to Section 8(f).
(e) Beneficial
Ownership. Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Dealer be entitled to
receive, or shall be deemed to receive, any Shares if, immediately upon giving effect to such receipt of such Shares (and after taking
into account any Shares deliverable by Counterparty to Dealer at such time under any transaction or security other than the Transaction),
(i) the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the rules promulgated
thereunder) of Shares by Dealer, any of its affiliates subject to aggregation with Dealer for purposes of the “beneficial ownership”
test under Section 13 of the Exchange Act and all persons who may form a “group” (within the meaning of Rule 13d-5(b)(1) under
the Exchange Act) with Dealer with respect to “beneficial ownership” of any Shares (collectively, “Dealer Group”)
(or, to the extent that for any reason the equivalent calculation under Section 16 of the Exchange Act and the rules and regulations
thereunder results in a higher number, such higher number) would be equal to or greater than 8.0% or more of the outstanding Shares on
the date of determination or (ii) Dealer, Dealer Group or any person whose ownership position would be aggregated with that of Dealer
or Dealer Group (Dealer, Dealer Group or any such person, a “Dealer Person”) under the Minnesota Business Corporations
or other federal, state or local law, rule, regulation or regulatory order or organizational documents or contracts of Counterparty applicable
to ownership of Shares (“Applicable Restrictions”), would own, beneficially own, constructively own, control, hold
the power to vote or otherwise meet a relevant definition of ownership in excess of a number of Shares equal to (x) the number of
Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval by a state
or federal regulator) of a Dealer Person under Applicable Restrictions and with respect to which such requirements have not been met
or the relevant approval has not been received or that would subject a Dealer Person to restrictions (including restrictions relating
to business combinations or other designated transactions) or have any other adverse effect on a Dealer Person under Applicable Restrictions
minus (y) 1.0% of the number of Shares outstanding on the date of determination (either such condition described in clause
(i) or (ii), an “Excess Ownership Position”). If any delivery owed to Dealer hereunder is not made, in whole
or in part, as a result of this provision, Counterparty’s obligation to make such delivery shall not be extinguished and Counterparty
shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Dealer gives notice
to Counterparty that such delivery would not result in the existence of an Excess Ownership Position.
(f) Limitations
on Settlement by Counterparty. Notwithstanding anything herein or in the Agreement to the contrary (except as set forth in this Section 8(f)),
in no event shall Counterparty be required to deliver Shares in connection with the Transaction in excess of 3,411,720 Shares, as such
number may be adjusted from time to time in accordance with the provisions hereof; provided that no such adjustment shall cause
the Capped Number to exceed the Available Shares (as in effect from time to time), other than as a result of actions of Counterparty
or events within Counterparty’s control (the “Capped Number”). Notwithstanding anything to the contrary in the
Agreement or the Equity Definitions, such limitation shall not affect the calculation of any Payment Obligation (as defined in Section 8(b)),
it being understood that if the Share Termination Alternative applies pursuant to Section 8(b), the number of Shares deliverable
pursuant to such Section shall not exceed the Capped Number. Counterparty represents and warrants to Dealer (which representation
and warranty shall be deemed to be repeated on each day that the Transaction is outstanding) that the Capped Number is equal to or less
than the number of authorized but unissued Shares of the Counterparty that are not reserved for future issuance in connection with transactions
in the Shares (other than the Transaction) on the date of the determination of the Capped Number (such Shares, the “Available
Shares”). In the event Counterparty shall not have delivered the full number of Shares otherwise deliverable as a result of
this Section 8(f) (the resulting deficit, the “Deficit Shares”), Counterparty shall be continually obligated
to deliver Shares, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, when, and
to the extent, that (A) Shares are repurchased, acquired or otherwise received by Counterparty or any of its subsidiaries after
the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares
previously reserved for issuance in respect of other transactions become no longer so reserved or (C) Counterparty additionally
authorizes any unissued Shares that are not reserved for other transactions (such events as set forth in clauses (A), (B) and (C) above,
collectively, the “Share Issuance Events”). In the event that there are any Deficit Shares or the proviso in
the first sentence of this Section 8(f) has prevented any adjustment to the Capped Number, (i) Counterparty shall promptly
notify Dealer of the occurrence of any of the Share Issuance Events (including the number
of Shares subject to clause (A), (B) or (C) and the
corresponding number of Shares to be delivered) and, as promptly as reasonably practicable, deliver such Shares thereafter, (ii) Counterparty
shall use its best efforts to cause Share Issuance Events to the extent necessary to deliver the full number of Deficit Shares or cause
the Capped Number to equal the Capped Number that would be in effect but for the proviso set forth in the first sentence of this
Section 8(f), as the case may be, and (iii) Counterparty shall not, until Counterparty’s obligations under the Transaction
have been satisfied in full, use any Shares that become available for potential delivery to Dealer as a result of any Share Issuance Event
for the settlement or satisfaction of any transaction or obligation
other than the Transaction or any other warrant transaction between Counterparty and Dealer or reserve any such Shares for future issuance
for any purpose other than to satisfy Counterparty’s obligations to Dealer under the Transaction or any other warrant transaction
between Counterparty and Dealer.
(g) Equity
Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction
that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy. For the avoidance of doubt, the
parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim arising
as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement. For the avoidance of doubt,
the parties acknowledge that the obligations of Counterparty under this Confirmation are not secured by any collateral that would otherwise
secure the obligations of Counterparty herein under or pursuant to any other agreement.
(h) Amendments
to Equity Definitions. The following amendments shall be made to the Equity Definitions:
(i) The
first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as
follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation
of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent
will determine whether such Potential Adjustment Event has an effect on the theoretical value of the relevant Shares or options on the
Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and, the portion of such sentence
immediately preceding clause (ii) thereof is hereby amended by deleting the words “diluting or concentrative” and the
words “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate
or liquidity relative to the relevant Shares)” and replacing such latter phrase with the words “(and, for the avoidance of
doubt, adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative
to the relevant Shares)”;
(ii) Sections
11.2(a) and 11.2(e)(vii) of the Equity Definitions are hereby amended by deleting the words “a diluting or concentrative”
and, in the case of Section 11.2(e)(vii), replacing them with “an economic” and, in each case, adding the phrase “or
options on the Shares” at the end of the sentence;
(iii) Section 12.7(b) of
the Equity Definitions is hereby amended by deleting the words “(and in any event within five Exchange Business Days) by the parties
after” appearing after the words “agreed promptly” and replacing with the words “by the parties on or prior to”;
(iv) Section 12.9(b)(iv) of
the Equity Definitions is hereby amended by (A) deleting (1) subsection (A) in its entirety, (2) the phrase “or
(B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); (B) replacing “will
lend” with “lends” in subsection (B); and (C) deleting the phrase “neither the Non-Hedging Party nor the
Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence; “Lending Party”
means a third party that is not the Counterparty or an affiliate of the Counterparty that Dealer considers to be an acceptable counterparty
(acting in good faith and in a reasonable manner in light of (x) other transactions that Dealer (or its agent or affiliate) may have
entered into with such party and (y) any legal, regulatory or self-regulatory requirements or related policies and procedures (whether
or not such requirements or related policies and procedures are imposed by law or have been voluntarily adopted by Dealer) that apply
generally to transactions of a nature and kind similar to the transactions contemplated with such party); and
(v) Section 12.9(b)(v) of
the Equity Definitions is hereby amended by (A) adding the word “or” immediately before subsection “(B)”
and deleting the comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its entirety, (2) deleting the
word “or” immediately preceding subsection (C), (3) replacing in the penultimate sentence the words “either party”
with “the Hedging Party” and (4) deleting clause (X) in the final sentence.
(i) Transfer
and Assignment. Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part, at
any time without the consent of Counterparty.
(j) 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.
(k) Additional
Termination Events. The occurrence of any of the following shall constitute an Additional Termination Event with respect to which
the Transaction shall be the sole Affected Transaction and Counterparty shall be the sole Affected Party and Dealer shall be the party
entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement and to determine the amount payable
pursuant to Section 6(e) of the Agreement; provided that with respect to any Additional Termination Event, Dealer may
choose to treat part of the Transaction as the sole Affected Transaction, and, upon the termination of the Affected Transaction, a Transaction
with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated
for all purposes as the Transaction, which shall remain in full force and effect:
(i) Dealer
reasonably determines that it is advisable to terminate a portion of the Transaction so that Dealer’s related commercially reasonable
hedging activities will comply with applicable securities laws, rules or regulations or related policies and procedures of Dealer
(whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer), or Dealer, despite
using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal to hedge its obligations pursuant
to this Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory or self-regulatory
requirements;
(ii) at
any time at which any Excess Ownership Position occurs, Dealer, in its discretion, is unable to effect a transfer or assignment to a third
party of the Transaction or any other transaction between the parties after using its commercially reasonable efforts on pricing and terms
and within a time period reasonably acceptable to Dealer such that an Excess Ownership Position no longer exists; provided that
Dealer shall treat only that portion of the Transaction as the Affected Transaction as necessary so that such Excess Ownership Position
would no longer exist following the resulting partial termination of the Transaction (after taking into account commercially reasonable
adjustments to Dealer’s commercially reasonable Hedge Positions from such partial termination);
(iii) a
“person” or “group” (within the meaning of Section 13(d) of the Exchange Act), other than Counterparty
or its wholly-owned subsidiaries, becomes the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3
under the Exchange Act, of the common equity of Counterparty representing more than 50.0% of the voting power of such common equity;
(iv) (1) any
sale, lease or other transfer, in one transaction or a series of transactions, of all or substantially all of the assets of Counterparty
and its subsidiaries, taken as a whole, to any person; or (2) any transaction or series of related transactions in connection with
which (whether by means of merger, consolidation, share exchange, combination, reclassification, recapitalization, acquisition, liquidation
or otherwise) all of the Shares are exchanged for, converted into, acquired for, or constitutes solely the right to receive, other securities,
cash or other property;
provided that, notwithstanding
the foregoing, any transaction or event set forth in the immediately preceding clause (iv) shall not constitute an Additional Termination
Event if at least 90% of the consideration received or to be received by holders of the Shares (excluding cash payments for fractional
Shares or pursuant to dissenters rights) in connection with the transaction or transactions
that would otherwise constitute
an Additional Termination Event pursuant to clause (iv) of this Section 8(k) consists of shares of common stock
listed on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their
respective successors) or that will be so listed when issued or exchanged in connection with such transaction or transactions, and
following such transaction or transactions, the Shares will consist of such consideration, excluding cash payments for fractional
shares. For the avoidance of doubt, an event that is not considered an Additional Termination Event pursuant to the immediately
preceding sentence shall not be an Additional Termination Event solely because such event could also be described by clause
(iii) above; or
(v) holders
of Shares approve any plan or proposal for Counterparty’s liquidation or dissolution (other than in a transaction described in (iv) above).
(l) Early
Unwind. In the event the sale by Counterparty of the Firm Securities (defined under the Purchase Agreement) is not consummated pursuant
to the Purchase Agreement for any reason by the close of business in New York on January 23, 2023 (or such later date as agreed upon
by the parties (January 23, 2023 or such later date being the “Early Unwind Date”), the Transaction shall automatically
terminate (the “Early Unwind”) on the Early Unwind Date and (i) the Transaction and all of the respective rights
and obligations of Dealer and Counterparty thereunder shall be cancelled and terminated and (ii) Counterparty shall pay to Dealer
an amount in cash equal to the aggregate amount of actual costs and expenses relating to the unwinding of Dealer’s commercially
reasonable hedging activities in respect of the Transaction (including market losses incurred in reselling any Shares purchased by Dealer
or its affiliates in connection with such hedging activities, unless Counterparty agrees to purchase any such Shares at the cost at which
Dealer purchased such Shares). Following such termination, cancellation and payment, each party shall be released and discharged by the
other party from, and agrees not to make any claim against the other party with respect to, any obligations or liabilities of either party
arising out of, and to be performed in connection with, the Transaction either prior to or after the Early Unwind Date. Dealer and Counterparty
represent and acknowledge to the other that upon an Early Unwind and following the payment referred to above, all obligations with respect
to the Transaction shall be deemed fully and finally discharged.
(m) No
Netting and Set-off. The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party waives
any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any
delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between
parties hereto, by operation of law or otherwise.
(n) Delivery
of Cash. For the avoidance of doubt, nothing in this Confirmation shall be interpreted as requiring the Counterparty to deliver cash
in respect of the settlement of the Transaction, except in circumstances where the required cash settlement thereof is permitted for classification
of the contract as equity by ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, as in effect on the relevant
Trade Date (including, without limitation, where the Counterparty so elects to deliver cash or fails timely to elect to deliver Shares
or Share Termination Delivery Property in respect of such settlement).
(o) Agreements
and Acknowledgements Regarding Hedging. Counterparty understands, acknowledges and agrees that: (A) at any time on and prior
to the last 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 VWAP Prices; (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 VWAP Prices, each in a manner that may be adverse to Counterparty; and (E) the Transaction is
a derivatives transaction in which it has granted Dealer an option, and Dealer may purchase shares for its own account at an average price
that may be greater than, or less than, the price paid by Counterparty under the terms of the Transaction.
(p) Wall
Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and
Accountability Act of 2010 (the “WSTAA”), the parties hereby agree that neither the enactment of the WSTAA (or any
statute containing any legal certainty provision similar to Section 739 of the WSTAA) or any regulation under the WSTAA (or any
such statute), nor any requirement under the WSTAA (or any statute containing any legal certainty provision similar to
Section 739 of the WSTAA) or an amendment made by the WSTAA (or any such statute), 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, Increased Cost of Hedging or Illegality).
(q) Governing
Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE,
OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(r) Amendment.
This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty
and Dealer.
(s) 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.
(t) Tax
Matters.
(i) Withholding
Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act. “Indemnifiable
Tax” as defined in Section 14 of the Agreement, shall not include any withholding tax imposed or collected pursuant to Sections
1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or
official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation
of such Sections of the Code (a “FATCA Withholding Tax”). 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.
(ii) HIRE
Act. To the extent that either party to the Agreement with respect to this Transaction is not an adhering party to the ISDA 2015 Section 871(m) Protocol
published by the International Swaps and Derivatives Association, Inc. on November 2, 2015 and available at www.isda.org, as
may be amended, supplemented, replaced or superseded from time to time (the “871(m) Protocol”), the parties agree
that the provisions and amendments contained in the Attachment to the 871(m) Protocol are incorporated into and apply to the Agreement
with respect to this Transaction as if set forth in full herein. The parties further agree that, solely for purposes of applying such
provisions and amendments to the Agreement with respect to this Transaction, references to “each Covered Agreement” in the
871(m) Protocol will be deemed to be references to the Master Agreement with respect to this Transaction, and references to the “Implementation
Date” in the 871(m) Protocol will be deemed to be references to the Trade Date of this Transaction.
(iii) Tax
documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto,
(i) on or before the date of execution of this Confirmation, (ii) upon reasonable request of Dealer and (iii) promptly
upon learning that any such tax form previously provided by Counterparty has become obsolete or incorrect. Dealer shall provide to Counterparty
a valid U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on or before the date of execution of this Confirmation,
(ii) upon reasonable request of Counterparty and (iii) promptly upon learning that any such tax form previously provided by
Dealer has become obsolete or incorrect.
(iv) Tax
Representations. For the purpose of Section 3(f) of the Agreement, Counterparty is a corporation for U.S. federal income tax
purposes and is organized under the laws of the State of Minnesota. Counterparty represents to Dealer that for U.S. federal income tax
purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations)
and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States Treasury Regulations).
For the purpose of Section 3(f) of the Agreement, Dealer represents to Counterparty that for U.S. federal income tax purposes
it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations)
and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States Treasury Regulations).
(u) QFC
Stay Provisions.
(i) (A) In
the event that Dealer becomes subject to a proceeding under (i) the Federal Deposit Insurance Act and the regulations promulgated
thereunder or (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder
(a “U.S. Special Resolution Regime”) the transfer from Dealer of this Confirmation, and any interest and obligation
in or under, and any property securing, this Confirmation, will be effective to the same extent as the transfer would be effective under
the U.S. Special Resolution Regime if this Confirmation, and any interest and obligation in or under, and any property securing, this
Confirmation were governed by the laws of the United States or a state of the United States. (B) In the event that Dealer or an Affiliate
becomes subject to a proceeding under a U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§ 252.81,
47.2 or 382.1, as applicable (“Default Right”)) under this Confirmation that may be exercised against Dealer are permitted
to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Confirmation
were governed by the laws of the United States or a state of the United States.
(ii) Notwithstanding
anything to the contrary in this Confirmation, the parties expressly acknowledge and agree that: (A) Counterparty shall not be permitted
to exercise any Default Right with respect to this Confirmation or any Affiliate Credit Enhancement that is related, directly or indirectly,
to an Affiliate of Dealer becoming subject to receivership, insolvency, liquidation, resolution, or similar proceeding (an “Insolvency
Proceeding”), except to the extent that the exercise of such Default Right would be permitted under the provisions of 12 C.F.R.
252.84, 12 C.F.R. 47.5 or 12 C.F.R. 382.4, as applicable; and (B) Nothing in this Confirmation shall prohibit the transfer of any
Affiliate Credit Enhancement, any interest or obligation in or under such Affiliate Credit Enhancement, or any property securing such
Affiliate Credit Enhancement, to a transferee upon or following an Affiliate of Dealer becoming subject to an Insolvency Proceeding, unless
the transfer would result in the Counterparty being the beneficiary of such Affiliate Credit Enhancement in violation of any law applicable
to the Counterparty.
(iii) If
Counterparty has previously adhered to, or subsequently adheres to, the ISDA 2018 U.S. Resolution Stay Protocol as published by the International
Swaps and Derivatives Association, Inc. as of July 31, 2018 (the “ISDA U.S. Protocol”), the terms of such
protocol shall be incorporated into and form a part of this Confirmation and the terms of the ISDA U.S. Protocol shall supersede and replace
the terms of this Section 8(u). For purposes of incorporating the ISDA U.S. Protocol, Dealer shall be deemed to be a Regulated Entity,
Counterparty shall be deemed to be an Adhering Party, and this Confirmation shall be deemed to be a Protocol Covered Agreement. Capitalized
terms used but not defined in this paragraph shall have the meanings given to them in the ISDA U.S. Protocol.
(iv) Dealer
and Counterparty agree that to the extent there are any outstanding “in-scope QFCs,” as defined in 12 C.F.R. § 252.82(d),
that are not excluded under 12 C.F.R. § 252.88, between Dealer and Counterparty that do not otherwise comply with the requirements
of 12 C.F.R. § 252.2, 252.81–8 (each such agreement, a “Preexisting In-Scope Agreement”), then each such
Preexisting In-Scope Agreement is hereby amended to include the foregoing provisions in this
Section 8(u), with references to “this
Confirmation” being understood to be references to the applicable Preexisting In-Scope Agreement.
For purposes of this Section 8(u):
“Affiliate” is defined
in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Credit Enhancement”
means any credit enhancement or credit support arrangement in support of the obligations of Dealer under or with respect to this Confirmation,
including any guarantee, collateral arrangement (including any pledge, charge, mortgage or other security interest in collateral or title
transfer arrangement), trust or similar arrangement, letter of credit, transfer of margin or any similar arrangement.
9. Arbitration:
(a) All
parties to this Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided
by the rules of the arbitration forum in which a claim is filed.
(b) Arbitration
awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.
(c) The
ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court
proceedings.
(d) The
arbitrators do not have to explain the reason(s) for their award.
(e) The
panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless
Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with
the securities industry.
(f) The
rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible
for arbitration may be brought in court.
(g) The
rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Confirmation.
(h) Counterparty
agrees that any and all controversies that may arise between Counterparty and Dealer, including, but not limited to, those arising out
of or relating to the Agreement or the Transaction hereunder, shall be determined by arbitration conducted before FINRA Dispute Resolution
(“FINRA-DR”), or, if FINRA-DR declines to hear the matter, before the American Arbitration Association, in accordance with
their arbitration rules then in force. The award of the arbitrator shall be final, and judgment upon the award rendered may be entered
in any court, state or federal, having jurisdiction.
(i) No
person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class
with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class
is decertified; or (iii) Counterparty is excluded from the class by the court.
(j) Such
forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Confirmation except to the extent
stated herein.
Counterparty hereby agrees
(a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified
and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the
agreement between Dealer and Counterparty with respect to the Transaction, by manually signing this Confirmation or this page hereof
as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy
to Goldman Sachs & Co. LLC, Equity Derivatives Documentation Department, Facsimile No. (212) 428-1980/83
| Yours faithfully, |
| | |
| GOLDMAN SACHS & CO. LLC |
| | |
| By: | /s/ Mike Voris |
| | Name: Mike Voris |
| | Title: Partner |
[Signature Page to Base Warrant Confirmation]
Agreed and Accepted By:
WINNEBAGO INDUSTRIES, INC.
By: | /s/ Bryan L. Hughes |
|
| Name: Bryan L. Hughes |
|
| Title: Chief Financial Officer and |
|
| Senior Vice President |
|
[Signature Page to GS Warrant Confirmation]
Annex A
For each Component of the Transaction, the Number of Warrants and Expiration
Date is set forth below.
Component Number |
Number of Warrants |
Expiration Date |
1 |
11,373 |
April 15, 2030 |
2 |
11,373 |
April 16, 2030 |
3 |
11,373 |
April 17, 2030 |
4 |
11,373 |
April 18, 2030 |
5 |
11,373 |
April 22, 2030 |
6 |
11,373 |
April 23, 2030 |
7 |
11,373 |
April 24, 2030 |
8 |
11,373 |
April 25, 2030 |
9 |
11,373 |
April 26, 2030 |
10 |
11,373 |
April 29, 2030 |
11 |
11,373 |
April 30, 2030 |
12 |
11,373 |
May 1, 2030 |
13 |
11,373 |
May 2, 2030 |
14 |
11,373 |
May 3, 2030 |
15 |
11,373 |
May 6, 2030 |
16 |
11,373 |
May 7, 2030 |
17 |
11,373 |
May 8, 2030 |
18 |
11,373 |
May 9, 2030 |
19 |
11,373 |
May 10, 2030 |
20 |
11,373 |
May 13, 2030 |
21 |
11,373 |
May 14, 2030 |
22 |
11,373 |
May 15, 2030 |
23 |
11,373 |
May 16, 2030 |
24 |
11,373 |
May 17, 2030 |
25 |
11,373 |
May 20, 2030 |
26 |
11,373 |
May 21, 2030 |
27 |
11,373 |
May 22, 2030 |
28 |
11,373 |
May 23, 2030 |
29 |
11,373 |
May 24, 2030 |
30 |
11,373 |
May 28, 2030 |
31 |
11,373 |
May 29, 2030 |
32 |
11,373 |
May 30, 2030 |
33 |
11,373 |
May 31, 2030 |
34 |
11,373 |
June 3, 2030 |
35 |
11,373 |
June 4, 2030 |
36 |
11,373 |
June 5, 2030 |
37 |
11,373 |
June 6, 2030 |
38 |
11,373 |
June 7, 2030 |
39 |
11,373 |
June 10, 2030 |
40 |
11,373 |
June 11, 2030 |
41 |
11,372 |
June 12, 2030 |
42 |
11,372 |
June 13, 2030 |
43 |
11,372 |
June 14, 2030 |
44 |
11,372 |
June 17, 2030 |
45 |
11,372 |
June 18, 2030 |
46 |
11,372 |
June 20, 2030 |
47 |
11,372 |
June 21, 2030 |
48 |
11,372 |
June 24, 2030 |
49 |
11,372 |
June 25, 2030 |
|
|
|
50 |
11,372 |
June 26, 2030 |
51 |
11,372 |
June 27, 2030 |
52 |
11,372 |
June 28, 2030 |
53 |
11,372 |
July 1, 2030 |
54 |
11,372 |
July 2, 2030 |
55 |
11,372 |
July 3, 2030 |
56 |
11,372 |
July 5, 2030 |
57 |
11,372 |
July 8, 2030 |
58 |
11,372 |
July 9, 2030 |
59 |
11,372 |
July 10, 2030 |
60 |
11,372 |
July 11, 2030 |
61 |
11,372 |
July 12, 2030 |
62 |
11,372 |
July 15, 2030 |
63 |
11,372 |
July 16, 2030 |
64 |
11,372 |
July 17, 2030 |
65 |
11,372 |
July 18, 2030 |
66 |
11,372 |
July 19, 2030 |
67 |
11,372 |
July 22, 2030 |
68 |
11,372 |
July 23, 2030 |
69 |
11,372 |
July 24, 2030 |
70 |
11,372 |
July 25, 2030 |
71 |
11,372 |
July 26, 2030 |
72 |
11,372 |
July 29, 2030 |
73 |
11,372 |
July 30, 2030 |
74 |
11,372 |
July 31, 2030 |
75 |
11,372 |
August 1, 2030 |
76 |
11,372 |
August 2, 2030 |
77 |
11,372 |
August 5, 2030 |
78 |
11,372 |
August 6, 2030 |
79 |
11,372 |
August 7, 2030 |
80 |
11,372 |
August 8, 2030 |
81 |
11,372 |
August 9, 2030 |
82 |
11,372 |
August 12, 2030 |
83 |
11,372 |
August 13, 2030 |
84 |
11,372 |
August 14, 2030 |
85 |
11,372 |
August 15, 2030 |
86 |
11,372 |
August 16, 2030 |
87 |
11,372 |
August 19, 2030 |
88 |
11,372 |
August 20, 2030 |
89 |
11,372 |
August 21, 2030 |
90 |
11,372 |
August 22, 2030 |
91 |
11,372 |
August 23, 2030 |
92 |
11,372 |
August 26, 2030 |
93 |
11,372 |
August 27, 2030 |
94 |
11,372 |
August 28, 2030 |
95 |
11,372 |
August 29, 2030 |
96 |
11,372 |
August 30, 2030 |
97 |
11,372 |
September 3, 2030 |
98 |
11,372 |
September 4, 2030 |
99 |
11,372 |
September 5, 2030 |
100 |
11,372 |
September 6, 2030 |
Exhibit 10.9
Bank of Montreal
55 Bloor Street West, 18th Floor
Toronto, Ontario M4W 1A5
Opening Transaction
To: |
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, Minnesota 55347 |
|
|
From: |
Bank of Montreal |
|
|
Re: |
Base Issuer Warrant Transaction |
|
|
Date: |
January 18, 2024 |
|
|
Dear Ladies and Gentlemen:
The purpose of this communication
(this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on
the Trade Date specified below (the “Transaction”) between Bank of Montreal (“Dealer”) and Winnebago
Industries, Inc. (“Counterparty”). Dealer is acting as principal in this Transaction and BMO Capital Markets
Corp. (“Agent”), its affiliate, is acting as agent for this Transaction solely in connection with Rule 15a-6
of the Exchange Act (as defined herein), as amended. This communication constitutes a “Confirmation” as referred to in the
Agreement specified below.
1. This
Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (the “2006 Definitions”)
and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and
together with the 2006 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”). For purposes of the Equity Definitions, each reference herein to a Warrant shall
be deemed to be a reference to a Call Option or an Option, as context requires.
Counterparty is hereby advised,
and Counterparty acknowledges, that Dealer has engaged in, or refrained from engaging in, substantial financial transactions and has
taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the
terms and conditions set forth below.
This Confirmation evidences
a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.
This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement
(Multicurrency—Cross Border) as if Dealer and Counterparty had executed an agreement in such form on the date hereof (but without
any Schedule except for (i) the election of Loss and Second Method and US Dollars (“USD”) as the Termination
Currency, (ii) the replacement of the word “third” in the last line of Section 5(a)(i) of the Agreement with
the word “first” and (iii) (a) the election that the “Cross Default” provisions of Section 5(a)(vi) of
the Agreement shall apply to Counterparty with a “Threshold Amount” of USD35.0 million), (b) (b) the
phrase “, or becoming capable at such time of being declared,” shall be deleted from clause (1) of such Section 5(a)(vi),
and (c) the following language shall be added to the end thereof: “Notwithstanding the foregoing, a default under subsection
(2) hereof shall not constitute an Event of Default if (x) the default was caused solely by error or omission of an administrative
or operational nature; (y) funds were available to enable the party to make the payment when due; and (z) the payment is made
within two Local Business Days of such party’s receipt of written notice of its failure to pay.”.
All provisions contained
in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event of
any inconsistency among this Confirmation, the Equity Definitions, the 2006 Definitions or the Agreement, the following shall prevail
in the order of precedence indicated: (i) this Confirmation; (ii) the Equity Definitions; (iii) the 2006 Definitions;
and (iv) the Agreement. For the avoidance of doubt, except to the extent of an express conflict, the application of any provision
of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions shall not be construed to exclude or limit any other
provision of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions.
The Transaction hereunder
shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Counterparty or any confirmation
or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Counterparty,
then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to
which Dealer and Counterparty are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such
existing or deemed ISDA Master Agreement.
2. The
Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of the Equity Definitions. The
terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms:
Trade Date: | January 18, 2023 |
| |
Effective Date: | January 23, 2023, or such other date as agreed
between the parties, subject to Section 8(l) below |
| |
Components: | The Transaction will be divided
into individual Components, each with the terms set forth in this Confirmation, and, in particular,
with the Number of Warrants and Expiration Date set forth in this Confirmation. The payments
and deliveries to be made upon settlement of the Transaction will be determined separately
for each Component as if each Component were a separate Transaction under the Agreement. |
Warrant Style: |
European |
|
|
Warrant Type: |
Call |
| |
Seller: | Counterparty |
| |
Buyer: | Dealer |
| |
Shares: | The Common Stock of Counterparty, par value USD0.50 (Ticker
Symbol: “WGO”). |
| |
Number of Warrants: |
For each Component, as provided in Annex A to this Confirmation. |
|
|
Warrant Entitlement: |
One Share per Warrant |
|
|
Strike Price: |
USD135.2800 |
|
|
|
Notwithstanding anything to the contrary in the Agreement, this Confirmation
or the Equity Definitions, in no event shall the Strike Price be subject to adjustment to the extent that, after giving effect to
such adjustment, the Strike Price would be |
| less than USD67.2580, except for any adjustment pursuant to
the terms of this Confirmation and the Equity Definitions in connection with a stock split
or similar change to Counterparty’s capitalization. |
| |
Number of Shares: | As of any date, a number of Shares equal to the
product of the Number of Warrants and the Warrant Entitlement. |
| |
Premium: | USD8,940,000 |
| |
Premium Payment Date: | The Effective Date |
| |
Exchange: | New York Stock Exchange |
| |
Related Exchange: | All Exchanges |
| |
Procedures for Exercise: | |
| |
In respect of any Component: | |
| |
Expiration Time: |
Valuation Time |
|
|
Expiration Date: |
As provided in Annex A to this Confirmation (or, if such date
is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for another Component);
provided that if that date is a Disrupted Day, the Expiration Date for such Component shall be the first succeeding Scheduled
Trading Day that is not a Disrupted Day and is not and 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 an Expiration Date in respect of any other Component for
the Transaction). Notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market Disruption Event
occurs on any Expiration Date, the Calculation Agent may determine that such Expiration Date is a Disrupted Day only in part, in
which case the Calculation Agent shall make adjustments to the Number of Warrants for the relevant Component for which such day shall
be the Expiration Date, 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 may determine the VWAP Price for such Expiration
Date based on transactions in the Shares taking into account the nature and duration of such Market Disruption Event. Any Scheduled
Trading Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed
not to be a Scheduled Trading Day; if a closure of the Exchange prior to its normal close of trading on any Scheduled |
|
Trading Day is scheduled following the date hereof, then such Scheduled Trading Day shall
be deemed to be a Disrupted Day in full. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring
on an Expiration Date. “Final Disruption Date” means September 20, 2030. |
|
|
Market Disruption Event: |
Section 6.3(a) of the Equity Definitions is hereby amended by (A) deleting
the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time
or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof and (B) by replacing the words “or (iii) an
Early Closure.” therein with “(iii) an Early Closure, or (iv) a Regulatory Disruption.” |
|
|
|
Section 6.3(d) of the Equity Definitions is hereby amended by deleting
the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof. |
|
|
Regulatory Disruption: |
Any event that Dealer, in its reasonable discretion, determines makes
it appropriate, with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether
or not such requirements or related policies and procedures are imposed by law or have been voluntarily adopted by Dealer and provided
any such policies and procedures are related to legal, regulatory or self-regulatory issues generally applicable to the Transaction
and are applied to the Transaction in a non-discriminatory manner), for Dealer to refrain from or decrease any market activity connected
with the Transaction. Dealer shall notify Counterparty as soon as reasonably practicable that a Regulatory Disruption has occurred
and the Expiration Dates affected by it. |
|
|
Automatic Exercise: |
Applicable; and means that the Number of Warrants for the corresponding
Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date unless Dealer notifies
Seller (by telephone or in writing) prior to the Expiration Time on such Expiration Date that it does not wish Automatic Exercise
to occur, in which case Automatic Exercise will not apply to such Expiration Date. |
|
|
Counterparty’s Telephone Number and Telex and/or Facsimile Number
and Contact Details for purpose of Giving Notice: |
As provided in Section 6(a) below. |
|
|
Settlement Terms: |
|
|
|
In respect of any Component: |
|
|
|
Settlement Currency: |
USD |
Net Share Settlement: |
On each Settlement Date, Counterparty shall deliver to
Dealer a number of Shares equal to the Number of Shares to be Delivered for such Settlement Date to the account specified by Dealer
and cash in lieu of any fractional Share valued at the Relevant Price on the Valuation Date corresponding to such Settlement Date.
If, in the reasonable opinion of Dealer, based on advice of counsel, for any reason, the Shares deliverable upon Net Share Settlement
would not be immediately freely transferable by Dealer under Rule 144 under the Securities Act of 1933, as amended (the “Securities
Act”), then Dealer may elect to either (x) accept delivery of such Shares notwithstanding any restriction on transfer or
(y) have the provisions set forth in Section 8(c) below apply. |
|
|
|
The Number of Shares to be Delivered shall be delivered by Counterparty
to Dealer no later than 12:00 noon (local time in New York City) on the relevant Settlement Date. |
|
|
Number of Shares to be Delivered: |
In respect of any Exercise Date, the product of (i) the number of Warrants
exercised or deemed exercised on such Exercise Date, (ii) the Warrant Entitlement and (iii) (A) the excess of the VWAP Price on the
Valuation Date occurring in respect of such Exercise Date over the Strike Price (or, if there is no such excess, zero) divided
by (B) such VWAP Price. |
|
|
VWAP Price: |
For any Exchange Business Day, as determined by the Calculation Agent
based on the New York Volume Weighted Average Price per Share for the regular trading session (including any extensions thereof)
of the Exchange on such Exchange Business Day (without regard to pre-open or after hours trading outside of such regular trading
session), as published by Bloomberg at 4:15 P.M., New York City time (or 15 minutes following the end of any extension of the regular
trading session), on such Exchange Business Day, on Bloomberg page “WGO.N <Equity> AQR” (or any successor thereto)
(or if such published volume weighted average price is unavailable or is manifestly incorrect, the market value of one Share on such
Exchange Business Day, as determined by the Calculation Agent using, if practicable, a volume weighted method). |
|
|
Other Applicable Provisions: |
The provisions of Sections 9.1(c), 9.4, 9.8, 9.9, 9.10, 9.11 and 9.12
of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction; provided
that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations
therein relating to restrictions, obligations, limitations or requirements under applicable securities laws that exist as a result
of the fact that Counterparty is the issuer of the Shares. |
Adjustments: |
|
|
|
In respect of any Component: |
|
|
|
Method of Adjustment: |
Calculation Agent Adjustment. For the avoidance of doubt, Calculation
Agent Adjustment shall continue to apply until the obligations of the parties (including any obligations of Counterparty pursuant
to Section 8(f) below) under the Transaction have been satisfied in full. |
|
|
Extraordinary Dividend: |
For any regular dividend period of Counterparty, any dividend or distribution
on the Shares with an ex-dividend date occurring during such regular dividend period (other than any dividend or distribution of
the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity Definitions) (a “Dividend”) the
amount or value of which (as determined by the Calculation Agent), when aggregated with the amount or value (as determined by the
Calculation Agent) of any and all previous Dividends with ex-dividend dates occurring in the same regular dividend period, exceeds
the Ordinary Dividend Amount. |
|
|
Ordinary Dividend Amount: |
For the first Dividend on the Shares for which the ex-dividend date
occurs during any regular quarterly dividend period of Counterparty, USD 0.31, and for any other Dividend on the Shares for which
the ex-dividend date occurs during the same regular quarterly dividend period, USD 0.00. |
|
|
Extraordinary Events: |
|
|
|
New Shares: |
In the definition of New Shares in Section 12.1(i) of the Equity Definitions,
the text in clause (i) thereof shall be deleted in its entirety and replaced with “publicly quoted, traded or listed on any
of The New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or their respective successors) and
of an entity or person that is a corporation organized under the laws of the United States, any State thereof or the District of
Columbia”. |
|
|
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 an Additional Termination Event under Section 8(k)(iv) of
this Confirmation, Dealer may elect, in its sole discretion, whether the provisions of Section 12.2 of the Equity Definitions or
Section 8(k)(iv) will apply. |
|
|
Consequences of Merger Events: |
|
|
|
(a) Share-for-Share: | Modified
Calculation Agent Adjustment |
| |
(b) Share-for-Other: | Cancellation
and Payment (Calculation Agent Determination); provided that Dealer may elect, in
its sole discretion, that Modified Calculation Agent |
| Adjustment shall apply for all or part of the Transaction. |
| |
(c) Share-for-Combined: | Cancellation
and Payment (Calculation Agent Determination); provided that Dealer may elect, in
its sole discretion, that Modified Calculation Agent Adjustment or Component Adjustment shall
apply for all or part of the Transaction. |
| |
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 an Additional Termination Event under Section 8(k)(iii) of this Confirmation,
Dealer may elect, in its sole discretion, whether the provisions of Section 12.3 of
the Equity Definitions or Section 8(k)(iii) will apply. |
| |
Consequences of Tender Offers: | |
| |
(a) Share-for-Share: | Modified
Calculation Agent Adjustment |
| |
(b) Share-for-Other: | Modified
Calculation Agent Adjustment |
| |
(c) Share-for-Combined: | Modified
Calculation Agent Adjustment |
| |
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, (x) 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”, (y) the
word “shall” in the second line shall be replaced with “may”, and (z) for the avoidance
of doubt, the Calculation Agent may determine whether the relevant Announcement Event has had an economic effect
on any Component (and, if so, adjust the terms of such Component accordingly) 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 thereof, 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 any 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 paid and/or delivered exceeds 15% of the market capitalization
of Issuer as of the date of such announcement (an “Transformative Transaction”)
or (z) the intention to enter into a Merger Event or Tender Offer or an Transformative
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 Transformative Transaction or (iii) any subsequent public announcement by any 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, whether or not by the same party, 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,” 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. |
|
|
Modified Calculation Agent Adjustment: |
If, in respect of a Merger Event, the Counterparty under the Transaction
following such Merger Event will not be the issuer of the New Shares, the Dealer may elect (in its sole discretion) for Cancellation
and Payment (Calculation Agent Determination) to apply. In addition, if, in respect of any Merger Event to which Modified Calculation
Agent Adjustment applies, the adjustments to be made in accordance with Section 12.2(e)(i) of the Equity Definitions would result
in Counterparty being different from the issuer of the Shares, then with respect to such Merger Event, as a condition precedent to
the adjustments contemplated in Section 12.2(e)(i) of the Equity Definitions, Counterparty and the issuer of the Shares shall, prior
to the Merger Date, have entered into such documentation containing representations, warranties and agreements relating to securities
law and other issues as requested by Dealer that Dealer has determined, in its reasonable discretion, to be reasonably necessary
or appropriate to allow Dealer to continue as a party to the Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions,
and to preserve its hedging or hedge unwind activities in connection with the Transaction in a manner compliant with applicable legal,
regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer (whether or not such requirements
or related policies and procedures are imposed by law or have been voluntarily adopted by Dealer), and if such conditions are not
met or if |
|
the Calculation Agent determines that no adjustment that
it could make under Section 12.2(e)(i) of the Equity Definitions will produce a commercially reasonable result, then the consequences
set forth in Section 12.2(e)(ii) of the Equity Definitions shall apply. |
|
|
Composition of Combined Consideration: |
Notwithstanding anything to the contrary in the Equity Definitions,
if the composition of Combined Consideration in respect of any Share-for-Combined Merger Event could be determined by a holder of
Shares, Dealer shall determine the composition of such Combined Consideration assumed for purposes of adjustments and deliveries
hereunder in its sole discretion. |
|
|
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 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 Termination Event(s): |
Notwithstanding anything to the contrary in the Equity Definitions,
if, as a result of an Extraordinary Event, the Transaction would be cancelled or terminated (whether in whole or in part) pursuant
to Article 12 of the Equity Definitions, an Additional Termination Event (with the Transaction (or the cancelled or terminated portion
thereof) being the Affected Transaction and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of
Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to such Affected Transaction. |
|
|
Additional Disruption Events: |
|
|
|
(a) Change in Law: | Applicable;
provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by
(i) replacing the phrase “the interpretation” in the third line thereof
with the phrase “, or public announcement of, the formal or informal interpretation”,
(ii) by adding the phrase “and/or Hedge Position” after the word “Shares”
in clause (X) thereof and (iii) by immediately following the word “Transaction”
in clause (X) thereof, adding the phrase “in the manner contemplated by the Hedging
Party on the Trade Date”; and provided further that Section 12.9(a)(ii) of
the Equity Definitions is hereby amended by (i) replacing the parenthetical beginning
after the word “regulation” in the second line thereof with the |
| phrase “(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)” and (ii) adding the
words “, or holding, acquiring or disposing of Shares or any Hedge Positions relating
to,” after the words “obligations under” in clause (Y) thereof. |
| |
(b) Failure to Deliver: | Not
Applicable |
| |
(c) Insolvency Filing: | Applicable |
| |
(d) 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 paragraphs at the end of such Section: |
| |
| |
|
“Such inability described in clauses (A) or (B) above
shall not constitute a “Hedging Disruption” if such inability results from Hedging
Party’s creditworthiness. |
| |
| |
|
For the avoidance of doubt, (i) the term “equity
price risk” shall be deemed to include, but shall not be limited to, stock price and
volatility risk, and (ii) the transactions or assets referred to in phrases (A) or
(B) above must be available on commercially reasonable pricing and other 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”. |
| |
(e) Increased Cost of Hedging: | Applicable;
provided that (i) that such increased cost described in Section 12.9(vi) of
the Equity Definitions shall not constitute an “Increased Cost of Hedging” if
such increased cost results from Hedging Party’s creditworthiness or financial position,
and (ii) the following parenthetical shall be inserted immediately following the word
“expense” in the third line of Section 12.9(a)(vi) of the Equity Definitions:
“(including, for the avoidance of doubt, the incurrence of any stock borrow expense
in excess of Hedging Party’s expectation as of the Trade Date, other than to the extent
resulting from an Increased Cost of Stock Borrow)”. |
(f) Loss of Stock Borrow: | Applicable |
| |
Maximum Stock Loan Rate: | 2.00
% per annum |
| |
(g) Increased Cost of Stock Borrow: | Applicable |
| |
Initial Stock Loan
Rate: | Prior
to January 16, 2030, 0% per annum, and thereafter, 0.25 % per annum. |
| |
Hedging Party: | Dealer for all applicable Additional Disruption Events. |
| |
Determining Party: | Dealer for all applicable Additional Disruption
Events. All calculations and determinations by the
Determining Party shall be made in good faith and in a commercially reasonable manner. Following
any calculation by the Determining Party hereunder, upon written request by Counterparty,
the Determining Party will, within five Exchange Business Days immediately following such
request, provide to Counterparty 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; provided, however, that in no
event will the Determining Party be obligated to share with Counterparty any proprietary
or confidential data or information or any proprietary or confidential models used by it. |
| |
Non-Reliance: | Applicable |
| |
Agreements and Acknowledgments Regarding Hedging Activities: | Applicable |
| |
Additional Acknowledgments: | Applicable |
| |
3. 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, if the Calculation Agent fails to timely make
any calculation, adjustment or determination required to be made by the Calculation Agent
hereunder or to perform any obligations of the Calculation Agent hereunder and such failure
continues for five Exchange Business Days following notice to the Calculation Agent by Counterparty
of such failure, Counterparty shall have the right to designate a nationally recognize third-party
dealer in over-the-counter corporate equity derivatives to act, during the period commencing
on the first date the Calculation Agent fails to timely make such calculation, adjustment
or determination or to perform such obligation, as the case may be, and ending on the earlier
of the Early Termination Date with respect to such Event of Default and the date on which
such Event of Default is no longer continuing, as Calculation Agent. |
|
Following any calculation
by the Calculation Agent hereunder, upon written request by Counterparty, the Calculation Agent will, within five Exchange Business
Days immediately following such request, provide to Counterparty by email to the email 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
the basis for such calculation; provided that in no event will Dealer be obligated to share with Counterparty any proprietary
or confidential data or information or any proprietary or confidential models used by it or any information that is subject to an
obligation not to disclose such information.. |
4. Account
Details:
Dealer Payment Instructions:
Bank: Bank of New York
ABA#: 021000018
A/C#: 8661062712
Acct Name – BMO Nesbitt Burns
Account for delivery
of Shares to Dealer: To be provided by Dealer
Counterparty Payment
Instructions: To be provided by Counterparty.
5. Offices:
Dealer is a Multibranch Party and for
purposes of this Confirmation and each Transaction, may act through its London and Toronto Offices.
The Office of Counterparty for the Transaction
is: Inapplicable, Counterparty is not a Multibranch Party.
6. Notices:
For purposes of this Confirmation:
(a) Address
for notices or communications to Counterparty:
Winnebago Industries, Inc.
13200 Pioneer Trail, Suite 150
Eden Prairie, MN 55347
Attention: Kathy Hiebert, Treasurer
(b) Address
for notices or communications to Dealer:
| To: | Bank of Montreal |
| | 55 Bloor Street West, 18th Floor |
| | Toronto, Ontario M4W 1A5 |
| | Canada |
| Attn: | Manager, Derivatives Operations |
| Telephone: | (416) 552-4177 |
| Email: | BMOEquityLinked@bmo.com |
| | |
| With a copy to: | |
| | |
| To: | Bank of Montreal |
| | 100 King Street West, 20th Floor |
| | Toronto,
Ontario M5X 1A1 |
| | Canada |
| Attn: | Associate General Counsel & Managing Director, Derivatives Legal
Group |
| Facsimile: | (416) 956-2318 |
| | |
| And a copy to: | |
| | |
| To: | BMO Capital Markets Corp. |
| | 151 West 42nd Street 32nd Floor |
| | New York, New York 10036 |
| Attn: | Brian Riley |
| Telephone: | (212) 605-1414 |
| Email: | BMOEquityLinked@bmo.com |
7. Representations,
Warranties and Agreements:
(a) In
addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants
to and for the benefit of, and agrees with, Dealer as follows:
(i) On
the Trade Date and as of the date of any Notice of Share Termination under (and as defined in) Section 8(b) below, (A) none
of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and
(B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports
and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading.
(ii) Without
limiting the generality of Section 13.1 of the Equity Definitions, 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).
(iii) Prior
to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction
and such other certificate or certificates as Dealer shall reasonably request. Based on such resolutions, neither Dealer nor any of its
affiliates shall be subject to the restrictions under Section 302A.673 of the Minnesota Business Corporations Act as an “interested
shareholder” of Counterparty by virtue of (A) its role as initial purchaser of, or market-maker in, any securities of Counterparty
convertible into the Shares, (B) its entry into the Transaction and/or (C) any hedging transactions in Counterparty’s
securities in connection with the Transaction.
(iv) Counterparty
is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into
or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into
or exchangeable for Shares) or otherwise in violation of the Exchange Act.
(v) 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.
(vi) On
the Trade Date and the Premium Payment Date (A) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty,
including contingent liabilities, (B) the capital of Counterparty is adequate to conduct the business of Counterparty and (C) Counterparty
has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur
debt beyond its ability to pay as such debts mature.
(vii) Counterparty
shall not take any action to decrease the number of Available Shares below the Capped Number (each as defined below, but without giving
effect to the limitation on adjustments to the Capped Number set forth in the proviso in the first sentence of Section 8(f)).
(viii) The
representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement
dated as of the Trade Date between Goldman Sachs & Co. LLC and BMO Capital Markets Corp. as the representatives (the “Representatives”)
of the Initial Purchasers and Counterparty (the “Purchase Agreement”) are true and correct as of the Trade Date and
the Effective Date and are hereby deemed to be repeated to Dealer as if set forth herein.
(ix) (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”) 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 until the second Exchange Business Day immediately following the Settlement Period.
(x) (x) On
the Trade Date, (y) during the Settlement Period and (z) 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 Dealer.
(xi) Counterparty
agrees that it (A) will not during the Settlement Period make, or permit to be made, any public announcement (as defined in Rule 165(f) under
the Securities Act) of any Merger Transaction or potential Merger Transaction unless such public announcement is made prior to the opening
or after the close of the regular trading session on the Exchange for the Shares; (B) shall promptly (but in any event prior to
the next opening of the regular trading session on the Exchange) notify Dealer following any such announcement that such announcement
has been made; and (C) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange)
provide Dealer with written notice specifying (i) 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 Dealer or its affiliates
and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three
full calendar months preceding the announcement date. Such written notice shall be deemed to be a certification by Counterparty to Dealer
that such information is true and correct. In addition, Counterparty shall promptly notify Dealer of the earlier to occur of the completion
of 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.
(xii) (A) Any
issuance of Shares upon exercise or termination of the Transaction has been, and throughout the Transaction will continue to be, duly
authorized and, upon issuance, such Shares will be validly issued, fully paid and non-assessable, and the issuance or delivery thereof
shall not be subject to any preemptive or similar rights and such Shares shall, upon issuance, be accepted for listing or quotation on
the Exchange; (B) a number of Shares of Counterparty equal to the Capped Number have been reserved for issuance upon exercise or
termination of the Warrants by all required corporate action of the Counterparty and (C) the Shares issuable upon exercise of the
Warrants shall upon issuance be accepted for listing or quotation on the Exchange, subject to notice that the listing of the Shares issuable
upon exercise or termination of the Warrants on the Exchange has been approved by the Exchange.
(xiii) No
state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise
to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from
any person or entity) as a result of Dealer or its affiliates owning, holding (however defined) or having a right to acquire Shares;
provided however, that Counterparty makes no representation or warranty regarding any such requirement that is applicable generally to
the ownership of equity securities by Dealer or any of its affiliates as a result of it or any such affiliates being financial institutions
or broker-dealers.
(xiv) 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, including, without limitation, the transaction that is the subject of this confirmation
and any transactions related hereto or contemplated hereby; (B) will exercise independent judgment in evaluating the recommendations
of Dealer and its affiliates or associated persons with regard to any such securities transactions or strategies unless it has otherwise
notified Dealer in writing; and (C) has total assets of at least $50 million. Counterparty will notify Dealer if the immediately
preceding statement contained in this Section 7(a)(xiv) ceases to be true.
(xv) Without
limiting the generality of Section 3(a) of the Agreement, neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation
or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree
of any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Counterparty’s Annual Report
on Form 10-K for the year ended August 26, 2023, as updated by any subsequent filings, to which Counterparty or any of its
subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries
is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
(b) Each
of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18)
of the U.S. Commodity Exchange Act, as amended, and is entering into the Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise) and not for the benefit of any third party.
(c) Each
of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under
the Securities Act, by virtue of Section 4(a)(2) thereof. Accordingly, Dealer represents and warrants to Counterparty that
(i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss
of its investment and its investments in and liabilities in respect of the Transaction, which it understands are not readily marketable,
are not disproportionate to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of
its entire investment in the Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation
D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account and without a view to the
distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction has not been and will not
be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws, and (v) its
financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose
of any portion thereof to satisfy any existing or contemplated undertaking or
indebtedness and is capable of assessing the
merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions
and risks of the Transaction.
(d) Each
of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution” and “financial participant”
within the meaning of Sections 101(22) and 101(22A) of Title 11 of the United States Code (the “Bankruptcy Code”).
The parties hereto further agree and acknowledge (A) that this Confirmation is a “securities contract,” as such term
is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection
herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning
of Section 362 of the Bankruptcy Code and a “settlement payment” within the meaning of Section 546 of the Bankruptcy
Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(27), 362(o),
546(e), 546(j), 548(d)(2), 555 and 561 of the Bankruptcy Code.
(e) Counterparty
shall deliver to Dealer (i) an incumbency certificate, dated as of the Trade Date, of Counterparty in customary form and (ii) an
opinion of counsel, dated as of the Trade Date and reasonably acceptable to Dealer in form and substance, with respect to the matters
set forth in Section 3(a) of the Agreement and Sections 7(a)(v), 7(a)(xii) and 7(a)(xv) of this Confirmation and
such other matters as Dealer may reasonably request and (iii) evidence that the listing of the Shares issuable upon exercise or
termination of the Warrants on the Exchange has been approved by the Exchange, subject only to official notice of issuance.
(f) Counterparty
understands that notwithstanding any other relationship between Counterparty and Dealer and its affiliates, in connection with this Transaction
and any other over-the-counter derivative transactions between Counterparty and Dealer or its affiliates, Dealer or its affiliate is
acting as principal and is not a fiduciary or advisor in respect of any such transaction, including any entry, exercise, amendment, unwind
or termination thereof.
(g) Counterparty
represents and warrants that it has received, read and understands the OTC Options Risk Disclosure Statement and a copy of the
most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled “Characteristics and Risks of Standardized
Options”.
(h) 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.
8. Other
Provisions:
(a) Right
to Extend. Dealer may postpone or add, in whole or in part, any Expiration Date or Settlement Date or any other date of valuation
or delivery by Counterparty, with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate
adjustments to the relevant delivery obligation), if Dealer determines, in its commercially reasonable discretion, that such extension
is reasonably necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder
in light of existing liquidity conditions in the cash market, the stock borrow market or other relevant market or to enable Dealer to
effect transactions with respect to Shares or Share Termination Delivery Units 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 requirements, or with related policies and procedures (whether
or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer, and in the case of policies
or procedures, so long as such policies and procedures are consistently applied to transactions similar to the Transaction).
(b) Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Counterparty shall owe Dealer any amount pursuant
to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Counterparty shall have the right, in its
sole discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable
telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day (which written confirmation shall contain the representation
and warranty set forth in Section 7(a)(i)), no later than
9:30 A.M., New York City time, on the Merger
Date, Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary
Event, as applicable (“Notice of Share Termination”); provided that if Counterparty does not elect to satisfy
its Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to elect to require
Counterparty to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s failure to
elect or election to the contrary; and provided further that Counterparty shall not have the right to so elect (but, for the avoidance
of doubt, Dealer shall have the right to so elect) in the event of (i) an Insolvency, a Nationalization or a Merger Event, in each
case, in which the consideration or proceeds to be paid to holders of Shares consists solely of cash or (ii) an Event of Default
in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party or an Extraordinary
Event, which Event of Default, Termination Event or Extraordinary Event resulted from an event or events within Counterparty’s
control. Upon such Notice of Share Termination, the following provisions shall apply on the Scheduled Trading Day immediately following
the Merger Date, the Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of
an Extraordinary Event, as applicable:
Share Termination Alternative: | If applicable, means that Counterparty shall deliver to Dealer
the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise
be due pursuant to Section 6(d)(ii) of the Agreement, or such later date or dates as
the Calculation Agent may reasonably determine (the “Share Termination Payment Date”),
in satisfaction of the Payment Obligation. |
| |
Share Termination Delivery Property: | A number of Share Termination
Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided
by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination
Delivery Property by replacing any fractional portion of the aggregate amount of a security
therein with an amount of cash in the Settlement Currency equal to the value of such fractional
security based on the values used to calculate the Share Termination Unit Price. |
| |
Share Termination Unit Price: | The value of property contained in one Share Termination Delivery Unit on the date such Share
Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent
and notified by the Calculation Agent to Counterparty at the time of notification of the Payment Obligation. |
| |
Share Termination Delivery Unit: | In the case of a Termination Event (other than on account of an Insolvency, Nationalization
or Merger Event), Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency,
Nationalization or Merger Event, one Share or a unit consisting of the number or amount of each type of property received
by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional
amounts of any securities) in such Insolvency, Nationalization or Merger Event, as applicable. If such Insolvency,
Nationalization 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. |
| |
Failure to Deliver: | Not Applicable |
| |
Other Applicable Provisions: | If Share Termination Alternative is applicable, the provisions of
Sections 9.1(c), 9.8, 9.9, 9.11 and 9.12 of the Equity Definitions will be applicable as if “Physical
Settlement” applied to the Transaction, except that all references to “Shares”
shall be read as references to “Share Termination Delivery Units”; provided that
the Representation |
|
and Agreement contained
in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions,
obligations, limitations or requirements under applicable securities laws as a result of the fact that Counterparty is the issuer
of any Share Termination Delivery Units (or any security forming a part thereof). If, in the reasonable opinion of Dealer, based
on advice of counsel, for any reason, any securities comprising the Share Termination Delivery Units deliverable pursuant to this
Section 8(b) would not be immediately freely transferable by Dealer under Rule 144 under the Securities Act, then
Dealer may elect to either (x) permit delivery of such securities notwithstanding any restriction on transfer or (y) have
the provisions set forth in Section 8(c) below apply. |
(c) Registration/Private
Placement Procedures. (i) With respect to the Transaction, the following provisions shall apply to the extent provided for above
opposite the caption “Net Share Settlement” in Section 2 or in paragraph (b) of this Section 8. If so applicable,
then, at the election of Counterparty by notice to Dealer within one Exchange Business Day after the relevant delivery obligation arises,
but in any event at least one Exchange Business Day prior to the date on which such delivery obligation is due, either (A) all Shares
or Share Termination Delivery Units, as the case may be, delivered by Counterparty to Dealer shall be, at the time of such delivery,
covered by an effective registration statement of Counterparty for immediate resale by Dealer (such registration statement and the corresponding
prospectus (the “Prospectus”) (including, without limitation, any sections describing the plan of distribution) in
form and content commercially reasonably satisfactory to Dealer) or (B) Counterparty shall deliver additional Shares or Share Termination
Delivery Units, as the case may be, so that the value of such Shares or Share Termination Delivery Units, as determined by the Calculation
Agent to reflect a commercially reasonable liquidity discount, equals the value of the number of Shares or Share Termination Delivery
Units that would otherwise be deliverable if such Shares or Share Termination Delivery Units were freely tradeable (without prospectus
delivery) upon receipt by Dealer (such value, the “Freely Tradeable Value”); provided that, if requested by
Dealer, Counterparty shall make the election described in this clause (B) with respect to Shares delivered on all Settlement Dates
no later than one Exchange Business Day prior to the first Exercise Date, and the applicable procedures described below shall apply to
all Shares delivered on the Settlement Dates on an aggregate basis. (For the avoidance of doubt, as used in this paragraph (c) only,
the term “Counterparty” shall mean the issuer of the relevant securities, as the context shall require.)
(ii) It
shall be a condition to Counterparty’s right to make the election described in clause (c)(i)(A) that:
(A) Dealer
(or an affiliate of Dealer designated by Dealer) shall be afforded a reasonable opportunity to conduct a due diligence investigation
with respect to Counterparty that is customary in scope for underwritten offerings of equity securities and that yields results that
are satisfactory to Dealer or such affiliate, as the case may be, in its discretion; and
(B) Dealer
(or an affiliate of Dealer designated by Dealer) and Counterparty shall enter into an agreement (a “Registration Agreement”)
on commercially reasonable terms in connection with the public resale of such Shares or Share Termination Delivery Units, as the case
may be, by Dealer or such affiliate substantially similar to underwriting agreements customary for underwritten offerings of equity securities,
in form and substance commercially reasonably satisfactory to Dealer or such affiliate and Counterparty, which Registration Agreement
shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating to the
indemnification of, and contribution in connection with the liability of, Dealer and its affiliates and Counterparty, shall provide for
the payment by Counterparty of all expenses in connection with such resale, including all registration costs and all fees and expenses
of counsel for Dealer, and shall provide for the delivery of accountants’ “comfort letters” to Dealer or such affiliate
with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus.
(iii) If
Counterparty makes the election described in clause (c)(i)(B) above:
(A) Dealer
(or an affiliate of Dealer designated by Dealer) and any potential institutional purchaser of any such Shares or Share Termination Delivery
Units, as the case may be, from Dealer or such affiliate identified by Dealer shall be afforded a commercially reasonable opportunity
to conduct a due diligence investigation in compliance with applicable law with respect to Counterparty customary in scope for private
placements of equity securities (including, without limitation, the right to have made available to them for inspection all financial
and other records, pertinent corporate documents and other information reasonably requested by them), subject to execution by such recipients
of customary confidentiality agreements reasonably acceptable to Counterparty;
(B) Dealer
(or an affiliate of Dealer designated by Dealer) and Counterparty shall enter into an agreement (a “Private Placement Agreement”)
on commercially reasonable terms in connection with the private placement of such Shares or Share Termination Delivery Units, as the
case may be, by Counterparty to Dealer or such affiliate and the private resale of such shares by Dealer or such affiliate, substantially
similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially
reasonably satisfactory to Dealer and Counterparty, which Private Placement Agreement shall include, without limitation, provisions substantially
similar to those contained in such private placement purchase agreements relating to the indemnification of, and contribution in connection
with the liability of, Dealer and its affiliates and Counterparty, shall provide for the payment by Counterparty of all expenses in connection
with such resale, including all fees and expenses of counsel for Dealer, shall contain representations, warranties and agreements of
Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements
of the Securities Act for such resales, and shall use best efforts to provide for the delivery of accountants’ “comfort letters”
to Dealer or such affiliate with respect to the financial statements and certain financial information contained in or incorporated by
reference into the offering memorandum prepared for the resale of such Shares;
(C) Counterparty
agrees that (i) any Shares or Share Termination Delivery Units so delivered to Dealer may be transferred by and among Dealer and
its affiliates, and Counterparty shall effect such transfer without any further action by Dealer and (ii) after the minimum “holding
period” within the meaning of Rule 144(d) under the Securities Act has elapsed with respect to such Shares or any securities
issued by Counterparty comprising such Share Termination Delivery Units, Counterparty shall promptly remove, or cause the transfer agent
for such Shares or securities to remove, any legends referring to any such restrictions or requirements from such Shares or securities,
without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document,
any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer); and
(D) Counterparty
shall not take, or cause to be taken, any action that would make unavailable either the exemption pursuant to Section 4(a)(2) of
the Securities Act for the sale by Counterparty to Dealer (or any affiliate designated by Dealer) of the Shares or Share Termination
Delivery Units, as the case may be, or the exemption pursuant to Section 4(a)(1) or Section 4(a)(3) of the Securities
Act for resales of the Shares or Share Termination Delivery Units, as the case may be, by Dealer (or any such affiliate of Dealer).
(d) Make-whole
Shares. If Counterparty makes the election described in clause (i)(B) of paragraph (c) of this Section 8, then Dealer
or its affiliates may sell (which sale shall be made in a commercially reasonable manner) such Shares or Share Termination Delivery Units,
as the case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery
of such Shares or Share Termination Delivery Units, as the case may be, and ending on the Exchange Business Day on which Dealer or its
affiliates completes the sale of a sufficient number of Shares or Share Termination Delivery Units, as the case may be, so that the realized
net proceeds of such sales exceed the Freely Tradeable Value. If any of such delivered Shares or Share Termination Delivery Units remain
after such realized net proceeds exceed the Freely Tradeable Value, Dealer shall return such remaining Shares or Share Termination Delivery
Units to Counterparty. If the Freely Tradeable Value exceeds the realized net proceeds from such resale, Counterparty shall transfer
to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the final day
of the Resale Period
(without giving effect to any extension thereof pursuant to the immediately
succeeding sentence), the amount of such excess (the “Additional Amount”) in cash or in a number of additional Shares
or Share Termination Delivery Units, as the case may be, (“Make-whole Shares”) in an amount that, based on the Relevant
Price on such final day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Relevant
Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares
in the manner contemplated by this Section 8(d). This provision shall be applied successively until the Additional Amount is equal
to zero, subject to Section 8(f).
(e) Beneficial
Ownership. Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Dealer be entitled to
receive, or shall be deemed to receive, any Shares if, immediately upon giving effect to such receipt of such Shares (and after taking
into account any Shares deliverable by Counterparty to Dealer at such time under any transaction or security other than the Transaction),
(i) the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the rules promulgated
thereunder) of Shares by Dealer, any of its affiliates subject to aggregation with Dealer for purposes of the “beneficial ownership”
test under Section 13 of the Exchange Act and all persons who may form a “group” (within the meaning of Rule 13d-5(b)(1) under
the Exchange Act) with Dealer with respect to “beneficial ownership” of any Shares (collectively, “Dealer Group”)
(or, to the extent that for any reason the equivalent calculation under Section 16 of the Exchange Act and the rules and regulations
thereunder results in a higher number, such higher number) would be equal to or greater than 8.0% or more of the outstanding Shares on
the date of determination or (ii) Dealer, Dealer Group or any person whose ownership position would be aggregated with that of Dealer
or Dealer Group (Dealer, Dealer Group or any such person, a “Dealer Person”) under the Minnesota Business Corporations
or other federal, state or local law, rule, regulation or regulatory order or organizational documents or contracts of Counterparty applicable
to ownership of Shares (“Applicable Restrictions”), would own, beneficially own, constructively own, control, hold
the power to vote or otherwise meet a relevant definition of ownership in excess of a number of Shares equal to (x) the number of
Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval by a state
or federal regulator) of a Dealer Person under Applicable Restrictions and with respect to which such requirements have not been met
or the relevant approval has not been received or that would subject a Dealer Person to restrictions (including restrictions relating
to business combinations or other designated transactions) or have any other adverse effect on a Dealer Person under Applicable Restrictions
minus (y) 1.0% of the number of Shares outstanding on the date of determination (either such condition described in clause
(i) or (ii), an “Excess Ownership Position”). If any delivery owed to Dealer hereunder is not made, in whole
or in part, as a result of this provision, Counterparty’s obligation to make such delivery shall not be extinguished and Counterparty
shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Dealer gives notice
to Counterparty that such delivery would not result in the existence of an Excess Ownership Position.
(f) Limitations
on Settlement by Counterparty. Notwithstanding anything herein or in the Agreement to the contrary (except as set forth in this Section 8(f)),
in no event shall Counterparty be required to deliver Shares in connection with the Transaction in excess of 3,411,720 Shares, as such
number may be adjusted from time to time in accordance with the provisions hereof; provided that no such adjustment shall cause
the Capped Number to exceed the Available Shares (as in effect from time to time), other than as a result of actions of Counterparty
or events within Counterparty’s control (the “Capped Number”). Notwithstanding anything to the contrary in the
Agreement or the Equity Definitions, such limitation shall not affect the calculation of any Payment Obligation (as defined in Section 8(b)),
it being understood that if the Share Termination Alternative applies pursuant to Section 8(b), the number of Shares deliverable
pursuant to such Section shall not exceed the Capped Number. Counterparty represents and warrants to Dealer (which representation
and warranty shall be deemed to be repeated on each day that the Transaction is outstanding) that the Capped Number is equal to or less
than the number of authorized but unissued Shares of the Counterparty that are not reserved for future issuance in connection with transactions
in the Shares (other than the Transaction) on the date of the determination of the Capped Number (such Shares, the “Available
Shares”). In the event Counterparty shall not have delivered the full number of Shares otherwise deliverable as a result of
this Section 8(f) (the resulting deficit, the “Deficit Shares”), Counterparty shall be continually obligated
to deliver Shares, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, when,
and to the extent, that (A) Shares are repurchased,
acquired or otherwise received by Counterparty or any of its subsidiaries after the Trade Date (whether or not in exchange for cash,
fair value or any other consideration), (B) authorized and unissued Shares previously reserved for issuance in respect of other
transactions become no longer so reserved or (C) Counterparty additionally authorizes any unissued Shares that are not reserved
for other transactions (such events as set forth in clauses (A), (B) and (C) above, collectively, the “Share Issuance
Events”). In the event that there are any Deficit Shares or the proviso in the first sentence of this Section 8(f) has
prevented any adjustment to the Capped Number, (i) Counterparty shall promptly notify Dealer of the occurrence of any of the Share
Issuance Events (including the number of Shares subject to clause (A), (B) or (C) and the corresponding number of Shares to
be delivered) and, as promptly as reasonably practicable, deliver such Shares thereafter, (ii) Counterparty shall use its best efforts
to cause Share Issuance Events to the extent necessary to deliver the full number of Deficit Shares or cause the Capped Number to equal
the Capped Number that would be in effect but for the proviso set forth in the first sentence of this Section 8(f), as the
case may be, and (iii) Counterparty shall not, until Counterparty’s obligations under the Transaction have been satisfied
in full, use any Shares that become available for potential delivery to Dealer as a result of any Share Issuance Event for the settlement
or satisfaction of any transaction or obligation other than the Transaction or any other warrant transaction between Counterparty and
Dealer or reserve any such Shares for future issuance for any purpose other than to satisfy Counterparty’s obligations to Dealer
under the Transaction or any other warrant transaction between Counterparty and Dealer.
(g) Equity
Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction
that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy. For the avoidance of doubt, the
parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim
arising as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement. For the avoidance
of doubt, the parties acknowledge that the obligations of Counterparty under this Confirmation are not secured by any collateral that
would otherwise secure the obligations of Counterparty herein under or pursuant to any other agreement.
(h) Amendments
to Equity Definitions. The following amendments shall be made to the Equity Definitions:
(i) The
first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as
follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation
of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent
will determine whether such Potential Adjustment Event has an effect on the theoretical value of the relevant Shares or options on the
Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and, the portion of such sentence
immediately preceding clause (ii) thereof is hereby amended by deleting the words “diluting or concentrative” and the
words “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate
or liquidity relative to the relevant Shares)” and replacing such latter phrase with the words “(and, for the avoidance of
doubt, adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative
to the relevant Shares)”;
(ii) Sections
11.2(a) and 11.2(e)(vii) of the Equity Definitions are hereby amended by deleting the words “a diluting or concentrative”
and, in the case of Section 11.2(e)(vii), replacing them with “an economic” and, in each case, adding the phrase “or
options on the Shares” at the end of the sentence;
(iii) Section 12.7(b) of
the Equity Definitions is hereby amended by deleting the words “(and in any event within five Exchange Business Days) by the parties
after” appearing after the words “agreed promptly” and replacing with the words “by the parties on or prior to”;
(iv) Section 12.9(b)(iv) of
the Equity Definitions is hereby amended by (A) deleting (1) subsection (A) in its entirety, (2) the phrase “or
(B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); (B) replacing “will
lend” with “lends” in subsection (B); and (C) deleting the phrase “neither the Non-Hedging Party nor the
Lending Party lends Shares in
the amount of the Hedging Shares or” in the penultimate sentence;
“Lending Party” means a third party that is not the Counterparty or an affiliate of the Counterparty that Dealer considers
to be an acceptable counterparty (acting in good faith and in a reasonable manner in light of (x) other transactions that Dealer
(or its agent or affiliate) may have entered into with such party and (y) any legal, regulatory or self-regulatory requirements
or related policies and procedures (whether or not such requirements or related policies and procedures are imposed by law or have been
voluntarily adopted by Dealer) that apply generally to transactions of a nature and kind similar to the transactions contemplated with
such party); and
(v) Section 12.9(b)(v) of
the Equity Definitions is hereby amended by (A) adding the word “or” immediately before subsection “(B)”
and deleting the comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its entirety, (2) deleting
the word “or” immediately preceding subsection (C), (3) replacing in the penultimate sentence the words “either
party” with “the Hedging Party” and (4) deleting clause (X) in the final sentence.
(i) Transfer
and Assignment. Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part,
at any time without the consent of Counterparty.
(j) 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.
(k) Additional
Termination Events. The occurrence of any of the following shall constitute an Additional Termination Event with respect to which
the Transaction shall be the sole Affected Transaction and Counterparty shall be the sole Affected Party and Dealer shall be the party
entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement and to determine the amount payable
pursuant to Section 6(e) of the Agreement; provided that with respect to any Additional Termination Event, Dealer may
choose to treat part of the Transaction as the sole Affected Transaction, and, upon the termination of the Affected Transaction, a Transaction
with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated
for all purposes as the Transaction, which shall remain in full force and effect:
(i) Dealer
reasonably determines that it is advisable to terminate a portion of the Transaction so that Dealer’s related commercially reasonable
hedging activities will comply with applicable securities laws, rules or regulations or related policies and procedures of Dealer
(whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer), or Dealer,
despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal to hedge its obligations
pursuant to this Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory
or self-regulatory requirements;
(ii) at
any time at which any Excess Ownership Position occurs, Dealer, in its discretion, is unable to effect a transfer or assignment to a
third party of the Transaction or any other transaction between the parties after using its commercially reasonable efforts on pricing
and terms and within a time period reasonably acceptable to Dealer such that an Excess Ownership Position no longer exists; provided
that Dealer shall treat only that portion of the Transaction as the Affected Transaction as necessary so that such Excess Ownership
Position would no longer exist following the resulting partial termination of the Transaction (after taking into account commercially
reasonable adjustments to Dealer’s commercially reasonable Hedge Positions from such partial termination);
(iii) a
“person” or “group” (within the meaning of Section 13(d) of the Exchange Act), other than Counterparty
or its wholly-owned subsidiaries, becomes the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3
under the Exchange Act, of the common equity of Counterparty representing more than 50.0% of the voting power of such common equity;
(iv) (1) any
sale, lease or other transfer, in one transaction or a series of transactions, of all or substantially all of the assets of Counterparty
and its subsidiaries, taken as a whole, to any
person; or (2) any transaction
or series of related transactions in connection with which (whether by means of merger, consolidation, share exchange, combination, reclassification,
recapitalization, acquisition, liquidation or otherwise) all of the Shares are exchanged for, converted into, acquired for, or constitutes
solely the right to receive, other securities, cash or other property;
provided that, notwithstanding
the foregoing, any transaction or event set forth in the immediately preceding clause (iv) shall not constitute an Additional Termination
Event if at least 90% of the consideration received or to be received by holders of the Shares (excluding cash payments for fractional
Shares or pursuant to dissenters rights) in connection with the transaction or transactions that would otherwise constitute an Additional
Termination Event pursuant to clause (iv) of this Section 8(k) consists of shares of common stock listed on any of The
New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or that
will be so listed when issued or exchanged in connection with such transaction or transactions, and following such transaction or transactions,
the Shares will consist of such consideration, excluding cash payments for fractional shares. For the avoidance of doubt, an event that
is not considered an Additional Termination Event pursuant to the immediately preceding sentence shall not be an Additional Termination
Event solely because such event could also be described by clause (iii) above; or
(v) holders
of Shares approve any plan or proposal for Counterparty’s liquidation or dissolution (other than in a transaction described in
(iv) above).
(l) Early
Unwind. In the event the sale by Counterparty of the Firm Securities (defined under the Purchase Agreement) is not consummated pursuant
to the Purchase Agreement for any reason by the close of business in New York on January 23, 2023 (or such later date as agreed
upon by the parties (January 23, 2023 or such later date being the “Early Unwind Date”), the Transaction shall
automatically terminate (the “Early Unwind”) on the Early Unwind Date and (i) the Transaction and all of the
respective rights and obligations of Dealer and Counterparty thereunder shall be cancelled and terminated and (ii) Counterparty
shall pay to Dealer an amount in cash equal to the aggregate amount of actual costs and expenses relating to the unwinding of Dealer’s
commercially reasonable hedging activities in respect of the Transaction (including market losses incurred in reselling any Shares purchased
by Dealer or its affiliates in connection with such hedging activities, unless Counterparty agrees to purchase any such Shares at the
cost at which Dealer purchased such Shares). Following such termination, cancellation and payment, each party shall be released and discharged
by the other party from, and agrees not to make any claim against the other party with respect to, any obligations or liabilities of
either party arising out of, and to be performed in connection with, the Transaction either prior to or after the Early Unwind Date.
Dealer and Counterparty represent and acknowledge to the other that upon an Early Unwind and following the payment referred to above,
all obligations with respect to the Transaction shall be deemed fully and finally discharged.
(m) No
Netting and Set-off. The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party waives
any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any
delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between
parties hereto, by operation of law or otherwise.
(n) Delivery
of Cash. For the avoidance of doubt, nothing in this Confirmation shall be interpreted as requiring the Counterparty to deliver cash
in respect of the settlement of the Transaction, except in circumstances where the required cash settlement thereof is permitted for
classification of the contract as equity by ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, as in
effect on the relevant Trade Date (including, without limitation, where the Counterparty so elects to deliver cash or fails timely to
elect to deliver Shares or Share Termination Delivery Property in respect of such settlement).
(o) Agreements
and Acknowledgements Regarding Hedging. Counterparty understands, acknowledges and agrees that: (A) at any time on and prior
to the last 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 VWAP Prices; (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 VWAP Prices, each in a manner that may be adverse to Counterparty; and (E) the
Transaction is a derivatives transaction in which it has granted Dealer an option, and Dealer may purchase shares for its own account
at an average price that may be greater than, or less than, the price paid by Counterparty under the terms of the Transaction.
(p) Wall
Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability
Act of 2010 (the “WSTAA”), the parties hereby agree that neither the enactment of the WSTAA (or any statute containing any
legal certainty provision similar to Section 739 of the WSTAA) or any regulation under the WSTAA (or any such statute), nor any
requirement under the WSTAA (or any statute containing any legal certainty provision similar to Section 739 of the WSTAA) or an
amendment made by the WSTAA (or any such statute), 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, Increased Cost of
Hedging or Illegality).
(q) Governing
Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE,
OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(r) Amendment.
This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty
and Dealer.
(s) 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.
(t) Tax
Matters.
(i) Withholding
Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act. “Indemnifiable
Tax” as defined in Section 14 of the Agreement, shall not include any withholding tax imposed or collected pursuant to Sections
1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or
official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation
of such Sections of the Code (a “FATCA Withholding Tax”). 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.
(ii) HIRE
Act. To the extent that either party to the Agreement with respect to this Transaction is not an adhering party to the ISDA 2015
Section 871(m) Protocol published by the International Swaps and Derivatives Association, Inc. on November 2, 2015
and available at www.isda.org, as may be amended, supplemented, replaced or superseded from time to time (the “871(m) Protocol”),
the parties agree that the provisions and amendments contained in the Attachment to the 871(m) Protocol are incorporated into and
apply to the Agreement with respect to this Transaction as if set forth in full herein. The parties further agree that, solely for purposes
of applying such provisions and amendments to the Agreement with respect to this Transaction, references to “each Covered Agreement”
in the 871(m) Protocol will be deemed to be references to the Master Agreement with respect to this Transaction, and references
to the “Implementation Date” in the 871(m) Protocol will be deemed to be references to the Trade Date of this Transaction.
(iii) Tax
documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto,
(i) on or before the date of execution of this Confirmation, (ii) upon reasonable request of Dealer and (iii) promptly
upon learning that any such tax form previously provided by Counterparty has become obsolete or incorrect. Dealer shall provide to Counterparty
a valid U.S. Internal Revenue Service Form W-8ECI “Certificate of Foreign Person’s Claim That Income Is Effectively
Connected With the Conduct of a Trade or Business in the United States”, or any successor thereto, (i) on or before the date
of execution of this Confirmation, (ii) upon reasonable request of Counterparty and (iii) promptly upon learning that any such
tax form previously provided by Dealer has become obsolete or incorrect.
(iv) Tax
Representations. For the purpose of Section 3(f) of the Agreement, Counterparty is a corporation for U.S. federal income tax
purposes and is organized under the laws of the State of Minnesota. Counterparty represents to Dealer that for U.S. federal income tax
purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations)
and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States Treasury Regulations).
For the purpose of Section 3(f) of the Agreement, Dealer represents to Counterparty that (A) it is a “foreign person”
(as that term is used in section 1.6041-4(a)(4) of the United States Treasury Regulations) for U.S. federal income tax purposes
and (B)ach payment received or to be received by it under the Agreement will be effectively connected with its conduct of a trade or
business in the United States.
(u) Role
of Agent. Each of Dealer 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 Dealer under the Transactions pursuant to instructions from such party, (ii) the Agent is not a principal
or party to the Transactions, and may transfer its rights and obligations with respect to the Transactions, (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 Transactions, (iv) Dealer 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 Dealer 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 Transactions. 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 Dealer. Dealer will be acting for its own account in respect of this Confirmation and
the Transactions contemplated hereunder.
9. Arbitration:
(a) All
parties to this Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided
by the rules of the arbitration forum in which a claim is filed.
(b) Arbitration
awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.
(c) The
ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court
proceedings.
(d) The
arbitrators do not have to explain the reason(s) for their award.
(e) The
panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless
Counterparty is a member of the organization
sponsoring the arbitration facility, in which case all arbitrators
may be affiliated with the securities industry.
(f) The
rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible
for arbitration may be brought in court.
(g) The
rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Confirmation.
(h) Counterparty
agrees that any and all controversies that may arise between Counterparty and Dealer, including, but not limited to, those arising out
of or relating to the Agreement or the Transaction hereunder, shall be determined by arbitration conducted before FINRA Dispute Resolution
(“FINRA-DR”), or, if FINRA-DR declines to hear the matter, before the American Arbitration Association, in accordance with
their arbitration rules then in force. The award of the arbitrator shall be final, and judgment upon the award rendered may be entered
in any court, state or federal, having jurisdiction.
(i) No
person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class
with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the
class is decertified; or (iii) Counterparty is excluded from the class by the court.
(j) Such
forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Confirmation except to the extent
stated herein.
Counterparty hereby agrees
(a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified
and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the
agreement between Dealer and Counterparty with respect to the Transaction, by manually signing this Confirmation or this page hereof
as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy
to Bank of Montreal, Associate General Counsel & Managing Director, Derivatives Legal Group, Facsimile No. (416) 956-2318.
|
Yours faithfully, |
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|
|
BMO CAPITAL MARKETS CORP. |
|
as agent for BANK OF MONTREAL |
|
|
|
By: |
/s/
Eric Benedict |
|
Name: |
Eric Benedict |
|
Title: |
Co-Head, Global Equity
Capital Markets |
|
|
|
|
|
BANK OF MONTREAL |
|
|
|
|
By: |
/s/
Brian Riley |
|
Name: |
Brian Riley |
|
Title: |
Managing Director, Global
Markets |
[Signature Page to Base Warrant Confirmation]
Agreed and Accepted By: |
|
|
|
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WINNEBAGO INDUSTRIES, INC. |
|
|
|
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By: |
/s/
Bryan L. Hughes |
|
|
Name: Bryan L. Hughes |
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|
Title: Chief Financial
Officer and |
|
|
Senior Vice President |
|
[Signature Page to BMO Warrant
Confirmation]
Annex A
For each Component of the Transaction, the Number of Warrants and
Expiration Date is set forth below.
Component Number | |
Number of Warrants | |
Expiration Date |
1 | |
11,373 | |
April 15, 2030 |
2 | |
11,373 | |
April 16, 2030 |
3 | |
11,373 | |
April 17, 2030 |
4 | |
11,373 | |
April 18, 2030 |
5 | |
11,373 | |
April 22, 2030 |
6 | |
11,373 | |
April 23, 2030 |
7 | |
11,373 | |
April 24, 2030 |
8 | |
11,373 | |
April 25, 2030 |
9 | |
11,373 | |
April 26, 2030 |
10 | |
11,373 | |
April 29, 2030 |
11 | |
11,373 | |
April 30, 2030 |
12 | |
11,373 | |
May 1, 2030 |
13 | |
11,373 | |
May 2, 2030 |
14 | |
11,373 | |
May 3, 2030 |
15 | |
11,373 | |
May 6, 2030 |
16 | |
11,373 | |
May 7, 2030 |
17 | |
11,373 | |
May 8, 2030 |
18 | |
11,373 | |
May 9, 2030 |
19 | |
11,373 | |
May 10, 2030 |
20 | |
11,373 | |
May 13, 2030 |
21 | |
11,373 | |
May 14, 2030 |
22 | |
11,373 | |
May 15, 2030 |
23 | |
11,373 | |
May 16, 2030 |
24 | |
11,373 | |
May 17, 2030 |
25 | |
11,373 | |
May 20, 2030 |
26 | |
11,373 | |
May 21, 2030 |
27 | |
11,373 | |
May 22, 2030 |
28 | |
11,373 | |
May 23, 2030 |
29 | |
11,373 | |
May 24, 2030 |
30 | |
11,373 | |
May 28, 2030 |
31 | |
11,373 | |
May 29, 2030 |
32 | |
11,373 | |
May 30, 2030 |
33 | |
11,373 | |
May 31, 2030 |
34 | |
11,373 | |
June 3, 2030 |
35 | |
11,373 | |
June 4, 2030 |
36 | |
11,373 | |
June 5, 2030 |
37 | |
11,373 | |
June 6, 2030 |
38 | |
11,373 | |
June 7, 2030 |
39 | |
11,373 | |
June 10, 2030 |
40 | |
11,373 | |
June 11, 2030 |
41 | |
11,372 | |
June 12, 2030 |
42 | |
11,372 | |
June 13, 2030 |
43 | |
11,372 | |
June 14, 2030 |
44 | |
11,372 | |
June 17, 2030 |
45 | |
11,372 | |
June 18, 2030 |
46 | |
11,372 | |
June 20, 2030 |
47 | |
11,372 | |
June 21, 2030 |
48 | |
11,372 | |
June 24, 2030 |
49 | |
11,372 | |
June 25, 2030 |
50 | |
11,372 | |
June 26, 2030 |
51 | |
11,372 | |
June 27, 2030 |
52 | |
11,372 | |
June 28, 2030 |
53 | |
11,372 | |
July 1, 2030 |
54 | |
11,372 | |
July 2, 2030 |
55 | |
11,372 | |
July 3, 2030 |
56 | |
11,372 | |
July 5, 2030 |
57 | |
11,372 | |
July 8, 2030 |
58 | |
11,372 | |
July 9, 2030 |
59 | |
11,372 | |
July 10, 2030 |
60 | |
11,372 | |
July 11, 2030 |
61 | |
11,372 | |
July 12, 2030 |
62 | |
11,372 | |
July 15, 2030 |
63 | |
11,372 | |
July 16, 2030 |
64 | |
11,372 | |
July 17, 2030 |
65 | |
11,372 | |
July 18, 2030 |
66 | |
11,372 | |
July 19, 2030 |
67 | |
11,372 | |
July 22, 2030 |
68 | |
11,372 | |
July 23, 2030 |
69 | |
11,372 | |
July 24, 2030 |
70 | |
11,372 | |
July 25, 2030 |
71 | |
11,372 | |
July 26, 2030 |
72 | |
11,372 | |
July 29, 2030 |
73 | |
11,372 | |
July 30, 2030 |
74 | |
11,372 | |
July 31, 2030 |
75 | |
11,372 | |
August 1, 2030 |
76 | |
11,372 | |
August 2, 2030 |
77 | |
11,372 | |
August 5, 2030 |
78 | |
11,372 | |
August 6, 2030 |
79 | |
11,372 | |
August 7, 2030 |
80 | |
11,372 | |
August 8, 2030 |
81 | |
11,372 | |
August 9, 2030 |
82 | |
11,372 | |
August 12, 2030 |
83 | |
11,372 | |
August 13, 2030 |
84 | |
11,372 | |
August 14, 2030 |
85 | |
11,372 | |
August 15, 2030 |
86 | |
11,372 | |
August 16, 2030 |
87 | |
11,372 | |
August 19, 2030 |
88 | |
11,372 | |
August 20, 2030 |
89 | |
11,372 | |
August 21, 2030 |
90 | |
11,372 | |
August 22, 2030 |
91 | |
11,372 | |
August 23, 2030 |
92 | |
11,372 | |
August 26, 2030 |
93 | |
11,372 | |
August 27, 2030 |
94 | |
11,372 | |
August 28, 2030 |
95 | |
11,372 | |
August 29, 2030 |
96 | |
11,372 | |
August 30, 2030 |
97 | |
11,372 | |
September 3, 2030 |
98 | |
11,372 | |
September 4, 2030 |
99 | |
11,372 | |
September 5, 2030 |
100 | |
11,372 | |
September 6, 2030 |
Exhibit 10.10
JPMorgan Chase Bank, National Association
New York Branch
383 Madison Avenue
New York, NY 10179
Opening Transaction
To: |
Winnebago
Industries, Inc. 13200 Pioneer Trail
Eden Prairie, Minnesota 55347 |
|
From: |
JPMorgan
Chase Bank, National Association |
|
Re: |
Base
Issuer Warrant Transaction |
|
Date: |
January 18,
2024 |
|
Dear Ladies and Gentlemen:
The purpose of this communication
(this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on
the Trade Date specified below (the “Transaction”) between JPMorgan Chase Bank, National Association (“Dealer”)
and Winnebago Industries, Inc. (“Counterparty”). This communication constitutes a “Confirmation” as
referred to in the Agreement specified below.
1. This
Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (the “2006 Definitions”)
and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together
with the 2006 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”). For purposes of the Equity Definitions, each reference herein to a Warrant shall be
deemed to be a reference to a Call Option or an Option, as context requires.
Counterparty is hereby advised,
and Counterparty acknowledges, that Dealer has engaged in, or refrained from engaging in, substantial financial transactions and has taken
other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms
and conditions set forth below.
This Confirmation evidences
a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.
This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement
(Multicurrency—Cross Border) as if Dealer and Counterparty had executed an agreement in such form on the date hereof (but without
any Schedule except for (i) the election of Loss and Second Method and US Dollars (“USD”) as the Termination Currency,
(ii) the replacement of the word “third” in the last line of Section 5(a)(i) of the Agreement with the word
“first” and (iii) (a) the election that the “Cross Default” provisions of Section 5(a)(vi) of
the Agreement shall apply to Counterparty with a “Threshold Amount” of USD35.0 million), (b) (b) the
phrase “, or becoming capable at such time of being declared,” shall be deleted from clause (1) of such Section 5(a)(vi),
and (c) the following language shall be added to the end thereof: “Notwithstanding the foregoing, a default under subsection
(2) hereof shall not constitute an Event of Default if (x) the default was caused solely by error or omission of an administrative
or operational nature; (y) funds were available to enable the party to make the payment when due; and (z) the payment is made
within two Local Business Days of such party’s receipt of written notice of its failure to pay.”.
All provisions contained in,
or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event of any
inconsistency among this
Confirmation, the Equity Definitions, the 2006
Definitions or the Agreement, the following shall prevail in the order of precedence indicated: (i) this Confirmation; (ii) the
Equity Definitions; (iii) the 2006 Definitions; and (iv) the Agreement. For the avoidance of doubt, except to the extent of
an express conflict, the application of any provision of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions
shall not be construed to exclude or limit any other provision of this Confirmation, the Agreement, the Equity Definitions or the 2006
Definitions.
The Transaction hereunder
shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Counterparty or any confirmation
or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Counterparty,
then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to
which Dealer and Counterparty are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such
existing or deemed ISDA Master Agreement.
2. The
Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of the Equity Definitions. The
terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms:
|
Trade
Date: |
January 18,
2023 |
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Effective
Date: |
January 23,
2023, or such other date as agreed between the parties, subject to Section 8(l) below |
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Components: |
The
Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with
the Number of Warrants and Expiration Date set forth in this Confirmation. The payments and deliveries to be made upon settlement of
the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement. |
|
Warrant
Style: |
European |
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Warrant
Type: |
Call |
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Seller: |
Counterparty |
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Buyer: |
Dealer |
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Shares: |
The
Common Stock of Counterparty, par value USD0.50 (Ticker Symbol: “WGO”). |
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Number
of Warrants: |
For
each Component, as provided in Annex A to this Confirmation. |
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Warrant
Entitlement: |
One
Share per Warrant |
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Strike
Price: |
USD135.2800 |
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Notwithstanding
anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Strike Price be subject
to adjustment to the extent that, after giving effect to such adjustment, the Strike Price would be less than USD 67.2580, except
for any adjustment pursuant to the terms of this Confirmation and the |
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Equity Definitions in connection with a stock split or similar change to Counterparty’s capitalization. |
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Number of Shares: |
As of any date, a number of Shares equal to the product of the Number of Warrants and the Warrant Entitlement. |
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Premium: | USD8,940,000 |
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| |
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Premium Payment Date: |
The Effective Date |
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Exchange: | New York Stock Exchange |
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| |
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Related Exchange: |
All Exchanges |
Procedures for Exercise:
In respect of any Component:
|
Expiration Time: |
Valuation Time |
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|
Expiration Date: |
As provided in Annex A to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled
Trading Day that is not already an Expiration Date for another Component); provided that if that date is a Disrupted Day, the
Expiration Date for such Component shall be the first succeeding Scheduled Trading Day that is not a Disrupted Day and is not and 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 an Expiration Date in respect of any other Component for the Transaction). Notwithstanding the foregoing and anything to
the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date, the Calculation Agent may determine
that such Expiration Date is a Disrupted Day only in part, in which case the Calculation Agent shall make adjustments to the Number of
Warrants for the relevant Component for which such day shall be the Expiration Date, 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
may determine the VWAP Price for such Expiration Date based on transactions in the Shares taking into account the nature and duration
of such Market Disruption Event. Any Scheduled Trading Day on which, as of the date hereof, the Exchange is scheduled to close prior
to its normal close of trading shall be deemed not to be a Scheduled Trading Day; if a closure of the Exchange prior to its normal close
of trading on any Scheduled Trading Day is scheduled following the date hereof, then such Scheduled Trading Day shall be deemed to |
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be a Disrupted Day in full.
Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on an Expiration Date. “Final
Disruption Date” means September 20, 2030. |
|
Market
Disruption Event: |
Section 6.3(a) of
the Equity Definitions is hereby amended by (A) deleting the words “during the one hour period that ends at the relevant
Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof
and (B) by replacing the words “or (iii) an Early Closure.” therein with “(iii) an Early Closure,
or (iv) a Regulatory Disruption.” |
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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. |
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Regulatory
Disruption: |
Any event that Dealer, in its
reasonable discretion, determines makes it appropriate, with regard to any legal, regulatory or self-regulatory requirements or related
policies and procedures (whether or not such requirements or related policies and procedures are imposed by law or have been voluntarily
adopted by Dealer and provided any such policies and procedures are related to legal, regulatory or self-regulatory issues generally
applicable to the Transaction and are applied to the Transaction in a non-discriminatory manner), for Dealer to refrain from or decrease
any market activity connected with the Transaction. Dealer shall notify Counterparty as soon as reasonably practicable that a Regulatory
Disruption has occurred and the Expiration Dates affected by it. |
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Automatic
Exercise: |
Applicable; and means that the
Number of Warrants for the corresponding Expiration Date will be deemed to be automatically exercised at the Expiration Time on such
Expiration Date unless Dealer notifies Seller (by telephone or in writing) prior to the Expiration Time on such Expiration Date that
it does not wish Automatic Exercise to occur, in which case Automatic Exercise will not apply to such Expiration Date. |
|
Counterparty’s Telephone Number and Telex and/or Facsimile Number and Contact Details for purpose of Giving Notice: |
As provided in Section 6(a) below. |
Settlement
Terms:
In
respect of any Component:
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Settlement
Currency: |
USD |
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Net
Share Settlement: |
On each Settlement Date, Counterparty
shall deliver to Dealer a number of Shares equal to the Number of Shares to be Delivered for such Settlement Date to |
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the
account specified by Dealer and cash in lieu of any fractional Share valued at the Relevant Price on the Valuation Date corresponding
to such Settlement Date. If, in the reasonable opinion of Dealer, based on advice of counsel, for any reason, the Shares deliverable
upon Net Share Settlement would not be immediately freely transferable by Dealer under Rule 144 under the Securities Act of 1933,
as amended (the “Securities Act”), then Dealer may elect to either (x) accept delivery of such Shares notwithstanding
any restriction on transfer or (y) have the provisions set forth in Section 8(c) below apply. |
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The
Number of Shares to be Delivered shall be delivered by Counterparty to Dealer no later than 12:00 noon (local time in New York City)
on the relevant Settlement Date. |
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Number
of Shares to be Delivered: |
In
respect of any Exercise Date, the product of (i) the number of Warrants exercised or deemed exercised on such Exercise Date,
(ii) the Warrant Entitlement and (iii) (A) the excess of the VWAP Price on the Valuation Date occurring in respect
of such Exercise Date over the Strike Price (or, if there is no such excess, zero) divided by (B) such VWAP Price. |
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VWAP
Price: |
For
any Exchange Business Day, as determined by the Calculation Agent based on the New York Volume Weighted Average Price per Share for
the regular trading session (including any extensions thereof) of the Exchange on such Exchange Business Day (without regard to pre-open
or after hours trading outside of such regular trading session), as published by Bloomberg at 4:15 P.M., New York City time (or 15
minutes following the end of any extension of the regular trading session), on such Exchange Business Day, on Bloomberg page “WGO.N
<Equity> AQR” (or any successor thereto) (or if such published volume weighted average price is unavailable or is manifestly
incorrect, the market value of one Share on such Exchange Business Day, as determined by the Calculation Agent using, if practicable,
a volume weighted method). |
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Other
Applicable Provisions: |
The
provisions of Sections 9.1(c), 9.4, 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable as if “Physical
Settlement” applied to the Transaction; provided that the Representation and Agreement contained in Section 9.11
of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations
or requirements under applicable securities laws that exist as a result of the fact that Counterparty is the issuer of the Shares. |
Adjustments:
In
respect of any Component:
|
Method
of Adjustment: |
Calculation Agent Adjustment.
For the avoidance of doubt, Calculation Agent Adjustment shall continue to apply until the obligations of the parties (including any
obligations of Counterparty pursuant to Section 8(f) below) under the Transaction have been satisfied in full. |
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Extraordinary
Dividend: |
For any regular dividend period
of Counterparty, any dividend or distribution on the Shares with an ex-dividend date occurring during such regular dividend period
(other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of
the Equity Definitions) (a “Dividend”) the amount or value of which (as determined by the Calculation Agent), when
aggregated with the amount or value (as determined by the Calculation Agent) of any and all previous Dividends with ex-dividend dates
occurring in the same regular dividend period, exceeds the Ordinary Dividend Amount. |
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Ordinary
Dividend Amount: |
For the first Dividend on the
Shares for which the ex-dividend date occurs during any regular quarterly dividend period of Counterparty, USD 0.31, and for any other
Dividend on the Shares for which the ex-dividend date occurs during the same regular quarterly dividend period, USD 0.00. |
Extraordinary
Events:
|
New
Shares: |
In the definition of New Shares
in Section 12.1(i) of the Equity Definitions, the text in clause (i) thereof shall be deleted in its entirety and
replaced with “publicly quoted, traded or listed on any of The New York Stock Exchange, The NASDAQ Global Market or The NASDAQ
Global Select Market (or their respective successors) and of an entity or person that is a corporation organized under the laws of
the United States, any State thereof or the District of Columbia”. |
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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 an Additional
Termination Event under Section 8(k)(iv) of this Confirmation, Dealer may elect, in its sole discretion, whether the provisions
of Section 12.2 of the Equity Definitions or Section 8(k)(iv) will apply. |
Consequences
of Merger Events:
|
(a)
Share-for-Share: |
Modified Calculation Agent Adjustment |
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(b)
Share-for-Other: |
Cancellation and Payment (Calculation
Agent Determination); provided that Dealer may elect, in its sole discretion, that Modified Calculation Agent Adjustment shall
apply for all or part of the Transaction. |
|
(c)
Share-for-Combined: |
Cancellation and Payment (Calculation
Agent Determination); provided that Dealer may elect, in its sole discretion, that Modified
Calculation Agent Adjustment or Component Adjustment shall apply for all or part of the Transaction. |
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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 an Additional
Termination Event under Section 8(k)(iii) of this Confirmation, Dealer may elect, in its sole discretion, whether the provisions
of Section 12.3 of the Equity Definitions or Section 8(k)(iii) will apply. |
Consequences
of Tender Offers:
|
(a)
Share-for-Share: |
Modified Calculation Agent Adjustment |
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(b)
Share-for-Other: |
Modified Calculation Agent Adjustment |
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(c)
Share-for-Combined: |
Modified Calculation Agent Adjustment |
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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, (x) 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”, (y) the word “shall”
in the second line shall be replaced with “may”, and (z) for the avoidance of doubt, the Calculation Agent may determine
whether the relevant Announcement Event has had an economic effect on any Component (and, if so, adjust the terms of such Component
accordingly) 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 thereof, 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. |
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Announcement
Event: |
(i) The public announcement
by any 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 paid and/or delivered exceeds
15% of the market capitalization of Issuer as of the date of such announcement (an “Transformative Transaction”)
or (z) the intention to enter into a Merger Event or Tender Offer or an Transformative Transaction, (ii) the public announcement
by Issuer of an intention to solicit or enter into, or to explore strategic |
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alternatives or other similar undertaking that may include, a Merger Event or Tender Offer or an Transformative Transaction or (iii) any subsequent
public announcement by any 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, whether or not by the same party,
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,” 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. |
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Modified Calculation Agent Adjustment: |
If, in respect of a Merger Event, the Counterparty under the Transaction following such Merger Event will not be the issuer of the New
Shares, the Dealer may elect (in its sole discretion) for Cancellation and Payment (Calculation Agent Determination) to apply. In addition,
if, in respect of any Merger Event to which Modified Calculation Agent Adjustment applies, the adjustments to be made in accordance with
Section 12.2(e)(i) of the Equity Definitions would result in Counterparty being different from the issuer of the Shares,
then with respect to such Merger Event, as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of
the Equity Definitions, Counterparty and the issuer of the Shares shall, prior to the Merger Date, have entered into such documentation
containing representations, warranties and agreements relating to securities law and other issues as requested by Dealer that Dealer
has determined, in its reasonable discretion, to be reasonably necessary or appropriate to allow Dealer to continue as a party to the
Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions, and to preserve its hedging or hedge unwind
activities in connection with the Transaction in a manner compliant with applicable legal, regulatory or self-regulatory requirements,
or with related policies and procedures applicable to Dealer (whether or not such requirements or related policies and procedures are
imposed by law or have been voluntarily adopted by Dealer), and if such conditions are not met or if the Calculation Agent determines
that no adjustment that it could make under Section 12.2(e)(i) of the |
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Equity Definitions will produce
a commercially reasonable result, then the consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall
apply. |
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Composition
of Combined Consideration: |
Notwithstanding anything to
the contrary in the Equity Definitions, if the composition of Combined Consideration in respect of any Share-for-Combined Merger Event
could be determined by a holder of Shares, Dealer shall determine the composition of such Combined Consideration assumed for purposes
of adjustments and deliveries hereunder in its sole discretion. |
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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 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
Termination Event(s): |
Notwithstanding anything to
the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, the Transaction would be cancelled or terminated
(whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event (with the Transaction
(or the cancelled or terminated portion thereof) being the Affected Transaction and Counterparty being the sole Affected Party) shall
be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement shall
apply to such Affected Transaction. |
Additional
Disruption Events:
(a)
Change in Law: |
Applicable;
provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the
interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”,
(ii) by adding the phrase “and/or Hedge Position” after the word “Shares” in clause (X) thereof and
(iii) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the
manner contemplated by the Hedging Party on the Trade Date”; and provided further that Section 12.9(a)(ii) of the Equity
Definitions is hereby amended by (i) replacing the parenthetical beginning after the word “regulation” in the second
line thereof with the phrase “(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)” and (ii) adding the words “, or holding, acquiring or disposing of Shares
or any Hedge Positions relating to,” after the words “obligations under” in clause (Y) thereof. |
(b)
Failure to Deliver: |
Not Applicable |
(c)
Insolvency Filing: |
Applicable |
(d)
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 |
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(b) |
inserting the following paragraphs at the end of such Section: |
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“Such inability described in clauses (A) or (B) above
shall not constitute a “Hedging Disruption” if such inability results from Hedging Party’s creditworthiness. |
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For the avoidance of doubt, (i) the term “equity
price risk” shall be deemed to include, but shall not be limited to, stock price and volatility risk, and (ii) the transactions
or assets referred to in phrases (A) or (B) above must be available on commercially reasonable pricing and other 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”. |
(e)
Increased Cost of Hedging: |
Applicable; provided
that (i) that such increased cost described in Section 12.9(vi) of the Equity Definitions shall not constitute an
“Increased Cost of Hedging” if such increased cost results from Hedging Party’s creditworthiness, and (ii) the
following parenthetical shall be inserted immediately following the word “expense” in the third line of Section 12.9(a)(vi) of
the Equity Definitions: “(including, for the avoidance of doubt, the incurrence of any stock borrow expense in excess of Hedging
Party’s expectation as of the Trade Date, other than to the extent resulting from an Increased Cost of Stock Borrow)”. |
(f)
Loss of Stock Borrow: |
Applicable |
Maximum Stock Loan
Rate: |
2.00 % per annum |
|
|
(g) Increased Cost of Stock Borrow: |
Applicable |
Initial Stock Loan
Rate: |
Prior to January 16, 2030,
0% per annum, and thereafter, 0.25 % per annum. |
Hedging Party: |
Dealer for all applicable Additional
Disruption Events. |
Determining Party: |
Dealer for all applicable Additional
Disruption Events. All calculations and determinations by the Determining Party shall be made
in good faith and in a commercially reasonable manner. Following any calculation by the Determining Party hereunder, upon written request
by Counterparty, the Determining Party will, within five Exchange Business Days immediately following such request, provide to Counterparty
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; provided, however, that in no event will the Determining Party be obligated
to share with Counterparty any proprietary or confidential data or information or any proprietary or confidential models used by it. |
Agreements and Acknowledgments
Regarding Hedging
Activities: |
Applicable |
Additional Acknowledgments: |
Applicable |
3. 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, if the Calculation Agent fails to timely make any calculation, adjustment or determination
required to be made by the Calculation Agent hereunder or to perform any obligations of the Calculation Agent hereunder and such failure
continues for five Exchange Business Days following notice to the Calculation Agent by Counterparty of such failure, Counterparty shall
have the right to designate a nationally recognize third-party dealer in over-the-counter corporate equity derivatives to act, during
the period commencing on the first date the Calculation Agent fails to timely make such calculation, adjustment or determination or
to perform such obligation, as the case may be, and ending on the earlier of the Early Termination Date with respect to such Event
of Default and the date on which such Event of Default is no longer continuing, as Calculation Agent. |
|
Following any calculation by the Calculation Agent
hereunder, upon written request by Counterparty, the Calculation Agent will, within five Exchange Business Days immediately
following such request, provide to Counterparty by email to the email 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 the basis
for such calculation; provided that in no event will Dealer be obligated to share with Counterparty any proprietary or
confidential data or information or any proprietary or confidential models used by it or any information that is subject to an
obligation not to disclose such information.. |
4. Account
Details:
Dealer Payment Instructions:
Bank: |
|
JPMorgan Chase Bank, N.A. |
ABA#: |
|
021000021 |
Acct No.: |
|
099997979 |
Beneficiary: |
|
JPMorgan Chase Bank, N.A. New York |
Ref: |
|
Derivatives |
Account for delivery
of Shares to Dealer: To be provided by Dealer
Counterparty
Payment Instructions: To be provided by Counterparty.
5. Offices:
The Office of Dealer for the Transaction
is: New York, New York
JPMorgan Chase
Bank National Association
New York Branch
283 Madison Avenue
New York, NY 10179
The Office of Counterparty for the
Transaction is: Inapplicable, Counterparty is not a Multibranch Party.
6. Notices:
For purposes of this Confirmation:
(a) Address
for notices or communications to Counterparty:
Winnebago Industries, Inc.
13200 Pioneer
Trail, Suite 150
Eden Prairie,
MN 55347
Attention: Kathy
Hiebert, Treasurer
(b) Address
for notices or communications to Dealer:
JPMorgan Chase Bank, National Association
EDG Marketing Support
|
Email: |
edg_notices@jpmorgan.com |
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|
edg.us.flow.corporates.mo@jpmorgan.com |
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With a copy to: |
|
|
Attention: |
Mr. Gaurav Maria |
|
Title: |
Managing Director |
|
Email: |
gaurav.x.maria@jpmorgan.com |
7. Representations,
Warranties and Agreements:
(a) In
addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants
to and for the benefit of, and agrees with, Dealer as follows:
(i) On
the Trade Date and as of the date of any Notice of Share Termination under (and as defined in) Section 8(b) below, (A) none
of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and
(B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports
and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading.
(ii) Without
limiting the generality of Section 13.1 of the Equity Definitions, 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).
(iii) Prior
to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction
and such other certificate or certificates as Dealer shall reasonably request. Based on such resolutions, neither Dealer nor any of its
affiliates shall be subject to the restrictions under Section 302A.673 of the Minnesota Business Corporations Act as an “interested
shareholder” of Counterparty by virtue of (A) its role as initial purchaser of, or market-maker in, any securities of Counterparty
convertible into the Shares, (B) its entry into the Transaction and/or (C) any hedging transactions in Counterparty’s
securities in connection with the Transaction.
(iv) Counterparty
is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable
for Shares) or otherwise in violation of the Exchange Act.
(v) 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.
(vi) On
the Trade Date and the Premium Payment Date (A) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty,
including contingent liabilities, (B) the capital of Counterparty is adequate to conduct the business of Counterparty and (C) Counterparty
has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur
debt beyond its ability to pay as such debts mature.
(vii) Counterparty
shall not take any action to decrease the number of Available Shares below the Capped Number (each as defined below, but without giving
effect to the limitation on adjustments to the Capped Number set forth in the proviso in the first sentence of Section 8(f)).
(viii) The
representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement
dated as of the Trade Date between Goldman
Sachs & Co. LLC and BMO Capital Markets Corp. as the representatives (the “Representatives”)
of the Initial Purchasers and Counterparty (the “Purchase Agreement”) are true and correct as of the Trade Date and
the Effective Date and are hereby deemed to be repeated to Dealer as if set forth herein.
(ix) (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”) 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 until the second Exchange Business Day immediately following the Settlement Period.
(x) (x) On
the Trade Date, (y) during the Settlement Period and (z) 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 Dealer.
(xi) Counterparty
agrees that it (A) will not during the Settlement Period make, or permit to be made, any public announcement (as defined in Rule 165(f) under
the Securities Act) of any Merger Transaction or potential Merger Transaction unless such public announcement is made prior to the opening
or after the close of the regular trading session on the Exchange for the Shares; (B) shall promptly (but in any event prior to the
next opening of the regular trading session on the Exchange) notify Dealer following any such announcement that such announcement has
been made; and (C) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide
Dealer with written notice specifying (i) 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 Dealer or its affiliates
and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three
full calendar months preceding the announcement date. Such written notice shall be deemed to be a certification by Counterparty to Dealer
that such information is true and correct. In addition, Counterparty shall promptly notify Dealer of the earlier to occur of the completion
of 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.
(xii) (A) Any
issuance of Shares upon exercise or termination of the Transaction has been, and throughout the Transaction will continue to be, duly
authorized and, upon issuance, such Shares will be validly issued, fully paid and non-assessable, and the issuance or delivery thereof
shall not be subject to any preemptive or similar rights and such Shares shall, upon issuance, be accepted for listing or quotation on
the Exchange; (B) a number of Shares of Counterparty equal to the Capped Number have been reserved for issuance upon exercise or
termination of the Warrants by all required corporate action of the Counterparty and (C) the Shares issuable upon exercise of the
Warrants shall upon issuance be accepted for listing or quotation on the Exchange, subject to notice that the listing of the Shares issuable
upon exercise or termination of the Warrants on the Exchange has been approved by the Exchange.
(xiii) No
state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise to
any reporting, consent, registration or
other requirement (including without limitation a requirement to obtain prior approval from any
person or entity) as a result of Dealer or its affiliates owning, holding (however defined) or having a right to acquire Shares; provided
however, that Counterparty makes no representation or warranty regarding any such requirement that is applicable generally to the ownership
of equity securities by Dealer or any of its affiliates as a result of it or any such affiliates being financial institutions or broker-dealers.
(xiv) 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, including, without limitation, the transaction that is the subject of this confirmation and any transactions
related hereto or contemplated hereby; (B) will exercise independent judgment in evaluating the recommendations of Dealer and its
affiliates or associated persons with regard to any such securities transactions or strategies unless it has otherwise notified Dealer
in writing; and (C) has total assets of at least $50 million. Counterparty will notify Dealer if the immediately preceding statement
contained in this Section 7(a)(xiv) ceases to be true.
(xv) Without
limiting the generality of Section 3(a) of the Agreement, neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or
by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of
any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Counterparty’s Annual Report
on Form 10-K for the year ended August 26, 2023, as updated by any subsequent filings, to which Counterparty or any of its subsidiaries
is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject,
or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
(b) Each
of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18)
of the U.S. Commodity Exchange Act, as amended, and is entering into the Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise) and not for the benefit of any third party.
(c) Each
of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under
the Securities Act, by virtue of Section 4(a)(2) thereof. Accordingly, Dealer represents and warrants to Counterparty that (i) it
has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment
and its investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not disproportionate
to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the
Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities
Act, (iii) it is entering into the Transaction for its own account and without a view to the distribution or resale thereof, (iv) the
assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted
under this Confirmation, the Securities Act and state securities laws, and (v) its financial condition is such that it has no need
for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing
or contemplated undertaking or indebtedness and is capable of assessing the merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction.
(d) Each
of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution” and “financial
participant” within the meaning of Sections 101(22) and 101(22A) of Title 11 of the United States Code (the
“Bankruptcy Code”). The parties hereto further agree and acknowledge (A) that this Confirmation is a
“securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to
which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment
amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a
“settlement payment” within the meaning of Section 546 of the Bankruptcy Code, and (B) that Dealer is
entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 548(d)(2),
555 and 561 of the Bankruptcy Code.
(e) Counterparty
shall deliver to Dealer (i) an incumbency certificate, dated as of the Trade Date, of Counterparty in customary form and (ii) an
opinion of counsel, dated as of the Trade Date and reasonably acceptable to Dealer in form and substance, with respect to the matters
set forth in Section 3(a) of the Agreement and Sections 7(a)(v), 7(a)(xii) and 7(a)(xv) of this Confirmation and such
other matters as Dealer may reasonably request and (iii) evidence that the listing of the Shares issuable upon exercise or termination
of the Warrants on the Exchange has been approved by the Exchange, subject only to official notice of issuance.
(f) Counterparty
understands that notwithstanding any other relationship between Counterparty and Dealer and its affiliates, in connection with this Transaction
and any other over-the-counter derivative transactions between Counterparty and Dealer or its affiliates, Dealer or its affiliate is acting
as principal and is not a fiduciary or advisor in respect of any such transaction, including any entry, exercise, amendment, unwind or
termination thereof.
8. Other
Provisions:
(a) Right
to Extend. Dealer may postpone or add, in whole or in part, any Expiration Date or Settlement Date or any other date of valuation
or delivery by Counterparty, with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate
adjustments to the relevant delivery obligation), if Dealer determines, in its commercially reasonable discretion, that such extension
is reasonably necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in
light of existing liquidity conditions in the cash market, the stock borrow market or other relevant market or to enable Dealer to effect
transactions with respect to Shares or Share Termination Delivery Units 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 requirements, or with related policies and procedures (whether or
not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer, and in the case of policies
or procedures, so long as such policies and procedures are consistently applied to transactions similar to the Transaction).
(b) Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Counterparty shall owe Dealer any amount pursuant
to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Counterparty shall have the right, in its
sole discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable
telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day (which written confirmation shall contain the representation
and warranty set forth in Section 7(a)(i)), no later than 9:30 A.M., New York City time, on the Merger Date, Tender Offer Date, Announcement
Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable (“Notice
of Share Termination”); provided that if Counterparty does not elect to satisfy its Payment Obligation by the Share Termination
Alternative, Dealer shall have the right, in its sole discretion, to elect to require Counterparty to satisfy its Payment Obligation by
the Share Termination Alternative, notwithstanding Counterparty’s failure to elect or election to the contrary; and provided
further that Counterparty shall not have the right to so elect (but, for the avoidance of doubt, Dealer shall have the right to so
elect) in the event of (i) an Insolvency, a Nationalization or a Merger Event, in each case, in which the consideration or proceeds
to be paid to holders of Shares consists solely of cash or (ii) an Event of Default in which Counterparty is the Defaulting Party
or a Termination Event in which Counterparty is the Affected Party or an Extraordinary Event, which Event of Default, Termination Event
or Extraordinary Event resulted from an event or events within Counterparty’s control. Upon such Notice of Share Termination, the
following provisions shall apply on the Scheduled Trading Day immediately following the Merger Date, the Tender Offer Date, Announcement
Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable:
Share Termination Alternative: |
If applicable, means that Counterparty shall deliver to Dealer the Share Termination Delivery Property on the date on which the Payment
Obligation would otherwise be due pursuant to Section 6(d)(ii) of the Agreement, or such later date or dates as the Calculation
Agent may reasonably determine
(the “Share Termination Payment Date”), in |
|
satisfaction of the Payment Obligation. |
Share Termination
Delivery
Property: | A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment
Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by
replacing any fractional portion of the aggregate amount of a security therein with an amount of cash in the Settlement Currency equal
to the value of such fractional security based on the values used to calculate the Share Termination Unit Price. |
Share Termination Unit Price: |
The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered
as Share Termination Delivery Property, as determined by the Calculation Agent and notified by the Calculation Agent to Counterparty
at the time of notification of the Payment Obligation. |
Share Termination Delivery Unit: |
In the case of a Termination Event (other than on account of an Insolvency, Nationalization or Merger Event), Event of Default, Delisting
or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization or Merger Event, one Share or a unit consisting
of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash
or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization or Merger Event, as applicable.
If such Insolvency, Nationalization 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. |
Failure to Deliver: |
Not Applicable |
Other Applicable Provisions: |
If Share Termination Alternative is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 and 9.12 of the Equity Definitions
will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares”
shall be read as references to “Share Termination Delivery Units”; provided that the Representation and Agreement
contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions,
obligations, limitations or requirements under applicable securities laws as a result of the fact that Counterparty is the issuer of
any Share Termination Delivery Units (or any security forming a part thereof). If, in the reasonable opinion of Dealer, based on advice
of counsel, for any reason, any securities comprising the Share Termination Delivery Units deliverable pursuant to this Section 8(b) would
not be immediately freely transferable by Dealer under Rule 144 under the Securities Act, then Dealer may elect to either (x) permit
delivery of such securities notwithstanding any restriction on transfer or (y) have the provisions set forth in Section 8(c) below
apply. |
(c) Registration/Private
Placement Procedures. (i) With respect to the Transaction, the following provisions shall apply to the extent provided for
above opposite the caption “Net Share Settlement” in Section 2 or in paragraph (b) of this Section 8. If
so applicable, then, at the election of Counterparty by notice to Dealer within one Exchange Business Day after the relevant delivery
obligation arises, but in any event at least one Exchange Business Day prior to the date on which such delivery obligation is due, either
(A) all Shares or Share Termination Delivery Units, as the case may be, delivered by Counterparty to Dealer shall be, at the time
of such delivery, covered by an effective registration statement of Counterparty for immediate resale by Dealer (such registration statement
and the
corresponding
prospectus (the “Prospectus”) (including, without limitation, any sections describing
the plan of distribution) in form and content commercially reasonably satisfactory to Dealer) or (B) Counterparty shall deliver additional
Shares or Share Termination Delivery Units, as the case may be, so that the value of such Shares or Share Termination Delivery Units,
as determined by the Calculation Agent to reflect a commercially reasonable liquidity discount, equals the value of the number of Shares
or Share Termination Delivery Units that would otherwise be deliverable if such Shares or Share Termination Delivery Units were freely
tradeable (without prospectus delivery) upon receipt by Dealer (such value, the “Freely Tradeable Value”); provided
that, if requested by Dealer, Counterparty shall make the election described in this clause (B) with respect to Shares delivered
on all Settlement Dates no later than one Exchange Business Day prior to the first Exercise Date, and the applicable procedures described
below shall apply to all Shares delivered on the Settlement Dates on an aggregate basis. (For the avoidance of doubt, as used in this
paragraph (c) only, the term “Counterparty” shall mean the issuer of the relevant securities, as the context shall require.)
(ii) It
shall be a condition to Counterparty’s right to make the election described in clause (c)(i)(A) that:
(A) Dealer
(or an affiliate of Dealer designated by Dealer) shall be afforded a reasonable opportunity to conduct a due diligence investigation with
respect to Counterparty that is customary in scope for underwritten offerings of equity securities and that yields results that are satisfactory
to Dealer or such affiliate, as the case may be, in its discretion; and
(B) Dealer
(or an affiliate of Dealer designated by Dealer) and Counterparty shall enter into an agreement (a “Registration Agreement”)
on commercially reasonable terms in connection with the public resale of such Shares or Share Termination Delivery Units, as the case
may be, by Dealer or such affiliate substantially similar to underwriting agreements customary for underwritten offerings of equity securities,
in form and substance commercially reasonably satisfactory to Dealer or such affiliate and Counterparty, which Registration Agreement
shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating to the
indemnification of, and contribution in connection with the liability of, Dealer and its affiliates and Counterparty, shall provide for
the payment by Counterparty of all expenses in connection with such resale, including all registration costs and all fees and expenses
of counsel for Dealer, and shall provide for the delivery of accountants’ “comfort letters” to Dealer or such affiliate
with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus.
(iii) If
Counterparty makes the election described in clause (c)(i)(B) above:
(A) Dealer
(or an affiliate of Dealer designated by Dealer) and any potential institutional purchaser of any such Shares or Share Termination Delivery
Units, as the case may be, from Dealer or such affiliate identified by Dealer shall be afforded a commercially reasonable opportunity
to conduct a due diligence investigation in compliance with applicable law with respect to Counterparty customary in scope for private
placements of equity securities (including, without limitation, the right to have made available to them for inspection all financial
and other records, pertinent corporate documents and other information reasonably requested by them), subject to execution by such recipients
of customary confidentiality agreements reasonably acceptable to Counterparty;
(B) Dealer
(or an affiliate of Dealer designated by Dealer) and Counterparty shall enter into an agreement (a “Private Placement Agreement”)
on commercially reasonable terms in connection with the private placement of such Shares or Share Termination Delivery Units, as the case
may be, by Counterparty to Dealer or such affiliate and the private resale of such shares by Dealer or such affiliate, substantially similar
to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially reasonably
satisfactory to Dealer and Counterparty, which Private Placement Agreement shall include, without limitation, provisions substantially
similar to those contained in such private placement purchase agreements relating to the indemnification of, and contribution in connection
with the liability of, Dealer and its affiliates and Counterparty, shall provide for the payment by Counterparty of all expenses in connection
with such resale, including all fees and expenses of
counsel for Dealer, shall contain representations, warranties and agreements of Counterparty
reasonably necessary or advisable to establish and maintain
the availability of an exemption from the registration requirements of the Securities Act for such resales, and shall use best efforts
to provide for the delivery of accountants’ “comfort letters” to Dealer or such affiliate with respect to the financial
statements and certain financial information contained in or incorporated by reference into the offering memorandum prepared for the resale
of such Shares;
(C) Counterparty
agrees that (i) any Shares or Share Termination Delivery Units so delivered to Dealer may be transferred by and among Dealer and
its affiliates, and Counterparty shall effect such transfer without any further action by Dealer and (ii) after the minimum “holding
period” within the meaning of Rule 144(d) under the Securities Act has elapsed with respect to such Shares or any securities
issued by Counterparty comprising such Share Termination Delivery Units, Counterparty shall promptly remove, or cause the transfer agent
for such Shares or securities to remove, any legends referring to any such restrictions or requirements from such Shares or securities,
without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document,
any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer); and
(D) Counterparty
shall not take, or cause to be taken, any action that would make unavailable either the exemption pursuant to Section 4(a)(2) of
the Securities Act for the sale by Counterparty to Dealer (or any affiliate designated by Dealer) of the Shares or Share Termination Delivery
Units, as the case may be, or the exemption pursuant to Section 4(a)(1) or Section 4(a)(3) of the Securities Act for
resales of the Shares or Share Termination Delivery Units, as the case may be, by Dealer (or any such affiliate of Dealer).
(d) Make-whole
Shares. If Counterparty makes the election described in clause (i)(B) of paragraph (c) of this Section 8, then Dealer
or its affiliates may sell (which sale shall be made in a commercially reasonable manner) such Shares or Share Termination Delivery Units,
as the case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery
of such Shares or Share Termination Delivery Units, as the case may be, and ending on the Exchange Business Day on which Dealer or its
affiliates completes the sale of a sufficient number of Shares or Share Termination Delivery Units, as the case may be, so that the realized
net proceeds of such sales exceed the Freely Tradeable Value. If any of such delivered Shares or Share Termination Delivery Units remain
after such realized net proceeds exceed the Freely Tradeable Value, Dealer shall return such remaining Shares or Share Termination Delivery
Units to Counterparty. If the Freely Tradeable Value exceeds the realized net proceeds from such resale, Counterparty shall transfer to
Dealer by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the final day of the
Resale Period (without giving effect to any extension thereof pursuant to the immediately succeeding sentence), the amount of such excess
(the “Additional Amount”) in cash or in a number of additional Shares or Share Termination Delivery Units, as the case
may be, (“Make-whole Shares”) in an amount that, based on the Relevant Price on such final day of the Resale Period
(as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a dollar value equal to the Additional
Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares in the manner contemplated by this Section 8(d).
This provision shall be applied successively until the Additional Amount is equal to zero, subject to Section 8(f).
(e) Beneficial
Ownership. Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Dealer be entitled to
receive, or shall be deemed to receive, any Shares if, immediately upon giving effect to such receipt of such Shares (and after taking
into account any Shares deliverable by Counterparty to Dealer at such time under any transaction or security other than the Transaction),
(i) the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the rules promulgated
thereunder) of Shares by Dealer, any of its affiliates subject to aggregation with Dealer for purposes of the “beneficial ownership”
test under Section 13 of the Exchange Act and all persons who may form a “group” (within the meaning of Rule 13d-5(b)(1) under
the Exchange Act) with Dealer with respect to “beneficial ownership” of any Shares (collectively, “Dealer Group”)
(or, to the extent that for any reason the equivalent calculation under Section 16 of the Exchange Act and the rules and
regulations thereunder results in a higher number, such higher number) would be equal to or greater than 8.0% or more of the outstanding
Shares on the date of determination or (ii) Dealer, Dealer Group or any person whose
ownership position would be aggregated with that of Dealer
or Dealer Group (Dealer, Dealer Group or any such person, a “Dealer Person”) under the Minnesota Business Corporations
or other federal, state or local law, rule, regulation or regulatory order or organizational
documents or contracts of Counterparty applicable to ownership of Shares (“Applicable Restrictions”), would own, beneficially
own, constructively own, control, hold the power to vote or otherwise meet a relevant definition of ownership in excess of a number of
Shares equal to (x) the number of Shares that would give rise to reporting or registration obligations or other requirements (including
obtaining prior approval by a state or federal regulator) of a Dealer Person under Applicable Restrictions and with respect to which such
requirements have not been met or the relevant approval has not been received or that would subject a Dealer Person to restrictions (including
restrictions relating to business combinations or other designated transactions) or have any other adverse effect on a Dealer Person under
Applicable Restrictions minus (y) 1.0% of the number of Shares outstanding on the date of determination (either such condition
described in clause (i) or (ii), an “Excess Ownership Position”). If any delivery owed to Dealer hereunder is
not made, in whole or in part, as a result of this provision, Counterparty’s obligation to make such delivery shall not be extinguished
and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after,
Dealer gives notice to Counterparty that such delivery would not result in the existence of an Excess Ownership Position.
(f) Limitations
on Settlement by Counterparty. Notwithstanding anything herein or in the Agreement to the contrary (except as set forth in this Section 8(f)),
in no event shall Counterparty be required to deliver Shares in connection with the Transaction in excess of 3,411,720 Shares, as such
number may be adjusted from time to time in accordance with the provisions hereof; provided that no such adjustment shall cause
the Capped Number to exceed the Available Shares (as in effect from time to time), other than as a result of actions of Counterparty or
events within Counterparty’s control (the “Capped Number”). Notwithstanding anything to the contrary in the Agreement
or the Equity Definitions, such limitation shall not affect the calculation of any Payment Obligation (as defined in Section 8(b)),
it being understood that if the Share Termination Alternative applies pursuant to Section 8(b), the number of Shares deliverable
pursuant to such Section shall not exceed the Capped Number. Counterparty represents and warrants to Dealer (which representation
and warranty shall be deemed to be repeated on each day that the Transaction is outstanding) that the Capped Number is equal to or less
than the number of authorized but unissued Shares of the Counterparty that are not reserved for future issuance in connection with transactions
in the Shares (other than the Transaction) on the date of the determination of the Capped Number (such Shares, the “Available
Shares”). In the event Counterparty shall not have delivered the full number of Shares otherwise deliverable as a result of
this Section 8(f) (the resulting deficit, the “Deficit Shares”), Counterparty shall be continually obligated
to deliver Shares, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, when, and
to the extent, that (A) Shares are repurchased, acquired or otherwise received by Counterparty or any of its subsidiaries after the
Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares previously
reserved for issuance in respect of other transactions become no longer so reserved or (C) Counterparty additionally authorizes any
unissued Shares that are not reserved for other transactions (such events as set forth in clauses (A), (B) and (C) above, collectively,
the “Share Issuance Events”). In the event that there are any Deficit Shares or the proviso in the first sentence
of this Section 8(f) has prevented any adjustment to the Capped Number, (i) Counterparty shall promptly notify Dealer of
the occurrence of any of the Share Issuance Events (including the number of Shares subject to clause (A), (B) or (C) and the
corresponding number of Shares to be delivered) and, as promptly as reasonably practicable, deliver such Shares thereafter, (ii) Counterparty
shall use its best efforts to cause Share Issuance Events to the extent necessary to deliver the full number of Deficit Shares or cause
the Capped Number to equal the Capped Number that would be in effect but for the proviso set forth in the first sentence of this
Section 8(f), as the case may be, and (iii) Counterparty shall not, until Counterparty’s obligations under the Transaction
have been satisfied in full, use any Shares that become available for potential delivery to Dealer as a result of any Share Issuance Event
for the settlement or satisfaction of any transaction or obligation other than the Transaction or any other warrant transaction between
Counterparty and Dealer or reserve any such Shares for future issuance for any purpose other than to satisfy Counterparty’s obligations
to Dealer under the Transaction or any other warrant transaction between Counterparty and Dealer.
(g) Equity
Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction
that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy. For the avoidance of doubt, the
parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim
arising as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement. For the avoidance
of doubt, the parties acknowledge that the obligations of Counterparty under this Confirmation are not secured by any collateral that
would otherwise secure the obligations of Counterparty herein under or pursuant to any other agreement.
(h) Amendments
to Equity Definitions. The following amendments shall be made to the Equity Definitions:
(i) The
first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as
follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation
of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent
will determine whether such Potential Adjustment Event has an effect on the theoretical value of the relevant Shares or options on the
Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and, the portion of such sentence
immediately preceding clause (ii) thereof is hereby amended by deleting the words “diluting or concentrative” and the
words “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate
or liquidity relative to the relevant Shares)” and replacing such latter phrase with the words “(and, for the avoidance of
doubt, adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative
to the relevant Shares)”;
(ii) Sections
11.2(a) and 11.2(e)(vii) of the Equity Definitions are hereby amended by deleting the words “a diluting or concentrative”
and, in the case of Section 11.2(e)(vii), replacing them with “an economic” and, in each case, adding the phrase “or
options on the Shares” at the end of the sentence;
(iii) Section 12.7(b) of
the Equity Definitions is hereby amended by deleting the words “(and in any event within five Exchange Business Days) by the parties
after” appearing after the words “agreed promptly” and replacing with the words “by the parties on or prior to”;
(iv) Section 12.9(b)(iv) of
the Equity Definitions is hereby amended by (A) deleting (1) subsection (A) in its entirety, (2) the phrase “or
(B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); (B) replacing “will
lend” with “lends” in subsection (B); and (C) deleting the phrase “neither the Non-Hedging Party nor the
Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence; “Lending Party”
means a third party that is not the Counterparty or an affiliate of the Counterparty that Dealer considers to be an acceptable counterparty
(acting in good faith and in a reasonable manner in light of (x) other transactions that Dealer (or its agent or affiliate) may have
entered into with such party and (y) any legal, regulatory or self-regulatory requirements or related policies and procedures (whether
or not such requirements or related policies and procedures are imposed by law or have been voluntarily adopted by Dealer) that apply
generally to transactions of a nature and kind similar to the transactions contemplated with such party); and
(v) Section 12.9(b)(v) of
the Equity Definitions is hereby amended by (A) adding the word “or” immediately before subsection “(B)”
and deleting the comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its entirety, (2) deleting the
word “or” immediately preceding subsection (C), (3) replacing in the penultimate sentence the words “either party”
with “the Hedging Party” and (4) deleting clause (X) in the final sentence.
(i) Transfer
and Assignment. Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part, at
any time without the consent of Counterparty. 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 to 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.
(j) 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.
(k) Additional
Termination Events. The occurrence of any of the following shall constitute an Additional Termination Event with respect to which
the Transaction shall be the sole Affected Transaction and Counterparty shall be the sole Affected Party and Dealer shall be the party
entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement and to determine the amount payable
pursuant to Section 6(e) of the Agreement; provided that with respect to any Additional Termination Event, Dealer may
choose to treat part of the Transaction as the sole Affected Transaction, and, upon the termination of the Affected Transaction, a Transaction
with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated
for all purposes as the Transaction, which shall remain in full force and effect:
(i) Dealer
reasonably determines that it is advisable to terminate a portion of the Transaction so that Dealer’s related commercially reasonable
hedging activities will comply with applicable securities laws, rules or regulations or related policies and procedures of
Dealer (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer), or Dealer,
despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal to hedge its obligations
pursuant to this Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory
or self-regulatory requirements;
(ii) at
any time at which any Excess Ownership Position occurs, Dealer, in its discretion, is unable to effect a transfer or assignment to a third
party of the Transaction or any other transaction between the parties after using its commercially reasonable efforts on pricing and terms
and within a time period reasonably acceptable to Dealer such that an Excess Ownership Position no longer exists; provided that
Dealer shall treat only that portion of the Transaction as the Affected Transaction as necessary so that such Excess Ownership Position
would no longer exist following the resulting partial termination of the Transaction (after taking into account commercially reasonable
adjustments to Dealer’s commercially reasonable Hedge Positions from such partial termination);
(iii) a
“person” or “group” (within the meaning of Section 13(d) of the Exchange Act), other than Counterparty
or its wholly-owned subsidiaries, becomes the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3
under the Exchange Act, of the common equity of Counterparty representing more than 50.0% of the voting power of such common equity;
(iv) (1) any
sale, lease or other transfer, in one transaction or a series of transactions, of all or substantially all of the assets of Counterparty
and its subsidiaries, taken as a whole, to any person; or (2) any transaction or series of related transactions in connection with
which (whether by means of merger, consolidation, share exchange, combination, reclassification, recapitalization, acquisition, liquidation
or otherwise) all of the Shares are exchanged for, converted into, acquired for, or constitutes solely the right to receive, other securities,
cash or other property;
provided
that, notwithstanding the foregoing, any transaction or event set forth in the immediately preceding clause (iv) shall not constitute
an Additional Termination Event if at least 90% of the consideration received or to be received by holders of the Shares (excluding cash
payments for fractional Shares or pursuant to dissenters rights) in connection with the transaction or transactions that would otherwise
constitute an Additional Termination Event pursuant to clause (iv) of this Section 8(k) consists of shares of common stock
listed on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective
successors) or that will be so listed when issued or exchanged in connection with such transaction or transactions, and following such
transaction or transactions, the Shares will consist of such
consideration, excluding cash payments
for fractional shares. For the avoidance of doubt, an event that is not considered an Additional Termination Event pursuant to the immediately
preceding sentence shall not be an Additional Termination Event solely because such event could also be described by clause (iii) above;
or
(v) holders
of Shares approve any plan or proposal for Counterparty’s liquidation or dissolution (other than in a transaction described in (iv) above).
(l) Early
Unwind. In the event the sale by Counterparty of the Firm Securities (defined under the Purchase Agreement) is not consummated pursuant
to the Purchase Agreement for any reason by the close of business in New York on January 23, 2023 (or such later date as agreed upon
by the parties (January 23, 2023 or such later date being the “Early Unwind Date”), the Transaction shall automatically
terminate (the “Early Unwind”) on the Early Unwind Date and (i) the Transaction and all of the respective rights
and obligations of Dealer and Counterparty thereunder shall be cancelled and terminated and (ii) Counterparty shall pay to
Dealer an amount in cash equal to the aggregate amount of actual costs and expenses relating to the unwinding of Dealer’s commercially
reasonable hedging activities in respect of the Transaction (including market losses incurred in reselling any Shares purchased by Dealer
or its affiliates in connection with such hedging activities, unless Counterparty agrees to purchase any such Shares at the cost at which
Dealer purchased such Shares). Following such termination, cancellation and payment, each party
shall be released and discharged by the
other party from, and agrees not to make any claim against the other party with respect to, any obligations or liabilities of either party
arising out of, and to be performed in connection with, the Transaction either prior to or after the Early Unwind Date. Dealer and Counterparty
represent and acknowledge to the other that upon an Early Unwind and following the payment referred to above, all obligations with respect
to the Transaction shall be deemed fully and finally discharged.
(m) No
Netting and Set-off. The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party waives
any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any
delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between
parties hereto, by operation of law or otherwise.
(n) Delivery
of Cash. For the avoidance of doubt, nothing in this Confirmation shall be interpreted as requiring the Counterparty to deliver cash
in respect of the settlement of the Transaction, except in circumstances where the required cash settlement thereof is permitted for classification
of the contract as equity by ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, as in effect on the relevant
Trade Date (including, without limitation, where the Counterparty so elects to deliver cash or fails timely to elect to deliver Shares
or Share Termination Delivery Property in respect of such settlement).
(o) Agreements
and Acknowledgements Regarding Hedging. Counterparty understands, acknowledges and agrees that: (A) at any time on and prior
to the last 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 VWAP Prices; (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 VWAP Prices, each in a manner that may be adverse to Counterparty; and (E) the Transaction is
a derivatives transaction in which it has granted Dealer an option, and Dealer may purchase shares for its own account at an average price
that may be greater than, or less than, the price paid by Counterparty under the terms of the Transaction.
(p) Wall
Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability
Act of 2010 (the “WSTAA”), the parties hereby agree that neither the enactment of the WSTAA (or any statute containing any
legal certainty provision similar to Section 739 of the WSTAA) or any regulation under the WSTAA (or any such statute), nor any
requirement under the WSTAA (or any statute containing any legal certainty provision similar to Section 739 of the WSTAA) or an
amendment made by the WSTAA (or any such statute), 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, Increased Cost
of Hedging or Illegality).
(q) Governing
Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE,
OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(r) Amendment.
This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty
and Dealer.
(s) 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.
(t) Tax
Matters.
(i) Withholding
Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act. “Indemnifiable
Tax” as defined in Section 14 of the Agreement, shall not include any withholding tax imposed or collected pursuant to Sections
1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or
official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation
of such Sections of the Code (a “FATCA Withholding Tax”). 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.
(ii) HIRE
Act. To the extent that either party to the Agreement with respect to this Transaction is not an adhering party to the ISDA
2015 Section 871(m) Protocol published by the International Swaps and Derivatives Association, Inc. on November 2,
2015 and available at www.isda.org, as may be amended, supplemented, replaced or superseded from time to time (the “871(m) Protocol”),
the parties agree that the provisions and amendments contained in the Attachment to the 871(m) Protocol are incorporated into and
apply to the Agreement with respect to this Transaction as if set forth in full herein. The parties further agree that, solely for purposes
of applying such provisions and amendments to the Agreement with respect to this Transaction, references to “each Covered Agreement”
in the 871(m) Protocol will be deemed to be references to the Master Agreement with respect to this Transaction, and references to
the “Implementation Date” in the 871(m) Protocol will be deemed to be references to the Trade Date of this Transaction.
(iii) Tax
documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto,
(i) on or before the date of execution of this Confirmation, (ii) upon reasonable request of Dealer and (iii) promptly
upon learning that any such tax form previously provided by Counterparty has become obsolete or incorrect. Dealer shall provide to Counterparty
a valid U.S. Internal Revenue Service Form W-9 or any successor thereto, (i) on or before the date of execution of this Confirmation,
(ii) upon reasonable request of Counterparty and (iii) promptly upon learning that any such tax form previously provided by
Dealer has become obsolete or incorrect.
(iv) Tax
Representations. For the purpose of Section 3(f) of the Agreement, Counterparty is a corporation for U.S. federal
income tax purposes and is organized under the laws of the State of Minnesota. Counterparty represents to Dealer that for U.S. federal
income tax purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States
Treasury Regulations) and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States
Treasury Regulations). For the purpose of Section 3(f) of the Agreement,
Dealer represents to Counterparty that Dealer is a national banking association organized and existing under the laws of the United
States of America.
(u) QFC
Stay Provisions.
(i) (A) In
the event that Dealer becomes subject to a proceeding under (i) the Federal Deposit Insurance Act and the regulations promulgated
thereunder or (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder
(a “U.S. Special Resolution Regime”) the transfer from Dealer of this Confirmation, and any interest and obligation
in or under, and any property securing, this Confirmation, will be effective to the same extent as the transfer would be effective under
the U.S. Special Resolution Regime if this Confirmation, and any interest and obligation in or under, and any property securing, this
Confirmation were governed by the laws of the United States or a state of the United States. (B) In the event that Dealer or an Affiliate
becomes subject to a proceeding under a U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§ 252.81,
47.2 or 382.1, as applicable (“Default Right”)) under this Confirmation that may be exercised against
Dealer are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution
Regime if this Confirmation were governed by the laws of the United States or a state of the United States.
(ii) Notwithstanding
anything to the contrary in this Confirmation, the parties expressly acknowledge and agree that: (A) Counterparty shall not be permitted
to exercise any Default Right with respect to this Confirmation or any Affiliate Credit Enhancement that is related, directly or indirectly,
to an Affiliate of Dealer becoming subject to receivership, insolvency, liquidation, resolution, or similar proceeding (an “Insolvency
Proceeding”), except to the extent that the exercise of such Default Right would be permitted under the provisions of 12 C.F.R.
252.84, 12 C.F.R. 47.5 or 12 C.F.R. 382.4, as applicable; and (B) Nothing in this Confirmation shall prohibit the transfer of any
Affiliate Credit Enhancement, any interest or obligation in or under such Affiliate Credit Enhancement, or any property securing such
Affiliate Credit Enhancement, to a transferee upon or following an Affiliate of Dealer becoming subject to an Insolvency Proceeding, unless
the transfer would result in the Counterparty being the beneficiary of such Affiliate Credit Enhancement in violation of any law applicable
to the Counterparty.
(iii) If
Counterparty has previously adhered to, or subsequently adheres to, the ISDA 2018 U.S. Resolution Stay Protocol as published by the International
Swaps and Derivatives Association, Inc. as of July 31, 2018 (the “ISDA U.S. Protocol”), the terms of such
protocol shall be incorporated into and form a part of this Confirmation and the terms of the ISDA U.S. Protocol shall supersede and replace
the terms of this Section 8(r). For purposes of incorporating the ISDA U.S. Protocol, Dealer shall be deemed to be a Regulated Entity,
Counterparty shall be deemed to be an Adhering Party, and this Confirmation shall be deemed to be a Protocol Covered Agreement. Capitalized
terms used but not defined in this paragraph shall have the meanings given to them in the ISDA U.S. Protocol.
(iv) Dealer
and Counterparty agree that to the extent there are any outstanding “in-scope QFCs,” as defined in 12 C.F.R. § 252.82(d),
that are not excluded under 12 C.F.R. § 252.88, between Dealer and Counterparty that do not otherwise comply with the requirements
of 12 C.F.R. § 252.2, 252.81–8 (each such agreement, a “Preexisting In-Scope Agreement”), then each such
Preexisting In-Scope Agreement is hereby amended to include the foregoing provisions in this Section 8(r), with references to “this
Confirmation” being understood to be references to the applicable Preexisting In-Scope Agreement.
(a) For
purposes of this Section 8(r):
(b) “Affiliate”
is defined in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Credit Enhancement” means any
credit enhancement or credit support arrangement in support of the obligations of Dealer under or with respect to this Confirmation, including
any guarantee, collateral arrangement (including any pledge, charge, mortgage or other security interest in collateral or title transfer
arrangement), trust or similar arrangement, letter of credit, transfer of margin or any similar arrangement.
(v) Exclusive
Jurisdiction; Waiver of Jury.
(i) Section 13(b) of
the Agreement is deleted in its entirety and replaced by the following:
“The courts
of the United States of America for the Southern District of New York and appellate courts from thereof will have the sole and exclusive
jurisdiction over any and all claims, disputes or causes of action arising out of, in connection with, or relating to this Agreement or
the transactions and relationships between the parties contemplated by this Agreement. If such courts lack federal subject matter jurisdiction,
the Supreme Court of the State of New York, sitting in New York County and any appellate court from thereof, will have sole and exclusive
jurisdiction. Subject to the foregoing, either of these courts will be the proper venue and the parties waive any objection to venue or
their convenience as a forum. The parties agree to submit to the jurisdiction of any of the courts specified and to accept service of
process to vest personal jurisdiction over them in any of these courts.”
(ii) EACH
OF COUNTERPARTY AND DEALER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS
STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS CONFIRMATION OR THE AGREEMENT.
(w) Communications
with Employees of J.P. Morgan Securities LLC. If Counterparty interacts with any employee of J.P. Morgan Securities LLC with respect
to the Transaction, Counterparty is hereby notified that such employee will act solely as an authorized representative of JPMorgan Chase
Bank, N.A. (and not as a representative of J.P. Morgan Securities LLC) in connection with the Transaction.
Please confirm that the foregoing
correctly sets forth the terms of our agreement by executing this Confirmation and returning it to J.P. Morgan Securities LLC, 383 Madison
Ave, New York, NY 10179, and by email to EDG_Notices@jpmorgan.com and edg.us.flow.corporates.mo@jpmorgan.com.
|
Yours faithfully, |
|
|
|
JPMorgan Chase Bank, National Association |
|
By: |
/s/ Gaurav Maria |
|
Name: |
Gaurav Maria |
|
Title: |
Managing Director |
[Signature Page to Base Warrant Confirmation]
Agreed and Accepted By:
WINNEBAGO INDUSTRIES, INC.
By: |
/s/ Bryan L. Hughes |
|
|
Name: Bryan L. Hughes |
|
|
Title: Chief Financial Officer and |
|
|
Senior Vice President |
|
[Signature Page to JPM Warrant Confirmation]
Annex A
For each Component of the Transaction, the Number of Warrants and Expiration
Date is set forth below.
Component Number |
|
Number of Warrants |
|
Expiration Date |
1 |
|
11,373 |
|
April 15, 2030 |
2 |
|
11,373 |
|
April 16, 2030 |
3 |
|
11,373 |
|
April 17, 2030 |
4 |
|
11,373 |
|
April 18, 2030 |
5 |
|
11,373 |
|
April 22, 2030 |
6 |
|
11,373 |
|
April 23, 2030 |
7 |
|
11,373 |
|
April 24, 2030 |
8 |
|
11,373 |
|
April 25, 2030 |
9 |
|
11,373 |
|
April 26, 2030 |
10 |
|
11,373 |
|
April 29, 2030 |
11 |
|
11,373 |
|
April 30, 2030 |
12 |
|
11,373 |
|
May 1, 2030 |
13 |
|
11,373 |
|
May 2, 2030 |
14 |
|
11,373 |
|
May 3, 2030 |
15 |
|
11,373 |
|
May 6, 2030 |
16 |
|
11,373 |
|
May 7, 2030 |
17 |
|
11,373 |
|
May 8, 2030 |
18 |
|
11,373 |
|
May 9, 2030 |
19 |
|
11,373 |
|
May 10, 2030 |
20 |
|
11,373 |
|
May 13, 2030 |
21 |
|
11,373 |
|
May 14, 2030 |
22 |
|
11,373 |
|
May 15, 2030 |
23 |
|
11,373 |
|
May 16, 2030 |
24 |
|
11,373 |
|
May 17, 2030 |
25 |
|
11,373 |
|
May 20, 2030 |
26 |
|
11,373 |
|
May 21, 2030 |
27 |
|
11,373 |
|
May 22, 2030 |
28 |
|
11,373 |
|
May 23, 2030 |
29 |
|
11,373 |
|
May 24, 2030 |
30 |
|
11,373 |
|
May 28, 2030 |
31 |
|
11,373 |
|
May 29, 2030 |
32 |
|
11,373 |
|
May 30, 2030 |
33 |
|
11,373 |
|
May 31, 2030 |
34 |
|
11,373 |
|
June 3, 2030 |
35 |
|
11,373 |
|
June 4, 2030 |
36 |
|
11,373 |
|
June 5, 2030 |
37 |
|
11,373 |
|
June 6, 2030 |
38 |
|
11,373 |
|
June 7, 2030 |
39 |
|
11,373 |
|
June 10, 2030 |
40 |
|
11,373 |
|
June 11, 2030 |
41 |
|
11,372 |
|
June 12, 2030 |
42 |
|
11,372 |
|
June 13, 2030 |
43 |
|
11,372 |
|
June 14, 2030 |
44 |
|
11,372 |
|
June 17, 2030 |
45 |
|
11,372 |
|
June 18, 2030 |
46 |
|
11,372 |
|
June 20, 2030 |
47 |
|
11,372 |
|
June 21, 2030 |
48 |
|
11,372 |
|
June 24, 2030 |
49 |
|
11,372 |
|
June 25, 2030 |
50 |
|
11,372 |
|
June 26, 2030 |
51 |
|
11,372 |
|
June 27, 2030 |
52 |
|
11,372 |
|
June 28, 2030 |
53 |
|
11,372 |
|
July 1, 2030 |
54 |
|
11,372 |
|
July 2, 2030 |
55 |
|
11,372 |
|
July 3, 2030 |
56 |
|
11,372 |
|
July 5, 2030 |
57 |
|
11,372 |
|
July 8, 2030 |
58 |
|
11,372 |
|
July 9, 2030 |
59 |
|
11,372 |
|
July 10, 2030 |
60 |
|
11,372 |
|
July 11, 2030 |
61 |
|
11,372 |
|
July 12, 2030 |
62 |
|
11,372 |
|
July 15, 2030 |
63 |
|
11,372 |
|
July 16, 2030 |
64 |
|
11,372 |
|
July 17, 2030 |
65 |
|
11,372 |
|
July 18, 2030 |
66 |
|
11,372 |
|
July 19, 2030 |
67 |
|
11,372 |
|
July 22, 2030 |
68 |
|
11,372 |
|
July 23, 2030 |
69 |
|
11,372 |
|
July 24, 2030 |
70 |
|
11,372 |
|
July 25, 2030 |
71 |
|
11,372 |
|
July 26, 2030 |
72 |
|
11,372 |
|
July 29, 2030 |
73 |
|
11,372 |
|
July 30, 2030 |
74 |
|
11,372 |
|
July 31, 2030 |
75 |
|
11,372 |
|
August 1, 2030 |
76 |
|
11,372 |
|
August 2, 2030 |
77 |
|
11,372 |
|
August 5, 2030 |
78 |
|
11,372 |
|
August 6, 2030 |
79 |
|
11,372 |
|
August 7, 2030 |
80 |
|
11,372 |
|
August 8, 2030 |
81 |
|
11,372 |
|
August 9, 2030 |
82 |
|
11,372 |
|
August 12, 2030 |
83 |
|
11,372 |
|
August 13, 2030 |
84 |
|
11,372 |
|
August 14, 2030 |
85 |
|
11,372 |
|
August 15, 2030 |
86 |
|
11,372 |
|
August 16, 2030 |
87 |
|
11,372 |
|
August 19, 2030 |
88 |
|
11,372 |
|
August 20, 2030 |
89 |
|
11,372 |
|
August 21, 2030 |
90 |
|
11,372 |
|
August 22, 2030 |
91 |
|
11,372 |
|
August 23, 2030 |
92 |
|
11,372 |
|
August 26, 2030 |
93 |
|
11,372 |
|
August 27, 2030 |
94 |
|
11,372 |
|
August 28, 2030 |
95 |
|
11,372 |
|
August 29, 2030 |
96 |
|
11,372 |
|
August 30, 2030 |
97 |
|
11,372 |
|
September 3, 2030 |
98 |
|
11,372 |
|
September 4, 2030 |
99 |
|
11,372 |
|
September 5, 2030 |
100 |
|
11,372 |
|
September 6, 2030 |
Exhibit 10.11
GOLDMAN SACHS & CO. LLC | 200 WEST STREET | NEW YORK,
NEW YORK 10282-2198 |TEL: 212-902-1000
To: |
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, Minnesota 55347
|
From: |
Goldman Sachs & Co. LLC
|
Re: |
Additional Issuer Warrant Transaction
|
Date: |
January 19, 2024 |
Dear Ladies and Gentlemen:
The purpose of this communication
(this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on
the Trade Date specified below (the “Transaction”) between Goldman Sachs & Co. LLC (“Dealer”)
and Winnebago Industries, Inc. (“Counterparty”). This communication constitutes a “Confirmation” as
referred to in the Agreement specified below.
1. This
Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (the “2006 Definitions”)
and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together
with the 2006 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”). For purposes of the Equity Definitions, each reference herein to a Warrant shall be
deemed to be a reference to a Call Option or an Option, as context requires.
Counterparty is hereby advised,
and Counterparty acknowledges, that Dealer has engaged in, or refrained from engaging in, substantial financial transactions and has taken
other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms
and conditions set forth below.
This Confirmation evidences
a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.
This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement
(Multicurrency—Cross Border) as if Dealer and Counterparty had executed an agreement in such form on the date hereof (but without
any Schedule except for (i) the election of Loss and Second Method and US Dollars (“USD”) as the Termination Currency,
(ii) the replacement of the word “third” in the last line of Section 5(a)(i) of the Agreement with the word
“first” and (iii) (a) the election that the “Cross Default” provisions of Section 5(a)(vi) of
the Agreement shall apply to Counterparty with a “Threshold Amount” of USD35.0 million), (b) (b) the
phrase “, or becoming capable at such time of being declared,” shall be deleted from clause (1) of such Section 5(a)(vi),
and (c) the following language shall be added to the end thereof: “Notwithstanding the foregoing, a default under subsection
(2) hereof shall not constitute an Event of Default if (x) the default was caused solely by error or omission of an administrative
or operational nature; (y) funds were available to enable the party to make the payment when due; and (z) the payment is made
within two Local Business Days of such party’s receipt of written notice of its failure to pay.”.
All provisions contained
in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event of
any inconsistency among this Confirmation, the Equity Definitions, the 2006 Definitions or the Agreement, the following shall prevail
in the order of precedence indicated: (i) this Confirmation; (ii) the Equity Definitions; (iii) the 2006
Definitions;and
(iv) the Agreement. For the avoidance of doubt, except to the extent of an express conflict, the application of any provision of
this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions shall not be construed to exclude or limit any other
provision of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions.
The Transaction hereunder
shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Counterparty or any confirmation
or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Counterparty,
then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to
which Dealer and Counterparty are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such
existing or deemed ISDA Master Agreement.
2. The
Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of the Equity Definitions. The
terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms:
Trade Date: |
January 19, 2024 |
Effective Date: |
January 23,
2024, or such other date as agreed between the parties, subject to Section 8(l) below |
Components: |
The Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with
the Number of Warrants and Expiration Date set forth in this Confirmation. The payments and deliveries to be made upon settlement of
the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement. |
Shares: |
The Common Stock of Counterparty, par value USD0.50 (Ticker Symbol: “WGO”). |
Number of Warrants: |
For each Component, as provided in Annex A to this Confirmation. |
Warrant Entitlement: |
One Share per Warrant |
Strike Price: |
USD135.2800 |
|
Notwithstanding anything to the contrary in the Agreement,
this Confirmation or the Equity Definitions, in no event shall the Strike Price be subject to adjustment to the extent that, after
giving effect to such adjustment, the Strike Price would be less than USD 67.2580, except for any adjustment pursuant to the terms
of this Confirmation and the Equity Definitions in connection with a stock split or similar change to Counterparty’s
capitalization. |
Number of Shares: |
As of any date, a
number of Shares equal to the product of the Number of Warrants and the Warrant
Entitlement. |
Premium Payment Date: |
The Effective Date |
Exchange: |
New York Stock Exchange |
Related Exchange: |
All Exchanges |
In respect of any Component: |
|
Expiration Time: |
Valuation Time |
Expiration Date: |
As provided in Annex
A to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already
an Expiration Date for another Component); provided that if that date is a Disrupted Day, the Expiration Date for such Component
shall be the first succeeding Scheduled Trading Day that is not a Disrupted Day and is not and 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 an Expiration Date in respect of any
other Component for the Transaction). Notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market
Disruption Event occurs on any Expiration Date, the Calculation Agent may determine that such Expiration Date is a Disrupted Day only
in part, in which case the Calculation Agent shall make adjustments to the Number of Warrants for the relevant Component for which such
day shall be the Expiration Date, 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 may determine the VWAP Price for such Expiration Date
based on transactions in the Shares taking into account the nature and duration of such Market Disruption Event. Any Scheduled Trading
Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be
a Scheduled Trading Day; if a closure of the Exchange prior to its normal close of trading on any Scheduled Trading Day is scheduled
following the date hereof, then such Scheduled Trading Day shall be deemed to be a Disrupted Day in full. Section 6.6 of
the Equity Definitions shall not apply to any Valuation Date |
|
occurring on an Expiration Date.
“Final Disruption Date” means September 20, 2030. |
|
|
Market Disruption Event: |
Section 6.3(a) of the Equity Definitions is hereby amended by (A) deleting the words “during the one hour period
that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may
be,” in clause (ii) thereof and (B) by replacing the words “or (iii) an Early Closure.” therein with
“(iii) an Early Closure, or (iv) a Regulatory Disruption.” |
|
Section 6.3(d) of the
Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing
Time” in the fourth line thereof. |
Regulatory Disruption: |
Any event that Dealer, in its reasonable discretion, determines makes it appropriate, with regard to any legal, regulatory or self-regulatory
requirements or related policies and procedures (whether or not such requirements or related policies and procedures are imposed by law
or have been voluntarily adopted by Dealer and provided any such policies and procedures are related to legal, regulatory or self-regulatory
issues generally applicable to the Transaction and are applied to the Transaction in a non-discriminatory manner), for Dealer to refrain
from or decrease any market activity connected with the Transaction. Dealer shall notify Counterparty as soon as reasonably practicable
that a Regulatory Disruption has occurred and the Expiration Dates affected by it. |
Automatic Exercise: |
Applicable; and means that the Number of Warrants for the corresponding Expiration Date will be deemed to be automatically exercised
at the Expiration Time on such Expiration Date unless Dealer notifies Seller (by telephone or in writing) prior to the Expiration Time
on such Expiration Date that it does not wish Automatic Exercise to occur, in which case Automatic Exercise will not apply to such Expiration
Date. |
Counterparty’s Telephone Number |
|
and Telex and/or Facsimile Number |
|
and Contact Details for purpose of |
|
Giving Notice: |
As provided in Section 6(a) below. |
In respect of any Component: |
|
Net Share Settlement: |
On each Settlement
Date, Counterparty shall deliver to Dealer a number of Shares equal to the Number of Shares to be Delivered for such Settlement Date
to the account specified by Dealer and cash in lieu of any fractional Share valued at the Relevant Price on |
|
the Valuation Date corresponding to such Settlement Date. If, in the reasonable opinion of Dealer, based on advice of counsel, for any reason, the Shares deliverable upon Net Share Settlement would not be immediately freely transferable by Dealer under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), then Dealer may elect to either (x) accept delivery of such Shares notwithstanding any restriction on transfer or (y) have the provisions set forth in Section 8(c) below apply.
|
|
The Number of Shares to be Delivered
shall be delivered by Counterparty to Dealer no later than 12:00 noon (local time in New York City) on the relevant Settlement
Date. |
Number of Shares to be Delivered: |
In respect of any Exercise Date, the product of (i) the number of Warrants exercised or deemed exercised on such Exercise Date,
(ii) the Warrant Entitlement and (iii) (A) the excess of the VWAP Price on the Valuation Date occurring in respect of
such Exercise Date over the Strike Price (or, if there is no such excess, zero) divided by (B) such VWAP Price. |
VWAP Price: |
For any Exchange Business Day, as determined by the Calculation Agent based on the New York Volume Weighted Average Price per Share for
the regular trading session (including any extensions thereof) of the Exchange on such Exchange Business Day (without regard to pre-open
or after hours trading outside of such regular trading session), as published by Bloomberg at 4:15 P.M., New York City time (or 15 minutes
following the end of any extension of the regular trading session), on such Exchange Business Day, on Bloomberg page “WGO.N
<Equity> AQR” (or any successor thereto) (or if such published volume weighted average price is unavailable or is manifestly
incorrect, the market value of one Share on such Exchange Business Day, as determined by the Calculation Agent using, if practicable,
a volume weighted method). |
Other Applicable Provisions: |
The provisions of Sections 9.1(c), 9.4, 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable as if “Physical
Settlement” applied to the Transaction; provided that the Representation and Agreement contained in Section 9.11 of
the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations
or requirements under applicable securities laws that exist as a result of the fact that Counterparty is the issuer of the Shares. |
In respect of any Component: |
|
Method of Adjustment: |
Calculation Agent Adjustment. For the avoidance of doubt, Calculation Agent Adjustment shall continue to apply until the obligations
of the parties (including any obligations
of Counterparty pursuant to Section 8(f) below) under the Transaction have been satisfied in full. |
Extraordinary Dividend: |
For any regular dividend period of Counterparty, any dividend or distribution on the Shares with an ex-dividend date occurring during
such regular dividend period (other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of
the Equity Definitions) (a “Dividend”) the amount or value of which (as determined by the Calculation Agent), when
aggregated with the amount or value (as determined by the Calculation Agent) of any and all previous Dividends with ex-dividend dates
occurring in the same regular dividend period, exceeds the Ordinary Dividend Amount. |
Ordinary Dividend Amount: |
For the first Dividend on the Shares for which the ex-dividend date occurs during any regular quarterly dividend period of Counterparty,
USD 0.31, and for any other Dividend on the Shares for which the ex-dividend date occurs during the same regular quarterly dividend period,
USD 0.00. |
New Shares: |
In the definition of New Shares in Section 12.1(i) of the Equity Definitions, the text in clause (i) thereof shall be
deleted in its entirety and replaced with “publicly quoted, traded or listed on any of The New York Stock Exchange, The NASDAQ
Global Market or The NASDAQ Global Select Market (or their respective successors) and of an entity or person that is a corporation organized
under the laws of the United States, any State thereof or the District of Columbia”. |
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 an Additional Termination Event under Section 8(k)(iv) of this Confirmation, Dealer may elect, in its sole
discretion, whether the provisions of Section 12.2 of the Equity Definitions or Section 8(k)(iv) will apply. |
Consequences of Merger Events: |
|
(a) Share-for-Share: |
Modified Calculation Agent Adjustment |
(b) Share-for-Other: |
Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its sole discretion, that Modified
Calculation Agent Adjustment shall apply for all or part of the Transaction. |
(c) Share-for-Combined: |
Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its sole discretion, that Modified
Calculation Agent Adjustment or Component Adjustment shall apply for all or part of the Transaction. |
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 an Additional Termination Event under Section 8(k)(iii) of
this Confirmation, Dealer may elect, in its sole discretion, whether the provisions of Section 12.3 of the Equity Definitions or
Section 8(k)(iii) will apply. |
Consequences of Tender Offers: |
|
|
|
(a) Share-for-Share: |
Modified Calculation Agent Adjustment |
|
|
(b) Share-for-Other: |
Modified Calculation Agent Adjustment |
|
|
(c) Share-for-Combined: |
Modified Calculation Agent Adjustment |
|
|
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, (x) 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”, (y) the
word “shall” in the second line shall be replaced with “may”, and (z) for the avoidance of doubt, the Calculation
Agent may determine whether the relevant Announcement Event has had an economic effect on any Component (and, if so, adjust the terms
of such Component accordingly) 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 thereof, 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 any 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
paid and/or delivered exceeds 15% of the market capitalization of Issuer as of the date of such announcement (an “Transformative
Transaction”) or (z) the intention to enter into a Merger Event or Tender Offer or an Transformative 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 Transformative Transaction or (iii) any subsequent public announcement by any 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, whether or not by the same party, 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,” 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. |
Modified Calculation
Agent Adjustment: |
If, in respect of a Merger Event, the Counterparty under the Transaction following such Merger Event will not be the issuer of the New
Shares, the Dealer may elect (in its sole discretion) for Cancellation and Payment (Calculation Agent Determination) to apply. In addition,
if, in respect of any Merger Event to which Modified Calculation Agent Adjustment applies, the adjustments to be made in accordance with
Section 12.2(e)(i) of the Equity Definitions would result in Counterparty being different from the issuer of the Shares, then
with respect to such Merger Event, as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity
Definitions, Counterparty and the issuer of the Shares shall, prior to the Merger Date, have entered into such documentation containing
representations, warranties and agreements relating to securities law and other issues as requested by Dealer that Dealer has determined,
in its reasonable discretion, to be reasonably necessary or appropriate to allow Dealer to continue as a party to the Transaction, as
adjusted under Section 12.2(e)(i) of the Equity Definitions, and to preserve its hedging or hedge unwind activities in connection
with the Transaction in a manner compliant with applicable legal, regulatory or self-regulatory requirements, or with related policies
and procedures applicable to Dealer (whether or not such requirements or related policies and procedures are imposed by law or have been
voluntarily adopted by Dealer), and if such conditions are not met or if the Calculation Agent determines that no adjustment that it
could make under Section 12.2(e)(i) of the |
|
Equity Definitions will produce a commercially reasonable result, then the
consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall apply. |
Composition of Combined Consideration: |
Notwithstanding anything to the contrary in the Equity Definitions, if the composition of Combined Consideration in respect of any Share-for-Combined
Merger Event could be determined by a holder of Shares, Dealer shall determine the composition of such Combined Consideration
assumed for purposes of adjustments and deliveries hereunder in its sole discretion. |
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 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 Termination Event(s): |
Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, the Transaction would
be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination
Event (with the Transaction (or the cancelled or terminated portion thereof) being the Affected Transaction and Counterparty being the
sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6
of the Agreement shall apply to such Affected Transaction. |
Additional Disruption Events: |
|
(a) Change in Law: |
Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase
“the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal
interpretation”, (ii) by adding the phrase “and/or Hedge Position” after the word “Shares” in clause
(X) thereof and (iii) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase
“in the manner contemplated by the Hedging Party on the Trade Date”; and provided further that Section 12.9(a)(ii) of
the Equity Definitions is hereby amended by (i) replacing the parenthetical beginning after the word “regulation” in
the second line thereof with the phrase “(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)” and (ii) adding the words “, or holding, acquiring or disposing of Shares or any Hedge Positions relating
to,” after the words “obligations under” in clause (Y) thereof. |
(b) Failure to Deliver: |
Not Applicable |
(c) Insolvency Filing: |
Applicable |
(d) 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 paragraphs at the end of such Section: |
|
“Such inability
described in clauses (A) or (B) above shall not constitute a “Hedging Disruption” if such inability results
from Hedging Party’s creditworthiness. |
|
For the
avoidance of doubt, (i) the term “equity price risk” shall be deemed to include, but shall not be limited to, stock
price and volatility risk, and (ii) the transactions or assets referred to in phrases (A) or (B) above must be
available on commercially reasonable pricing and other 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”. |
(e) Increased Cost of Hedging: |
Applicable; provided that (i) that such increased cost described in Section 12.9(vi) of the Equity Definitions
shall not constitute an “Increased Cost of Hedging” if such increased cost results from Hedging Party’s creditworthiness
or financial position, and (ii) the following parenthetical shall be inserted immediately following the word “expense”
in the third line of Section 12.9(a)(vi) of the Equity Definitions: “(including, for the avoidance of doubt, the incurrence
of any stock borrow expense in excess of Hedging Party’s expectation as of the Trade Date, other than to the extent resulting from
an Increased Cost of Stock Borrow)”. |
(f) Loss of Stock Borrow: |
Applicable |
Maximum Stock Loan Rate: |
2.00 % per annum |
(g) Increased Cost of Stock Borrow: |
Applicable |
Initial Stock Loan Rate: |
Prior to January 16, 2030, 0% per annum, and thereafter, 0.25 % per annum. |
Hedging Party: |
Dealer for all applicable Additional Disruption Events. |
Determining Party: |
Dealer for all applicable Additional Disruption Events. All calculations and determinations by
the Determining Party shall be made in good faith and in a commercially reasonable manner. Following any calculation by the Determining
Party hereunder, upon written request by Counterparty, the Determining Party will, within five Exchange Business Days immediately following
such request, provide to Counterparty 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; provided, however, that
in no event will the Determining Party be obligated to share with Counterparty any proprietary or confidential data or information or
any proprietary or confidential models used by it. |
Agreements and Acknowledgments |
|
Regarding Hedging Activities: |
Applicable |
Additional Acknowledgments: |
Applicable |
3. 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, if the Calculation Agent fails to timely make any calculation,
adjustment or determination required to be made by the Calculation Agent hereunder or to perform any obligations of the Calculation Agent
hereunder and such failure continues for five Exchange Business Days following notice to the Calculation Agent by Counterparty of such
failure, Counterparty shall have the right to designate a nationally recognize third-party dealer in over-the-counter corporate equity
derivatives to act, during the period commencing on the first date the Calculation Agent fails to timely make such calculation, adjustment
or determination or to perform such obligation, as the case may be, and ending on the earlier of the Early Termination Date with respect
to such Event of Default and the date on which such Event of Default is no longer continuing, as Calculation Agent. |
Following any calculation by the Calculation
Agent hereunder, upon written request by Counterparty, the Calculation Agent will, within five Exchange Business Days immediately following
such request, provide to Counterparty by email to the email 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 the basis for such calculation;
provided that in no event will Dealer be obligated to share with Counterparty any proprietary or confidential data or information
or any proprietary or confidential models used by it or any information that is subject to an obligation not to disclose such information..
4. Account
Details:
Dealer Payment
Instructions:
Chase Manhattan Bank New York
For A/C Goldman, Sachs & Co.
A/C #930-1-011483
ABA: 021-000021
Account for delivery of Shares to Dealer: To be provided by
Dealer
Counterparty
Payment Instructions: To be provided by Counterparty.
5. Offices:
The Office of Dealer for the Transaction
is: 200 West Street, New York, New York 10282-2198
The Office of Counterparty for the
Transaction is: Inapplicable, Counterparty is not a Multibranch Party.
6. Notices:
For purposes of this Confirmation:
(a) Address
for notices or communications to Counterparty:
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, MN
55347
Attention: Kathy
Hiebert, Treasurer
(b) Address
for notices or communications to Dealer:
To: Goldman
Sachs & Co. LLC
200 West Street
New York, NY 10282-2198
Attn: Michael Voris, Equity Capital
Markets Telephone: 212-902-4895
Facsimile: 212-256-5738
E-mail: michael.voris@gs.com With a copy
to:
Attn: Jan Debeuckelaer Telephone: 212-934-0893
Facsimile: 212-256-5738
Email: jan.debeuckelaer@gs.com And
Attn: Garrett Cohen Telephone: 212-357-3427
Facsimile: 212-256-5738
Email: garrett.cohen@gs.com
And email notification
to the following address: Eq-derivs-notifications@ny.ibd.gs.com
7. Representations,
Warranties and Agreements:
(a) In
addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants
to and for the benefit of, and agrees with, Dealer as follows:
(i) On
the Trade Date and as of the date of any Notice of Share Termination under (and as defined in) Section 8(b) below, (A) none
of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and
(B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports
and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading.
(ii) Without
limiting the generality of Section 13.1 of the Equity Definitions, 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).
(iii) Prior
to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction
and such other certificate or certificates as Dealer shall reasonably request. Based on such resolutions, neither Dealer nor any of its
affiliates shall be subject to the restrictions under Section 302A.673 of the Minnesota Business Corporations Act as an “interested
shareholder” of Counterparty by virtue of (A) its role as initial purchaser of, or market-maker in, any securities of Counterparty
convertible into the Shares, (B) its entry into the Transaction and/or (C) any hedging transactions in Counterparty’s
securities in connection with the Transaction.
(iv) Counterparty
is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable
for Shares) or otherwise in violation of the Exchange Act.
(v) 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.
(vi) On
the Trade Date and the Premium Payment Date (A) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty,
including contingent liabilities, (B) the capital of Counterparty is adequate to conduct the business of Counterparty and (C) Counterparty
has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur
debt beyond its ability to pay as such debts mature.
(vii) Counterparty
shall not take any action to decrease the number of Available Shares below the Capped Number (each as defined below, but without giving
effect to the limitation on adjustments to the Capped Number set forth in the proviso in the first sentence of Section 8(f)).
(viii) The
representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement
dated as of the Trade Date between Goldman Sachs & Co. LLC and BMO Capital Markets Corp. as the representatives (the “Representatives”)
of the Initial Purchasers and Counterparty (the “Purchase Agreement”) are true and correct as of the Trade Date and
the Effective Date and are hereby deemed to be repeated to Dealer as if set forth herein.
(ix) (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”) 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 until the second Exchange Business Day immediately following the Settlement Period.
(x) (x) On
the Trade Date, (y) during the Settlement Period and (z) 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 Dealer.
(xi) Counterparty
agrees that it (A) will not during the Settlement Period make, or permit to be made, any public announcement (as defined in Rule 165(f) under
the Securities Act) of any Merger Transaction or potential Merger Transaction unless such public announcement is made prior to the opening
or after the close of the regular trading session on the Exchange for the Shares; (B) shall promptly (but in any event prior to the
next opening of the regular trading session on the Exchange) notify Dealer following any such announcement that such announcement has
been made; and (C) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide
Dealer with written notice specifying (i) 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 Dealer or its affiliates
and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three
full calendar months preceding the announcement date. Such written notice shall be deemed to be a certification by Counterparty to Dealer
that such information is true and correct. In addition, Counterparty shall promptly notify Dealer of the earlier to occur of the completion
of 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.
(xii) (A) Any
issuance of Shares upon exercise or termination of the Transaction has been, and throughout the Transaction will continue to be, duly
authorized and, upon issuance, such Shares will be validly issued, fully paid and non-assessable, and the issuance or delivery thereof
shall not be subject to any preemptive or similar rights and such Shares shall, upon issuance, be accepted for listing or quotation on
the Exchange; (B) a number of Shares of Counterparty equal to the Capped Number have been reserved for issuance upon exercise or
termination of the Warrants by all required corporate action of the Counterparty and (C) the Shares issuable upon exercise of the
Warrants shall upon issuance be accepted for listing or quotation on the Exchange, subject to notice that the listing of the Shares issuable
upon exercise or termination of the Warrants on the Exchange has been approved by the Exchange.
(xiii) No
state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise to
any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any
person or entity) as a result of Dealer or its affiliates owning, holding (however defined) or having a right to acquire Shares; provided
however, that Counterparty makes no representation or warranty regarding any such requirement that is applicable generally to the ownership
of equity securities by Dealer or any of its affiliates as a result of it or any such affiliates being financial institutions or broker-dealers.
(xiv) 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, including, without limitation, the transaction that is the subject of this confirmation and any transactions
related hereto or contemplated hereby; (B) will exercise independent judgment in evaluating the recommendations of Dealer and its
affiliates or associated persons with regard to any such securities transactions or strategies unless it has otherwise notified Dealer
in writing; and (C) has total assets of at least $50 million. Counterparty will notify Dealer if the immediately preceding statement
contained in this Section 7(a)(xiv) ceases to be true.
(xv) Without
limiting the generality of Section 3(a) of the Agreement, neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or
by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of
any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Counterparty’s Annual Report
on Form 10-K for the year ended August 26, 2023, as updated by any subsequent filings, to which Counterparty or any of its subsidiaries
is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject,
or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
(b) Each
of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18)
of the U.S. Commodity Exchange Act, as amended, and is entering into the Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise) and not for the benefit of any third party.
(c) Each
of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under
the Securities Act, by virtue of Section 4(a)(2) thereof. Accordingly, Dealer represents and warrants to Counterparty that (i) it
has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment
and its investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not disproportionate
to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the
Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities
Act, (iii) it is entering into the Transaction for its own account and without a view to the distribution or resale thereof, (iv) the
assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted
under this Confirmation, the Securities Act and state securities laws, and (v) its financial condition is such that it has no need
for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing
or contemplated undertaking or indebtedness and is capable of assessing the merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction.
(d) Each
of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution” and “financial
participant” within the meaning of Sections 101(22) and 101(22A) of Title 11 of the United States Code (the
“Bankruptcy Code”). The parties hereto further agree and acknowledge (A) that this Confirmation is a
“securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which
each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or
“other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement
payment” within the meaning of Section 546 of the Bankruptcy Code, and (B) that Dealer is entitled to the
protections afforded by, among other sections, Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 548(d)(2), 555 and 561 of the
Bankruptcy Code.
(e) Counterparty
shall deliver to Dealer (i) an incumbency certificate, dated as of the Trade Date, of Counterparty in customary form and (ii) an
opinion of counsel, dated as of the Trade Date and reasonably acceptable to Dealer in form and substance, with respect to the matters
set forth in Section 3(a) of the Agreement and Sections 7(a)(v), 7(a)(xii) and 7(a)(xv) of this Confirmation and such
other matters as Dealer may reasonably request and (iii) evidence that the listing of the Shares issuable upon exercise or termination
of the Warrants on the Exchange has been approved by the Exchange, subject only to official notice of issuance.
(f) Counterparty
understands that notwithstanding any other relationship between Counterparty and Dealer and its affiliates, in connection with this Transaction
and any other over-the-counter derivative transactions between Counterparty and Dealer or its affiliates, Dealer or its affiliate is acting
as principal and is not a fiduciary or advisor in respect of any such transaction, including any entry, exercise, amendment, unwind or
termination thereof.
(g) Counterparty
represents and warrants that it has received, read and understands the OTC Options Risk Disclosure Statement and a copy of the
most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled “Characteristics and Risks of Standardized
Options”.
(h) 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.
8. Other
Provisions:
(a) Right
to Extend. Dealer may postpone or add, in whole or in part, any Expiration Date or Settlement Date or any other date of valuation
or delivery by Counterparty, with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate
adjustments to the relevant delivery obligation), if Dealer determines, in its commercially reasonable discretion, that such extension
is reasonably necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in
light of existing liquidity conditions in the cash market, the stock borrow market or other relevant market or to enable Dealer to effect
transactions with respect to Shares or Share Termination Delivery Units 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 requirements, or with related policies and procedures (whether or
not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer, and in the case of policies
or procedures, so long as such policies and procedures are consistently applied to transactions similar to the Transaction).
(b) Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Counterparty shall owe Dealer any amount
pursuant to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Counterparty shall have the
right, in its sole discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by
giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day (which written confirmation
shall contain the representation and warranty set forth in Section 7(a)(i)), no later than 9:30 A.M., New York City time, on
the Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of
an Extraordinary Event, as applicable (“Notice of Share Termination”); provided that if Counterparty does
not elect to satisfy its Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole
discretion, to elect to require Counterparty to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding
Counterparty’s failure to elect or election to the contrary; and provided further that Counterparty shall not have the
right to so elect (but, for the avoidance of doubt, Dealer shall have the right to so elect) in the event of (i) an Insolvency,
a Nationalization or a Merger Event, in each case, in which the consideration or proceeds to be paid to holders of Shares consists
solely of cash or (ii) an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which
Counterparty is the Affected Party or an Extraordinary Event, which Event of Default, Termination Event or Extraordinary Event
resulted from an event or events within Counterparty’s control. Upon such Notice of Share Termination, the following
provisions shall apply on the Scheduled Trading Day immediately following the Merger Date, the Tender Offer Date, Announcement Date,
Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable:
Share Termination Alternative: |
If applicable, means that Counterparty shall deliver to Dealer the Share Termination Delivery Property on the date on which the Payment
Obligation would otherwise be due pursuant to Section 6(d)(ii) of the Agreement, or such later date or dates as the Calculation
Agent may reasonably determine (the “Share Termination Payment Date”), in satisfaction of the Payment Obligation. |
Share Termination Delivery |
|
Property: |
A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment
Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by
replacing any fractional portion of the aggregate amount of a security therein with an amount of cash in the Settlement Currency equal
to the value of such fractional security based on the values used to calculate the Share Termination Unit Price. |
Share Termination Unit Price: |
The value of property contained in one Share Termination Delivery Unit on the
date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the
Calculation Agent and notified by the Calculation Agent to Counterparty at the time of notification of the Payment Obligation. |
Share Termination Delivery Unit: |
In the case of a Termination Event (other than on account of an Insolvency, Nationalization or Merger Event), Event of Default, Delisting
or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization or Merger Event, one Share or a unit consisting
of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash
or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization or Merger Event, as applicable.
If such Insolvency, Nationalization 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. |
Failure to Deliver: |
Not Applicable |
Other Applicable Provisions: |
If Share Termination Alternative is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 and 9.12 of the Equity Definitions
will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares”
shall be read as references to “Share Termination Delivery Units”; provided that the Representation and Agreement
contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions,
obligations, limitations or requirements under applicable securities laws as a result of the fact that Counterparty is the issuer of
any Share Termination Delivery Units (or any security forming a part thereof). If, in the reasonable opinion of Dealer, based on advice
of counsel, for any reason, any securities comprising the Share Termination Delivery Units deliverable pursuant to this Section 8(b) would
not be immediately freely transferable by Dealer under Rule 144 under the Securities Act, then Dealer may elect to either (x) permit
delivery of such securities notwithstanding any restriction on transfer or (y) have the provisions set forth in Section 8(c) below
apply. |
(c) Registration/Private
Placement Procedures. (i) With respect to the Transaction, the following provisions shall apply to the extent provided for above
opposite the caption “Net Share Settlement” in Section 2 or in paragraph (b) of this Section 8. If so applicable,
then, at the election of Counterparty by notice to Dealer within one Exchange Business Day after the relevant delivery obligation arises,
but in any event at least one Exchange Business Day prior to the date on which such delivery obligation is due, either (A) all Shares
or Share Termination Delivery Units, as the case may be, delivered by Counterparty to Dealer shall be, at the time of such delivery, covered
by an effective registration statement of Counterparty for immediate resale by Dealer (such registration statement and the corresponding
prospectus (the “Prospectus”) (including, without limitation, any sections describing the plan of distribution) in
form and content commercially reasonably satisfactory to Dealer) or (B) Counterparty shall deliver additional Shares or Share Termination
Delivery Units, as the case may be, so that the value of such Shares or Share Termination Delivery Units, as determined by the Calculation
Agent to reflect a commercially reasonable liquidity discount, equals the value of the number of Shares or Share Termination Delivery
Units that would otherwise be deliverable if such Shares or Share Termination Delivery Units were freely tradeable (without prospectus
delivery) upon receipt by Dealer (such value, the “Freely Tradeable Value”); provided that, if requested by
Dealer, Counterparty shall make the election described in this clause (B) with respect to Shares delivered on all Settlement Dates
no later than one Exchange Business Day prior to the first Exercise Date, and the applicable procedures described below shall apply to
all Shares delivered on the Settlement Dates on an aggregate basis. (For the avoidance of doubt, as used in this paragraph (c) only,
the term “Counterparty” shall mean the issuer of the relevant securities, as the context shall require.)
(ii) It
shall be a condition to Counterparty’s right to make the election described in clause (c)(i)(A) that:
(A) Dealer
(or an affiliate of Dealer designated by Dealer) shall be afforded a reasonable opportunity to conduct a due diligence investigation with
respect to Counterparty that is customary in scope for underwritten offerings of equity securities and that yields results that are satisfactory
to Dealer or such affiliate, as the case may be, in its discretion; and
(B) Dealer
(or an affiliate of Dealer designated by Dealer) and Counterparty shall enter into an agreement (a “Registration Agreement”)
on commercially reasonable terms in connection with the public resale of such Shares or Share Termination Delivery Units, as the case
may be, by Dealer or such affiliate substantially similar to underwriting agreements customary for underwritten offerings of equity securities,
in form and substance commercially reasonably satisfactory to Dealer or such affiliate and Counterparty, which Registration Agreement
shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating to the
indemnification of, and contribution in connection with the liability of, Dealer and its affiliates and Counterparty, shall provide for
the payment by Counterparty of all expenses in connection with such resale, including all registration costs and all fees and expenses
of counsel for Dealer, and shall provide for the delivery of accountants’ “comfort letters” to Dealer or such affiliate
with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus.
(iii) If
Counterparty makes the election described in clause (c)(i)(B) above:
(A) Dealer
(or an affiliate of Dealer designated by Dealer) and any potential institutional purchaser of any such Shares or Share Termination Delivery
Units, as the case may be, from Dealer or such affiliate identified by Dealer shall be afforded a commercially reasonable opportunity
to conduct a due diligence investigation in compliance with applicable law with respect to Counterparty customary in scope for private
placements of equity securities (including, without limitation, the right to have made available to them for inspection all financial
and other records, pertinent corporate documents and other information reasonably requested by them), subject to execution by such recipients
of customary confidentiality agreements reasonably acceptable to Counterparty;
(B) Dealer
(or an affiliate of Dealer designated by Dealer) and Counterparty shall enter into an agreement (a “Private Placement
Agreement”) on commercially reasonable terms in connection with the private placement of such Shares or Share Termination
Delivery Units, as the case may be, by Counterparty to Dealer or such affiliate and the private resale of such shares by Dealer or
such affiliate, substantially similar to private placement purchase agreements customary for private placements of equity
securities, in form and substance commercially reasonably satisfactory to Dealer and Counterparty, which Private Placement Agreement
shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements
relating to the indemnification of, and contribution in connection with the liability of, Dealer and its affiliates and
Counterparty, shall provide for the payment by Counterparty of all expenses in connection with such resale, including all fees and
expenses of counsel for Dealer, shall contain representations, warranties and agreements of Counterparty reasonably necessary or
advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for
such resales, and shall use best efforts to provide for the delivery of accountants’ “comfort letters” to Dealer
or such affiliate with respect to the financial statements and certain financial information contained in or incorporated by
reference into the offering memorandum prepared for the resale of such Shares;
(C) Counterparty
agrees that (i) any Shares or Share Termination Delivery Units so delivered to Dealer may be transferred by and among Dealer and
its affiliates, and Counterparty shall effect such transfer without any further action by Dealer and (ii) after the minimum “holding
period” within the meaning of Rule 144(d) under the Securities Act has elapsed with respect to such Shares or any securities
issued by Counterparty comprising such Share Termination Delivery Units, Counterparty shall promptly remove, or cause the transfer agent
for such Shares or securities to remove, any legends referring to any such restrictions or requirements from such Shares or securities,
without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document,
any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer); and
(D) Counterparty
shall not take, or cause to be taken, any action that would make unavailable either the exemption pursuant to Section 4(a)(2) of
the Securities Act for the sale by Counterparty to Dealer (or any affiliate designated by Dealer) of the Shares or Share Termination Delivery
Units, as the case may be, or the exemption pursuant to Section 4(a)(1) or Section 4(a)(3) of the Securities Act for
resales of the Shares or Share Termination Delivery Units, as the case may be, by Dealer (or any such affiliate of Dealer).
(d) Make-whole
Shares. If Counterparty makes the election described in clause (i)(B) of paragraph (c) of this Section 8, then Dealer
or its affiliates may sell (which sale shall be made in a commercially reasonable manner) such Shares or Share Termination Delivery Units,
as the case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery
of such Shares or Share Termination Delivery Units, as the case may be, and ending on the Exchange Business Day on which Dealer or its
affiliates completes the sale of a sufficient number of Shares or Share Termination Delivery Units, as the case may be, so that the realized
net proceeds of such sales exceed the Freely Tradeable Value. If any of such delivered Shares or Share Termination Delivery Units remain
after such realized net proceeds exceed the Freely Tradeable Value, Dealer shall return such remaining Shares or Share Termination Delivery
Units to Counterparty. If the Freely Tradeable Value exceeds the realized net proceeds from such resale, Counterparty shall transfer to
Dealer by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the final day of the
Resale Period (without giving effect to any extension thereof pursuant to the immediately succeeding sentence), the amount of such excess
(the “Additional Amount”) in cash or in a number of additional Shares or Share Termination Delivery Units, as the case
may be, (“Make-whole Shares”) in an amount that, based on the Relevant Price on such final day of the Resale Period
(as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a dollar value equal to the Additional
Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares in the manner contemplated by this Section 8(d).
This provision shall be applied successively until the Additional Amount is equal to zero, subject to Section 8(f).
(e) Beneficial
Ownership. Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Dealer be entitled
to receive, or shall be deemed to receive, any Shares if, immediately upon giving effect to such receipt of such Shares (and after
taking into account any Shares deliverable by Counterparty to Dealer at such time under any transaction or security other than the
Transaction), (i) the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the
rules promulgated thereunder) of Shares by Dealer, any of its affiliates subject to aggregation with Dealer for purposes of the
“beneficial ownership” test under Section 13 of the Exchange Act and all persons who may form a “group”
(within the meaning of Rule 13d-5(b)(1) under the Exchange Act) with Dealer with respect to “beneficial
ownership” of any Shares (collectively, “Dealer Group”) (or, to the extent that for any reason the
equivalent calculation under Section 16 of the Exchange Act and the rules and regulations thereunder results in a higher
number, such higher number) would be equal to or greater than 8.0% or more of the outstanding Shares on the date of determination or
(ii) Dealer, Dealer Group or any person whose ownership position would be aggregated with that of Dealer or Dealer Group
(Dealer, Dealer Group or any such person, a “Dealer Person”) under the Minnesota Business Corporations or other
federal, state or local law, rule, regulation or regulatory order or organizational documents or contracts of Counterparty
applicable to ownership of Shares (“Applicable Restrictions”), would own, beneficially own, constructively own,
control, hold the power to vote or otherwise meet a relevant definition of ownership in excess of a number of Shares equal to
(x) the number of Shares that would give rise to reporting or registration obligations or other requirements (including
obtaining prior approval by a state or federal regulator) of a Dealer Person under Applicable Restrictions and with respect to which
such requirements have not been met or the relevant approval has not been received or that would subject a Dealer Person to
restrictions (including restrictions relating to business combinations or other designated transactions) or have any other adverse
effect on a Dealer Person under Applicable Restrictions minus (y) 1.0% of the number of Shares outstanding on the date
of determination (either such condition described in clause (i) or (ii), an “Excess Ownership Position”). If
any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s
obligation to make such delivery shall not be extinguished and Counterparty shall make such delivery as promptly as practicable
after, but in no event later than one Exchange Business Day after, Dealer gives notice to Counterparty that such delivery would not
result in the existence of an Excess Ownership Position.
(f) Limitations
on Settlement by Counterparty. Notwithstanding anything herein or in the Agreement to the contrary (except as set forth in this
Section 8(f)), in no event shall Counterparty be required to deliver Shares in connection with the Transaction in excess of
568,620 Shares, as such number may be adjusted from time to time in accordance with the provisions hereof; provided that no
such adjustment shall cause the Capped Number to exceed the Available Shares (as in effect from time to time), other than as a
result of actions of Counterparty or events within Counterparty’s control (the “Capped Number”).
Notwithstanding anything to the contrary in the Agreement or the Equity Definitions, such limitation shall not affect the
calculation of any Payment Obligation (as defined in Section 8(b)), it being understood that if the Share Termination
Alternative applies pursuant to Section 8(b), the number of Shares deliverable pursuant to such Section shall not exceed
the Capped Number. Counterparty represents and warrants to Dealer (which representation and warranty shall be deemed to be repeated
on each day that the Transaction is outstanding) that the Capped Number is equal to or less than the number of authorized but
unissued Shares of the Counterparty that are not reserved for future issuance in connection with transactions in the Shares (other
than the Transaction) on the date of the determination of the Capped Number (such Shares, the “Available
Shares”). In the event Counterparty shall not have delivered the full number of Shares otherwise deliverable as a result
of this Section 8(f) (the resulting deficit, the “Deficit Shares”), Counterparty shall be continually
obligated to deliver Shares, from time to time until the full number of Deficit Shares have been delivered pursuant to this
paragraph, when, and to the extent, that (A) Shares are repurchased, acquired or otherwise received by Counterparty or any of
its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration),
(B) authorized and unissued Shares previously reserved for issuance in respect of other transactions become no longer so
reserved or (C) Counterparty additionally authorizes any unissued Shares that are not reserved for other transactions (such
events as set forth in clauses (A), (B) and (C) above, collectively, the “Share Issuance Events”). In
the event that there are any Deficit Shares or the proviso in the first sentence of this Section 8(f) has prevented
any adjustment to the Capped Number, (i) Counterparty shall promptly notify Dealer of the occurrence of any of the Share
Issuance Events (including the number of Shares subject to clause (A), (B) or (C) and the corresponding number of Shares
to be delivered) and, as promptly as reasonably practicable, deliver such Shares thereafter, (ii) Counterparty shall use its
best efforts to cause Share Issuance Events to the extent necessary to deliver the full number of Deficit Shares or cause the Capped
Number to equal the Capped Number that would be in effect but for the proviso set forth in the first sentence of this
Section 8(f), as the case may be, and (iii) Counterparty shall not, until Counterparty’s obligations under the
Transaction have been satisfied in full, use any Shares that become available for potential delivery to Dealer as a result of any
Share Issuance Event for the settlement or satisfaction of any transaction or obligation other than the Transaction or any other
warrant transaction between Counterparty and Dealer or reserve any such Shares for future issuance for any purpose other than to
satisfy Counterparty’s obligations to Dealer under the Transaction or any other warrant transaction between Counterparty and
Dealer.
(g) Equity
Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction
that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy. For the avoidance of doubt, the
parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim arising
as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement. For the avoidance of doubt,
the parties acknowledge that the obligations of Counterparty under this Confirmation are not secured by any collateral that would otherwise
secure the obligations of Counterparty herein under or pursuant to any other agreement.
(h) Amendments
to Equity Definitions. The following amendments shall be made to the Equity Definitions:
(i) The
first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as
follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation
of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent
will determine whether such Potential Adjustment Event has an effect on the theoretical value of the relevant Shares or options on the
Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and, the portion of such sentence
immediately preceding clause (ii) thereof is hereby amended by deleting the words “diluting or concentrative” and the
words “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate
or liquidity relative to the relevant Shares)” and replacing such latter phrase with the words “(and, for the avoidance of
doubt, adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative
to the relevant Shares)”;
(ii) Sections
11.2(a) and 11.2(e)(vii) of the Equity Definitions are hereby amended by deleting the words “a diluting or concentrative”
and, in the case of Section 11.2(e)(vii), replacing them with “an economic” and, in each case, adding the phrase “or
options on the Shares” at the end of the sentence;
(iii) Section 12.7(b) of
the Equity Definitions is hereby amended by deleting the words “(and in any event within five Exchange Business Days) by the parties
after” appearing after the words “agreed promptly” and replacing with the words “by the parties on or prior to”;
(iv) Section 12.9(b)(iv) of
the Equity Definitions is hereby amended by (A) deleting (1) subsection (A) in its entirety, (2) the phrase “or
(B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); (B) replacing “will
lend” with “lends” in subsection (B); and (C) deleting the phrase “neither the Non-Hedging Party nor the
Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence; “Lending Party”
means a third party that is not the Counterparty or an affiliate of the Counterparty that Dealer considers to be an acceptable counterparty
(acting in good faith and in a reasonable manner in light of (x) other transactions that Dealer (or its agent or affiliate) may have
entered into with such party and (y) any legal, regulatory or self-regulatory requirements or related policies and procedures (whether
or not such requirements or related policies and procedures are imposed by law or have been voluntarily adopted by Dealer) that apply
generally to transactions of a nature and kind similar to the transactions contemplated with such party); and
(v) Section 12.9(b)(v) of
the Equity Definitions is hereby amended by (A) adding the word “or” immediately before subsection “(B)”
and deleting the comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its entirety, (2) deleting
the word “or” immediately preceding subsection (C), (3) replacing in the penultimate sentence the words “either
party” with “the Hedging Party” and (4) deleting clause (X) in the final sentence.
(i) Transfer
and Assignment. Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part, at
any time without the consent of Counterparty.
(j) 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.
(k) Additional
Termination Events. The occurrence of any of the following shall constitute an Additional Termination Event with respect to which
the Transaction shall be the sole Affected Transaction and Counterparty shall be the sole Affected Party and Dealer shall be the party
entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement and to determine the amount payable
pursuant to Section 6(e) of the Agreement; provided that with respect to any Additional Termination Event, Dealer may
choose to treat part of the Transaction as the sole Affected Transaction, and, upon the termination of the Affected Transaction, a Transaction
with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated
for all purposes as the Transaction, which shall remain in full force and effect:
(i) Dealer
reasonably determines that it is advisable to terminate a portion of the Transaction so that Dealer’s related commercially reasonable
hedging activities will comply with applicable securities laws, rules or regulations or related policies and procedures of
Dealer (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer), or Dealer,
despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal to hedge its obligations
pursuant to this Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory
or self-regulatory requirements;
(ii) at
any time at which any Excess Ownership Position occurs, Dealer, in its discretion, is unable to effect a transfer or assignment to a third
party of the Transaction or any other transaction between the parties after using its commercially reasonable efforts on pricing and terms
and within a time period reasonably acceptable to Dealer such that an Excess Ownership Position no longer exists; provided that
Dealer shall treat only that portion of the Transaction as the Affected Transaction as necessary so that such Excess Ownership Position
would no longer exist following the resulting partial termination of the Transaction (after taking into account commercially reasonable
adjustments to Dealer’s commercially reasonable Hedge Positions from such partial termination);
(iii) a
“person” or “group” (within the meaning of Section 13(d) of the Exchange Act), other than Counterparty
or its wholly-owned subsidiaries, becomes the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3
under the Exchange Act, of the common equity of Counterparty representing more than 50.0% of the voting power of such common equity;
(iv) (1) any
sale, lease or other transfer, in one transaction or a series of transactions, of all or substantially all of the assets of Counterparty
and its subsidiaries, taken as a whole, to any person; or (2) any transaction or series of related transactions in connection with
which (whether by means of merger, consolidation, share exchange, combination, reclassification, recapitalization, acquisition, liquidation
or otherwise) all of the Shares are exchanged for, converted into, acquired for, or constitutes solely the right to receive, other securities,
cash or other property;
provided that,
notwithstanding the foregoing, any transaction or event set forth in the immediately preceding clause (iv) shall not constitute
an Additional Termination Event if at least 90% of the consideration received or to be received by holders of the Shares (excluding
cash payments for fractional Shares or pursuant to dissenters rights) in connection with the transaction or transactions that would
otherwise constitute an Additional Termination Event pursuant to clause (iv) of this Section 8(k) consists of shares
of common stock listed on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of
their respective successors) or that will be so listed when issued or exchanged in connection with such transaction or transactions,
and following such transaction or transactions, the Shares will consist of such consideration, excluding cash payments for
fractional shares. For the avoidance of doubt, an event that is not considered an Additional Termination Event pursuant to the
immediately preceding sentence shall not be an Additional Termination Event solely because such event could also be described by
clause (iii) above; or
(v) holders
of Shares approve any plan or proposal for Counterparty’s liquidation or dissolution (other than in a transaction described in (iv) above).
(l) Early
Unwind. In the event the sale by Counterparty of the Optional Securities (defined under the Purchase Agreement) is not consummated
pursuant to the Purchase Agreement for any reason by the close of business in New York on January 23, 2023 (or such later date as
agreed upon by the parties (January 23, 2023 or such later date being the “Early Unwind Date”), the Transaction
shall automatically terminate (the “Early Unwind”) on the Early Unwind Date and (i) the Transaction and all of
the respective rights and obligations of Dealer and Counterparty thereunder shall be cancelled and terminated and (ii) Counterparty
shall pay to Dealer an amount in cash equal to the aggregate amount of actual costs and expenses relating to the unwinding of Dealer’s
commercially reasonable hedging activities in respect of the Transaction (including market losses incurred in reselling any Shares purchased
by Dealer or its affiliates in connection with such hedging activities, unless Counterparty agrees to purchase any such Shares at the
cost at which Dealer purchased such Shares). Following such termination, cancellation and payment, each party shall be released and discharged
by the other party from, and agrees not to make any claim against the other party with respect to, any obligations or liabilities of either
party arising out of, and to be performed in connection with, the Transaction either prior to or after the Early Unwind Date. Dealer and
Counterparty represent and acknowledge to the other that upon an Early Unwind and following the payment referred to above, all obligations
with respect to the Transaction shall be deemed fully and finally discharged.
(m) No
Netting and Set-off. The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party waives
any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any
delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between
parties hereto, by operation of law or otherwise.
(n) Delivery
of Cash. For the avoidance of doubt, nothing in this Confirmation shall be interpreted as requiring the Counterparty to deliver cash
in respect of the settlement of the Transaction, except in circumstances where the required cash settlement thereof is permitted for classification
of the contract as equity by ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, as in effect on the relevant
Trade Date (including, without limitation, where the Counterparty so elects to deliver cash or fails timely to elect to deliver Shares
or Share Termination Delivery Property in respect of such settlement).
(o) Agreements
and Acknowledgements Regarding Hedging. Counterparty understands, acknowledges and agrees that: (A) at any time on and prior
to the last 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 VWAP Prices; (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 VWAP Prices, each in a manner that may be adverse to Counterparty; and (E) the Transaction is
a derivatives transaction in which it has granted Dealer an option, and Dealer may purchase shares for its own account at an average price
that may be greater than, or less than, the price paid by Counterparty under the terms of the Transaction.
(p) Wall
Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and
Accountability Act of 2010 (the “WSTAA”), the parties hereby agree that neither the enactment of the WSTAA (or any
statute containing any legal certainty provision similar to Section 739 of the WSTAA) or any regulation under the WSTAA (or any
such statute), nor any requirement under the WSTAA (or any statute containing any legal certainty provision similar to
Section 739 of the WSTAA) or an amendment made by the WSTAA (or any such statute), 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, Increased Cost of Hedging or Illegality).
(q) Governing
Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE,
OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(r) Amendment.
This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty
and Dealer.
(s) 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.
(t) Tax
Matters.
(i) Withholding
Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act. “Indemnifiable
Tax” as defined in Section 14 of the Agreement, shall not include any withholding tax imposed or collected pursuant to Sections
1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or
official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation
of such Sections of the Code (a “FATCA Withholding Tax”). 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.
(ii) HIRE
Act. To the extent that either party to the Agreement with respect to this Transaction is not an adhering party to the ISDA
2015 Section 871(m) Protocol published by the International Swaps and Derivatives Association, Inc. on November 2,
2015 and available at www.isda.org, as may be amended, supplemented, replaced or superseded from time to time (the “871(m) Protocol”),
the parties agree that the provisions and amendments contained in the Attachment to the 871(m) Protocol are incorporated into and
apply to the Agreement with respect to this Transaction as if set forth in full herein. The parties further agree that, solely for purposes
of applying such provisions and amendments to the Agreement with respect to this Transaction, references to “each Covered Agreement”
in the 871(m) Protocol will be deemed to be references to the Master Agreement with respect to this Transaction, and references to
the “Implementation Date” in the 871(m) Protocol will be deemed to be references to the Trade Date of this Transaction.
(iii) Tax
documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto,
(i) on or before the date of execution of this Confirmation, (ii) upon reasonable request of Dealer and (iii) promptly
upon learning that any such tax form previously provided by Counterparty has become obsolete or incorrect. Dealer shall provide to Counterparty
a valid U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on or before the date of execution of this Confirmation,
(ii) upon reasonable request of Counterparty and (iii) promptly upon learning that any such tax form previously provided by
Dealer has become obsolete or incorrect.
(iv) Tax
Representations. For the purpose of Section 3(f) of the Agreement, Counterparty is a corporation for U.S. federal income
tax purposes and is organized under the laws of the State of Minnesota. Counterparty represents to Dealer that for U.S. federal income
tax purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury
Regulations) and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United
States Treasury Regulations). For the purpose of Section 3(f) of the Agreement, Dealer represents to Counterparty that
for U.S. federal income tax purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the
United States Treasury Regulations) and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the
United States Treasury Regulations).
(u) QFC
Stay Provisions.
(i) (A) In
the event that Dealer becomes subject to a proceeding under (i) the Federal Deposit Insurance Act and the regulations promulgated
thereunder or (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder
(a “U.S. Special Resolution Regime”) the transfer from Dealer of this Confirmation, and any interest and obligation
in or under, and any property securing, this Confirmation, will be effective to the same extent as the transfer would be effective under
the U.S. Special Resolution Regime if this Confirmation, and any interest and obligation in or under, and any property securing, this
Confirmation were governed by the laws of the United States or a state of the United States. (B) In the event that Dealer or an Affiliate
becomes subject to a proceeding under a U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§ 252.81,
47.2 or 382.1, as applicable (“Default Right”)) under this Confirmation that may be exercised against Dealer are permitted
to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Confirmation
were governed by the laws of the United States or a state of the United States.
(ii) Notwithstanding
anything to the contrary in this Confirmation, the parties expressly acknowledge and agree that: (A) Counterparty shall not be permitted
to exercise any Default Right with respect to this Confirmation or any Affiliate Credit Enhancement that is related, directly or indirectly,
to an Affiliate of Dealer becoming subject to receivership, insolvency, liquidation, resolution, or similar proceeding (an “Insolvency
Proceeding”), except to the extent that the exercise of such Default Right would be permitted under the provisions of 12 C.F.R.
252.84, 12 C.F.R. 47.5 or 12 C.F.R. 382.4, as applicable; and (B) Nothing in this Confirmation shall prohibit the transfer of any
Affiliate Credit Enhancement, any interest or obligation in or under such Affiliate Credit Enhancement, or any property securing such
Affiliate Credit Enhancement, to a transferee upon or following an Affiliate of Dealer becoming subject to an Insolvency Proceeding, unless
the transfer would result in the Counterparty being the beneficiary of such Affiliate Credit Enhancement in violation of any law applicable
to the Counterparty.
(iii) If
Counterparty has previously adhered to, or subsequently adheres to, the ISDA 2018 U.S. Resolution Stay Protocol as published by the International
Swaps and Derivatives Association, Inc. as of July 31, 2018 (the “ISDA U.S. Protocol”), the terms of such
protocol shall be incorporated into and form a part of this Confirmation and the terms of the ISDA U.S. Protocol shall supersede and replace
the terms of this Section 8(u). For purposes of incorporating the ISDA U.S. Protocol, Dealer shall be deemed to be a Regulated Entity,
Counterparty shall be deemed to be an Adhering Party, and this Confirmation shall be deemed to be a Protocol Covered Agreement. Capitalized
terms used but not defined in this paragraph shall have the meanings given to them in the ISDA U.S. Protocol.
(iv) Dealer
and Counterparty agree that to the extent there are any outstanding “in-scope QFCs,” as defined in 12 C.F.R. § 252.82(d),
that are not excluded under 12 C.F.R. § 252.88, between Dealer and Counterparty that do not otherwise comply with the requirements
of 12 C.F.R. § 252.2, 252.81–8 (each such agreement, a “Preexisting In-Scope Agreement”), then each such
Preexisting In-Scope Agreement is hereby amended to include the foregoing provisions in this Section 8(u), with references to “this
Confirmation” being understood to be references to the applicable Preexisting In-Scope Agreement.
For purposes of this Section 8(u):
“Affiliate” is defined
in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Credit Enhancement”
means any credit enhancement or credit support arrangement in support of the obligations of Dealer under or with respect to this Confirmation,
including any guarantee, collateral arrangement (including any pledge, charge, mortgage or other security interest in collateral or title
transfer arrangement), trust or similar arrangement, letter of credit, transfer of margin or any similar arrangement.
9. Arbitration:
(a) All
parties to this Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided
by the rules of the arbitration forum in which a claim is filed.
(b) Arbitration
awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.
(c) The
ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court
proceedings.
(d) The
arbitrators do not have to explain the reason(s) for their award.
(e) The
panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless
Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with
the securities industry.
(f) The
rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible
for arbitration may be brought in court.
(g) The
rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Confirmation.
(h) Counterparty
agrees that any and all controversies that may arise between Counterparty and Dealer, including, but not limited to, those arising out
of or relating to the Agreement or the Transaction hereunder, shall be determined by arbitration conducted before FINRA Dispute Resolution
(“FINRA-DR”), or, if FINRA-DR declines to hear the matter, before the American Arbitration Association, in accordance with
their arbitration rules then in force. The award of the arbitrator shall be final, and judgment upon the award rendered may be entered
in any court, state or federal, having jurisdiction.
(i) No
person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class
with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class
is decertified; or (iii) Counterparty is excluded from the class by the court.
(j) Such
forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Confirmation except to the extent
stated herein.
Counterparty hereby agrees
(a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified
and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the
agreement between Dealer and Counterparty with respect to the Transaction, by manually signing this Confirmation or this page hereof
as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy
to Goldman Sachs & Co. LLC, Equity Derivatives Documentation Department, Facsimile No. (212) 428-1980/83
|
By: |
/s/ Mike Voris |
|
|
Name: Mike Voris |
|
|
Title: Partner |
[Signature Page to Additional
Warrant Confirmation]
Agreed and Accepted By:
WINNEBAGO INDUSTRIES, INC. |
|
By: |
/s/ Bryan L. Hughes |
|
|
Name: Bryan L. Hughes |
|
|
Title: Chief Financial Officer and |
|
|
Senior Vice President |
|
[Signature Page to GS Additional Warrant Confirmation]
Annex A
For each Component of the Transaction, the Number of Warrants and Expiration
Date is set forth below.
Component Number | |
Number of Warrants | |
Expiration Date |
| 1 | |
| 1,896 | |
April 15, 2030 |
| 2 | |
| 1,896 | |
April 16, 2030 |
| 3 | |
| 1,896 | |
April 17, 2030 |
| 4 | |
| 1,896 | |
April 18, 2030 |
| 5 | |
| 1,896 | |
April 22, 2030 |
| 6 | |
| 1,896 | |
April 23, 2030 |
| 7 | |
| 1,896 | |
April 24, 2030 |
| 8 | |
| 1,896 | |
April 25, 2030 |
| 9 | |
| 1,896 | |
April 26, 2030 |
| 10 | |
| 1,896 | |
April 29, 2030 |
| 11 | |
| 1,896 | |
April 30, 2030 |
| 12 | |
| 1,896 | |
May 1, 2030 |
| 13 | |
| 1,896 | |
May 2, 2030 |
| 14 | |
| 1,896 | |
May 3, 2030 |
| 15 | |
| 1,896 | |
May 6, 2030 |
| 16 | |
| 1,896 | |
May 7, 2030 |
| 17 | |
| 1,896 | |
May 8, 2030 |
| 18 | |
| 1,896 | |
May 9, 2030 |
| 19 | |
| 1,896 | |
May 10, 2030 |
| 20 | |
| 1,896 | |
May 13, 2030 |
| 21 | |
| 1,896 | |
May 14, 2030 |
| 22 | |
| 1,896 | |
May 15, 2030 |
| 23 | |
| 1,896 | |
May 16, 2030 |
| 24 | |
| 1,896 | |
May 17, 2030 |
| 25 | |
| 1,896 | |
May 20, 2030 |
| 26 | |
| 1,896 | |
May 21, 2030 |
| 27 | |
| 1,896 | |
May 22, 2030 |
| 28 | |
| 1,896 | |
May 23, 2030 |
| 29 | |
| 1,896 | |
May 24, 2030 |
| 30 | |
| 1,896 | |
May 28, 2030 |
| 31 | |
| 1,896 | |
May 29, 2030 |
| 32 | |
| 1,896 | |
May 30, 2030 |
| 33 | |
| 1,896 | |
May 31, 2030 |
| 34 | |
| 1,896 | |
June 3, 2030 |
| 35 | |
| 1,896 | |
June 4, 2030 |
| 36 | |
| 1,896 | |
June 5, 2030 |
| 37 | |
| 1,896 | |
June 6, 2030 |
| 38 | |
| 1,896 | |
June 7, 2030 |
| 39 | |
| 1,896 | |
June 10, 2030 |
| 40 | |
| 1,896 | |
June 11, 2030 |
| 41 | |
| 1,895 | |
June 12, 2030 |
| 42 | |
| 1,895 | |
June 13, 2030 |
| 43 | |
| 1,895 | |
June 14, 2030 |
| 44 | |
| 1,895 | |
June 17, 2030 |
| 45 | |
| 1,895 | |
June 18, 2030 |
| 46 | |
| 1,895 | |
June 20, 2030 |
| 47 | |
| 1,895 | |
June 21, 2030 |
| 48 | |
| 1,895 | |
June 24, 2030 |
| 49 | |
| 1,895 | |
June 25, 2030 |
| 50 | |
| 1,895 | |
June 26, 2030 |
| 51 | |
| 1,895 | |
June 27, 2030 |
| 52 | |
| 1,895 | |
June 28, 2030 |
| 53 | |
| 1,895 | |
July 1, 2030 |
| 54 | |
| 1,895 | |
July 2, 2030 |
| 55 | |
| 1,895 | |
July 3, 2030 |
| 56 | |
| 1,895 | |
July 5, 2030 |
| 57 | |
| 1,895 | |
July 8, 2030 |
| 58 | |
| 1,895 | |
July 9, 2030 |
| 59 | |
| 1,895 | |
July 10, 2030 |
| 60 | |
| 1,895 | |
July 11, 2030 |
| 61 | |
| 1,895 | |
July 12, 2030 |
| 62 | |
| 1,895 | |
July 15, 2030 |
| 63 | |
| 1,895 | |
July 16, 2030 |
| 64 | |
| 1,895 | |
July 17, 2030 |
| 65 | |
| 1,895 | |
July 18, 2030 |
| 66 | |
| 1,895 | |
July 19, 2030 |
| 67 | |
| 1,895 | |
July 22, 2030 |
| 68 | |
| 1,895 | |
July 23, 2030 |
| 69 | |
| 1,895 | |
July 24, 2030 |
| 70 | |
| 1,895 | |
July 25, 2030 |
| 71 | |
| 1,895 | |
July 26, 2030 |
| 72 | |
| 1,895 | |
July 29, 2030 |
| 73 | |
| 1,895 | |
July 30, 2030 |
| 74 | |
| 1,895 | |
July 31, 2030 |
| 75 | |
| 1,895 | |
August 1, 2030 |
| 76 | |
| 1,895 | |
August 2, 2030 |
| 77 | |
| 1,895 | |
August 5, 2030 |
| 78 | |
| 1,895 | |
August 6, 2030 |
| 79 | |
| 1,895 | |
August 7, 2030 |
| 80 | |
| 1,895 | |
August 8, 2030 |
| 81 | |
| 1,895 | |
August 9, 2030 |
| 82 | |
| 1,895 | |
August 12, 2030 |
| 83 | |
| 1,895 | |
August 13, 2030 |
| 84 | |
| 1,895 | |
August 14, 2030 |
| 85 | |
| 1,895 | |
August 15, 2030 |
| 86 | |
| 1,895 | |
August 16, 2030 |
| 87 | |
| 1,895 | |
August 19, 2030 |
| 88 | |
| 1,895 | |
August 20, 2030 |
| 89 | |
| 1,895 | |
August 21, 2030 |
| 90 | |
| 1,895 | |
August 22, 2030 |
| 91 | |
| 1,895 | |
August 23, 2030 |
| 92 | |
| 1,895 | |
August 26, 2030 |
| 93 | |
| 1,895 | |
August 27, 2030 |
| 94 | |
| 1,895 | |
August 28, 2030 |
| 95 | |
| 1,895 | |
August 29, 2030 |
| 96 | |
| 1,895 | |
August 30, 2030 |
| 97 | |
| 1,895 | |
September 3, 2030 |
| 98 | |
| 1,895 | |
September 4, 2030 |
| 99 | |
| 1,895 | |
September 5, 2030 |
| 100 | |
| 1,895 | |
September 6, 2030 |
Exhibit 10.12
Bank of Montreal
55 Bloor Street West, 18th Floor
Toronto, Ontario M4W 1A5
Opening Transaction
To: |
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, Minnesota 55347 |
|
|
From: |
Bank of Montreal |
|
|
Re: |
Additional Issuer Warrant Transaction |
|
|
Date: |
January 19, 2024 |
|
|
Dear Ladies and Gentlemen:
The purpose of this communication
(this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on
the Trade Date specified below (the “Transaction”) between Bank of Montreal (“Dealer”) and Winnebago
Industries, Inc. (“Counterparty”). Dealer is acting as principal in this Transaction and BMO Capital Markets
Corp. (“Agent”), its affiliate, is acting as agent for this Transaction solely in connection with Rule 15a-6
of the Exchange Act (as defined herein), as amended. This communication constitutes a “Confirmation” as referred to in the
Agreement specified below.
1. This
Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (the “2006 Definitions”)
and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and
together with the 2006 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”). For purposes of the Equity Definitions, each reference herein to a Warrant shall
be deemed to be a reference to a Call Option or an Option, as context requires.
Counterparty is hereby advised,
and Counterparty acknowledges, that Dealer has engaged in, or refrained from engaging in, substantial financial transactions and has
taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the
terms and conditions set forth below.
This Confirmation evidences
a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.
This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement
(Multicurrency—Cross Border) as if Dealer and Counterparty had executed an agreement in such form on the date hereof (but without
any Schedule except for (i) the election of Loss and Second Method and US Dollars (“USD”) as the Termination
Currency, (ii) the replacement of the word “third” in the last line of Section 5(a)(i) of the Agreement with
the word “first” and (iii) (a) the election that the “Cross Default” provisions of Section 5(a)(vi) of
the Agreement shall apply to Counterparty with a “Threshold Amount” of USD35.0 million), (b) (b) the
phrase “, or becoming capable at such time of being declared,” shall be deleted from clause (1) of such Section 5(a)(vi),
and (c) the following language shall be added to the end thereof: “Notwithstanding the foregoing, a default under subsection
(2) hereof shall not constitute an Event of Default if (x) the default was caused solely by error or omission of an administrative
or operational nature; (y) funds were available to enable the party to make the payment when due; and (z) the payment is made
within two Local Business Days of such party’s receipt of written notice of its failure to pay.”.
All provisions contained
in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event of
any inconsistency among this Confirmation, the Equity Definitions, the 2006 Definitions or the Agreement, the following shall prevail
in the order of precedence indicated: (i) this Confirmation; (ii) the Equity Definitions; (iii) the 2006 Definitions;
and (iv) the Agreement. For the avoidance of doubt, except to the extent of an express conflict, the application of any provision
of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions shall not be construed to exclude or limit any other
provision of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions.
The Transaction hereunder
shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Counterparty or any confirmation
or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Counterparty,
then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to
which Dealer and Counterparty are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such
existing or deemed ISDA Master Agreement.
2. The
Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of the Equity Definitions. The
terms of the particular Transaction to which this Confirmation relates are as follows:
Trade Date: |
January 19, 2024 |
Effective Date: |
January 23, 2024, or such other date as agreed between the parties, subject to Section 8(l) below |
Components: | The Transaction will be divided into individual
Components, each with the terms set forth in this Confirmation, and, in particular, with
the Number of Warrants and Expiration Date set forth in this Confirmation. The payments and
deliveries to be made upon settlement of the Transaction will be determined separately for
each Component as if each Component were a separate Transaction under the Agreement. |
Shares: | The Common Stock of Counterparty, par value USD0.50
(Ticker Symbol: “WGO”). |
Number of Warrants: |
For each Component, as provided in Annex A to this Confirmation. |
Warrant Entitlement: |
One Share per Warrant |
Strike Price: |
USD135.2800 |
|
Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions,
in no event shall the Strike Price be subject to adjustment to the extent that, after giving effect to such adjustment, the Strike
Price would be |
|
less than USD67.2580, except for any adjustment pursuant to the terms of this Confirmation
and the Equity Definitions in connection with a stock split or similar change to Counterparty’s capitalization. |
|
|
Number
of Shares: |
As of any date, a number
of Shares equal to the product of the Number of Warrants and the Warrant Entitlement. |
|
|
Premium: |
USD1,490,000 |
|
|
Premium
Payment Date: |
The Effective Date |
|
|
Exchange: |
New York Stock Exchange |
|
|
Related
Exchange: |
All Exchanges |
|
|
Procedures for Exercise: |
|
|
|
In
respect of any Component: |
|
|
|
Expiration
Time: |
Valuation Time |
|
|
Expiration
Date: |
As provided in Annex
A to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not
already an Expiration Date for another Component); provided that if that date is a Disrupted Day, the Expiration Date for
such Component shall be the first succeeding Scheduled Trading Day that is not a Disrupted Day and is not and 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 an Expiration Date in respect of any other Component for the Transaction). Notwithstanding the foregoing and anything to the contrary
in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date, the Calculation Agent may determine that such
Expiration Date is a Disrupted Day only in part, in which case the Calculation Agent shall make adjustments to the Number of Warrants
for the relevant Component for which such day shall be the Expiration Date, 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 may determine the VWAP Price for such Expiration Date based on transactions in the Shares taking into account the nature and
duration of such Market Disruption Event. Any Scheduled Trading Day on which, as of the date hereof, the Exchange is scheduled to
close prior to its normal close of trading shall be deemed not to be a Scheduled Trading Day; if a closure of the Exchange prior
to its normal close of trading on any Scheduled |
|
Trading Day is scheduled following the date hereof, then such Scheduled Trading Day shall be deemed
to be a Disrupted Day in full. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring
on an Expiration Date. “Final Disruption Date” means September 20, 2030. |
|
|
Market
Disruption Event: |
Section 6.3(a) of
the Equity Definitions is hereby amended by (A) deleting the words “during the one hour period that ends at the relevant
Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof
and (B) by replacing the words “or (iii) an Early Closure.” therein with “(iii) an Early Closure,
or (iv) a Regulatory Disruption.” |
|
|
|
Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of
the provision following the term “Scheduled Closing Time” in the fourth line thereof. |
|
|
Regulatory Disruption: |
Any event that Dealer,
in its reasonable discretion, determines makes it appropriate, with regard to any legal, regulatory or self-regulatory requirements
or related policies and procedures (whether or not such requirements or related policies and procedures are imposed by law or have
been voluntarily adopted by Dealer and provided any such policies and procedures are related to legal, regulatory or self-regulatory
issues generally applicable to the Transaction and are applied to the Transaction in a non-discriminatory manner), for Dealer to
refrain from or decrease any market activity connected with the Transaction. Dealer shall notify Counterparty as soon as reasonably
practicable that a Regulatory Disruption has occurred and the Expiration Dates affected by it. |
|
|
Automatic
Exercise: |
Applicable; and means that
the Number of Warrants for the corresponding Expiration Date will be deemed to be automatically exercised at the Expiration Time
on such Expiration Date unless Dealer notifies Seller (by telephone or in writing) prior to the Expiration Time on such Expiration
Date that it does not wish Automatic Exercise to occur, in which case Automatic Exercise will not apply to such Expiration Date. |
|
|
Counterparty’s
Telephone Number
and Telex and/or Facsimile Number
and Contact Details for purpose of Giving Notice: |
As provided in Section 6(a) below. |
|
|
Settlement Terms: |
|
|
|
In
respect of any Component: |
|
|
|
Settlement Currency: |
USD |
Net Share Settlement: |
On each Settlement Date, Counterparty shall deliver to Dealer a number of Shares equal to the Number
of Shares to be Delivered for such Settlement Date to the account specified by Dealer and cash in lieu of any fractional Share valued
at the Relevant Price on the Valuation Date corresponding to such Settlement Date. If, in the reasonable opinion of Dealer, based on
advice of counsel, for any reason, the Shares deliverable upon Net Share Settlement would not be immediately freely transferable by
Dealer under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), then Dealer may
elect to either (x) accept delivery of such Shares notwithstanding any restriction on transfer or (y) have the provisions
set forth in Section 8(c) below apply. |
|
The Number of Shares to be Delivered shall be delivered by Counterparty to Dealer no later than 12:00
noon (local time in New York City) on the relevant Settlement Date. |
Number of Shares to be Delivered: |
In respect of any Exercise Date, the product of (i) the number of Warrants exercised or deemed
exercised on such Exercise Date, (ii) the Warrant Entitlement and (iii) (A) the excess of the VWAP Price on the Valuation
Date occurring in respect of such Exercise Date over the Strike Price (or, if there is no such excess, zero) divided by (B) such
VWAP Price. |
VWAP Price: |
For any Exchange Business Day, as determined by the Calculation Agent based on the New York Volume
Weighted Average Price per Share for the regular trading session (including any extensions thereof) of the Exchange on such Exchange
Business Day (without regard to pre-open or after hours trading outside of such regular trading session), as published by Bloomberg
at 4:15 P.M., New York City time (or 15 minutes following the end of any extension of the regular trading session), on such Exchange
Business Day, on Bloomberg page “WGO.N <Equity> AQR” (or any successor thereto) (or if such published volume
weighted average price is unavailable or is manifestly incorrect, the market value of one Share on such Exchange Business Day, as determined
by the Calculation Agent using, if practicable, a volume weighted method). |
Other Applicable Provisions: |
The provisions of Sections 9.1(c), 9.4, 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will
be applicable as if “Physical Settlement” applied to the Transaction; provided that the Representation and Agreement
contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions,
obligations, limitations or requirements under applicable securities laws that exist as a result of the fact that Counterparty is the
issuer of the Shares. |
Adjustments:
In
respect of any Component:
Method of Adjustment: |
Calculation Agent Adjustment. For the avoidance of doubt, Calculation Agent Adjustment shall continue
to apply until the obligations of the parties (including any obligations of Counterparty pursuant to Section 8(f) below)
under the Transaction have been satisfied in full. |
Extraordinary Dividend: |
For any regular dividend period of Counterparty, any dividend or distribution on the Shares with an
ex-dividend date occurring during such regular dividend period (other than any dividend or distribution of the type described in Section 11.2(e)(i) or
Section 11.2(e)(ii)(A) of the Equity Definitions) (a “Dividend”) the amount or value of which (as determined
by the Calculation Agent), when aggregated with the amount or value (as determined by the Calculation Agent) of any and all previous
Dividends with ex-dividend dates occurring in the same regular dividend period, exceeds the Ordinary Dividend Amount. |
Ordinary Dividend Amount: |
For the first Dividend on the Shares for which the ex-dividend date occurs during any regular quarterly
dividend period of Counterparty, USD 0.31, and for any other Dividend on the Shares for which the ex-dividend date occurs during the
same regular quarterly dividend period, USD 0.00. |
Extraordinary Events:
New Shares: |
In the definition of New Shares in Section 12.1(i) of the Equity Definitions, the text in
clause (i) thereof shall be deleted in its entirety and replaced with “publicly quoted, traded or listed on any of The New
York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or their respective successors) and of an entity
or person that is a corporation organized under the laws of the United States, any State thereof or the District of Columbia”. |
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 an Additional Termination Event under Section 8(k)(iv) of this Confirmation, Dealer may elect,
in its sole discretion, whether the provisions of Section 12.2 of the Equity Definitions or Section 8(k)(iv) will apply. |
Consequences
of Merger Events:
| (a) | Share-for-Share: |
Modified Calculation Agent Adjustment |
| (b) | Share-for-Other: |
Cancellation and Payment (Calculation Agent
Determination); provided that Dealer may elect, in its sole discretion, that Modified
Calculation Agent |
| | |
Adjustment shall apply for all or part of
the Transaction. |
| (c) | Share-for-Combined: |
Cancellation and Payment (Calculation Agent
Determination); provided that Dealer may elect, in its sole discretion, that Modified
Calculation Agent Adjustment or Component Adjustment shall apply for all or part of the Transaction. |
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 an Additional
Termination Event under Section 8(k)(iii) of this Confirmation, Dealer may elect, in its sole discretion, whether the provisions
of Section 12.3 of the Equity Definitions or Section 8(k)(iii) will apply. |
Consequences
of Tender Offers:
| (a) | Share-for-Share: |
Modified Calculation Agent Adjustment |
| (b) | Share-for-Other: |
Modified Calculation Agent Adjustment |
| (c) | Share-for-Combined: |
Modified Calculation Agent Adjustment |
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, (x) 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”, (y) the word “shall” in the second line shall be replaced with “may”,
and (z) for the avoidance of doubt, the Calculation Agent may determine whether the relevant Announcement Event has had an economic
effect on any Component (and, if so, adjust the terms of such Component accordingly) 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
thereof, 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 any 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 paid and/or delivered exceeds 15% of the market capitalization of Issuer as of the date of such announcement
(an “Transformative Transaction”) or (z) the intention to enter into a Merger Event or Tender Offer or an Transformative
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 Transformative Transaction or (iii) any
subsequent public announcement by any 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, whether or not
by the same party, 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,” 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. |
Modified Calculation Agent Adjustment: |
If, in respect of a Merger Event, the Counterparty under the Transaction following such Merger Event
will not be the issuer of the New Shares, the Dealer may elect (in its sole discretion) for Cancellation and Payment (Calculation Agent
Determination) to apply. In addition, if, in respect of any Merger Event to which Modified Calculation Agent Adjustment applies, the
adjustments to be made in accordance with Section 12.2(e)(i) of the Equity Definitions would result in Counterparty being
different from the issuer of the Shares, then with respect to such Merger Event, as a condition precedent to the adjustments contemplated
in Section 12.2(e)(i) of the Equity Definitions, Counterparty and the issuer of the Shares shall, prior to the Merger Date,
have entered into such documentation containing representations, warranties and agreements relating to securities law and other issues
as requested by Dealer that Dealer has determined, in its reasonable discretion, to be reasonably necessary or appropriate to allow
Dealer to continue as a party to the Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions, and to
preserve its hedging or hedge unwind activities in connection with the Transaction in a manner compliant with applicable legal, regulatory
or self-regulatory requirements, or with related policies and procedures applicable to Dealer (whether or not such requirements or
related policies and procedures are imposed by law or have been voluntarily adopted by Dealer), and if such conditions are not met
or if |
|
the Calculation Agent determines that no adjustment that it could make under Section 12.2(e)(i) of
the Equity Definitions will produce a commercially reasonable result, then the consequences set forth in Section 12.2(e)(ii) of
the Equity Definitions shall apply. |
|
|
Composition of Combined Consideration: |
Notwithstanding anything to the contrary in the Equity Definitions, if the composition of Combined
Consideration in respect of any Share-for-Combined Merger Event could be determined by a holder of Shares, Dealer shall determine the
composition of such Combined Consideration assumed for purposes of adjustments and deliveries hereunder in its sole discretion. |
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 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 Termination Event(s): |
Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary
Event, the Transaction would be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions,
an Additional Termination Event (with the Transaction (or the cancelled or terminated portion thereof) being the Affected Transaction
and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity
Definitions, Section 6 of the Agreement shall apply to such Affected Transaction. |
Additional
Disruption Events:
| (a) | Change in Law: |
Applicable; provided that Section 12.9(a)(ii) of
the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation”
in the third line thereof with the phrase “, or public announcement of, the formal
or informal interpretation”, (ii) by adding the phrase “and/or Hedge Position”
after the word “Shares” in clause (X) thereof and (iii) by immediately
following the word “Transaction” in clause (X) thereof, adding the phrase
“in the manner contemplated by the Hedging Party on the Trade Date”; and provided
further that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by
(i) replacing the parenthetical beginning after the word “regulation” in
the second line thereof with the |
| | |
phrase “(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)” and (ii) adding
the words “, or holding, acquiring or disposing of Shares or any Hedge Positions relating
to,” after the words “obligations under” in clause (Y) thereof. |
| (b) | Failure to Deliver: |
Not Applicable |
| (c) | Insolvency Filing: |
Applicable |
| (d) | 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 paragraphs at the end
of such Section: |
| | |
| | “Such inability described in clauses (A) or (B) above shall
not constitute a “Hedging Disruption” if such inability results from Hedging Party’s
creditworthiness. |
| | |
| | For the avoidance of doubt, (i) the term “equity price risk”
shall be deemed to include, but shall not be limited to, stock price and volatility risk, and (ii) the
transactions or assets referred to in phrases (A) or (B) above must be available on commercially
reasonable pricing and other 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”. |
| (e) | Increased Cost of Hedging: |
Applicable; provided that (i) that
such increased cost described in Section 12.9(vi) of the Equity Definitions shall
not constitute an “Increased Cost of Hedging” if such increased cost results
from Hedging Party’s creditworthiness or financial position, and (ii) the following
parenthetical shall be inserted immediately following the word “expense” in the
third line of Section 12.9(a)(vi) of the Equity Definitions: “(including,
for the avoidance of doubt, the incurrence of any stock borrow expense in excess of Hedging
Party’s expectation as of the Trade Date, other than to the extent resulting from an
Increased Cost of Stock Borrow)”. |
| (f) | Loss of Stock Borrow: |
Applicable |
| | |
|
| | Maximum Stock Loan Rate: |
2.00 % per annum |
| (g) | Increased Cost of Stock Borrow: |
Applicable |
| | |
|
| | Initial Stock Loan Rate: |
Prior to January 16, 2030, 0% per annum,
and thereafter, 0.25 % per annum. |
Hedging Party: |
Dealer for all applicable Additional Disruption Events. |
Determining Party: |
Dealer for all applicable Additional Disruption Events. All calculations
and determinations by the Determining Party shall be made in good faith and in a commercially reasonable manner. Following any calculation
by the Determining Party hereunder, upon written request by Counterparty, the Determining Party will, within five Exchange Business
Days immediately following such request, provide to Counterparty 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;
provided, however, that in no event will the Determining Party be obligated to share with Counterparty any proprietary or confidential
data or information or any proprietary or confidential models used by it. |
Agreements
and Acknowledgments Regarding Hedging Activities: |
Applicable |
Additional Acknowledgments: |
Applicable |
| 3. | 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, if the Calculation
Agent fails to timely make any calculation, adjustment or determination required to be made
by the Calculation Agent hereunder or to perform any obligations of the Calculation Agent
hereunder and such failure continues for five Exchange Business Days following notice to
the Calculation Agent by Counterparty of such failure, Counterparty shall have the right
to designate a nationally recognize third-party dealer in over-the-counter corporate equity
derivatives to act, during the period commencing on the first date the Calculation Agent
fails to timely make such calculation, adjustment or determination or to perform such obligation,
as the case may be, and ending on the earlier of the Early Termination Date with respect
to such Event of Default and the date on which such Event of Default is no longer continuing,
as Calculation Agent. |
|
Following any calculation by the Calculation Agent hereunder, upon written request by Counterparty,
the Calculation Agent will, within five Exchange Business Days immediately following such request, provide to Counterparty by email
to the email 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 the basis for such calculation; provided that in no event
will Dealer be obligated to share with Counterparty any proprietary or confidential data or information or any proprietary or confidential
models used by it or any information that is subject to an obligation not to disclose such information.. |
| 4. | Account Details: |
| | |
| | Dealer Payment Instructions: |
Bank:
Bank of New York
ABA#: 021000018
A/C#: 8661062712
Acct Name –
BMO Nesbitt Burns
|
Account for delivery of Shares to Dealer: To be provided by Dealer |
|
|
|
Counterparty Payment Instructions: To be provided by Counterparty. |
|
|
|
5. |
Offices: |
|
|
|
|
|
Dealer is a Multibranch Party and for purposes of this Confirmation and each Transaction,
may act through its London and Toronto Offices. |
|
|
|
|
|
The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a
Multibranch Party. |
|
|
|
|
6. |
Notices: For purposes of this Confirmation: |
|
|
|
|
|
(a) Address for notices or communications to Counterparty: |
|
|
|
|
|
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, MN 55347
Attention: Kathy Hiebert, Treasurer |
|
|
|
|
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(b) Address for notices or communications to Dealer: |
|
|
|
|
|
To: |
Bank of Montreal
55 Bloor Street West, 18th Floor |
|
|
|
Toronto, Ontario M4W 1A5
Canada |
| Attn: | Manager, Derivatives Operations |
| Telephone: | (416) 552-4177 |
| Email: | BMOEquityLinked@bmo.com |
| | |
| With a copy to: |
| | |
| To: | Bank of Montreal
100 King Street West, 20th Floor |
| | Toronto, Ontario M5X 1A1 |
| | Canada |
| Attn: | Associate
General Counsel & Managing Director, Derivatives Legal Group |
|
Facsimile: |
(416) 956-2318 |
|
|
|
|
And a copy to: |
|
|
|
|
To: |
BMO Capital Markets Corp. 151 West 42nd Street 32nd Floor New York, New York 10036 |
|
Attn: |
Brian Riley |
|
Telephone: |
(212) 605-1414 |
|
Email: |
BMOEquityLinked@bmo.com |
7. Representations,
Warranties and Agreements:
(a) In
addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants
to and for the benefit of, and agrees with, Dealer as follows:
(i) On
the Trade Date and as of the date of any Notice of Share Termination under (and as defined in) Section 8(b) below, (A) none
of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and
(B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports
and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading.
(ii) Without
limiting the generality of Section 13.1 of the Equity Definitions, 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).
(iii) Prior
to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction
and such other certificate or certificates as Dealer shall reasonably request. Based on such resolutions, neither Dealer nor any of its
affiliates shall be subject to the restrictions under Section 302A.673 of the Minnesota Business Corporations Act as an “interested
shareholder” of Counterparty by virtue of (A) its role as initial purchaser of, or market-maker in, any securities of Counterparty
convertible into the Shares, (B) its entry into the Transaction and/or (C) any hedging transactions in Counterparty’s
securities in connection with the Transaction.
(iv) Counterparty
is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into
or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into
or exchangeable for Shares) or otherwise in violation of the Exchange Act.
(v) 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.
(vi) On
the Trade Date and the Premium Payment Date (A) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty,
including contingent liabilities, (B) the capital of Counterparty is adequate to conduct the business of Counterparty and (C) Counterparty
has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur
debt beyond its ability to pay as such debts mature.
(vii) Counterparty
shall not take any action to decrease the number of Available Shares below the Capped Number (each as defined below, but without giving
effect to the limitation on adjustments to the Capped Number set forth in the proviso in the first sentence of Section 8(f)).
(viii) The
representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement
dated as of the Trade Date between Goldman Sachs & Co. LLC and BMO Capital Markets Corp. as the representatives (the “Representatives”)
of the Initial Purchasers and Counterparty (the “Purchase Agreement”) are true and correct as of the Trade Date and
the Effective Date and are hereby deemed to be repeated to Dealer as if set forth herein.
(ix) (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”) 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 until the second Exchange Business Day immediately following the Settlement Period.
(x) (x) On
the Trade Date, (y) during the Settlement Period and (z) 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 Dealer.
(xi) Counterparty
agrees that it (A) will not during the Settlement Period make, or permit to be made, any public announcement (as defined in Rule 165(f) under
the Securities Act) of any Merger Transaction or potential Merger Transaction unless such public announcement is made prior to the opening
or after the close of the regular trading session on the Exchange for the Shares; (B) shall promptly (but in any event prior to
the next opening of the regular trading session on the Exchange) notify Dealer following any such announcement that such announcement
has been made; and (C) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange)
provide Dealer with written notice specifying (i) 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 Dealer or its affiliates
and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three
full calendar months preceding the announcement date. Such written notice shall be deemed to be a certification by Counterparty to Dealer
that such information is true and correct. In addition, Counterparty shall promptly notify Dealer of the earlier to occur of the completion
of 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.
(xii) (A) Any
issuance of Shares upon exercise or termination of the Transaction has been, and throughout the Transaction will continue to be, duly
authorized and, upon issuance, such Shares will be validly issued, fully paid and non-assessable, and the issuance or delivery thereof
shall not be subject to any preemptive or similar rights and such Shares shall, upon issuance, be accepted for listing or quotation on
the Exchange; (B) a number of Shares of Counterparty equal to the Capped Number have been reserved for issuance upon exercise or
termination of the Warrants by all required corporate action of the Counterparty and (C) the Shares issuable upon exercise of the
Warrants shall upon issuance be accepted for listing or quotation on the Exchange, subject to notice that the listing of the Shares issuable
upon exercise or termination of the Warrants on the Exchange has been approved by the Exchange.
(xiii) No
state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise
to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from
any person or entity) as a result of Dealer or its affiliates owning, holding (however defined) or having a right to acquire Shares;
provided however, that Counterparty makes no representation or warranty regarding any such requirement that is applicable generally to
the ownership of equity securities by Dealer or any of its affiliates as a result of it or any such affiliates being financial institutions
or broker-dealers.
(xiv) 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, including, without limitation, the transaction that is the subject of this confirmation
and any transactions related hereto or contemplated hereby; (B) will exercise independent judgment in evaluating the recommendations
of Dealer and its affiliates or associated persons with regard to any such securities transactions or strategies unless it has otherwise
notified Dealer in writing; and (C) has total assets of at least $50 million. Counterparty will notify Dealer if the immediately
preceding statement contained in this Section 7(a)(xiv) ceases to be true.
(xv) Without
limiting the generality of Section 3(a) of the Agreement, neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation
or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree
of any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Counterparty’s Annual Report
on Form 10-K for the year ended August 26, 2023, as updated by any subsequent filings, to which Counterparty or any of its
subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries
is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
(b) Each
of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18)
of the U.S. Commodity Exchange Act, as amended, and is entering into the Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise) and not for the benefit of any third party.
(c) Each
of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under
the Securities Act, by virtue of Section 4(a)(2) thereof. Accordingly, Dealer represents and warrants to Counterparty that
(i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss
of its investment and its investments in and liabilities in respect of the Transaction, which it understands are not readily marketable,
are not disproportionate to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of
its entire investment in the Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation
D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account and without a view to the
distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction has not been and will not
be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws, and (v) its
financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose
of any portion thereof to satisfy any existing or contemplated undertaking or
indebtedness and is capable
of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts,
the terms, conditions and risks of the Transaction.
(d) Each
of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution” and “financial participant”
within the meaning of Sections 101(22) and 101(22A) of Title 11 of the United States Code (the “Bankruptcy Code”).
The parties hereto further agree and acknowledge (A) that this Confirmation is a “securities contract,” as such term
is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection
herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning
of Section 362 of the Bankruptcy Code and a “settlement payment” within the meaning of Section 546 of the Bankruptcy
Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(27), 362(o),
546(e), 546(j), 548(d)(2), 555 and 561 of the Bankruptcy Code.
(e) Counterparty
shall deliver to Dealer (i) an incumbency certificate, dated as of the Trade Date, of Counterparty in customary form and (ii) an
opinion of counsel, dated as of the Trade Date and reasonably acceptable to Dealer in form and substance, with respect to the matters
set forth in Section 3(a) of the Agreement and Sections 7(a)(v), 7(a)(xii) and 7(a)(xv) of this Confirmation and
such other matters as Dealer may reasonably request and (iii) evidence that the listing of the Shares issuable upon exercise or
termination of the Warrants on the Exchange has been approved by the Exchange, subject only to official notice of issuance.
(f) Counterparty
understands that notwithstanding any other relationship between Counterparty and Dealer and its affiliates, in connection with this Transaction
and any other over-the-counter derivative transactions between Counterparty and Dealer or its affiliates, Dealer or its affiliate is
acting as principal and is not a fiduciary or advisor in respect of any such transaction, including any entry, exercise, amendment, unwind
or termination thereof.
(g) Counterparty
represents and warrants that it has received, read and understands the OTC Options Risk Disclosure Statement and a copy of the
most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled “Characteristics and Risks of Standardized
Options”.
(h) 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.
8. Other
Provisions:
(a) Right
to Extend. Dealer may postpone or add, in whole or in part, any Expiration Date or Settlement Date or any other date of valuation
or delivery by Counterparty, with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate
adjustments to the relevant delivery obligation), if Dealer determines, in its commercially reasonable discretion, that such extension
is reasonably necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder
in light of existing liquidity conditions in the cash market, the stock borrow market or other relevant market or to enable Dealer to
effect transactions with respect to Shares or Share Termination Delivery Units 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 requirements, or with related policies and procedures (whether
or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer, and in the case of policies
or procedures, so long as such policies and procedures are consistently applied to transactions similar to the Transaction).
(b) Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Counterparty shall owe Dealer any amount pursuant
to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Counterparty shall have the right, in its
sole discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable
telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day (which written confirmation shall contain the representation
and warranty set forth in Section 7(a)(i)), no later than
9:30 A.M., New York City
time, on the Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect
of an Extraordinary Event, as applicable (“Notice of Share Termination”); provided that if Counterparty does
not elect to satisfy its Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion,
to elect to require Counterparty to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s
failure to elect or election to the contrary; and provided further that Counterparty shall not have the right to so elect (but,
for the avoidance of doubt, Dealer shall have the right to so elect) in the event of (i) an Insolvency, a Nationalization or a Merger
Event, in each case, in which the consideration or proceeds to be paid to holders of Shares consists solely of cash or (ii) an Event
of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party or an Extraordinary
Event, which Event of Default, Termination Event or Extraordinary Event resulted from an event or events within Counterparty’s
control. Upon such Notice of Share Termination, the following provisions shall apply on the Scheduled Trading Day immediately following
the Merger Date, the Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of
an Extraordinary Event, as applicable:
Share Termination Alternative: |
If applicable, means that Counterparty shall deliver to Dealer the Share Termination Delivery Property
on the date on which the Payment Obligation would otherwise be due pursuant to Section 6(d)(ii) of the Agreement, or such
later date or dates as the Calculation Agent may reasonably determine (the “Share Termination Payment Date”), in
satisfaction of the Payment Obligation. |
Share Termination Delivery Property: | A number of Share Termination Delivery
Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by
the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination
Delivery Property by replacing any fractional portion of the aggregate amount of a security
therein with an amount of cash in the Settlement Currency equal to the value of such fractional
security based on the values used to calculate the Share Termination Unit Price. |
Share Termination Unit Price: |
The value of property contained in one Share Termination Delivery Unit on the date such Share Termination
Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent and notified by the
Calculation Agent to Counterparty at the time of notification of the Payment Obligation. |
Share Termination Delivery Unit: |
In the case of a Termination Event (other than on account of an Insolvency, Nationalization or Merger
Event), Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization or
Merger Event, one Share or a unit consisting of the number or amount of each type of property received by a holder of one Share (without
consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency,
Nationalization or Merger Event, as applicable. If such Insolvency, Nationalization 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. |
Failure to Deliver: |
Not Applicable |
Other Applicable Provisions: |
If Share Termination Alternative is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 and
9.12 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction, except that all
references to “Shares” shall be read as references to “Share Termination Delivery Units”; provided that
the Representation |
|
and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding
any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as
a result of the fact that Counterparty is the issuer of any Share Termination Delivery Units (or any security forming a part thereof).
If, in the reasonable opinion of Dealer, based on advice of counsel, for any reason, any securities comprising the Share Termination
Delivery Units deliverable pursuant to this Section 8(b) would not be immediately freely transferable by Dealer under Rule 144
under the Securities Act, then Dealer may elect to either (x) permit delivery of such securities notwithstanding any restriction
on transfer or (y) have the provisions set forth in Section 8(c) below apply. |
(c) Registration/Private
Placement Procedures. (i) With respect to the Transaction, the following provisions shall apply to the extent provided for above
opposite the caption “Net Share Settlement” in Section 2 or in paragraph (b) of this Section 8. If so applicable,
then, at the election of Counterparty by notice to Dealer within one Exchange Business Day after the relevant delivery obligation arises,
but in any event at least one Exchange Business Day prior to the date on which such delivery obligation is due, either (A) all Shares
or Share Termination Delivery Units, as the case may be, delivered by Counterparty to Dealer shall be, at the time of such delivery,
covered by an effective registration statement of Counterparty for immediate resale by Dealer (such registration statement and the corresponding
prospectus (the “Prospectus”) (including, without limitation, any sections describing the plan of distribution) in
form and content commercially reasonably satisfactory to Dealer) or (B) Counterparty shall deliver additional Shares or Share Termination
Delivery Units, as the case may be, so that the value of such Shares or Share Termination Delivery Units, as determined by the Calculation
Agent to reflect a commercially reasonable liquidity discount, equals the value of the number of Shares or Share Termination Delivery
Units that would otherwise be deliverable if such Shares or Share Termination Delivery Units were freely tradeable (without prospectus
delivery) upon receipt by Dealer (such value, the “Freely Tradeable Value”); provided that, if requested by
Dealer, Counterparty shall make the election described in this clause (B) with respect to Shares delivered on all Settlement Dates
no later than one Exchange Business Day prior to the first Exercise Date, and the applicable procedures described below shall apply to
all Shares delivered on the Settlement Dates on an aggregate basis. (For the avoidance of doubt, as used in this paragraph (c) only,
the term “Counterparty” shall mean the issuer of the relevant securities, as the context shall require.)
(ii) It
shall be a condition to Counterparty’s right to make the election described in clause (c)(i)(A) that:
(A) Dealer
(or an affiliate of Dealer designated by Dealer) shall be afforded a reasonable opportunity to conduct a due diligence investigation
with respect to Counterparty that is customary in scope for underwritten offerings of equity securities and that yields results that
are satisfactory to Dealer or such affiliate, as the case may be, in its discretion; and
(B) Dealer
(or an affiliate of Dealer designated by Dealer) and Counterparty shall enter into an agreement (a “Registration Agreement”)
on commercially reasonable terms in connection with the public resale of such Shares or Share Termination Delivery Units, as the case
may be, by Dealer or such affiliate substantially similar to underwriting agreements customary for underwritten offerings of equity securities,
in form and substance commercially reasonably satisfactory to Dealer or such affiliate and Counterparty, which Registration Agreement
shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating to the
indemnification of, and contribution in connection with the liability of, Dealer and its affiliates and Counterparty, shall provide for
the payment by Counterparty of all expenses in connection with such resale, including all registration costs and all fees and expenses
of counsel for Dealer, and shall provide for the delivery of accountants’ “comfort letters” to Dealer or such affiliate
with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus.
(iii) If
Counterparty makes the election described in clause (c)(i)(B) above:
(A) Dealer
(or an affiliate of Dealer designated by Dealer) and any potential institutional purchaser of any such Shares or Share Termination Delivery
Units, as the case may be, from Dealer or such affiliate identified by Dealer shall be afforded a commercially reasonable opportunity
to conduct a due diligence investigation in compliance with applicable law with respect to Counterparty customary in scope for private
placements of equity securities (including, without limitation, the right to have made available to them for inspection all financial
and other records, pertinent corporate documents and other information reasonably requested by them), subject to execution by such recipients
of customary confidentiality agreements reasonably acceptable to Counterparty;
(B) Dealer
(or an affiliate of Dealer designated by Dealer) and Counterparty shall enter into an agreement (a “Private Placement Agreement”)
on commercially reasonable terms in connection with the private placement of such Shares or Share Termination Delivery Units, as the
case may be, by Counterparty to Dealer or such affiliate and the private resale of such shares by Dealer or such affiliate, substantially
similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially
reasonably satisfactory to Dealer and Counterparty, which Private Placement Agreement shall include, without limitation, provisions substantially
similar to those contained in such private placement purchase agreements relating to the indemnification of, and contribution in connection
with the liability of, Dealer and its affiliates and Counterparty, shall provide for the payment by Counterparty of all expenses in connection
with such resale, including all fees and expenses of counsel for Dealer, shall contain representations, warranties and agreements of
Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements
of the Securities Act for such resales, and shall use best efforts to provide for the delivery of accountants’ “comfort letters”
to Dealer or such affiliate with respect to the financial statements and certain financial information contained in or incorporated by
reference into the offering memorandum prepared for the resale of such Shares;
(C) Counterparty
agrees that (i) any Shares or Share Termination Delivery Units so delivered to Dealer may be transferred by and among Dealer and
its affiliates, and Counterparty shall effect such transfer without any further action by Dealer and (ii) after the minimum “holding
period” within the meaning of Rule 144(d) under the Securities Act has elapsed with respect to such Shares or any securities
issued by Counterparty comprising such Share Termination Delivery Units, Counterparty shall promptly remove, or cause the transfer agent
for such Shares or securities to remove, any legends referring to any such restrictions or requirements from such Shares or securities,
without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document,
any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer); and
(D) Counterparty
shall not take, or cause to be taken, any action that would make unavailable either the exemption pursuant to Section 4(a)(2) of
the Securities Act for the sale by Counterparty to Dealer (or any affiliate designated by Dealer) of the Shares or Share Termination
Delivery Units, as the case may be, or the exemption pursuant to Section 4(a)(1) or Section 4(a)(3) of the Securities
Act for resales of the Shares or Share Termination Delivery Units, as the case may be, by Dealer (or any such affiliate of Dealer).
(d) Make-whole
Shares. If Counterparty makes the election described in clause (i)(B) of paragraph (c) of this Section 8, then Dealer
or its affiliates may sell (which sale shall be made in a commercially reasonable manner) such Shares or Share Termination Delivery Units,
as the case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery
of such Shares or Share Termination Delivery Units, as the case may be, and ending on the Exchange Business Day on which Dealer or its
affiliates completes the sale of a sufficient number of Shares or Share Termination Delivery Units, as the case may be, so that the realized
net proceeds of such sales exceed the Freely Tradeable Value. If any of such delivered Shares or Share Termination Delivery Units remain
after such realized net proceeds exceed the Freely Tradeable Value, Dealer shall return such remaining Shares or Share Termination Delivery
Units to Counterparty. If the Freely Tradeable Value exceeds the realized net proceeds from such resale, Counterparty shall transfer
to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the final day
of the Resale Period
(without giving effect
to any extension thereof pursuant to the immediately succeeding sentence), the amount of such excess (the “Additional Amount”)
in cash or in a number of additional Shares or Share Termination Delivery Units, as the case may be, (“Make-whole Shares”)
in an amount that, based on the Relevant Price on such final day of the Resale Period (as if such day was the “Valuation Date”
for purposes of computing such Relevant Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to
enable the sale of the Make-whole Shares in the manner contemplated by this Section 8(d). This provision shall be applied successively
until the Additional Amount is equal to zero, subject to Section 8(f).
(e) Beneficial
Ownership. Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Dealer be entitled to
receive, or shall be deemed to receive, any Shares if, immediately upon giving effect to such receipt of such Shares (and after taking
into account any Shares deliverable by Counterparty to Dealer at such time under any transaction or security other than the Transaction),
(i) the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the rules promulgated
thereunder) of Shares by Dealer, any of its affiliates subject to aggregation with Dealer for purposes of the “beneficial ownership”
test under Section 13 of the Exchange Act and all persons who may form a “group” (within the meaning of Rule 13d-5(b)(1) under
the Exchange Act) with Dealer with respect to “beneficial ownership” of any Shares (collectively, “Dealer Group”)
(or, to the extent that for any reason the equivalent calculation under Section 16 of the Exchange Act and the rules and regulations
thereunder results in a higher number, such higher number) would be equal to or greater than 8.0% or more of the outstanding Shares on
the date of determination or (ii) Dealer, Dealer Group or any person whose ownership position would be aggregated with that of Dealer
or Dealer Group (Dealer, Dealer Group or any such person, a “Dealer Person”) under the Minnesota Business Corporations
or other federal, state or local law, rule, regulation or regulatory order or organizational documents or contracts of Counterparty applicable
to ownership of Shares (“Applicable Restrictions”), would own, beneficially own, constructively own, control, hold
the power to vote or otherwise meet a relevant definition of ownership in excess of a number of Shares equal to (x) the number of
Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval by a state
or federal regulator) of a Dealer Person under Applicable Restrictions and with respect to which such requirements have not been met
or the relevant approval has not been received or that would subject a Dealer Person to restrictions (including restrictions relating
to business combinations or other designated transactions) or have any other adverse effect on a Dealer Person under Applicable Restrictions
minus (y) 1.0% of the number of Shares outstanding on the date of determination (either such condition described in clause
(i) or (ii), an “Excess Ownership Position”). If any delivery owed to Dealer hereunder is not made, in whole
or in part, as a result of this provision, Counterparty’s obligation to make such delivery shall not be extinguished and Counterparty
shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Dealer gives notice
to Counterparty that such delivery would not result in the existence of an Excess Ownership Position.
(f) Limitations
on Settlement by Counterparty. Notwithstanding anything herein or in the Agreement to the contrary (except as set forth in this Section 8(f)),
in no event shall Counterparty be required to deliver Shares in connection with the Transaction in excess of 568,620 Shares, as such
number may be adjusted from time to time in accordance with the provisions hereof; provided that no such adjustment shall cause
the Capped Number to exceed the Available Shares (as in effect from time to time), other than as a result of actions of Counterparty
or events within Counterparty’s control (the “Capped Number”). Notwithstanding anything to the contrary in the
Agreement or the Equity Definitions, such limitation shall not affect the calculation of any Payment Obligation (as defined in Section 8(b)),
it being understood that if the Share Termination Alternative applies pursuant to Section 8(b), the number of Shares deliverable
pursuant to such Section shall not exceed the Capped Number. Counterparty represents and warrants to Dealer (which representation
and warranty shall be deemed to be repeated on each day that the Transaction is outstanding) that the Capped Number is equal to or less
than the number of authorized but unissued Shares of the Counterparty that are not reserved for future issuance in connection with transactions
in the Shares (other than the Transaction) on the date of the determination of the Capped Number (such Shares, the “Available
Shares”). In the event Counterparty shall not have delivered the full number of Shares otherwise deliverable as a result of
this Section 8(f) (the resulting deficit, the “Deficit Shares”), Counterparty shall be continually obligated
to deliver Shares, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, when,
and to the extent, that
(A) Shares are repurchased, acquired or otherwise received by Counterparty or any of its subsidiaries after the Trade Date (whether
or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares previously reserved for
issuance in respect of other transactions become no longer so reserved or (C) Counterparty additionally authorizes any unissued
Shares that are not reserved for other transactions (such events as set forth in clauses (A), (B) and (C) above, collectively,
the “Share Issuance Events”). In the event that there are any Deficit Shares or the proviso in the first sentence
of this Section 8(f) has prevented any adjustment to the Capped Number, (i) Counterparty shall promptly notify Dealer
of the occurrence of any of the Share Issuance Events (including the number of Shares subject to clause (A), (B) or (C) and
the corresponding number of Shares to be delivered) and, as promptly as reasonably practicable, deliver such Shares thereafter, (ii) Counterparty
shall use its best efforts to cause Share Issuance Events to the extent necessary to deliver the full number of Deficit Shares or cause
the Capped Number to equal the Capped Number that would be in effect but for the proviso set forth in the first sentence of this
Section 8(f), as the case may be, and (iii) Counterparty shall not, until Counterparty’s obligations under the Transaction
have been satisfied in full, use any Shares that become available for potential delivery to Dealer as a result of any Share Issuance
Event for the settlement or satisfaction of any transaction or obligation other than the Transaction or any other warrant transaction
between Counterparty and Dealer or reserve any such Shares for future issuance for any purpose other than to satisfy Counterparty’s
obligations to Dealer under the Transaction or any other warrant transaction between Counterparty and Dealer.
(g) Equity
Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction
that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy. For the avoidance of doubt, the
parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim
arising as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement. For the avoidance
of doubt, the parties acknowledge that the obligations of Counterparty under this Confirmation are not secured by any collateral that
would otherwise secure the obligations of Counterparty herein under or pursuant to any other agreement.
(h) Amendments
to Equity Definitions. The following amendments shall be made to the Equity Definitions:
(i) The
first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as
follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation
of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent
will determine whether such Potential Adjustment Event has an effect on the theoretical value of the relevant Shares or options on the
Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and, the portion of such sentence
immediately preceding clause (ii) thereof is hereby amended by deleting the words “diluting or concentrative” and the
words “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate
or liquidity relative to the relevant Shares)” and replacing such latter phrase with the words “(and, for the avoidance of
doubt, adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative
to the relevant Shares)”;
(ii) Sections
11.2(a) and 11.2(e)(vii) of the Equity Definitions are hereby amended by deleting the words “a diluting or concentrative”
and, in the case of Section 11.2(e)(vii), replacing them with “an economic” and, in each case, adding the phrase “or
options on the Shares” at the end of the sentence;
(iii) Section 12.7(b) of
the Equity Definitions is hereby amended by deleting the words “(and in any event within five Exchange Business Days) by the parties
after” appearing after the words “agreed promptly” and replacing with the words “by the parties on or prior to”;
(iv) Section 12.9(b)(iv) of
the Equity Definitions is hereby amended by (A) deleting (1) subsection (A) in its entirety, (2) the phrase “or
(B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); (B) replacing “will
lend” with “lends” in subsection (B); and (C) deleting the phrase “neither the Non-Hedging Party nor the
Lending Party lends Shares in
the amount of the Hedging Shares or”
in the penultimate sentence; “Lending Party” means a third party that is not the Counterparty or an affiliate of the
Counterparty that Dealer considers to be an acceptable counterparty (acting in good faith and in a reasonable manner in light of (x) other
transactions that Dealer (or its agent or affiliate) may have entered into with such party and (y) any legal, regulatory or self-regulatory
requirements or related policies and procedures (whether or not such requirements or related policies and procedures are imposed by law
or have been voluntarily adopted by Dealer) that apply generally to transactions of a nature and kind similar to the transactions contemplated
with such party); and
(v) Section 12.9(b)(v) of
the Equity Definitions is hereby amended by (A) adding the word “or” immediately before subsection “(B)”
and deleting the comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its entirety, (2) deleting
the word “or” immediately preceding subsection (C), (3) replacing in the penultimate sentence the words “either
party” with “the Hedging Party” and (4) deleting clause (X) in the final sentence.
(i) Transfer
and Assignment. Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part,
at any time without the consent of Counterparty.
(j) 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.
(k) Additional
Termination Events. The occurrence of any of the following shall constitute an Additional Termination Event with respect to which
the Transaction shall be the sole Affected Transaction and Counterparty shall be the sole Affected Party and Dealer shall be the party
entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement and to determine the amount payable
pursuant to Section 6(e) of the Agreement; provided that with respect to any Additional Termination Event, Dealer may
choose to treat part of the Transaction as the sole Affected Transaction, and, upon the termination of the Affected Transaction, a Transaction
with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated
for all purposes as the Transaction, which shall remain in full force and effect:
(i) Dealer
reasonably determines that it is advisable to terminate a portion of the Transaction so that Dealer’s related commercially reasonable
hedging activities will comply with applicable securities laws, rules or regulations or related policies and procedures of
Dealer (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer), or Dealer,
despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal to hedge its obligations
pursuant to this Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory
or self-regulatory requirements;
(ii) at
any time at which any Excess Ownership Position occurs, Dealer, in its discretion, is unable to effect a transfer or assignment to a
third party of the Transaction or any other transaction between the parties after using its commercially reasonable efforts on pricing
and terms and within a time period reasonably acceptable to Dealer such that an Excess Ownership Position no longer exists; provided
that Dealer shall treat only that portion of the Transaction as the Affected Transaction as necessary so that such Excess Ownership
Position would no longer exist following the resulting partial termination of the Transaction (after taking into account commercially
reasonable adjustments to Dealer’s commercially reasonable Hedge Positions from such partial termination);
(iii) a
“person” or “group” (within the meaning of Section 13(d) of the Exchange Act), other than Counterparty
or its wholly-owned subsidiaries, becomes the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3
under the Exchange Act, of the common equity of Counterparty representing more than 50.0% of the voting power of such common equity;
(iv) (1) any
sale, lease or other transfer, in one transaction or a series of transactions, of all or substantially all of the assets of Counterparty
and its subsidiaries, taken as a whole, to any
person; or (2) any transaction
or series of related transactions in connection with which (whether by means of merger, consolidation, share exchange, combination, reclassification,
recapitalization, acquisition, liquidation or otherwise) all of the Shares are exchanged for, converted into, acquired for, or constitutes
solely the right to receive, other securities, cash or other property;
provided
that, notwithstanding the foregoing, any transaction or event set forth in the immediately preceding clause (iv) shall
not constitute an Additional Termination Event if at least 90% of the consideration received or to be received by holders of the Shares
(excluding cash payments for fractional Shares or pursuant to dissenters rights) in connection with the transaction or transactions that
would otherwise constitute an Additional Termination Event pursuant to clause (iv) of this Section 8(k) consists of shares
of common stock listed on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of
their respective successors) or that will be so listed when issued or exchanged in connection with such transaction or transactions,
and following such transaction or transactions, the Shares will consist of such consideration, excluding cash payments for fractional
shares. For the avoidance of doubt, an event that is not considered an Additional Termination Event pursuant to the immediately preceding
sentence shall not be an Additional Termination Event solely because such event could also be described by clause (iii) above; or
(v) holders
of Shares approve any plan or proposal for Counterparty’s liquidation or dissolution (other than in a transaction described in
(iv) above).
(l) Early
Unwind. In the event the sale by Counterparty of the Optional Securities (defined under the Purchase Agreement) is not consummated
pursuant to the Purchase Agreement for any reason by the close of business in New York on January 23, 2023 (or such later date as
agreed upon by the parties (January 23, 2023 or such later date being the “Early Unwind Date”), the Transaction
shall automatically terminate (the “Early Unwind”) on the Early Unwind Date and (i) the Transaction and all of
the respective rights and obligations of Dealer and Counterparty thereunder shall be cancelled and terminated and (ii) Counterparty
shall pay to Dealer an amount in cash equal to the aggregate amount of actual costs and expenses relating to the unwinding of Dealer’s
commercially reasonable hedging activities in respect of the Transaction (including market losses incurred in reselling any Shares purchased
by Dealer or its affiliates in connection with such hedging activities, unless Counterparty agrees to purchase any such Shares at the
cost at which Dealer purchased such Shares). Following such termination, cancellation and payment, each party shall be released and discharged
by the other party from, and agrees not to make any claim against the other party with respect to, any obligations or liabilities of
either party arising out of, and to be performed in connection with, the Transaction either prior to or after the Early Unwind Date.
Dealer and Counterparty represent and acknowledge to the other that upon an Early Unwind and following the payment referred to above,
all obligations with respect to the Transaction shall be deemed fully and finally discharged.
(m) No
Netting and Set-off. The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party waives
any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any
delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between
parties hereto, by operation of law or otherwise.
(n) Delivery
of Cash. For the avoidance of doubt, nothing in this Confirmation shall be interpreted as requiring the Counterparty to deliver cash
in respect of the settlement of the Transaction, except in circumstances where the required cash settlement thereof is permitted for
classification of the contract as equity by ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, as in
effect on the relevant Trade Date (including, without limitation, where the Counterparty so elects to deliver cash or fails timely to
elect to deliver Shares or Share Termination Delivery Property in respect of such settlement).
(o) Agreements
and Acknowledgements Regarding Hedging. Counterparty understands, acknowledges and agrees that: (A) at any time on and prior
to the last 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 VWAP Prices; (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 VWAP Prices, each in a manner that may be adverse to Counterparty;
and (E) the Transaction is a derivatives transaction in which it has granted Dealer an option, and Dealer may purchase shares for
its own account at an average price that may be greater than, or less than, the price paid by Counterparty under the terms of the Transaction.
(p) Wall
Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability
Act of 2010 (the “WSTAA”), the parties hereby agree that neither the enactment of the WSTAA (or any statute containing any
legal certainty provision similar to Section 739 of the WSTAA) or any regulation under the WSTAA (or any such statute), nor any
requirement under the WSTAA (or any statute containing any legal certainty provision similar to Section 739 of the WSTAA) or an
amendment made by the WSTAA (or any such statute), 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, Increased Cost of
Hedging or Illegality).
(q) Governing
Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE,
OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(r) Amendment.
This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty
and Dealer.
(s) 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.
(t) Tax
Matters.
(i) Withholding
Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act. “Indemnifiable
Tax” as defined in Section 14 of the Agreement, shall not include any withholding tax imposed or collected pursuant to Sections
1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or
official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation
of such Sections of the Code (a “FATCA Withholding Tax”). 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.
(ii) HIRE
Act. To the extent that either party to the Agreement with respect to this Transaction is not an adhering party to the ISDA
2015 Section 871(m) Protocol published by the International Swaps and Derivatives Association, Inc. on November 2,
2015 and available at www.isda.org, as may be amended, supplemented, replaced or superseded from time to time (the “871(m) Protocol”),
the parties agree that the provisions and amendments contained in the Attachment to the 871(m) Protocol are incorporated into and
apply to the Agreement with respect to this Transaction as if set forth in full herein. The parties further agree that, solely for purposes
of applying such provisions and amendments to the Agreement with respect to this Transaction, references to “each Covered Agreement”
in the 871(m) Protocol will be deemed to be references to the Master Agreement with respect to this Transaction, and references
to the “Implementation Date” in the 871(m) Protocol will be deemed to be references to the Trade Date of this Transaction.
(iii) Tax
documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto,
(i) on or before the date of execution of this Confirmation, (ii) upon reasonable request of Dealer and (iii) promptly
upon learning that any such tax form previously provided by Counterparty has become obsolete or incorrect. Dealer shall provide to Counterparty
a valid U.S. Internal Revenue Service Form W-8ECI “Certificate of Foreign Person’s Claim That Income Is Effectively
Connected With the Conduct of a Trade or Business in the United States”, or any successor thereto, (i) on or before the date
of execution of this Confirmation, (ii) upon reasonable request of Counterparty and (iii) promptly upon learning that any such
tax form previously provided by Dealer has become obsolete or incorrect.
(iv) Tax
Representations. For the purpose of Section 3(f) of the Agreement, Counterparty is a corporation for U.S. federal income
tax purposes and is organized under the laws of the State of Minnesota. Counterparty represents to Dealer that for U.S. federal income
tax purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury
Regulations) and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United States Treasury
Regulations). For the purpose of Section 3(f) of the Agreement, Dealer represents to Counterparty that (A) it is a “foreign
person” (as that term is used in section 1.6041-4(a)(4) of the United States Treasury Regulations) for U.S. federal income
tax purposes and (B)ach payment received or to be received by it under the Agreement will be effectively connected with its conduct of
a trade or business in the United States.
(u) Role
of Agent. Each of Dealer 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 Dealer under the Transactions pursuant to instructions from such party, (ii) the Agent is not a principal
or party to the Transactions, and may transfer its rights and obligations with respect to the Transactions, (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 Transactions, (iv) Dealer 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 Dealer 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 Transactions. 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 Dealer. Dealer will be acting for its own account in respect of this Confirmation and
the Transactions contemplated hereunder.
9.
Arbitration:
(a) All
parties to this Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided
by the rules of the arbitration forum in which a claim is filed.
(b) Arbitration
awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.
(c) The
ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court
proceedings.
(d) The
arbitrators do not have to explain the reason(s) for their award.
(e) The
panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless
Counterparty is a member of the organization
sponsoring the arbitration
facility, in which case all arbitrators may be affiliated with the securities industry.
(f) The
rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible
for arbitration may be brought in court.
(g) The
rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Confirmation.
(h) Counterparty
agrees that any and all controversies that may arise between Counterparty and Dealer, including, but not limited to, those arising out
of or relating to the Agreement or the Transaction hereunder, shall be determined by arbitration conducted before FINRA Dispute Resolution
(“FINRA-DR”), or, if FINRA-DR declines to hear the matter, before the American Arbitration Association, in accordance with
their arbitration rules then in force. The award of the arbitrator shall be final, and judgment upon the award rendered may be entered
in any court, state or federal, having jurisdiction.
(i) No
person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class
with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the
class is decertified; or (iii) Counterparty is excluded from the class by the court.
(j) Such
forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Confirmation except to the extent
stated herein.
Counterparty hereby agrees
(a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified
and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the
agreement between Dealer and Counterparty with respect to the Transaction, by manually signing this Confirmation or this page hereof
as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy
to Bank of Montreal, Associate General Counsel & Managing Director, Derivatives Legal Group, Facsimile No. (416) 956-2318.
|
Yours faithfully, |
|
|
|
BMO CAPITAL MARKETS CORP.
as agent for BANK OF MONTREAL |
|
|
|
By: |
/s/ Eric Benedict |
|
Name: |
Eric Benedict |
|
Title: |
Co-Head, Global Equity Capital Markets |
|
|
|
|
BANK OF MONTREAL |
|
|
|
|
By: |
/s/ Brian Riley |
|
Name: |
Brian Riley |
|
Title: |
Managing Director, Global Markets |
[Signature Page to Additonal
Warrant Confirmation]
Agreed and Accepted By:
WINNEBAGO INDUSTRIES, INC.
By: | /s/ Bryan L. Hughes |
|
| Name: Bryan L. Hughes |
|
| Title: Chief Financial Officer and |
|
| Senior Vice President |
|
[Signature Page to BMO Additonal
Warrant Confirmation]
Annex A
For each Component of the Transaction, the Number of Warrants and
Expiration Date is set forth below.
Component
Number |
|
Number
of Warrants |
|
Expiration
Date |
1 |
|
1,896 |
|
April 15, 2030 |
2 |
|
1,896 |
|
April 16, 2030 |
3 |
|
1,896 |
|
April 17, 2030 |
4 |
|
1,896 |
|
April 18, 2030 |
5 |
|
1,896 |
|
April 22, 2030 |
6 |
|
1,896 |
|
April 23, 2030 |
7 |
|
1,896 |
|
April 24, 2030 |
8 |
|
1,896 |
|
April 25, 2030 |
9 |
|
1,896 |
|
April 26, 2030 |
10 |
|
1,896 |
|
April 29, 2030 |
11 |
|
1,896 |
|
April 30, 2030 |
12 |
|
1,896 |
|
May 1, 2030 |
13 |
|
1,896 |
|
May 2, 2030 |
14 |
|
1,896 |
|
May 3, 2030 |
15 |
|
1,896 |
|
May 6, 2030 |
16 |
|
1,896 |
|
May 7, 2030 |
17 |
|
1,896 |
|
May 8, 2030 |
18 |
|
1,896 |
|
May 9, 2030 |
19 |
|
1,896 |
|
May 10, 2030 |
20 |
|
1,896 |
|
May 13, 2030 |
21 |
|
1,896 |
|
May 14, 2030 |
22 |
|
1,896 |
|
May 15, 2030 |
23 |
|
1,896 |
|
May 16, 2030 |
24 |
|
1,896 |
|
May 17, 2030 |
25 |
|
1,896 |
|
May 20, 2030 |
26 |
|
1,896 |
|
May 21, 2030 |
27 |
|
1,896 |
|
May 22, 2030 |
28 |
|
1,896 |
|
May 23, 2030 |
29 |
|
1,896 |
|
May 24, 2030 |
30 |
|
1,896 |
|
May 28, 2030 |
31 |
|
1,896 |
|
May 29, 2030 |
32 |
|
1,896 |
|
May 30, 2030 |
33 |
|
1,896 |
|
May 31, 2030 |
34 |
|
1,896 |
|
June 3, 2030 |
35 |
|
1,896 |
|
June 4, 2030 |
36 |
|
1,896 |
|
June 5, 2030 |
37 |
|
1,896 |
|
June 6, 2030 |
38 |
|
1,896 |
|
June 7, 2030 |
39 |
|
1,896 |
|
June 10, 2030 |
40 |
|
1,896 |
|
June 11, 2030 |
41 |
|
1,895 |
|
June 12, 2030 |
42 |
|
1,895 |
|
June 13, 2030 |
43 |
|
1,895 |
|
June 14, 2030 |
44 |
|
1,895 |
|
June 17, 2030 |
45 |
|
1,895 |
|
June 18, 2030 |
46 |
|
1,895 |
|
June 20, 2030 |
47 |
|
1,895 |
|
June 21, 2030 |
48 |
|
1,895 |
|
June 24, 2030 |
49 |
|
1,895 |
|
June 25, 2030 |
50 |
|
1,895 |
|
June 26, 2030 |
51 |
|
1,895 |
|
June 27, 2030 |
52 |
|
1,895 |
|
June 28, 2030 |
53 |
|
1,895 |
|
July 1, 2030 |
54 |
|
1,895 |
|
July 2, 2030 |
55 |
|
1,895 |
|
July 3, 2030 |
56 |
|
1,895 |
|
July 5, 2030 |
57 |
|
1,895 |
|
July 8, 2030 |
58 |
|
1,895 |
|
July 9, 2030 |
59 |
|
1,895 |
|
July 10, 2030 |
60 |
|
1,895 |
|
July 11, 2030 |
61 |
|
1,895 |
|
July 12, 2030 |
62 |
|
1,895 |
|
July 15, 2030 |
63 |
|
1,895 |
|
July 16, 2030 |
64 |
|
1,895 |
|
July 17, 2030 |
65 |
|
1,895 |
|
July 18, 2030 |
66 |
|
1,895 |
|
July 19, 2030 |
67 |
|
1,895 |
|
July 22, 2030 |
68 |
|
1,895 |
|
July 23, 2030 |
69 |
|
1,895 |
|
July 24, 2030 |
70 |
|
1,895 |
|
July 25, 2030 |
71 |
|
1,895 |
|
July 26, 2030 |
72 |
|
1,895 |
|
July 29, 2030 |
73 |
|
1,895 |
|
July 30, 2030 |
74 |
|
1,895 |
|
July 31, 2030 |
75 |
|
1,895 |
|
August 1, 2030 |
76 |
|
1,895 |
|
August 2, 2030 |
77 |
|
1,895 |
|
August 5, 2030 |
78 |
|
1,895 |
|
August 6, 2030 |
79 |
|
1,895 |
|
August 7, 2030 |
80 |
|
1,895 |
|
August 8, 2030 |
81 |
|
1,895 |
|
August 9, 2030 |
82 |
|
1,895 |
|
August 12, 2030 |
83 |
|
1,895 |
|
August 13, 2030 |
84 |
|
1,895 |
|
August 14, 2030 |
85 |
|
1,895 |
|
August 15, 2030 |
86 |
|
1,895 |
|
August 16, 2030 |
87 |
|
1,895 |
|
August 19, 2030 |
88 |
|
1,895 |
|
August 20, 2030 |
89 |
|
1,895 |
|
August 21, 2030 |
90 |
|
1,895 |
|
August 22, 2030 |
91 |
|
1,895 |
|
August 23, 2030 |
92 |
|
1,895 |
|
August 26, 2030 |
93 |
|
1,895 |
|
August 27, 2030 |
94 |
|
1,895 |
|
August 28, 2030 |
95 |
|
1,895 |
|
August 29, 2030 |
96 |
|
1,895 |
|
August 30, 2030 |
97 |
|
1,895 |
|
September 3, 2030 |
98 |
|
1,895 |
|
September 4, 2030 |
99 |
|
1,895 |
|
September 5, 2030 |
100 |
|
1,895 |
|
September 6, 2030 |
Exhibit 10.13
JPMorgan Chase Bank, National Association
New York Branch
383 Madison Avenue
New York, NY 10179
Opening Transaction
To: |
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, Minnesota 55347
|
From: |
JPMorgan Chase Bank, National Association
|
Re: |
Additional Issuer Warrant Transaction
|
Date: |
January 19, 2024 |
Dear Ladies and Gentlemen:
The purpose of this communication
(this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on
the Trade Date specified below (the “Transaction”) between JPMorgan Chase Bank, National Association (“Dealer”)
and Winnebago Industries, Inc. (“Counterparty”). This communication constitutes a “Confirmation” as
referred to in the Agreement specified below.
1. This
Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (the “2006 Definitions”)
and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together
with the 2006 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”). For purposes of the Equity Definitions, each reference herein to a Warrant shall be
deemed to be a reference to a Call Option or an Option, as context requires.
Counterparty is hereby advised,
and Counterparty acknowledges, that Dealer has engaged in, or refrained from engaging in, substantial financial transactions and has taken
other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms
and conditions set forth below.
This Confirmation evidences
a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.
This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement
(Multicurrency—Cross Border) as if Dealer and Counterparty had executed an agreement in such form on the date hereof (but without
any Schedule except for (i) the election of Loss and Second Method and US Dollars (“USD”) as the Termination Currency,
(ii) the replacement of the word “third” in the last line of Section 5(a)(i) of the Agreement with the word
“first” and (iii) (a) the election that the “Cross Default” provisions of Section 5(a)(vi) of
the Agreement shall apply to Counterparty with a “Threshold Amount” of USD35.0 million), (b) (b) the
phrase “, or becoming capable at such time of being declared,” shall be deleted from clause (1) of such Section 5(a)(vi),
and (c) the following language shall be added to the end thereof: “Notwithstanding the foregoing, a default under subsection
(2) hereof shall not constitute an Event of Default if (x) the default was caused solely by error or omission of an administrative
or operational nature; (y) funds were available to enable the party to make the payment when due; and (z) the payment is made
within two Local Business Days of such party’s receipt of written notice of its failure to pay.”.
All provisions contained in,
or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event of any
inconsistency among this
Confirmation, the Equity Definitions, the 2006 Definitions or the
Agreement, the following shall prevail in the order of precedence indicated: (i) this Confirmation; (ii) the Equity Definitions;
(iii) the 2006 Definitions; and (iv) the Agreement. For the avoidance of doubt, except to the extent of an express conflict,
the application of any provision of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions shall not be construed
to exclude or limit any other provision of this Confirmation, the Agreement, the Equity Definitions or the 2006 Definitions.
The Transaction hereunder
shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Counterparty or any confirmation
or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Counterparty,
then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to
which Dealer and Counterparty are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such
existing or deemed ISDA Master Agreement.
2. The
Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of the Equity Definitions. The
terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms:
Trade Date: | |
January 19, 2024 |
| |
|
Effective Date: | |
January 23, 2024, or such
other date as agreed between the parties, subject to Section 8(l) below |
| |
|
Components: | |
The Transaction will be divided into individual Components, each with
the terms set forth in this Confirmation, and, in particular, with the Number of Warrants and Expiration Date set forth in this Confirmation.
The payments and deliveries to be made upon settlement of the Transaction will be determined separately for each Component as if
each Component were a separate Transaction under the Agreement. |
| |
|
Warrant Style: | |
European |
| |
|
Warrant Type: | |
Call |
| |
|
Seller: | |
Counterparty |
| |
|
Buyer: | |
Dealer |
| |
|
Shares: | |
The Common Stock of Counterparty, par value USD0.50 (Ticker Symbol: “WGO”). |
| |
|
Number of Warrants: | |
For each Component, as provided
in Annex A to this Confirmation. |
| |
|
Warrant Entitlement: | |
One Share per Warrant |
| |
|
Strike Price: | |
USD135.2800 |
| |
|
| |
Notwithstanding anything to
the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Strike Price be subject to adjustment
to the extent that, after giving effect to such adjustment, the Strike Price would be less than USD 67.2580, except for any adjustment
pursuant to the terms of this Confirmation and the |
| |
Equity Definitions in connection
with a stock split or similar change to Counterparty’s capitalization. |
| |
|
Number of Shares: | |
As of any date,
a number of Shares equal to the product of the Number of Warrants and the Warrant Entitlement. |
| |
|
Premium: | |
USD1,490,000 |
| |
|
Premium Payment Date: | |
The Effective Date |
| |
|
Exchange: | |
New York Stock Exchange |
| |
|
Related Exchange: | |
All Exchanges |
| |
|
Procedures for Exercise: | |
|
| |
|
In respect of any Component: | |
|
| |
|
Expiration Time: | |
Valuation Time |
| |
|
Expiration Date: | |
As provided in Annex
A to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already
an Expiration Date for another Component); provided that if that date is a Disrupted Day, the Expiration Date for such Component
shall be the first succeeding Scheduled Trading Day that is not a Disrupted Day and is not and 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 an Expiration Date
in respect of any other Component for the Transaction). Notwithstanding the foregoing and anything to the contrary in the Equity
Definitions, if a Market Disruption Event occurs on any Expiration Date, the Calculation Agent may determine that such Expiration
Date is a Disrupted Day only in part, in which case the Calculation Agent shall make adjustments to the Number of Warrants for the
relevant Component for which such day shall be the Expiration Date, 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 may determine
the VWAP Price for such Expiration Date based on transactions in the Shares taking into account the nature and duration of such Market
Disruption Event. Any Scheduled Trading Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal
close of trading shall be deemed not to be a Scheduled Trading Day; if a closure of the Exchange prior to its normal close of trading
on any Scheduled Trading Day is scheduled following the date hereof, then such Scheduled Trading Day shall be deemed to |
| |
be a Disrupted Day in full.
Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on an Expiration Date. “Final
Disruption Date” means September 20, 2030. |
| |
|
Market Disruption
Event: | |
Section 6.3(a) of
the Equity Definitions is hereby amended by (A) deleting the words “during the one hour period that ends at the relevant
Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof
and (B) by replacing the words “or (iii) an Early Closure.” therein with “(iii) an Early Closure,
or (iv) a Regulatory Disruption.” |
| |
|
| |
Section 6.3(d) of
the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time”
in the fourth line thereof. |
| |
|
Regulatory Disruption: | |
Any event that Dealer, in its
reasonable discretion, determines makes it appropriate, with regard to any legal, regulatory or self-regulatory requirements or related
policies and procedures (whether or not such requirements or related policies and procedures are imposed by law or have been voluntarily
adopted by Dealer and provided any such policies and procedures are related to legal, regulatory or self-regulatory issues generally
applicable to the Transaction and are applied to the Transaction in a non-discriminatory manner), for Dealer to refrain from or decrease
any market activity connected with the Transaction. Dealer shall notify Counterparty as soon as reasonably practicable that a Regulatory
Disruption has occurred and the Expiration Dates affected by it. |
| |
|
Automatic Exercise: | |
Applicable; and means that the
Number of Warrants for the corresponding Expiration Date will be deemed to be automatically exercised at the Expiration Time on such
Expiration Date unless Dealer notifies Seller (by telephone or in writing) prior to the Expiration Time on such Expiration Date that
it does not wish Automatic Exercise to occur, in which case Automatic Exercise will not apply to such Expiration Date. |
| |
|
Counterparty’s
Telephone Number and Telex and/or Facsimile Number and Contact Details for purpose
of Giving Notice: | |
As provided in Section 6(a) below. |
| |
|
Settlement Terms: | |
|
| |
|
In respect of any Component: | |
|
| |
|
Settlement Currency: | |
USD |
| |
|
Net Share Settlement: | |
On each Settlement Date,
Counterparty shall deliver to Dealer a number of Shares equal to the Number of Shares to be Delivered for such Settlement Date to |
| |
the account specified by Dealer
and cash in lieu of any fractional Share valued at the Relevant Price on the Valuation Date corresponding to such Settlement Date.
If, in the reasonable opinion of Dealer, based on advice of counsel, for any reason, the Shares deliverable upon Net Share Settlement
would not be immediately freely transferable by Dealer under Rule 144 under the Securities Act of 1933, as amended (the “Securities
Act”), then Dealer may elect to either (x) accept delivery of such Shares notwithstanding any restriction on transfer
or (y) have the provisions set forth in Section 8(c) below apply. |
| |
|
| |
The Number of Shares to be Delivered
shall be delivered by Counterparty to Dealer no later than 12:00 noon (local time in New York City) on the relevant Settlement Date. |
| |
|
Number of Shares
to be Delivered: | |
In respect
of any Exercise Date, the product of (i) the number of Warrants exercised or deemed exercised on such Exercise Date, (ii) the
Warrant Entitlement and (iii) (A) the excess of the VWAP Price on the Valuation Date occurring in respect of such Exercise
Date over the Strike Price (or, if there is no such excess, zero) divided by (B) such VWAP Price. |
| |
|
VWAP Price: | |
For any Exchange Business Day,
as determined by the Calculation Agent based on the New York Volume Weighted Average Price per Share for the regular trading session
(including any extensions thereof) of the Exchange on such Exchange Business Day (without regard to pre-open or after hours trading
outside of such regular trading session), as published by Bloomberg at 4:15 P.M., New York City time (or 15 minutes following the
end of any extension of the regular trading session), on such Exchange Business Day, on Bloomberg page “WGO.N <Equity>
AQR” (or any successor thereto) (or if such published volume weighted average price is unavailable or is manifestly incorrect,
the market value of one Share on such Exchange Business Day, as determined by the Calculation Agent using, if practicable, a volume
weighted method). |
| |
|
Other Applicable Provisions: | |
The provisions of Sections
9.1(c), 9.4, 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable as if “Physical Settlement” applied
to the Transaction; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall
be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable
securities laws that exist as a result of the fact that Counterparty is the issuer of the Shares. |
| |
|
Adjustments: | |
|
| |
|
In respect of any Component: | |
|
Method of Adjustment: | |
Calculation Agent
Adjustment. For the avoidance of doubt, Calculation Agent Adjustment shall continue to apply until the obligations of the parties
(including any obligations of Counterparty pursuant to Section 8(f) below) under the Transaction have been satisfied in
full. |
| |
|
Extraordinary Dividend: | |
For any regular dividend
period of Counterparty, any dividend or distribution on the Shares with an ex-dividend date occurring during such regular dividend
period (other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of
the Equity Definitions) (a “Dividend”) the amount or value of which (as determined by the Calculation Agent),
when aggregated with the amount or value (as determined by the Calculation Agent) of any and all previous Dividends with ex-dividend
dates occurring in the same regular dividend period, exceeds the Ordinary Dividend Amount. |
| |
|
Ordinary Dividend Amount: | |
For the first Dividend on the
Shares for which the ex-dividend date occurs during any regular quarterly dividend period of Counterparty, USD 0.31, and for any
other Dividend on the Shares for which the ex-dividend date occurs during the same regular quarterly dividend period, USD 0.00. |
| |
|
Extraordinary Events: | |
|
| |
|
New Shares: | |
In the definition of New Shares
in Section 12.1(i) of the Equity Definitions, the text in clause (i) thereof shall be deleted in its entirety and
replaced with “publicly quoted, traded or listed on any of The New York Stock Exchange, The NASDAQ Global Market or The NASDAQ
Global Select Market (or their respective successors) and of an entity or person that is a corporation organized under the laws of
the United States, any State thereof or the District of Columbia”. |
| |
|
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 an Additional
Termination Event under Section 8(k)(iv) of this Confirmation, Dealer may elect, in its sole discretion, whether the provisions
of Section 12.2 of the Equity Definitions or Section 8(k)(iv) will apply. |
| |
|
Consequences of Merger Events: | |
|
| |
|
(a) Share-for-Share: | |
Modified Calculation Agent Adjustment |
| |
|
(b) Share-for-Other: | |
Cancellation and Payment (Calculation Agent Determination);
provided that Dealer may elect, in its sole discretion, that Modified Calculation Agent Adjustment shall apply for all or part of
the Transaction. |
| |
|
(c) Share-for-Combined: | |
Cancellation and Payment (Calculation Agent Determination);
provided that Dealer may elect, in its sole discretion, that Modified
Calculation Agent Adjustment or Component Adjustment shall apply for all or part of the Transaction. |
| |
|
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
an Additional Termination Event under Section 8(k)(iii) of this Confirmation, Dealer may elect, in its sole discretion,
whether the provisions of Section 12.3 of the Equity Definitions or Section 8(k)(iii) will apply. |
| |
|
Consequences of Tender Offers: | |
|
| |
|
(a) Share-for-Share: | |
Modified Calculation Agent Adjustment |
| |
|
(b) Share-for-Other: | |
Modified Calculation Agent Adjustment |
| |
|
(c) Share-for-Combined: | |
Modified Calculation Agent Adjustment |
| |
|
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, (x) 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”, (y) the
word “shall” in the second line shall be replaced with “may”, and (z) for the avoidance of doubt, the
Calculation Agent may determine whether the relevant Announcement Event has had an economic effect on any Component (and, if so,
adjust the terms of such Component accordingly) 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 thereof, 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 any 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 paid and/or delivered exceeds
15% of the market capitalization of Issuer as of the date of such announcement (an “Transformative Transaction”)
or (z) the intention to enter into a Merger Event or Tender Offer or an Transformative 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 Transformative Transaction or (iii) any subsequent
public announcement by any 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, whether or not by the same party,
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,” 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. |
| |
|
Modified
Calculation Agent Adjustment: | |
If, in respect of a Merger Event,
the Counterparty under the Transaction following such Merger Event will not be the issuer of the New Shares, the Dealer may elect
(in its sole discretion) for Cancellation and Payment (Calculation Agent Determination) to apply. In addition, if, in respect of
any Merger Event to which Modified Calculation Agent Adjustment applies, the adjustments to be made in accordance with Section 12.2(e)(i) of
the Equity Definitions would result in Counterparty being different from the issuer of the Shares, then with respect to such Merger
Event, as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity Definitions, Counterparty
and the issuer of the Shares shall, prior to the Merger Date, have entered into such documentation containing representations, warranties
and agreements relating to securities law and other issues as requested by Dealer that Dealer has determined, in its reasonable discretion,
to be reasonably necessary or appropriate to allow Dealer to continue as a party to the Transaction, as adjusted under Section 12.2(e)(i) of
the Equity Definitions, and to preserve its hedging or hedge unwind activities in connection with the Transaction in a manner compliant
with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer (whether
or not such requirements or related policies and procedures are imposed by law or have been voluntarily adopted by Dealer), and if
such conditions are not met or if the Calculation Agent determines that no adjustment that it could make under Section 12.2(e)(i) of
the |
| |
Equity Definitions will produce a commercially reasonable result, then the consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall apply. |
| |
|
Composition of Combined Consideration: | |
Notwithstanding anything to the contrary in the Equity Definitions, if the composition of Combined Consideration in respect of any Share-for-Combined Merger Event could be determined by a holder of Shares, Dealer shall determine the composition of such Combined Consideration assumed for purposes of adjustments and deliveries hereunder in its sole discretion. |
| |
|
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 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 Termination Event(s): | |
Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, the Transaction would be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event (with the Transaction (or the cancelled or terminated portion thereof) being the Affected Transaction and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to such Affected Transaction. |
| |
|
Additional Disruption Events: | |
|
| |
|
(a) Change in Law: | |
Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) by adding the phrase “and/or Hedge Position” after the word “Shares” in clause (X) thereof and (iii) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date”; and provided further that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the parenthetical beginning after the word “regulation” in the second line thereof with the phrase “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or |
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promulgation of new regulations authorized or mandated by existing statute)”
and (ii) adding the words “, or holding, acquiring or disposing of Shares or any Hedge Positions relating to,” after
the words “obligations under” in clause (Y) thereof. |
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(b) Failure to Deliver: | |
Not Applicable |
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(c) Insolvency Filing: | |
Applicable |
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(d) Hedging Disruption: | |
Applicable; provided that: |
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(i) |
Section 12.9(a)(v) of the Equity Definitions is hereby amended by |
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(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 |
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(b) |
inserting the following paragraphs at the end of such Section: |
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“Such inability described in clauses (A) or (B) above shall not constitute a “Hedging
Disruption” if such inability results from Hedging Party’s creditworthiness. |
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For the avoidance of doubt, (i) the term “equity price risk” shall be deemed to include,
but shall not be limited to, stock price and volatility risk, and (ii) the transactions or assets referred to in phrases (A) or
(B) above must be available on commercially reasonable pricing and other terms.”; and |
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(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”. |
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(e) Increased Cost of Hedging: | |
Applicable; provided that (i) that such
increased cost described in Section 12.9(vi) of the Equity Definitions shall not constitute an “Increased Cost of
Hedging” if such increased cost results from Hedging Party’s creditworthiness, and (ii) the following parenthetical
shall be inserted immediately following the word “expense” in the third line of Section 12.9(a)(vi) of the
Equity Definitions: “(including, for the avoidance of doubt, the incurrence of any stock borrow expense in excess of Hedging
Party’s expectation as of the Trade Date, other than to the extent resulting from an Increased Cost of Stock Borrow)”. |
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(f) Loss of Stock Borrow: | |
Applicable |
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Maximum Stock Loan
Rate: | |
2.00 % per annum |
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(g) Increased Cost of Stock Borrow: | |
Applicable |
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Initial Stock Loan Rate: | |
Prior to January 16, 2030,
0% per annum, and thereafter, 0.25 % per annum. |
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Hedging Party: | |
Dealer for all applicable Additional
Disruption Events. |
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Determining Party: | |
Dealer for all applicable Additional
Disruption Events. All calculations and determinations by the Determining Party shall be made in good faith and in a commercially
reasonable manner. Following any calculation by the Determining Party hereunder, upon written request by Counterparty, the Determining
Party will, within five Exchange Business Days immediately following such request, provide to Counterparty 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;
provided, however, that in no event will the Determining Party be obligated to share with Counterparty any proprietary or
confidential data or information or any proprietary or confidential models used by it. |
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Non-Reliance: | |
Applicable |
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Agreements and Acknowledgments
Regarding Hedging Activities: | |
Applicable |
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Additional Acknowledgments: | |
Applicable |
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3. 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, if the Calculation Agent fails to timely make any calculation, adjustment
or determination required to be made by the Calculation Agent hereunder or to perform any obligations of the Calculation Agent hereunder
and such failure continues for five Exchange Business Days following notice to the Calculation Agent by Counterparty of such failure,
Counterparty shall have the right to designate a nationally recognize third-party dealer in over-the-counter corporate equity derivatives
to act, during the period commencing on the first date the Calculation Agent fails to timely make such calculation, adjustment or
determination or to perform such obligation, as the case may be, and ending on the earlier of the Early Termination Date with respect
to such Event of Default and the date on which such Event of Default is no longer continuing, as Calculation Agent. |
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Following any calculation by the Calculation Agent hereunder, upon written request by Counterparty, the Calculation Agent will, within five Exchange Business Days immediately following such request, provide to Counterparty by email to the email 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 the basis for such calculation; provided that in no event will Dealer be obligated to share with Counterparty any proprietary or confidential data or information or any proprietary or confidential models used by it or any information that is subject to an obligation not to disclose such information.. |
4. Account
Details:
Dealer Payment
Instructions:
Bank: |
JPMorgan Chase Bank, N.A. |
ABA#: |
021000021 |
Acct No.: |
099997979 |
Beneficiary: |
JPMorgan Chase Bank, N.A. New York |
Ref: |
Derivatives |
Account for delivery
of Shares to Dealer: To be provided by Dealer
Counterparty
Payment Instructions: To be provided by Counterparty.
5. Offices:
The Office of Dealer for the Transaction is: New York, New York
JPMorgan Chase
Bank National Association
New York Branch
283 Madison Avenue
New York, NY 10179
The Office of Counterparty for the
Transaction is: Inapplicable, Counterparty is not a Multibranch Party.
6. Notices:
For purposes of this Confirmation:
(a) Address
for notices or communications to Counterparty:
Winnebago Industries, Inc.
13200 Pioneer Trail
Eden Prairie, MN
55347
Attention: Kathy
Hiebert, Treasurer
(b) Address
for notices or communications to Dealer:
JPMorgan Chase Bank, National Association
EDG Marketing Support
|
Email: | edg_notices@jpmorgan.com |
edg.us.flow.corporates.mo@jpmorgan.com
With a copy to:
Attention: Mr. Gaurav Maria
Title: Managing Director
Email: gaurav.x.maria@jpmorgan.com
7. Representations,
Warranties and Agreements:
(a) In
addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants
to and for the benefit of, and agrees with, Dealer as follows:
(i) On
the Trade Date and as of the date of any Notice of Share Termination under (and as defined in) Section 8(b) below, (A) none
of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and
(B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports
and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading.
(ii) Without
limiting the generality of Section 13.1 of the Equity Definitions, 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).
(iii) Prior
to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction
and such other certificate or certificates as Dealer shall reasonably request. Based on such resolutions, neither Dealer nor any of its
affiliates shall be subject to the restrictions under Section 302A.673 of the Minnesota Business Corporations Act as an “interested
shareholder” of Counterparty by virtue of (A) its role as initial purchaser of, or market-maker in, any securities of Counterparty
convertible into the Shares, (B) its entry into the Transaction and/or (C) any hedging transactions in Counterparty’s
securities in connection with the Transaction.
(iv) Counterparty
is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable
for Shares) or otherwise in violation of the Exchange Act.
(v) 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.
(vi) On
the Trade Date and the Premium Payment Date (A) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty,
including contingent liabilities, (B) the capital of Counterparty is adequate to conduct the business of Counterparty and (C) Counterparty
has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur
debt beyond its ability to pay as such debts mature.
(vii) Counterparty
shall not take any action to decrease the number of Available Shares below the Capped Number (each as defined below, but without giving
effect to the limitation on adjustments to the Capped Number set forth in the proviso in the first sentence of Section 8(f)).
(viii) The
representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement
dated as of the Trade Date between Goldman
Sachs & Co. LLC and BMO Capital Markets Corp. as the representatives (the “Representatives”)
of the Initial Purchasers and Counterparty (the “Purchase Agreement”) are true and correct as of the Trade Date and
the Effective Date and are hereby deemed to be repeated to Dealer as if set forth herein.
(ix) (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”) 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 until the second Exchange Business Day immediately following the Settlement Period.
(x) (x) On
the Trade Date, (y) during the Settlement Period and (z) 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 Dealer.
(xi) Counterparty
agrees that it (A) will not during the Settlement Period make, or permit to be made, any public announcement (as defined in Rule 165(f) under
the Securities Act) of any Merger Transaction or potential Merger Transaction unless such public announcement is made prior to the opening
or after the close of the regular trading session on the Exchange for the Shares; (B) shall promptly (but in any event prior to the
next opening of the regular trading session on the Exchange) notify Dealer following any such announcement that such announcement has
been made; and (C) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide
Dealer with written notice specifying (i) 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 Dealer or its affiliates
and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three
full calendar months preceding the announcement date. Such written notice shall be deemed to be a certification by Counterparty to Dealer
that such information is true and correct. In addition, Counterparty shall promptly notify Dealer of the earlier to occur of the completion
of 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.
(xii) (A) Any
issuance of Shares upon exercise or termination of the Transaction has been, and throughout the Transaction will continue to be, duly
authorized and, upon issuance, such Shares will be validly issued, fully paid and non-assessable, and the issuance or delivery thereof
shall not be subject to any preemptive or similar rights and such Shares shall, upon issuance, be accepted for listing or quotation on
the Exchange; (B) a number of Shares of Counterparty equal to the Capped Number have been reserved for issuance upon exercise or
termination of the Warrants by all required corporate action of the Counterparty and (C) the Shares issuable upon exercise of the
Warrants shall upon issuance be accepted for listing or quotation on the Exchange, subject to notice that the listing of the Shares issuable
upon exercise or termination of the Warrants on the Exchange has been approved by the Exchange.
(xiii) No
state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise to
any reporting, consent, registration or
other requirement (including without limitation a requirement to obtain prior approval from any
person or entity) as a result of Dealer or its affiliates owning, holding (however defined) or having a right to acquire Shares; provided
however, that Counterparty makes no representation or warranty regarding any such requirement that is applicable generally to the ownership
of equity securities by Dealer or any of its affiliates as a result of it or any such affiliates being financial institutions or broker-dealers.
(xiv) 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, including, without limitation, the transaction that is the subject of this confirmation and any transactions
related hereto or contemplated hereby; (B) will exercise independent judgment in evaluating the recommendations of Dealer and its
affiliates or associated persons with regard to any such securities transactions or strategies unless it has otherwise notified Dealer
in writing; and (C) has total assets of at least $50 million. Counterparty will notify Dealer if the immediately preceding statement
contained in this Section 7(a)(xiv) ceases to be true.
(xv) Without
limiting the generality of Section 3(a) of the Agreement, neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or
by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of
any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Counterparty’s Annual Report
on Form 10-K for the year ended August 26, 2023, as updated by any subsequent filings, to which Counterparty or any of its subsidiaries
is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject,
or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
(b) Each
of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18)
of the U.S. Commodity Exchange Act, as amended, and is entering into the Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise) and not for the benefit of any third party.
(c) Each
of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under
the Securities Act, by virtue of Section 4(a)(2) thereof. Accordingly, Dealer represents and warrants to Counterparty that (i) it
has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment
and its investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not disproportionate
to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the
Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities
Act, (iii) it is entering into the Transaction for its own account and without a view to the distribution or resale thereof, (iv) the
assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted
under this Confirmation, the Securities Act and state securities laws, and (v) its financial condition is such that it has no need
for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing
or contemplated undertaking or indebtedness and is capable of assessing the merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction.
(d) Each
of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution” and “financial
participant” within the meaning of Sections 101(22) and 101(22A) of Title 11 of the United States Code (the
“Bankruptcy Code”). The parties hereto further agree and acknowledge (A) that this Confirmation is a
“securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which
each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or
“other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement
payment” within the meaning of Section 546 of the Bankruptcy Code, and (B) that Dealer is entitled to the
protections afforded by, among other sections, Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 548(d)(2), 555 and 561 of the
Bankruptcy Code.
(e) Counterparty
shall deliver to Dealer (i) an incumbency certificate, dated as of the Trade Date, of Counterparty in customary form and (ii) an
opinion of counsel, dated as of the Trade Date and reasonably acceptable to Dealer in form and substance, with respect to the matters
set forth in Section 3(a) of the Agreement and Sections 7(a)(v), 7(a)(xii) and 7(a)(xv) of this Confirmation and such
other matters as Dealer may reasonably request and (iii) evidence that the listing of the Shares issuable upon exercise or termination
of the Warrants on the Exchange has been approved by the Exchange, subject only to official notice of issuance.
(f) Counterparty
understands that notwithstanding any other relationship between Counterparty and Dealer and its affiliates, in connection with this Transaction
and any other over-the-counter derivative transactions between Counterparty and Dealer or its affiliates, Dealer or its affiliate is acting
as principal and is not a fiduciary or advisor in respect of any such transaction, including any entry, exercise, amendment, unwind or
termination thereof.
8. Other
Provisions:
(a) Right
to Extend. Dealer may postpone or add, in whole or in part, any Expiration Date or Settlement Date or any other date of valuation
or delivery by Counterparty, with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate
adjustments to the relevant delivery obligation), if Dealer determines, in its commercially reasonable discretion, that such extension
is reasonably necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in
light of existing liquidity conditions in the cash market, the stock borrow market or other relevant market or to enable Dealer to effect
transactions with respect to Shares or Share Termination Delivery Units 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 requirements, or with related policies and procedures (whether or
not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer, and in the case of policies
or procedures, so long as such policies and procedures are consistently applied to transactions similar to the Transaction).
(b) Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Counterparty shall owe Dealer any amount pursuant
to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Counterparty shall have the right, in its
sole discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable
telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day (which written confirmation shall contain the representation
and warranty set forth in Section 7(a)(i)), no later than 9:30 A.M., New York City time, on the Merger Date, Tender Offer Date, Announcement
Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable (“Notice
of Share Termination”); provided that if Counterparty does not elect to satisfy its Payment Obligation by the Share Termination
Alternative, Dealer shall have the right, in its sole discretion, to elect to require Counterparty to satisfy its Payment Obligation by
the Share Termination Alternative, notwithstanding Counterparty’s failure to elect or election to the contrary; and provided
further that Counterparty shall not have the right to so elect (but, for the avoidance of doubt, Dealer shall have the right to so
elect) in the event of (i) an Insolvency, a Nationalization or a Merger Event, in each case, in which the consideration or proceeds
to be paid to holders of Shares consists solely of cash or (ii) an Event of Default in which Counterparty is the Defaulting Party
or a Termination Event in which Counterparty is the Affected Party or an Extraordinary Event, which Event of Default, Termination Event
or Extraordinary Event resulted from an event or events within Counterparty’s control. Upon such Notice of Share Termination, the
following provisions shall apply on the Scheduled Trading Day immediately following the Merger Date, the Tender Offer Date, Announcement
Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable:
Share Termination Alternative: | |
If applicable, means that Counterparty shall deliver
to Dealer the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to
Section 6(d)(ii) of the Agreement, or such later date or dates as the Calculation Agent may reasonably determine (the “Share
Termination Payment Date”), in |
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satisfaction of the Payment Obligation. |
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Share Termination Delivery Property: | |
A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of the aggregate amount of a security therein with an amount of cash in the Settlement Currency equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price. |
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Share Termination Unit Price: | |
The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent and notified by the Calculation Agent to Counterparty at the time of notification of the Payment Obligation. |
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Share Termination Delivery Unit: | |
In the case of a Termination Event (other than on account of an Insolvency, Nationalization or Merger Event), Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization or Merger Event, one Share or a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization or Merger Event, as applicable. If such Insolvency, Nationalization 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. |
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Failure to Deliver: | |
Not Applicable |
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Other Applicable Provisions: | |
If Share Termination Alternative is applicable, the provisions
of Sections 9.1(c), 9.8, 9.9, 9.11 and 9.12 of the Equity Definitions will be applicable as if “Physical Settlement”
applied to the Transaction, except that all references to “Shares” shall be read as references to “Share Termination
Delivery Units”; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions
shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under
applicable securities laws as a result of the fact that Counterparty is the issuer of any Share Termination Delivery Units (or any
security forming a part thereof). If, in the reasonable opinion of Dealer, based on advice of counsel, for any reason, any securities
comprising the Share Termination Delivery Units deliverable pursuant to this Section 8(b) would not be immediately freely
transferable by Dealer under Rule 144 under the Securities Act, then Dealer may elect to either (x) permit delivery of
such securities notwithstanding any restriction on transfer or (y) have the provisions set forth in Section 8(c) below
apply. |
(c) Registration/Private
Placement Procedures. (i) With respect to the Transaction, the following provisions shall apply to the extent provided for above
opposite the caption “Net Share Settlement” in Section 2 or in paragraph (b) of this Section 8. If so applicable,
then, at the election of Counterparty by notice to Dealer within one Exchange Business Day after the relevant delivery obligation arises,
but in any event at least one Exchange Business Day prior to the date on which such delivery obligation is due, either (A) all Shares
or Share Termination Delivery Units, as the case may be, delivered by Counterparty to Dealer shall be, at the time of such delivery, covered
by an effective registration statement of Counterparty for immediate resale by Dealer (such registration statement and the
corresponding prospectus
(the “Prospectus”) (including, without limitation, any sections describing the plan of distribution) in form and
content commercially reasonably satisfactory to Dealer) or (B) Counterparty shall deliver additional Shares or Share
Termination Delivery Units, as the case may be, so that the value of such Shares or Share Termination Delivery Units, as determined
by the Calculation Agent to reflect a commercially reasonable liquidity discount, equals the value of the number of Shares or Share
Termination Delivery Units that would otherwise be deliverable if such Shares or Share Termination Delivery Units were freely
tradeable (without prospectus delivery) upon receipt by Dealer (such value, the “Freely Tradeable Value”); provided
that, if requested by Dealer, Counterparty shall make the election described in this clause (B) with respect to Shares
delivered on all Settlement Dates no later than one Exchange Business Day prior to the first Exercise Date, and the applicable
procedures described below shall apply to all Shares delivered on the Settlement Dates on an aggregate basis. (For the avoidance of
doubt, as used in this paragraph (c) only, the term “Counterparty” shall mean the issuer of the relevant
securities, as the context shall require.)
(ii) It
shall be a condition to Counterparty’s right to make the election described in clause (c)(i)(A) that:
(A) Dealer
(or an affiliate of Dealer designated by Dealer) shall be afforded a reasonable opportunity to conduct a due diligence investigation with
respect to Counterparty that is customary in scope for underwritten offerings of equity securities and that yields results that are satisfactory
to Dealer or such affiliate, as the case may be, in its discretion; and
(B) Dealer
(or an affiliate of Dealer designated by Dealer) and Counterparty shall enter into an agreement (a “Registration Agreement”)
on commercially reasonable terms in connection with the public resale of such Shares or Share Termination Delivery Units, as the case
may be, by Dealer or such affiliate substantially similar to underwriting agreements customary for underwritten offerings of equity securities,
in form and substance commercially reasonably satisfactory to Dealer or such affiliate and Counterparty, which Registration Agreement
shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating to the
indemnification of, and contribution in connection with the liability of, Dealer and its affiliates and Counterparty, shall provide for
the payment by Counterparty of all expenses in connection with such resale, including all registration costs and all fees and expenses
of counsel for Dealer, and shall provide for the delivery of accountants’ “comfort letters” to Dealer or such affiliate
with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus.
(iii) If
Counterparty makes the election described in clause (c)(i)(B) above:
(A) Dealer
(or an affiliate of Dealer designated by Dealer) and any potential institutional purchaser of any such Shares or Share Termination Delivery
Units, as the case may be, from Dealer or such affiliate identified by Dealer shall be afforded a commercially reasonable opportunity
to conduct a due diligence investigation in compliance with applicable law with respect to Counterparty customary in scope for private
placements of equity securities (including, without limitation, the right to have made available to them for inspection all financial
and other records, pertinent corporate documents and other information reasonably requested by them), subject to execution by such recipients
of customary confidentiality agreements reasonably acceptable to Counterparty;
(B) Dealer
(or an affiliate of Dealer designated by Dealer) and Counterparty shall enter into an agreement (a “Private Placement
Agreement”) on commercially reasonable terms in connection with the private placement of such Shares or Share Termination
Delivery Units, as the case may be, by Counterparty to Dealer or such affiliate and the private resale of such shares by Dealer or
such affiliate, substantially similar to private placement purchase agreements customary for private placements of equity
securities, in form and substance commercially reasonably satisfactory to Dealer and Counterparty, which Private Placement Agreement
shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements
relating to the indemnification of, and contribution in connection with the liability of, Dealer and its affiliates and
Counterparty, shall provide for the payment by Counterparty of all expenses in connection with such resale, including all fees and
expenses of
counsel for Dealer, shall contain representations, warranties and agreements of Counterparty reasonably necessary or
advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for
such resales, and shall use best efforts to provide for the delivery of accountants’ “comfort letters” to Dealer
or such affiliate with respect to the financial statements and certain financial information contained in or incorporated by
reference into the offering memorandum prepared for the resale of such Shares;
(C) Counterparty
agrees that (i) any Shares or Share Termination Delivery Units so delivered to Dealer may be transferred by and among Dealer and
its affiliates, and Counterparty shall effect such transfer without any further action by Dealer and (ii) after the minimum “holding
period” within the meaning of Rule 144(d) under the Securities Act has elapsed with respect to such Shares or any securities
issued by Counterparty comprising such Share Termination Delivery Units, Counterparty shall promptly remove, or cause the transfer agent
for such Shares or securities to remove, any legends referring to any such restrictions or requirements from such Shares or securities,
without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document,
any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer); and
(D) Counterparty
shall not take, or cause to be taken, any action that would make unavailable either the exemption pursuant to Section 4(a)(2) of
the Securities Act for the sale by Counterparty to Dealer (or any affiliate designated by Dealer) of the Shares or Share Termination Delivery
Units, as the case may be, or the exemption pursuant to Section 4(a)(1) or Section 4(a)(3) of the Securities Act for
resales of the Shares or Share Termination Delivery Units, as the case may be, by Dealer (or any such affiliate of Dealer).
(d) Make-whole
Shares. If Counterparty makes the election described in clause (i)(B) of paragraph (c) of this Section 8, then Dealer
or its affiliates may sell (which sale shall be made in a commercially reasonable manner) such Shares or Share Termination Delivery Units,
as the case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery
of such Shares or Share Termination Delivery Units, as the case may be, and ending on the Exchange Business Day on which Dealer or its
affiliates completes the sale of a sufficient number of Shares or Share Termination Delivery Units, as the case may be, so that the realized
net proceeds of such sales exceed the Freely Tradeable Value. If any of such delivered Shares or Share Termination Delivery Units remain
after such realized net proceeds exceed the Freely Tradeable Value, Dealer shall return such remaining Shares or Share Termination Delivery
Units to Counterparty. If the Freely Tradeable Value exceeds the realized net proceeds from such resale, Counterparty shall transfer to
Dealer by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the final day of the
Resale Period (without giving effect to any extension thereof pursuant to the immediately succeeding sentence), the amount of such excess
(the “Additional Amount”) in cash or in a number of additional Shares or Share Termination Delivery Units, as the case
may be, (“Make-whole Shares”) in an amount that, based on the Relevant Price on such final day of the Resale Period
(as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a dollar value equal to the Additional
Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares in the manner contemplated by this Section 8(d).
This provision shall be applied successively until the Additional Amount is equal to zero, subject to Section 8(f).
(e) Beneficial
Ownership. Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Dealer be entitled
to receive, or shall be deemed to receive, any Shares if, immediately upon giving effect to such receipt of such Shares (and after
taking into account any Shares deliverable by Counterparty to Dealer at such time under any transaction or security other than the
Transaction), (i) the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the
rules promulgated thereunder) of Shares by Dealer, any of its affiliates subject to aggregation with Dealer for purposes of the
“beneficial ownership” test under Section 13 of the Exchange Act and all persons who may form a “group”
(within the meaning of Rule 13d-5(b)(1) under the Exchange Act) with Dealer with respect to “beneficial
ownership” of any Shares (collectively, “Dealer Group”) (or, to the extent that for any reason the
equivalent calculation under Section 16 of the Exchange Act and the rules and regulations thereunder results in a higher
number, such higher number) would be equal to or greater than 8.0% or more of the outstanding Shares on the date of determination or
(ii) Dealer, Dealer Group or any person whose
ownership position would be aggregated with that of Dealer or Dealer Group
(Dealer, Dealer Group or any such person, a “Dealer Person”) under the Minnesota Business Corporations or other
federal, state or local law, rule, regulation or regulatory order or organizational documents or contracts of Counterparty
applicable to ownership of Shares (“Applicable Restrictions”), would own, beneficially own, constructively own,
control, hold the power to vote or otherwise meet a relevant definition of ownership in excess of a number of Shares equal to
(x) the number of Shares that would give rise to reporting or registration obligations or other requirements (including
obtaining prior approval by a state or federal regulator) of a Dealer Person under Applicable Restrictions and with respect to which
such requirements have not been met or the relevant approval has not been received or that would subject a Dealer Person to
restrictions (including restrictions relating to business combinations or other designated transactions) or have any other adverse
effect on a Dealer Person under Applicable Restrictions minus (y) 1.0% of the number of Shares outstanding on the date
of determination (either such condition described in clause (i) or (ii), an “Excess Ownership Position”). If
any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s
obligation to make such delivery shall not be extinguished and Counterparty shall make such delivery as promptly as practicable
after, but in no event later than one Exchange Business Day after, Dealer gives notice to Counterparty that such delivery would not
result in the existence of an Excess Ownership Position.
(f) Limitations
on Settlement by Counterparty. Notwithstanding anything herein or in the Agreement to the contrary (except as set forth in this Section 8(f)),
in no event shall Counterparty be required to deliver Shares in connection with the Transaction in excess of 568,620 Shares, as such number
may be adjusted from time to time in accordance with the provisions hereof; provided that no such adjustment shall cause the Capped
Number to exceed the Available Shares (as in effect from time to time), other than as a result of actions of Counterparty or events within
Counterparty’s control (the “Capped Number”). Notwithstanding anything to the contrary in the Agreement or the
Equity Definitions, such limitation shall not affect the calculation of any Payment Obligation (as defined in Section 8(b)),
it being understood that if the Share Termination Alternative applies pursuant to Section 8(b), the number of Shares deliverable
pursuant to such Section shall not exceed the Capped Number. Counterparty represents and warrants to Dealer (which representation
and warranty shall be deemed to be repeated on each day that the Transaction is outstanding) that the Capped Number is equal to or less
than the number of authorized but unissued Shares of the Counterparty that are not reserved for future issuance in connection with transactions
in the Shares (other than the Transaction) on the date of the determination of the Capped Number (such Shares, the “Available
Shares”). In the event Counterparty shall not have delivered the full number of Shares otherwise deliverable as a result of
this Section 8(f) (the resulting deficit, the “Deficit Shares”), Counterparty shall be continually obligated
to deliver Shares, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, when, and
to the extent, that (A) Shares are repurchased, acquired or otherwise received by Counterparty or any of its subsidiaries after the
Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares previously
reserved for issuance in respect of other transactions become no longer so reserved or (C) Counterparty additionally authorizes any
unissued Shares that are not reserved for other transactions (such events as set forth in clauses (A), (B) and (C) above, collectively,
the “Share Issuance Events”). In the event that there are any Deficit Shares or the proviso in the first sentence
of this Section 8(f) has prevented any adjustment to the Capped Number, (i) Counterparty shall promptly notify Dealer of
the occurrence of any of the Share Issuance Events (including the number of Shares subject to clause (A), (B) or (C) and the
corresponding number of Shares to be delivered) and, as promptly as reasonably practicable, deliver such Shares thereafter, (ii) Counterparty
shall use its best efforts to cause Share Issuance Events to the extent necessary to deliver the full number of Deficit Shares or cause
the Capped Number to equal the Capped Number that would be in effect but for the proviso set forth in the first sentence of this
Section 8(f), as the case may be, and (iii) Counterparty shall not, until Counterparty’s obligations under the Transaction
have been satisfied in full, use any Shares that become available for potential delivery to Dealer as a result of any Share Issuance Event
for the settlement or satisfaction of any transaction or obligation other than the Transaction or any other warrant transaction between
Counterparty and Dealer or reserve any such Shares for future issuance for any purpose other than to satisfy Counterparty’s obligations
to Dealer under the Transaction or any other warrant transaction between Counterparty and Dealer.
(g) Equity
Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction
that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy. For the avoidance of doubt, the
parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim
arising as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement. For the avoidance
of doubt, the parties acknowledge that the obligations of Counterparty under this Confirmation are not secured by any collateral that
would otherwise secure the obligations of Counterparty herein under or pursuant to any other agreement.
(h) Amendments
to Equity Definitions. The following amendments shall be made to the Equity Definitions:
(i) The
first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as
follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation
of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent
will determine whether such Potential Adjustment Event has an effect on the theoretical value of the relevant Shares or options on the
Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and, the portion of such sentence
immediately preceding clause (ii) thereof is hereby amended by deleting the words “diluting or concentrative” and the
words “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate
or liquidity relative to the relevant Shares)” and replacing such latter phrase with the words “(and, for the avoidance of
doubt, adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative
to the relevant Shares)”;
(ii) Sections
11.2(a) and 11.2(e)(vii) of the Equity Definitions are hereby amended by deleting the words “a diluting or concentrative”
and, in the case of Section 11.2(e)(vii), replacing them with “an economic” and, in each case, adding the phrase “or
options on the Shares” at the end of the sentence;
(iii) Section 12.7(b) of
the Equity Definitions is hereby amended by deleting the words “(and in any event within five Exchange Business Days) by the parties
after” appearing after the words “agreed promptly” and replacing with the words “by the parties on or prior to”;
(iv) Section 12.9(b)(iv) of
the Equity Definitions is hereby amended by (A) deleting (1) subsection (A) in its entirety, (2) the phrase “or
(B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); (B) replacing “will
lend” with “lends” in subsection (B); and (C) deleting the phrase “neither the Non-Hedging Party nor the
Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence; “Lending Party”
means a third party that is not the Counterparty or an affiliate of the Counterparty that Dealer considers to be an acceptable counterparty
(acting in good faith and in a reasonable manner in light of (x) other transactions that Dealer (or its agent or affiliate) may have
entered into with such party and (y) any legal, regulatory or self-regulatory requirements or related policies and procedures (whether
or not such requirements or related policies and procedures are imposed by law or have been voluntarily adopted by Dealer) that apply
generally to transactions of a nature and kind similar to the transactions contemplated with such party); and
(v) Section 12.9(b)(v) of
the Equity Definitions is hereby amended by (A) adding the word “or” immediately before subsection “(B)”
and deleting the comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its entirety, (2) deleting the
word “or” immediately preceding subsection (C), (3) replacing in the penultimate sentence the words “either party”
with “the Hedging Party” and (4) deleting clause (X) in the final sentence.
(i) Transfer
and Assignment. Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part, at
any time without the consent of Counterparty. 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 to 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.
(j) 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.
(k) Additional
Termination Events. The occurrence of any of the following shall constitute an Additional Termination Event with respect to which
the Transaction shall be the sole Affected Transaction and Counterparty shall be the sole Affected Party and Dealer shall be the party
entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement and to determine the amount payable
pursuant to Section 6(e) of the Agreement; provided that with respect to any Additional Termination Event, Dealer may
choose to treat part of the Transaction as the sole Affected Transaction, and, upon the termination of the Affected Transaction, a Transaction
with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated
for all purposes as the Transaction, which shall remain in full force and effect:
(i) Dealer
reasonably determines that it is advisable to terminate a portion of the Transaction so that Dealer’s related commercially reasonable
hedging activities will comply with applicable securities laws, rules or regulations or related policies and procedures of Dealer
(whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer), or Dealer, despite
using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal to hedge its obligations pursuant
to this Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory or self-regulatory
requirements;
(ii) at
any time at which any Excess Ownership Position occurs, Dealer, in its discretion, is unable to effect a transfer or assignment to a third
party of the Transaction or any other transaction between the parties after using its commercially reasonable efforts on pricing and terms
and within a time period reasonably acceptable to Dealer such that an Excess Ownership Position no longer exists; provided that
Dealer shall treat only that portion of the Transaction as the Affected Transaction as necessary so that such Excess Ownership Position
would no longer exist following the resulting partial termination of the Transaction (after taking into account commercially reasonable
adjustments to Dealer’s commercially reasonable Hedge Positions from such partial termination);
(iii) a
“person” or “group” (within the meaning of Section 13(d) of the Exchange Act), other than Counterparty
or its wholly-owned subsidiaries, becomes the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3
under the Exchange Act, of the common equity of Counterparty representing more than 50.0% of the voting power of such common equity;
(iv) (1) any
sale, lease or other transfer, in one transaction or a series of transactions, of all or substantially all of the assets of Counterparty
and its subsidiaries, taken as a whole, to any person; or (2) any transaction or series of related transactions in connection with
which (whether by means of merger, consolidation, share exchange, combination, reclassification, recapitalization, acquisition, liquidation
or otherwise) all of the Shares are exchanged for, converted into, acquired for, or constitutes solely the right to receive, other securities,
cash or other property;
provided that,
notwithstanding the foregoing, any transaction or event set forth in the immediately preceding clause (iv) shall not constitute
an Additional Termination Event if at least 90% of the consideration received or to be received by holders of the Shares (excluding
cash payments for fractional Shares or pursuant to dissenters rights) in connection with the transaction or transactions that would
otherwise constitute an Additional Termination Event pursuant to clause (iv) of this Section 8(k) consists of shares
of common stock listed on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of
their respective successors) or that will be so listed when issued or exchanged in connection with such transaction or transactions,
and following such transaction or transactions, the Shares will consist of such consideration, excluding cash payments for
fractional shares. For the avoidance of doubt, an event that is not considered an Additional Termination Event pursuant to the
immediately preceding sentence shall not be an Additional Termination Event solely because such event could also be described by
clause (iii) above; or
(v) holders
of Shares approve any plan or proposal for Counterparty’s liquidation or dissolution (other than in a transaction described in (iv) above).
(l) Early
Unwind. In the event the sale by Counterparty of the Optional Securities (defined under the Purchase Agreement) is not consummated
pursuant to the Purchase Agreement for any reason by the close of business in New York on January 23, 2023 (or such later date as
agreed upon by the parties (January 23, 2023 or such later date being the “Early Unwind Date”), the Transaction
shall automatically terminate (the “Early Unwind”) on the Early Unwind Date and (i) the Transaction and all of
the respective rights and obligations of Dealer and Counterparty thereunder shall be cancelled and terminated and (ii) Counterparty
shall pay to Dealer an amount in cash equal to the aggregate amount of actual costs and expenses relating to the unwinding of Dealer’s
commercially reasonable hedging activities in respect of the Transaction (including market losses incurred in reselling any Shares purchased
by Dealer or its affiliates in connection with such hedging activities, unless Counterparty agrees to purchase any such Shares at the
cost at which Dealer purchased such Shares). Following such termination, cancellation and payment, each party
shall be released and discharged
by the other party from, and agrees not to make any claim against the other party with respect to, any obligations or liabilities of either
party arising out of, and to be performed in connection with, the Transaction either prior to or after the Early Unwind Date. Dealer and
Counterparty represent and acknowledge to the other that upon an Early Unwind and following the payment referred to above, all obligations
with respect to the Transaction shall be deemed fully and finally discharged.
(m) No
Netting and Set-off. The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party waives
any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any
delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between
parties hereto, by operation of law or otherwise.
(n) Delivery
of Cash. For the avoidance of doubt, nothing in this Confirmation shall be interpreted as requiring the Counterparty to deliver cash
in respect of the settlement of the Transaction, except in circumstances where the required cash settlement thereof is permitted for classification
of the contract as equity by ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, as in effect on the relevant
Trade Date (including, without limitation, where the Counterparty so elects to deliver cash or fails timely to elect to deliver Shares
or Share Termination Delivery Property in respect of such settlement).
(o) Agreements
and Acknowledgements Regarding Hedging. Counterparty understands, acknowledges and agrees that: (A) at any time on and prior
to the last 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 VWAP Prices; (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 VWAP Prices, each in a manner that may be adverse to Counterparty; and (E) the Transaction is
a derivatives transaction in which it has granted Dealer an option, and Dealer may purchase shares for its own account at an average price
that may be greater than, or less than, the price paid by Counterparty under the terms of the Transaction.
(p) Wall
Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and
Accountability Act of 2010 (the “WSTAA”), the parties hereby agree that neither the enactment of the WSTAA (or any
statute containing any legal certainty provision similar to Section 739 of the WSTAA) or any regulation under the WSTAA (or any
such statute), nor any requirement under the WSTAA (or any statute containing any legal certainty provision similar to
Section 739 of the WSTAA) or an amendment made by the WSTAA (or any such statute), 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, Increased Cost of Hedging or Illegality).
(q) Governing
Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE,
OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(r) Amendment.
This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty
and Dealer.
(s) 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.
(t) Tax
Matters.
(i) Withholding
Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act. “Indemnifiable
Tax” as defined in Section 14 of the Agreement, shall not include any withholding tax imposed or collected pursuant to Sections
1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or
official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation
of such Sections of the Code (a “FATCA Withholding Tax”). 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.
(ii) HIRE
Act. To the extent that either party to the Agreement with respect to this Transaction is not an adhering party to the ISDA 2015 Section 871(m) Protocol
published by the International Swaps and Derivatives Association, Inc. on November 2, 2015 and available at www.isda.org, as
may be amended, supplemented, replaced or superseded from time to time (the “871(m) Protocol”), the parties agree
that the provisions and amendments contained in the Attachment to the 871(m) Protocol are incorporated into and apply to the Agreement
with respect to this Transaction as if set forth in full herein. The parties further agree that, solely for purposes of applying such
provisions and amendments to the Agreement with respect to this Transaction, references to “each Covered Agreement” in the
871(m) Protocol will be deemed to be references to the Master Agreement with respect to this Transaction, and references to the “Implementation
Date” in the 871(m) Protocol will be deemed to be references to the Trade Date of this Transaction.
(iii) Tax
documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto,
(i) on or before the date of execution of this Confirmation, (ii) upon reasonable request of Dealer and (iii) promptly
upon learning that any such tax form previously provided by Counterparty has become obsolete or incorrect. Dealer shall provide to Counterparty
a valid U.S. Internal Revenue Service Form W-9 or any successor thereto, (i) on or before the date of execution of this Confirmation,
(ii) upon reasonable request of Counterparty and (iii) promptly upon learning that any such tax form previously provided by
Dealer has become obsolete or incorrect.
(iv) Tax
Representations. For the purpose of Section 3(f) of the Agreement, Counterparty is a corporation for U.S. federal income
tax purposes and is organized under the laws of the State of Minnesota. Counterparty represents to Dealer that for U.S. federal
income tax purposes it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of the United States
Treasury Regulations) and an “exempt recipient” (as that term is used in section 1.6049-4(c)(1) of the United
States Treasury Regulations). For the purpose of Section 3(f) of the Agreement, Dealer represents to Counterparty that
Dealer is a national banking association organized and existing under the laws of the United States of America.
(u) QFC
Stay Provisions.
(i) (A) In
the event that Dealer becomes subject to a proceeding under (i) the Federal Deposit Insurance Act and the regulations promulgated
thereunder or (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder
(a “U.S. Special Resolution Regime”) the transfer from Dealer of this Confirmation, and any interest and obligation
in or under, and any property securing, this Confirmation, will be effective to the same extent as the transfer would be effective under
the U.S. Special Resolution Regime if this Confirmation, and any interest and obligation in or under, and any property securing, this
Confirmation were governed by the laws of the United States or a state of the United States. (B) In the event that Dealer or an Affiliate
becomes subject to a proceeding under a U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§ 252.81,
47.2 or 382.1, as applicable (“Default Right”)) under this Confirmation that may be exercised against
Dealer are permitted
to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Confirmation
were governed by the laws of the United States or a state of the United States.
(ii) Notwithstanding
anything to the contrary in this Confirmation, the parties expressly acknowledge and agree that: (A) Counterparty shall not be permitted
to exercise any Default Right with respect to this Confirmation or any Affiliate Credit Enhancement that is related, directly or indirectly,
to an Affiliate of Dealer becoming subject to receivership, insolvency, liquidation, resolution, or similar proceeding (an “Insolvency
Proceeding”), except to the extent that the exercise of such Default Right would be permitted under the provisions of 12 C.F.R.
252.84, 12 C.F.R. 47.5 or 12 C.F.R. 382.4, as applicable; and (B) Nothing in this Confirmation shall prohibit the transfer of any
Affiliate Credit Enhancement, any interest or obligation in or under such Affiliate Credit Enhancement, or any property securing such
Affiliate Credit Enhancement, to a transferee upon or following an Affiliate of Dealer becoming subject to an Insolvency Proceeding, unless
the transfer would result in the Counterparty being the beneficiary of such Affiliate Credit Enhancement in violation of any law applicable
to the Counterparty.
(iii) If
Counterparty has previously adhered to, or subsequently adheres to, the ISDA 2018 U.S. Resolution Stay Protocol as published by the International
Swaps and Derivatives Association, Inc. as of July 31, 2018 (the “ISDA U.S. Protocol”), the terms of such
protocol shall be incorporated into and form a part of this Confirmation and the terms of the ISDA U.S. Protocol shall supersede and replace
the terms of this Section 8(r). For purposes of incorporating the ISDA U.S. Protocol, Dealer shall be deemed to be a Regulated Entity,
Counterparty shall be deemed to be an Adhering Party, and this Confirmation shall be deemed to be a Protocol Covered Agreement. Capitalized
terms used but not defined in this paragraph shall have the meanings given to them in the ISDA U.S. Protocol.
(iv) Dealer
and Counterparty agree that to the extent there are any outstanding “in-scope QFCs,” as defined in 12 C.F.R. § 252.82(d),
that are not excluded under 12 C.F.R. § 252.88, between Dealer and Counterparty that do not otherwise comply with the requirements
of 12 C.F.R. § 252.2, 252.81–8 (each such agreement, a “Preexisting In-Scope Agreement”), then each such
Preexisting In-Scope Agreement is hereby amended to include the foregoing provisions in this Section 8(r), with references to “this
Confirmation” being understood to be references to the applicable Preexisting In-Scope Agreement.
(a) For
purposes of this Section 8(r):
(b) “Affiliate”
is defined in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Credit Enhancement” means any
credit enhancement or credit support arrangement in support of the obligations of Dealer under or with respect to this Confirmation, including
any guarantee, collateral arrangement (including any pledge, charge, mortgage or other security interest in collateral or title transfer
arrangement), trust or similar arrangement, letter of credit, transfer of margin or any similar arrangement.
(v) Exclusive
Jurisdiction; Waiver of Jury.
(i) Section 13(b) of
the Agreement is deleted in its entirety and replaced by the following:
“The courts
of the United States of America for the Southern District of New York and appellate courts from thereof will have the sole and exclusive
jurisdiction over any and all claims, disputes or causes of action arising out of, in connection with, or relating to this Agreement or
the transactions and relationships between the parties contemplated by this Agreement. If such courts lack federal subject matter jurisdiction,
the Supreme Court of the State of New York, sitting in New York County and any appellate court from thereof, will have sole and exclusive
jurisdiction. Subject to the foregoing, either of these courts will be the proper venue and the parties waive any objection to venue or
their convenience as a forum. The parties agree to submit to the jurisdiction of any of the courts specified and to accept service of
process to vest personal jurisdiction over them in any of these courts.”
(ii) EACH
OF COUNTERPARTY AND DEALER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS
STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS CONFIRMATION OR THE AGREEMENT.
(w) Communications
with Employees of J.P. Morgan Securities LLC. If Counterparty interacts with any employee of J.P. Morgan Securities LLC with respect
to the Transaction, Counterparty is hereby notified that such employee will act solely as an authorized representative of JPMorgan Chase
Bank, N.A. (and not as a representative of J.P. Morgan Securities LLC) in connection with the Transaction.
Please confirm that the foregoing
correctly sets forth the terms of our agreement by executing this Confirmation and returning it to J.P. Morgan Securities LLC, 383 Madison
Ave, New York, NY 10179, and by email to EDG_Notices@jpmorgan.com and edg.us.flow.corporates.mo@jpmorgan.com.
|
Yours faithfully, |
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|
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JPMorgan Chase Bank, National
Association |
|
|
|
By: |
/s/ Gaurav Maria |
|
|
Name: Gaurav Maria |
|
|
Title: Managing Director |
[Signature Page to Additional
Bond Hedge Side Letter]
Agreed and Accepted By: |
|
|
|
WINNEBAGO INDUSTRIES, INC. |
|
|
|
By: |
/s/ Bryan L. Hughes |
|
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Name: Bryan L. Hughes |
|
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Title: Chief Financial Officer and Senior Vice President |
|
[Signature Page to JPM Additional Warrant Confirmation]
Annex A
For each Component of the Transaction, the Number of Warrants and Expiration
Date is set forth below.
Component Number |
Number of Warrants |
Expiration Date |
1 |
1,896 |
April 15, 2030 |
2 |
1,896 |
April 16, 2030 |
3 |
1,896 |
April 17, 2030 |
4 |
1,896 |
April 18, 2030 |
5 |
1,896 |
April 22, 2030 |
6 |
1,896 |
April 23, 2030 |
7 |
1,896 |
April 24, 2030 |
8 |
1,896 |
April 25, 2030 |
9 |
1,896 |
April 26, 2030 |
10 |
1,896 |
April 29, 2030 |
11 |
1,896 |
April 30, 2030 |
12 |
1,896 |
May 1, 2030 |
13 |
1,896 |
May 2, 2030 |
14 |
1,896 |
May 3, 2030 |
15 |
1,896 |
May 6, 2030 |
16 |
1,896 |
May 7, 2030 |
17 |
1,896 |
May 8, 2030 |
18 |
1,896 |
May 9, 2030 |
19 |
1,896 |
May 10, 2030 |
20 |
1,896 |
May 13, 2030 |
21 |
1,896 |
May 14, 2030 |
22 |
1,896 |
May 15, 2030 |
23 |
1,896 |
May 16, 2030 |
24 |
1,896 |
May 17, 2030 |
25 |
1,896 |
May 20, 2030 |
26 |
1,896 |
May 21, 2030 |
27 |
1,896 |
May 22, 2030 |
28 |
1,896 |
May 23, 2030 |
29 |
1,896 |
May 24, 2030 |
30 |
1,896 |
May 28, 2030 |
31 |
1,896 |
May 29, 2030 |
32 |
1,896 |
May 30, 2030 |
33 |
1,896 |
May 31, 2030 |
34 |
1,896 |
June 3, 2030 |
35 |
1,896 |
June 4, 2030 |
36 |
1,896 |
June 5, 2030 |
37 |
1,896 |
June 6, 2030 |
38 |
1,896 |
June 7, 2030 |
39 |
1,896 |
June 10, 2030 |
40 |
1,896 |
June 11, 2030 |
41 |
1,895 |
June 12, 2030 |
42 |
1,895 |
June 13, 2030 |
43 |
1,895 |
June 14, 2030 |
44 |
1,895 |
June 17, 2030 |
45 |
1,895 |
June 18, 2030 |
46 |
1,895 |
June 20, 2030 |
47 |
1,895 |
June 21, 2030 |
48 |
1,895 |
June 24, 2030 |
49 |
1,895 |
June 25, 2030 |
50 |
1,895 |
June 26, 2030 |
51 |
1,895 |
June 27, 2030 |
52 |
1,895 |
June 28, 2030 |
53 |
1,895 |
July 1, 2030 |
54 |
1,895 |
July 2, 2030 |
55 |
1,895 |
July 3, 2030 |
56 |
1,895 |
July 5, 2030 |
57 |
1,895 |
July 8, 2030 |
58 |
1,895 |
July 9, 2030 |
59 |
1,895 |
July 10, 2030 |
60 |
1,895 |
July 11, 2030 |
61 |
1,895 |
July 12, 2030 |
62 |
1,895 |
July 15, 2030 |
63 |
1,895 |
July 16, 2030 |
64 |
1,895 |
July 17, 2030 |
65 |
1,895 |
July 18, 2030 |
66 |
1,895 |
July 19, 2030 |
67 |
1,895 |
July 22, 2030 |
68 |
1,895 |
July 23, 2030 |
69 |
1,895 |
July 24, 2030 |
70 |
1,895 |
July 25, 2030 |
71 |
1,895 |
July 26, 2030 |
72 |
1,895 |
July 29, 2030 |
73 |
1,895 |
July 30, 2030 |
74 |
1,895 |
July 31, 2030 |
75 |
1,895 |
August 1, 2030 |
76 |
1,895 |
August 2, 2030 |
77 |
1,895 |
August 5, 2030 |
78 |
1,895 |
August 6, 2030 |
79 |
1,895 |
August 7, 2030 |
80 |
1,895 |
August 8, 2030 |
81 |
1,895 |
August 9, 2030 |
82 |
1,895 |
August 12, 2030 |
83 |
1,895 |
August 13, 2030 |
84 |
1,895 |
August 14, 2030 |
85 |
1,895 |
August 15, 2030 |
86 |
1,895 |
August 16, 2030 |
87 |
1,895 |
August 19, 2030 |
88 |
1,895 |
August 20, 2030 |
89 |
1,895 |
August 21, 2030 |
90 |
1,895 |
August 22, 2030 |
91 |
1,895 |
August 23, 2030 |
92 |
1,895 |
August 26, 2030 |
93 |
1,895 |
August 27, 2030 |
94 |
1,895 |
August 28, 2030 |
95 |
1,895 |
August 29, 2030 |
96 |
1,895 |
August 30, 2030 |
97 |
1,895 |
September 3, 2030 |
98 |
1,895 |
September 4, 2030 |
99 |
1,895 |
September 5, 2030 |
100 |
1,895 |
September 6, 2030 |
Exhibit 99.1
WINNEBAGO INDUSTRIES ANNOUNCES PROPOSED PRIVATE
OFFERING OF $300 MILLION
OF CONVERTIBLE SENIOR NOTES
EDEN PRAIRIE, MINNESOTA, January 17, 2024 — Winnebago Industries, Inc.
(NYSE: WGO) (the “Company”), a leading outdoor lifestyle product manufacturer, today announced its intention to offer, subject
to market conditions and other factors, $300 million aggregate principal amount of convertible senior notes due 2030 (the “notes”)
in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities
Act of 1933, as amended (the “Securities Act”). In connection with the offering, the Company expects to grant the initial
purchasers a 13 -day option to purchase up to an additional $45 million aggregate principal amount of notes.
Final terms of the notes, including the initial conversion price, interest
rate and certain other terms of the notes will be determined at the time of pricing. The notes will bear interest semi-annually and will
mature on January 15, 2030, unless repurchased, redeemed or converted in accordance with their terms prior to such date. Prior to
July 15, 2029, the notes will be convertible only upon satisfaction of certain conditions and during certain periods, and on and
after July 15, 2029, at any time until the close of business on the second scheduled trading day immediately before the maturity
date.
The Company will settle conversions in cash and, if applicable, shares
of its common stock, based on the applicable conversion rate(s). The notes will be redeemable, in whole or in part (subject to certain
limitations), for cash at the Company’s option at any time, and from time to time, on or after January 15, 2028 and on or before
the 40th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of the Company’s
common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal
amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Holders of the notes
will have the right to require the Company to repurchase all or any portion of their notes at 100% of their principal amount, plus any
accrued and unpaid interest, upon the occurrence of certain fundamental changes.
The Company intends to use a portion of the net proceeds from the
offering to fund the cost of entering into the convertible note hedge transactions described below (after such cost is partially
offset by the proceeds from entering into the warrant transactions described below). The Company expects to use a portion of the net
proceeds from the offering to repurchase a portion of its outstanding 1.50% Convertible Senior Notes due 2025 (the “2025
Notes”) concurrently with the pricing of the offering in privately negotiated transactions effected through one of the initial
purchasers of the notes or its affiliate, as the Company’s agent. The Company intends to use the remainder of the net proceeds
from the offering for general corporate purposes. If the initial purchasers exercise their option to purchase additional notes, then
the Company intends to use a portion of the additional net proceeds to fund the cost of entering into additional convertible note
hedge transactions as described below (after such cost is partially offset by the proceeds from entering into the additional warrant
transactions described below). Holders of the 2025 Notes that are repurchased in the concurrent repurchases described above may
purchase shares of the Company’s common stock in the open market to unwind any hedge positions they may have with respect to
the 2025 Notes. These activities may affect the trading price of the Company’s common stock and, if conducted concurrently
with this offering, may result in a higher initial conversion price for the notes.
In connection with issuing the 2025 Notes, the Company entered into
convertible note hedge transactions (the “existing convertible note hedge transactions”) and warrant transactions (the “existing
warrant transactions,” and, together with the existing convertible note hedge transactions, the “existing call spread transactions”)
with certain financial institutions (the “existing option counterparties”). If the Company repurchases any of its 2025 Notes,
then the Company may enter into agreements with the existing option counterparties to terminate a portion of the existing convertible
note hedge transactions in a notional amount corresponding to the amount of 2025 Notes repurchased. The Company may also enter into agreements
with the existing option counterparties to terminate a portion of the existing warrant transactions. In connection with the termination
of any of the existing call spread transactions, the Company expects the existing option counterparties or their respective affiliates
to unwind their related hedge positions, which may involve the sale of shares of the Company’s common stock in the open market or
other transactions with respect to the Company’s common stock. This hedge unwind activity could offset or exacerbate the effects
of the purchase, sale or other activity that holders of the 2025 Notes that participate in the repurchase transactions may effect in connection
with those transactions.
In connection with the pricing of the notes, the Company expects to
enter into one or more privately negotiated convertible note hedge transactions with the initial purchasers or their affiliates (the “hedge
counterparties”). The convertible note hedge transactions are expected to cover, subject to customary anti-dilution adjustments,
the number of shares of the Company’s common stock that will initially underlie the notes. The Company also intends to enter into
one or more separate, privately negotiated warrant transactions with the hedge counterparties collectively relating to the same number
of shares of the Company’s common stock, subject to customary anti-dilution adjustments, and for which the Company will receive
premiums to partially offset the cost of entering into the hedge transactions. If the initial purchasers exercise their option to purchase
additional notes, the Company may enter into one or more additional convertible note hedge transactions and one or more additional warrant
transactions with the hedge counterparties, which, if executed, will initially cover, collectively, the number of shares of the Company’s
common stock that will initially underlie the additional notes the Company sells to the initial purchasers.
The convertible note hedge transactions are expected generally to reduce
the potential dilution to the Company’s common stock upon any conversion of the notes and/or offset any potential cash payments
the Company is required to make in excess of the principal amount of converted notes, as the case may be. However, the warrant transactions
could separately have a dilutive effect with respect to the Company’s common stock to the extent that the market value per share
of the Company’s common stock exceeds the strike price of the warrants evidenced by the warrant transactions.
In connection with establishing their initial hedges with respect to
the convertible note hedge transactions and the warrant transactions, the hedge counterparties or their respective affiliates expect to
enter into various cash-settled over-the-counter derivative transactions with respect to the Company’s common stock concurrently
with, or shortly after, or purchase shares of the Company’s common stock shortly after, the pricing of the notes, and may unwind
these cash-settled over-the-counter derivative transactions and purchase shares of the Company’s common stock in open market transactions
shortly after the pricing of the notes. These activities could increase, or prevent a decline in, the market price of the Company’s
common stock concurrently with, or shortly after, the pricing of the notes.
In addition, the hedge counterparties or their respective
affiliates may modify their hedge positions with respect to the convertible note hedge transactions and the warrant transactions
from time to time after the pricing of the notes, and are likely to do so during any observation period, by purchasing or selling
shares of the Company’s common stock or the notes in privately negotiated transactions or open market transactions or by
entering into or unwinding various over-the-counter derivative transactions with respect to the Company’s common stock. Any of
these activities could, however, adversely affect the trading price of the Company’s common stock and, consequently, the value
of the consideration that noteholders receive upon conversion of the notes, the trading price of the notes or noteholders’
ability to convert the notes.
The offer and sale of the notes and the shares of common stock, if
any, issuable upon conversion of the notes have not been registered under the Securities Act or any state securities laws, and the notes
and such shares may not be offered or sold absent registration or an applicable exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable state laws.
This press release does not constitute an offer to sell or a solicitation
of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which
such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Any offers of the notes will be made only by means of a private offering memorandum. The notes being offered have not been approved or
disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the applicable private offering
memorandum.
About Winnebago Industries
Winnebago Industries, Inc. is a leading North American manufacturer
of outdoor lifestyle products under the Winnebago, Grand Design, Chris-Craft, Newmar and Barletta brands, which are used primarily in
leisure travel and outdoor recreation activities. The Company builds high-quality motorhomes, travel trailers, fifth-wheel products, outboard
and sterndrive powerboats, pontoons, and commercial community outreach vehicles. Committed to advancing sustainable innovation and leveraging
vertical integration in key component areas, Winnebago Industries has multiple facilities in Iowa, Indiana, Minnesota and Florida.
The Company’s common stock is listed on the New York Stock Exchange and traded under the symbol WGO. For access to Winnebago Industries'
investor relations material or to add your name to an automatic email list for Company news releases, visit http://investor.wgo.net.
Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are
inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not
limited to risks relating to the offering of the notes, general economic uncertainty in key markets and a worsening of domestic and
global economic conditions or low levels of economic growth; availability of financing for RV and marine dealers; competition and
new product introductions by competitors; ability to innovate and commercialize new products; ability to manage the Company’s
inventory to meet demand; risk related to cyclicality and seasonality of the Company’s business; risk related to independent
dealers; risk related to dealer consolidation or the loss of a significant dealer; significant increase in repurchase obligations;
ability to retain relationships with the Company’s suppliers and obtain components; business or production disruptions;
inadequate management of dealer inventory levels; increased material and component costs, including availability and price of fuel
and other raw materials; ability to integrate mergers and acquisitions; ability to attract and retain qualified personnel and
changes in market compensation rates; exposure to warranty claims; ability to protect the Company’s information technology
systems from data security, cyberattacks, and network disruption risks and the ability to successfully upgrade and evolve the
Company’s information technology systems; ability to retain brand reputation and related exposure to product liability claims;
governmental regulation, including for climate change; increased attention to environmental, social, and governance
("ESG") matters, and the Company’s ability to meet its commitments; impairment of goodwill and trade names; and
risks related to the Company’s Convertible and Senior Secured Notes including the Company’s ability to satisfy its
obligations under these notes. Additional information concerning certain risks and uncertainties that could cause actual results to
differ materially from that projected or suggested is contained in the Company's filings with the Securities and Exchange Commission
("SEC") over the last 12 months, copies of which are available from the SEC or from the Company upon request. The Company
disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this
release or to reflect any changes in the Company's expectations after the date of this release or any change in events, conditions
or circumstances on which any statement is based, except as required by law.
Contacts
Investors: Ray Posadas
ir@winnebagoind.com
Media: Dan Sullivan
media@winnebagoind.com
Exhibit 99.2
WINNEBAGO INDUSTRIES ANNOUNCES PRICING OF $300
MILLION OFFERING OF
CONVERTIBLE SENIOR NOTES FOR REFINANCING 2025 MATURITIES
EDEN PRAIRIE, MINNESOTA, January 18, 2024 — Winnebago Industries, Inc.
(NYSE: WGO) (the “Company”), a leading outdoor lifestyle product manufacturer, priced $300 million aggregate principal amount
of 3.250% convertible senior notes due 2030 (the “notes”) in a previously announced private offering to persons reasonably
believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities
Act”). In connection with the offering, the Company has granted the initial purchasers a 13 -day option to purchase up to an additional
$50 million aggregate principal amount of notes.
The notes will bear interest at a rate of 3.250% per year, payable
semi-annually in arrears on January 15 and July 15 of each year, beginning July 15, 2024. The notes will mature on January 15,
2030, unless repurchased, redeemed or converted in accordance with their terms prior to such date. Prior to July 15, 2029, the notes
will be convertible only upon satisfaction of certain conditions and during certain periods, and on and after July 15, 2029, at any
time until the close of business on the second scheduled trading day immediately before the maturity date.
The Company will settle conversions in cash and, if applicable, shares
of its common stock, based on the applicable conversion rate(s). The notes will be redeemable, in whole or in part (subject to certain
limitations), for cash at the Company’s option at any time, and from time to time, on or after January 15, 2028 and on or before
the 40th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of the Company’s
common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal
amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Holders of the notes
will have the right to require the Company to repurchase all or any portion of their notes at 100% of their principal amount, plus any
accrued and unpaid interest, upon the occurrence of certain fundamental changes.
The conversion rate will initially be 11.3724 shares of common stock
per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $87.93 per share of the Company’s
common stock), subject to adjustment. The initial conversion price of the notes represents a premium of approximately 30.0% over the $67.64
per share closing price of the Company’s common stock on January 18, 2024. The sale of the notes is expected to close January 23,
2024, subject to customary closing conditions.
The Company estimates that the net proceeds from the offering
will be approximately $291.1 million (or approximately $339.8 million if the initial purchasers fully exercise their option to
purchase additional notes), after deducting the initial purchasers’ discounts and commissions and estimated offering expenses.
The Company intends to use approximately $32.0 million of the net proceeds to fund the cost of entering into the convertible note
hedge transactions described below (after such cost is partially offset by the proceeds from entering into the warrant transactions
described below). The Company expects to use approximately $295 million of the net proceeds to repurchase approximately $241 million
aggregate principal amount of its outstanding 1.50% Convertible Senior Notes due 2025 (the “2025 Notes”) concurrently
with the offering in privately negotiated transactions effected through one of the initial purchasers of the notes or its affiliate,
as the Company’s agent. The Company intends to use the remainder of the net proceeds from the offering for general corporate
purposes. If the initial purchasers exercise their option to purchase additional notes, then the Company intends to use a portion of
the additional net proceeds to fund the cost of entering into additional convertible note hedge transactions as described below
(after such cost is partially offset by the proceeds from entering into the additional warrant transactions described below).
Holders of the 2025 Notes that are repurchased in the concurrent repurchases described above may purchase shares of the
Company’s common stock in the open market to unwind any hedge positions they may have with respect to the 2025 Notes. These
activities may affect the trading price of the Company’s common stock and the initial conversion price of the notes.
In connection with issuing the 2025 Notes, the Company entered into
convertible note hedge transactions (the “existing convertible note hedge transactions”) and warrant transactions (the “existing
warrant transactions,” and, together with the existing convertible note hedge transactions, the “existing call spread transactions”)
with certain financial institutions (the “existing option counterparties”). If the Company repurchases any of its 2025 Notes,
then the Company may enter into agreements with the existing option counterparties to terminate a portion of the existing convertible
note hedge transactions in a notional amount corresponding to the amount of 2025 Notes repurchased. The Company may also enter into agreements
with the existing option counterparties to terminate a portion of the existing warrant transactions. In connection with the termination
of any of the existing call spread transactions, the Company expects the existing option counterparties or their respective affiliates
to unwind their related hedge positions, which may involve the sale of shares of the Company’s common stock in the open market or
other transactions with respect to the Company’s common stock. This hedge unwind activity could offset or exacerbate the effects
of the purchase, sale or other activity that holders of the 2025 Notes that participate in the repurchase transactions may effect in connection
with those transactions.
In connection with the pricing of the notes, the Company entered into
privately negotiated convertible note hedge transactions with one or more of the initial purchasers or their respective affiliates or
other financial institutions (the “hedge counterparties”). The convertible note hedge transactions cover, subject to customary
anti-dilution adjustments, the number of shares of the Company’s common stock that will initially underlie the notes. The Company
also entered into one or more separate, privately negotiated warrant transactions with the hedge counterparties collectively relating
to the same number of shares of the Company’s common stock, subject to customary anti-dilution adjustments, and for which the Company
will receive premiums to partially offset the cost of entering into the hedge transactions. If the initial purchasers exercise their option
to purchase additional notes, the Company may enter into one or more additional convertible note hedge transactions and one or more additional
warrant transactions with the hedge counterparties, which, if executed, will initially cover, collectively, the number of shares of the
Company’s common stock that will initially underlie the additional notes the Company sells to the initial purchasers.
The convertible note hedge transactions are expected generally to reduce
the potential dilution to the Company’s common stock upon any conversion of the notes and/or offset any potential cash payments
the Company is required to make in excess of the principal amount of converted notes, as the case may be. However, the warrant transactions
could separately have a dilutive effect with respect to the Company’s common stock to the extent that the market value per share
of the Company’s common stock exceeds the strike price of the warrants evidenced by the warrant transactions. The strike price of
the warrants will initially be $135.28 per share, which represents a premium of 100% over the per share closing price of the Company’s
common stock on January 18, 2024, and is subject to certain adjustments under the terms of the warrant transactions.
In connection with establishing their initial hedges with respect
to the convertible note hedge transactions and the warrant transactions, the hedge counterparties or their respective affiliates expect
to enter into various cash-settled, over-the-counter derivative transactions with respect to the Company’s common stock concurrently
with, or shortly after, or purchase shares of the Company’s common stock shortly after, the pricing of the notes, and may unwind
these cash-settled over-the-counter derivative transactions and purchase shares of the Company’s common stock in open market transactions
shortly after the pricing of the notes. These activities could increase, or prevent a decline in, the market price of the Company’s
common stock concurrently with, or shortly after, the pricing of the notes.
In addition, the hedge counterparties or their respective affiliates
may modify their hedge positions with respect to the convertible note hedge transactions and the warrant transactions from time to time
after the pricing of the notes, and are likely to do so during any observation period, by purchasing or selling shares of the Company’s
common stock or the notes in privately negotiated transactions or open market transactions or by entering into or unwinding various over-the-counter
derivative transactions with respect to the Company’s common stock. Any of these activities could, however, adversely affect the
trading price of the Company’s common stock and, consequently, the value of the consideration that noteholders receive upon conversion
of the notes, the trading price of the notes or noteholders’ ability to convert the notes.
The offer and sale of the notes and the shares of common stock, if
any, issuable upon conversion of the notes have not been registered under the Securities Act or any state securities laws, and the notes
and such shares may not be offered or sold absent registration or an applicable exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable state laws.
This press release does not constitute an offer to sell or a solicitation
of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which
such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Any offers of the notes will be made only by means of a private offering memorandum. The notes being offered have not been approved or
disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the applicable private offering
memorandum.
About Winnebago Industries
Winnebago Industries, Inc. is a leading North American manufacturer
of outdoor lifestyle products under the Winnebago, Grand Design, Chris-Craft, Newmar and Barletta brands, which are used primarily in
leisure travel and outdoor recreation activities. The Company builds high-quality motorhomes, travel trailers, fifth-wheel products, outboard
and sterndrive powerboats, pontoons, and commercial community outreach vehicles. Committed to advancing sustainable innovation and leveraging
vertical integration in key component areas, Winnebago Industries has multiple facilities in Iowa, Indiana, Minnesota and Florida.
The Company’s common stock is listed on the New York Stock Exchange and traded under the symbol WGO. For access to Winnebago Industries'
investor relations material or to add your name to an automatic email list for Company news releases, visit http://investor.wgo.net.
Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are
inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not
limited to risks related to the offering of the notes, general economic uncertainty in key markets and a worsening of domestic and
global economic conditions or low levels of economic growth; availability of financing for RV and marine dealers; competition and
new product introductions by competitors; ability to innovate and commercialize new products; ability to manage the Company’s
inventory to meet demand; risk related to cyclicality and seasonality of the Company’s business; risk related to independent
dealers; risk related to dealer consolidation or the loss of a significant dealer; significant increase in repurchase obligations;
ability to retain relationships with the Company’s suppliers and obtain components; business or production disruptions;
inadequate management of dealer inventory levels; increased material and component costs, including availability and price of fuel
and other raw materials; ability to integrate mergers and acquisitions; ability to attract and retain qualified personnel and
changes in market compensation rates; exposure to warranty claims; ability to protect the Company’s information technology
systems from data security, cyberattacks, and network disruption risks and the ability to successfully upgrade and evolve the
Company’s information technology systems; ability to retain brand reputation and related exposure to product liability claims;
governmental regulation, including for climate change; increased attention to environmental, social, and governance
("ESG") matters, and the Company’s ability to meet its commitments; impairment of goodwill and trade names; and
risks related to the Company’s Convertible and Senior Secured Notes including its ability to satisfy its obligations under
these notes. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially
from that projected or suggested is contained in the Company's filings with the Securities and Exchange Commission ("SEC")
over the last 12 months, copies of which are available from the SEC or from the Company upon request. The Company disclaims any
obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this release or to
reflect any changes in the Company's expectations after the date of this release or any change in events, conditions or
circumstances on which any statement is based, except as required by law.
Contacts
Investors: Ray Posadas
ir@winnebagoind.com
Media: Dan Sullivan
media@winnebagoind.com
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