Table of Contents

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): June 4, 2008

NetApp, Inc.
(Exact name of Registrant as specified in its charter)
 	 	 	 	 	
Delaware	 	0-27130	 	77-0307520	
(State or other jurisdiction of
incorporation or organization)	 	(Commission
File Number)	 	(I.R.S. Employer
Identification Number)	
495 East Java Drive
Sunnyvale, CA 94089
(Address of principal executive offices) (Zip Code)
(408) 822-6000
(Registrant’s telephone number, including area code)
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

TABLE OF CONTENTS
 	 	 	 	 	 	 	 	 	
Item 1.01. Entry into a Material Definitive Agreement	
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant	
Item 3.02. Unregistered Sales of Equity Securities	
Item 8.01. Other Events	
Item 9.01. Financial Statements and Exhibits	
SIGNATURES	
EXHIBIT INDEX	
EXHIBIT 4.1	
EXHIBIT 4.2	
EXHIBIT 10.1	
EXHIBIT 10.2	
EXHIBIT 10.3	
EXHIBIT 99.1	

Table of Contents
 	 	 	
Item 1.01.	 	Entry into a Material Definitive Agreement.	
On June 10, 2008, NetApp, Inc. (the “Company”) issued $1.265 billion aggregate principal amount of 1.75% Convertible Senior Notes due 2013 (the “ Notes ”) to Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated, BNP Paribas Securities Corp., J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC (collectively, the “ Initial Purchasers ”) at a price of $1,000 per Note, less an Initial Purchaser discount of $20 per Note.
Indenture
The Notes are governed by an Indenture, dated as of June 10, 2008 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee, and will bear interest at a rate of 1.75% per year payable in cash semi-annually in arrears on June 1 and December 1 of each year, beginning December 1, 2008. The Notes will mature on June 1, 2013, unless earlier repurchased or converted. The Notes are convertible into cash and shares of the Company’s common stock (“ Common Stock ”), if any, at an initial conversion rate of 31.4006 shares of Common Stock per $1,000 principal amount of Notes, subject to adjustment. Prior to March 1, 2013, such conversion is subject to the satisfaction of certain conditions set forth below. Holders of the Notes who convert their Notes in connection with a fundamental change (as defined in the Indenture) will, under certain circumstances, be entitled to a make-whole premium in the form of an increase in the conversion rate. Additionally, in the event of a fundamental change, holders of the Notes may require the Company to repurchase all or a portion of their Notes at a repurchase price equal to 100% of the principal amount of Notes, plus accrued and unpaid interest, if any, to, but not including, the fundamental change repurchase date (as defined in the Indenture).
Holders of the Notes may convert their Notes on or after March 1, 2013 until the close of business on the scheduled trading day immediately preceding the maturity date. The conversion rate will be subject to adjustment in some events but will not be adjusted for accrued interest. Upon conversion, the Company will satisfy its conversion obligation by delivering cash and shares of Common Stock, if any, based on a daily settlement amount (as defined in the Indenture). Prior to March 1, 2013, holders of the Notes may convert their Notes, under any of the following conditions:
 	•	 	during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the Notes for each day of that five consecutive trading day period was less than 98% of the product of the last reported sale price of Common Stock and the conversion rate on such day;	
 	 	 	 	
 	•	 	during any calendar quarter beginning after June 30, 2008 (and only during such calendar quarter), if the last reported sale price of Common Stock for 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding the calendar quarter exceeds 130% of the applicable conversion price in effect for the Notes on the last trading day of such immediately preceding calendar quarter; or	
 	 	 	 	
 	•	 	upon the occurrence of specified corporate transactions.	
A copy of the Indenture is attached hereto as Exhibit 4.1 and is incorporated herein by reference. The descriptions of the Notes contained in this Form 8-K are qualified in their entirety by reference to the Indenture.
Registration Rights Agreement
The Company also entered into a Registration Rights Agreement, dated as of June 10, 2008 (the “Registration Agreement ”), with Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated, as representatives of the Initial Purchasers (the “ Representatives ”). Under the Registration Agreement, the Company has agreed to use its reasonable efforts to cause a shelf registration statement relating to the resale of the Notes and the shares of Common Stock issuable upon conversion of the Notes to be declared effective no later than the 181 st  calendar day after the later of the original date of issuance of the Notes or the date of issuance of additional Notes following the exercise of the Initial Purchasers’ option to purchase additional Notes. The Company will be required to pay additional interest if the registration statement has not become effective by such date. The Company’s obligation to have declared effective or maintain an effective registration statement will be suspended to the extent that the Notes and the shares of Common Stock issuable upon conversion of the Notes are eligible to be sold by a person who is not an affiliate of the Company pursuant to Rule

-2-

Table of Contents
144 without any volume or manner of sale restrictions. Additional interest will be the sole remedy for damages under the Registration Agreement. A copy of the Registration Agreement is attached hereto as Exhibit 4.2 and is incorporated herein by reference.

Convertible Note Hedge Transactions:
On June 4, 2008, in connection with the offering of the Notes, the Company entered into convertible note hedge transactions with respect to its Common Stock (the “ Purchased Options ”) with each of Goldman, Sachs & Co., JPMorgan Chase Bank, National Association, BNP Paribas and Lehman Brothers OTC Derivatives Inc. (collectively, the “ Counterparties ”). The Company paid an aggregate amount of $254.9 million to the Counterparties for the Purchased Options. The Purchased Options cover, subject to anti-dilution adjustments substantially identical to those in the Notes, approximately 39.7 million shares of Common Stock at a strike price that corresponds to the initial conversion price of the Notes, also subject to adjustment, and are exercisable upon conversion of the Notes. The Purchased Options will expire upon the maturity of the Notes. A form of the confirmations relating to the Purchased Options is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
The Purchased Options are intended to reduce the potential dilution upon conversion of the Notes in the event that the market value per share of the Common Stock, as measured under the Notes, at the time of exercise is greater than the conversion price of the Notes.
The Purchased Options are separate transactions, entered into by the Company with the Counterparties, and are not part of the terms of the Notes. Holders of the Notes will not have any rights with respect to the Purchased Options.
Warrant Transactions
Separately, on June 4, 2008, the Company also entered into warrant transactions (the “Warrants”), amended on June 6, 2008 in connection with the Initial Purchasers’ exercise of their option to purchase additional Notes, whereby the Company sold to the Counterparties warrants to acquire, subject to anti-dilution adjustments, up to 39.7 million shares of Common Stock at a strike price of $41.28 per share of Common Stock, also subject to adjustment, which is approximately 75% higher than the closing sale price of shares of Common Stock of $23.59 on June 4, 2008. The Company received aggregate proceeds of $163.06 million from the sale of the Warrants to the Counterparties. The Warrants will expire after the Purchased Options in approximately ratable portions on a series of expiration dates commencing on September 3, 2013. The Warrants were sold in private placements to the Counterparties pursuant to the exemptions from the registration requirements of the Securities Act of 1933, as amended (the “ Securities Act ”), afforded by Section 4(2) of the Securities Act. A form of the confirmations relating to the Warrant transactions is attached hereto as Exhibit 10.2 and is incorporated herein by reference. A form of the amendment to the Warrants is attached hereto as Exhibit 10.3 and is incorporated herein by reference.
If the market value per share of the Common Stock, as measured under the Warrants, exceeds the strike price of the Warrants, the Warrants will have a dilutive effect on the Company’s earnings per share. The Warrants will be accounted for as an adjustment to the Company’s stockholders’ equity.
The Warrants are separate transactions, entered into by the Company with the Counterparties, and are not part of the terms of the Notes. Holders of the Notes will not have any rights with respect to the Warrants.
 	 	 	
Item 2.03.	 	Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.	
The foregoing terms and conditions of the Notes, Indenture and Registration Agreement described in Items 1.01 and 3.02 of this Current Report on Form 8-K are incorporated herein by reference.
 	 	 	
Item 3.02.	 	Unregistered Sales of Equity Securities.	
-3-

Table of Contents
As described in Item 1.01 of this Current Report on Form 8-K, which is incorporated herein by reference, the Company issued $1,265,000,000 aggregate principal amount of Notes to the Initial Purchasers on June 10, 2008 in a private placement pursuant to exemptions from the registration requirements of the Securities Act.
The Company offered and sold the Notes to the Initial Purchasers in reliance on the exemption from registration provided by Section 4(2) of the Securities Act. The Initial Purchasers are initially offering the Notes to “qualified institutional buyers” pursuant to the exemption from registration provided by Rule 144A under the Securities Act. The Company relied on these exemptions from registration based in part on representations made by the Initial Purchasers.
The Notes and Common Stock issuable upon conversion of the Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
The Notes are convertible into cash and shares of Common Stock, if any, as described above.
On June 4, 2008, as amended on June 6, 2008 in connection with the Initial Purchasers’ exercise of their option to purchase additional Notes, the Company agreed to sell Warrants to acquire, subject to customary anti-dilution adjustments, 39.7 million shares of Common Stock at a strike price of $41.28 per share of Common Stock, also subject to adjustment, in reliance on the exemption from registration provided by Section 4(2) of the Act. The Company received aggregate proceeds of $163.06 million from the sale of the Warrants.
Neither the Warrants nor the underlying Common Stock issuable upon conversion of the Warrants have been registered under the Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Additional information pertaining to the Warrants is contained in Item 1.01 and is incorporated herein by reference.
 	 	 	
Item 8.01.	 	Other Events.	
On June 5, 2008, the Company issued a press release with respect to the pricing of its offer and sale of the Notes. A copy of this press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
 	 	 	
Exhibit	 	 	
No.	 	Description	
 	 	 	
4.1	 	Indenture, dated as of June 10, 2008, by and between U.S. Bank National Association, as Trustee, and the Company.	
 	 	 	
4.2	 	Registration Rights Agreement, dated as of June 10, 2008, by and among Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated and the Company.	
 	 	 	
10.1	 	Form of Convertible Bond Hedge Confirmation.	
 	 	 	
10.2	 	Form of Warrant Confirmation.	
 	 	 	
10.3	 	Form of Amendment to Warrant Confirmation.	
 	 	 	
99.1	 	Press Release dated June 5, 2008 by the Company announcing the pricing of its 1.75% Convertible Senior Notes due 2013.	
-4-

Table of Contents
SIGNATURES
     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.
 	 	 	 	 	 	 	
June 10, 2008	 	By:	 	/s/ Steven J. Gomo	 	 	
 	 	 	 	  Steven J. Gomo	 	 	
 	 	 	 	Chief Financial Officer	 	 	
-5-

Table of Contents
EXHIBIT INDEX
 	 	 	
Exhibit	 	 	
No.	 	Description	
 	 	 	
4.1	 	Indenture, dated as of June 10, 2008, by and between U.S. Bank National Association, as Trustee, and the Company.	
 	 	 	
4.2	 	Registration Rights Agreement, dated as of June 10, 2008, by and among Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated and the Company.	
 	 	 	
10.1	 	Form of Convertible Bond Hedge Confirmation.	
 	 	 	
10.2	 	Form of Warrant Confirmation.	
 	 	 	
10.3	 	Form of Amendment to Warrant Confirmation.	
 	 	 	
99.1	 	Press Release dated June 5, 2008 by the Company announcing the pricing of its 1.75% Convertible Senior Notes due 2013.	
-6-

Exhibit 4.1
NETAPP, INC.
AND
U.S. BANK NATIONAL ASSOCIATION
Trustee
 
Indenture
Dated as of June 10, 2008
 
1.75% Convertible Senior Notes due 2013

 
TABLE OF CONTENTS

 	 	PAGE	
ARTICLE 1	 	 	 	 	
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	 	 	 	 	
 	 	 	 	 	
Section 1.01. Definitions	 	 	1	 	
Section 1.02. Compliance Certificates and Opinions	 	 	12	 	
Section 1.03. Form of Documents Delivered to Trustee	 	 	13	 	
Section 1.04. Acts of Holders; Record Dates	 	 	14	 	
Section 1.05. Notices, Etc., to Trustee and Company	 	 	15	 	
Section 1.06. Notice to Holders; Waiver	 	 	15	 	
Section 1.07. Conflict With Trust Indenture Act	 	 	16	 	
Section 1.08. Effect of Headings and Table of Contents	 	 	16	 	
Section 1.09. Successors and Assigns	 	 	16	 	
Section 1.10. Separability Clause	 	 	16	 	
Section 1.11. Benefits of Indenture	 	 	16	 	
Section 1.12. Governing Law	 	 	16	 	
Section 1.13. Legal Holidays	 	 	16	 	
Section 1.14. Indenture and Securities Solely Corporate Obligations	 	 	17	 	
Section 1.15. Indenture May Be Executed in Counterparts	 	 	17	 	
Section 1.16. Acceptance of Trust	 	 	17	 	
Section 1.17. Calculations in Respect of Notes	 	 	17	 	
 	 	 	 	 	
ARTICLE 2	 	 	 	 	
SECURITY FORMS	 	 	 	 	
 	 	 	 	 	
Section 2.01. Forms Generally	 	 	18	 	
Section 2.02. Form of Face of Security	 	 	18	 	
Section 2.03. Form of Reverse of Security	 	 	20	 	
Section 2.04. Form of Legend for Global Securities	 	 	24	 	
Section 2.05. Form of Notice of Conversion	 	 	25	 	
Section 2.06. Form of Assignment	 	 	26	 	
Section 2.07. Form of Trustee’s Certificate of Authentication	 	 	28	 	
Section 2.08. Form of Fundamental Change Repurchase Notice	 	 	28	 	
Section 2.09. Legend on Restricted Securities	 	 	28	 	
 	 	 	 	 	
ARTICLE 3	 	 	 	 	
THE SECURITIES	 	 	 	 	
 	 	 	 	 	
Section 3.01. Title and Terms; Principal and Interest	 	 	29	 	
Section 3.02. Denominations	 	 	30	 	
Section 3.03. Global Securities; Non-Global Securities; Book-entry Provisions	 	 	30	 	
i

 
 	 	 	 	 	
 	 	PAGE	
Section 3.04. Execution, Authentication, Delivery and Dating	 	 	32	 	
Section 3.05. Temporary Securities	 	 	33	 	
Section 3.06. Registrar, Registration of Transfer and Exchange; Paying Agent	 	 	33	 	
Section 3.07. Mutilated, Destroyed, Lost and Stolen Securities	 	 	36	 	
Section 3.08. Payment of Interest; Interest Rights Preserved	 	 	37	 	
Section 3.09. Persons Deemed Owners	 	 	38	 	
Section 3.10. Cancellation and Transfer Provisions	 	 	39	 	
Section 3.11. CUSIP Numbers	 	 	41	 	
Section 3.12. Computation of Interest	 	 	41	 	
Section 3.13. Special Record Date	 	 	41	 	
 	 	 	 	 	
ARTICLE 4	 	 	 	 	
COVENANTS	 	 	 	 	
 	 	 	 	 	
Section 4.01. Payment of Principal and Interest	 	 	42	 	
Section 4.02. Maintenance of Office or Agency	 	 	42	 	
Section 4.03. Money for Security Payments to Be Held in Trust	 	 	43	 	
Section 4.04. Statement by Officers as to Default	 	 	44	 	
Section 4.05. Existence	 	 	44	 	
Section 4.06. Maintenance of Properties	 	 	44	 	
Section 4.07. Payment of Taxes and Other Claims	 	 	44	 	
Section 4.08. Additional Interest Under the Registration Rights Agreement	 	 	45	 	
Section 4.09. Waiver of Certain Covenants	 	 	45	 	
 	 	 	 	 	
ARTICLE 5	 	 	 	 	
REPURCHASE AT OPTION OF THE HOLDER	 	 	 	 	
 	 	 	 	 	
Section 5.01. Repurchase at the Option of the Holder Upon a Fundamental Change	 	 	46	 	
 	 	 	 	 	
ARTICLE 6	 	 	 	 	
CONVERSION OF SECURITIES	 	 	 	 	
 	 	 	 	 	
Section 6.01. Conversion of Securities	 	 	50	 	
Section 6.02. Adjustments to Conversion Rate	 	 	54	 	
Section 6.03. Adjustment Upon Fundamental Changes	 	 	61	 	
Section 6.04. Notice of Adjustments of Conversion Rate	 	 	62	 	
Section 6.05. Company to Reserve Common Stock	 	 	63	 	
Section 6.06. Taxes on Conversions	 	 	63	 	
Section 6.07. Certain Covenants	 	 	63	 	
Section 6.08. Cancellation of Converted Securities	 	 	64	 	
Section 6.09. Provision in Case of Effect of Reclassification, Consolidation, Merger or Sale	 	 	64	 	
Section 6.10. Responsibility of Trustee for Conversion Provisions	 	 	66	 	
Section 6.11. Stockholder Rights Plan	 	 	67	 	
Section 6.12. Right to Set-off Withholding Taxes	 	 	67	 	
ii

 
 	 	 	 	 	
ARTICLE 7	 	 	 	 	
REMEDIES	 	 	 	 	
 	 	PAGE	
Section 7.01. Events of Default	 	 	67	 	
Section 7.02. Acceleration of Maturity; Rescission and Annulment	 	 	69	 	
Section 7.03. Collection of Indebtedness and Suits for Enforcement by Trustee	 	 	70	 	
Section 7.04. Trustee May File Proofs of Claim	 	 	71	 	
Section 7.05. Trustee May Enforce Claims Without Possession of Securities	 	 	72	 	
Section 7.06. Application of Money Collected	 	 	72	 	
Section 7.07. Limitation on Suits	 	 	72	 	
Section 7.08. Unconditional Right of Holders to Receive Principal and Interest and to Convert	 	 	73	 	
Section 7.09. Restoration of Rights and Remedies	 	 	73	 	
Section 7.10. Rights and Remedies Cumulative	 	 	73	 	
Section 7.11. Delay or Omission Not Waiver	 	 	74	 	
Section 7.12. Control by Holders	 	 	74	 	
Section 7.13. Waiver of Past Defaults	 	 	74	 	
Section 7.14. Undertaking for Costs	 	 	75	 	
Section 7.15. Waiver of Stay or Extension Laws	 	 	75	 	
 	 	 	 	 	
ARTICLE 8	 	 	 	 	
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE	 	 	 	 	
 	 	 	 	 	
Section 8.01. Company May Consolidate, Etc., Only on Certain Terms	 	 	75	 	
Section 8.02. Successor Substituted	 	 	76	 	
 	 	 	 	 	
ARTICLE 9	 	 	 	 	
THE TRUSTEE	 	 	 	 	
 	 	 	 	 	
Section 9.01. Certain Duties and Responsibilities	 	 	76	 	
Section 9.02. Notice of Defaults	 	 	77	 	
Section 9.03. Certain Rights of Trustee	 	 	77	 	
Section 9.04. Not Responsible for Recitals or Issuance of Securities	 	 	78	 	
Section 9.05. May Hold Securities	 	 	78	 	
Section 9.06. Money Held in Trust	 	 	78	 	
Section 9.07. Compensation and Reimbursement	 	 	79	 	
Section 9.08. Disqualification; Conflicting Interests	 	 	79	 	
Section 9.09. Corporate Trustee Required; Eligibility	 	 	79	 	
Section 9.10. Resignation and Removal; Appointment of Successor	 	 	79	 	
Section 9.11. Acceptance of Appointment by Successor	 	 	81	 	
Section 9.12. Merger, Conversion, Consolidation or Succession to Business	 	 	81	 	
Section 9.13. Preferential Collection of Claims Against Company	 	 	82	 	
Section 9.14. Appointment of Authenticating Agent	 	 	82	 	
iii

 
 	 	 	 	 	
ARTICLE 10	 	 	 	 	
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY	 	 	 	 	
 	 	PAGE	
Section 10.01. Company to Furnish Trustee Names and Addresses of Holders	 	 	83	 	
Section 10.02. Preservation of Information; Communications to Holders	 	 	84	 	
Section 10.03. Reports by Trustee	 	 	84	 	
Section 10.04. Reports by Company	 	 	84	 	
 	 	 	 	 	
ARTICLE 11	 	 	 	 	
SATISFACTION AND DISCHARGE	 	 	 	 	
 	 	 	 	 	
Section 11.01. Satisfaction and Discharge of Indenture	 	 	85	 	
Section 11.02. Application of Trust Money	 	 	86	 	
 	 	 	 	 	
ARTICLE 12	 	 	 	 	
MODIFICATION AND AMENDMENT	 	 	 	 	
 	 	 	 	 	
Section 12.01. Supplemental Indentures Without Consent of Holders	 	 	87	 	
Section 12.02. Supplemental Indentures with Consent of Holders	 	 	88	 	
Section 12.03. Execution of Supplemental Indentures	 	 	89	 	
Section 12.04. Effect of Supplemental Indentures; Notices	 	 	89	 	
Section 12.05. Conformity with Trust Indenture Act	 	 	89	 	
Section 12.06. Reference in Securities to Supplemental Indentures	 	 	89	 	
 	 	 	 	 	
Signatures	 	 	 	 	
Schedule A	 	 	 	 	
iv

 
     INDENTURE, dated as of June 10, 2008, between NetApp, Inc., a Delaware corporation (the “Company”), having its principal office at 495 East Java Drive, Sunnyvale California 94089 and U.S. Bank National Association, a national banking association, as Trustee (herein called the “ Trustee ”).
Recitals of the Company
     The Company has duly authorized the creation of an issue of its 1.75% Convertible Senior Notes due 2013 (herein called the “ Initial Securities ” and together with any Additional Securities, the “ Securities ”) of substantially the tenor and amount hereinafter set forth, and to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution and delivery of this Indenture.
     All things necessary to make the Securities, when executed by the Company and authenticated and delivered as provided herein and duly issued by the Company, the valid obligations of the Company, and to make this Indenture a valid agreement of the Company, in accordance with their and its terms, have been done.
     NOW, THEREFORE, THIS INDENTURE WITNESSETH:
     For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
     Section 1.01 . Definitions.
     For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:
     (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;
     (2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;
     (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles,

 
and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” in the United States with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of this Indenture; and
     (4) the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.
     “Act”, when used with respect to any Holder, has the meaning specified in Section 1.04.
     “Additional Interest” means Additional Interest as defined in the Registration Rights Agreement.
     “Additional Securities” means an unlimited maximum aggregate principal amount of Securities (other than the Initial Securities) issued under this Indenture.
     “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
     “Agent Member” means any member of, or participant in, the Depositary.
     “Applicable Procedures” with respect to any transfer or transaction involving a Global Security or beneficial interest therein, the rules and procedures of DTC or any successor Depositary, in each case to the extent applicable to such transaction and as in effect from time to time.
     “Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 9.14 to act on behalf of the Trustee to authenticate Securities.
     “Bid Solicitation Agent” means the agency appointed by the Company to solicit bids for the Trading Price of the Securities in accordance with Section 6.01(a)(i). The Bid Solicitation Agent appointed by the Company shall initially be the Trustee.
     “Board of Directors” means either the board of directors of the Company or any duly authorized committee of that board.
     “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by
2

 
the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.
     “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in the City of New York or the city or cities where the Corporate Trust Office are located are authorized or obligated by law, regulation or executive order to close.
     “Capital Stock” means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity.
     “Commission” or “SEC” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
     “Common Stock” means the shares of common stock, par value $0.001 per share, of the Company as they exist on the date of this Indenture or any other shares of Capital Stock of the Company into which the Common Stock shall be reclassified or changed or, in the event of a merger, consolidation or other similar transaction involving the Company that is otherwise permitted hereunder in which the Company is not the surviving corporation, the common stock, common equity interests, ordinary shares or depositary shares or other certificates representing common equity interests of such surviving corporation or its direct or indirect parent corporation.
     “Company” means the Person named as the “Company” in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “ Company ” shall mean such successor Person.
     “Company Request” or “Company Order” means a written request or order signed in the name of the Company by the principal executive, financial or accounting officer of the Company.
     “Conversion Agent” means the person authorized by the Company to convert Securities in accordance with Article 6.
     “Conversion Date” has the meaning specified in Section 6.01(b).
     “Conversion Price” means at any time the amount equal to $1,000 divided by the then applicable Conversion Rate.
     “Conversion Rate” has the meaning specified in Section 6.01.
3

 
     “Corporate Trust Office” means the principal office of the Trustee at which at any particular time the trust created by this Indenture shall be administered or the corporate trust office of the Trustee located at 633 West Fifth Street, 24 th Floor, Los Angeles, CA 90071, Attention: Corporate Trust Services (NetApp 1.75% Convertible Senior Notes due 2013), as applicable.
     “corporation” means a corporation, association, company, joint-stock company or business trust.
     “Daily Conversion Value” means, for each of the 20 consecutive VWAP Trading Days during the Observation Period, one-twentieth (1/20 th ) of the product of (1) the applicable Conversion Rate and (2) the Daily VWAP of the Common Stock (or, if applicable, the Reference Property into which the Common Stock has been converted) on such VWAP Trading Day. Any such determination shall be made by the Company and shall be conclusive absent manifest error.
     “Daily Settlement Amount,” for each of the 20 VWAP Trading Days during the Observation Period, shall consist of:
     (i) cash equal to the lesser of (x) $50 and (y) the Daily Conversion Value for such VWAP Trading Day; and
     (ii) to the extent the Daily Conversion Value exceeds $50, a number of shares equal to (A) the difference between the Daily Conversion Value and $50, divided by (B) the Daily VWAP of the Common Stock for such VWAP Trading Day.
     “Daily VWAP” means, for each of the 20 consecutive VWAP Trading Days during the Observation Period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “NTAP.UQ <Equity> AQR”, or any equivalent successor page, in respect of the period from the scheduled open of trading on the principal trading market for the Common Stock to the scheduled close of trading on such market on such VWAP Trading Day (without regard to after-hours trading), or if such volume-weighted average price is unavailable, the market value of one share of Common Stock (or one unit of Reference Property consisting of marketable equity securities) on such VWAP Trading Day using a volume-weighted method (or, in the case of Reference Property consisting of cash, the amount of such cash or in the case of Reference Property other than marketable equity securities or cash, the market value thereof), in each case as determined by a nationally recognized independent investment banking firm retained for this purpose by the Company.
     “Defaulted Interest” has the meaning specified in Section 3.13.
     “DTC” means The Depository Trust Company, a New York corporation, or any successor.
4

 
     “Effective Date” means the date on which a Fundamental Change occurs or becomes effective.
     “Event of Default” has the meaning specified in Section 7.01.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended.
     “Ex-Date” means, with respect to any issuance or distribution on the Common Stock, the first date on which the shares of the Common Stock trade on the relevant exchange or in the relevant market, regular way, without the right to receive such issuance or distribution.
     “Fundamental Change” will be deemed to have occurred if any of the following occurs after the Securities are originally issued:
     (1) any Person other than the Company files a Schedule TO or any other schedule, form or report under the Exchange Act disclosing, or the Company otherwise becomes aware, that such person has acquired beneficial ownership directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of shares of the Company’s Capital Stock entitling the Person to exercise 50% or more of the total voting power of all shares of the Company’s Capital Stock entitled to vote generally in elections of directors (for purposes of this clause (1), whether a Person is a “beneficial owner” shall be determined in accordance with Rule 13d-3 under the Exchange Act, and “Person” shall include any syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act); or
     (2) the Company merges or consolidates with or into any other Person (other than a Subsidiary), another Person merges with or into the Company, or the Company conveys, sells, transfers or leases all or substantially all of the Company’s assets to another Person other than any merger or consolidation:
     (a) that does not result in a reclassification, conversion, exchange or cancellation of the Company’s outstanding Common Stock and pursuant to which the consideration received by the holders of the Company’s Common Stock immediately prior to the transaction entitles such holders to exercise, directly or indirectly, 50% or more of the voting power of all shares of Capital Stock entitled to vote generally in the election of directors of the continuing or surviving corporation immediately following such transaction in substantially the same proportion as their respective ownership of voting securities immediately prior to the transaction; or
     (b) which is effected solely to change the Company’s jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding shares of the Company’s Common Stock solely into shares of common stock of the surviving entity; or
5

 
     (3) the Company is liquidated or dissolved or holders of the Common Stock approve any plan or proposal for the Company’s liquidation or dissolution; or
     (4) the Common Stock, or shares of any other Capital Stock or American Depositary Receipts in respect of shares of Capital Stock into which the Securities are convertible pursuant to the terms of this Indenture, ceases to be listed for trading 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, that, notwithstanding the foregoing, the definition of Fundamental Change shall not include a merger or consolidation under clause (1) or any event specified under clause (2), in each case, if at least 90% of the consideration received for the Company’s Capital Stock (excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights and cash dividends) in connection with such event consists of shares of capital stock traded or quoted on any of the New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or any of their respective successors) (or will be so traded or quoted immediately following the completion of the merger or consolidation or such other transaction) and, as a result of such transaction or transactions the Securities become convertible into such shares of such capital stock pursuant to Section 6.09.
     “Fundamental Change Expiration Time” has the meaning specified in Section 5.01.
     “Fundamental Change Repurchase Date” has the meaning specified in Section 5.01.
     “Fundamental Change Repurchase Notice” has the meaning specified in Section 5.01.
     “Fundamental Change Repurchase Price” has the meaning specified in Section 5.01.
     “Global Security” means a Security that is registered in the Security Register in the name of a Depositary or a nominee thereof.
     “Holder” means a Person in whose name a Security is registered in the Security Register.
     “Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively.
6

 
     “Initial Purchasers” means Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated, as representatives of the several initial purchasers.
     “Initial Securities” has the meaning specified in the Recitals.
     “Interest Payment Date” means each June 1 and December 1 of each year, beginning December 1, 2008.
     “Issue Date” with respect to the Initial Securities means June 10, 2008, and with respect to any Additional Securities, the date of original issuance of such Additional Securities.
     “Last Reported Sale Price” of the Common Stock on any date means the closing sale price per share (or, if no closing sale price is reported, the average of the last bid and ask prices or, if more than one in either case, the average of the average last bid and average last ask prices) on that date as reported in the composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock is traded. If the Common Stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the Last Reported Sale Price shall be the average of the last quoted bid and ask prices for the Common Stock in the over-the-counter market on the relevant date as reported by Pink Sheets LLC or a similar organization. If the Common Stock is not so quoted, the Last Reported Sale Price shall be the average of the midpoint of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms, which may include any or all of the Initial Purchasers selected by the Company for this purpose. Any such determination shall be made by the Company and shall be conclusive absent manifest error.
     “Make-Whole Reference Date” shall have the meaning in Section 6.01.
     “Market Disruption Event” means the occurrence or existence on any Scheduled Trading Day for the Common Stock of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock 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 within the 30 minutes prior to the closing time of the relevant exchange on such day.
     “Measurement Period” has the meaning specified in Section 6.01(a).
     “Maturity”, when used with respect to any Security, means the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, required repurchase or otherwise.
     “Maturity Date” means June 1, 2013.
7

 
     “Notice of Conversion” has the meaning specified in Section 6.01.
     “Observation Period” with respect to any Security means (i) with respect to any Conversion Date occurring on or after the 25 th  Scheduled Trading Day prior to the Maturity Date, the 20 consecutive VWAP Trading Day period beginning on, and including, the 22 nd  Scheduled Trading Day prior to the Maturity Date (or if such day is not a VWAP Trading Day, the next succeeding VWAP Trading Day) and (ii) in all other instances, the 20 consecutive VWAP Trading Day period beginning on and including the third VWAP Trading Day following the Conversion Date.
     “Officer” means the Chairman of the Board, a Vice Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Secretary or any Assistant Secretary.
     “Officers’ Certificate” means a certificate signed by the principal executive officer, principal accounting officer or principal financial officer of the Company and delivered to the Trustee.
     “Opinion of Counsel” means a written opinion of counsel, who may be counsel for, or an employee of, the Company.
     “Outstanding”, when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture,  except :
     (i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
     (ii) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; and
     (iii) Securities which have been paid pursuant to Section 3.06 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by
8

 
the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.
     “Paying Agent” means any Person authorized by the Company to pay the principal of or interest on any Securities on behalf of the Company, and shall initially be the Trustee.
     “Person” means any individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.
     “Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.07 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.
     “Reference Property” has the meaning specified in Section 6.09(b).
     “Registration Rights Agreement” means the Registration Rights Agreement, dated as of June 10, 2008, between the Company and the Initial Purchasers, for the benefit of themselves and the Holders, as the same may be amended or modified from time to time in accordance with the terms thereof.
     “Regular Record Date” for the interest payable on any Interest Payment Date means the May 15 or November 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.
     “Reporting Default” has the meaning specified in Section 7.02.
     “Reporting Interest” has the meaning specified in Section 7.02.
     “Resale Registration Statement” means a registration statement under the Securities Act registering the Securities for resale pursuant to the terms of the Registration Rights Agreement.
     “Responsible Officer”, when used with respect to the Trustee, means the chairman or any vice-chairman of the board of directors, the chairman or any
9

 
vice-chairman of the executive committee of the board of directors, the chairman of the trust committee, the president, any vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.
     “Restricted Security” or “Restricted Securities” has the meaning specified in Section 2.09.
     “Rule 144” means Rule 144 under the Securities Act, as may be amended from time to time.
     “Scheduled Trading Day” means a day that is scheduled to be a trading day on the principal U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading or, if the Common Stock is not listed or admitted for trading on any exchange or market, a Business Day.
     “Security” and “Securities” have the meaning specified in the Recitals and include the Initial Securities and any Additional Securities. The Initial Securities and Additional Securities shall be treated as a single class for all purposes under this Indenture.
     “Security Register” and “Security Registrar” have the respective meanings specified in Section 3.06.
     “Securities Act” means the Securities Act of 1933, as amended.
     “Settlement Amount” has the meaning specified in Section 6.01(c).
     “Significant Subsidiaries” means any direct or indirect Subsidiary of the Company within the meaning of Section 1-02(w) of Regulation 
S-X as promulgated by the Commission.
     “Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.13.
     “Stated Maturity”, when used with respect to any Security, means the date specified in such Security as the fixed date on which the principal of such Security is due and payable.
     “Stock Price” means the price paid per share of Common Stock in connection with a Fundamental Change pursuant to which Additional Shares shall be added to the Conversion Rate as set forth in Article 6, which shall be equal to
10

 
(i) if holders of Common Stock receive only cash in such Fundamental Change, the cash amount paid per share of Common Stock and (ii) in all other cases, the average of the Last Reported Sale Prices of the Common Stock over the ten Trading Day period ending on the Trading Day preceding the date on which such Fundamental Change occurs or becomes effective.
     “Subsidiary” means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, “voting stock” means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.
     “Trading Day” means a day during which (i) trading in the Common Stock generally occurs on the principal U.S. national or regional securities exchange or market on which our common stock is listed or admitted for trading and (ii) there is no Market Disruption Event.
     “Trading Price” of the Securities on any date of determination means the average of the secondary market bid quotations obtained by the Bid Solicitation Agent for $2,000,000 principal amount of the Securities of such series at approximately 3:30 p.m., New York City time, on such determination date from three independent nationally recognized securities dealers selected by the Company (which may include any or all of the Initial Purchasers);  provided  that, if three such bids cannot reasonably be provided to the Trustee, but two such bids are obtained from a nationally recognized securities dealer on a date of determination, then the average of the two bids will be used, and if only one such bid is obtained, that one bid will be used. If at least one bid for $2,000,000 in principal amount of the Securities cannot reasonably be obtained, then the Trading Price per $1,000 in principal amount of the Securities will be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate for such date of determination. Any such determination shall be made by the Company and shall be conclusive absent manifest error.
     “Trustee” means the Person named as the “Trustee” in the first paragraph of this Indenture until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean such successor Trustee.
     “Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this Indenture was executed;  provided, however , that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.
11

 
     “Vice President,” when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president.”
     “VWAP Market Disruption Event” means (i) a failure by the principal U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted to trading to open for trading during its regular trading session or (ii) the occurrence or existence on any Scheduled Trading Day for the Common Stock for an aggregate one half-hour period of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in the Common Stock or in any options contracts or futures contracts related to the Common Stock and traded on a principal national or regional exchange or market located in the United States.
     “VWAP Trading Day” means a day during which (i) trading in the Common Stock generally occurs on the principal U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading, (ii) there is no VWAP Market Disruption Event. If the Common Stock is not listed or admitted for trading on a U.S. national or regional securities exchange or market, then, “ VWAP Trading Day ” shall mean a Business Day.
     This Indenture is subject to the mandatory provisions of the Trust Indenture Act, which are incorporated by reference in and made a part of this Indenture. The following Trust Indenture Act terms have the following meanings:
     “Indenture Securities” means the Securities.
     “Indenture Security Holder” means a Holder.
     “Indenture to be Qualified” means this Indenture.
     “Indenture Trustee” or “Institutional Trustee” means the Trustee.
     All other terms in this Indenture that are defined by the Trust Indenture Act, defined by it by reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Indenture by the Trust Indenture Act, such required provision shall control.
     Section 1.02 . Compliance Certificates and Opinions.
     Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers’ Certificate, if to be given by an officer of the Company, or an Opinion
12

 
of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirement set forth in this Indenture.
     Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:
     (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
     (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
     (3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
     (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.
     Section 1.03 . Form of Documents Delivered to Trustee.
     In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
     Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion of, or representations by, an accountant (who may be an employee of the Company) or firm of accountants, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.
13

 
     Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
     Section 1.04 . Acts of Holders; Record Dates.
     (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. The Trustee shall promptly deliver to the Company copies of all such instruments or instruments and records delivered to the Trustee. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 9.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.
     (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.
     (c) The Company may, in the circumstances permitted by the Trust Indenture Act, fix any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted to be given or taken by Holders. If not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 10.01) prior to such first solicitation or vote, as the case may be. With regard to any record date, only the Holders on such date (or their duly designated proxies) shall be entitled to give or take, or vote on, the relevant action.
14

 
     (d) The ownership of Securities shall be proved by the Security Register.
     (e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.
     Section 1.05 . Notices, Etc., to Trustee and Company.
     Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,
     (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (or by facsimile transmission to (213) 615-6197 or such other telephone number specified by the Trustee), provided that oral confirmation of receipt shall have been received) to or with the Trustee at its Corporate Trust Office, or such other means reasonably acceptable to the Trustee, or
     (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this Indenture or at any other address previously furnished in writing to the Trustee by the Company, Attention: Chief Financial Officer, with a copy to the Secretary or such other means reasonably acceptable to the Company.
     Section 1.06 . Notice to Holders; Waiver.
     Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, or by such other means reasonably acceptable to the Holder, in each case not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
15

 
     In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
     Section 1.07 . Conflict With Trust Indenture Act.
     If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.
     Section 1.08 . Effect of Headings and Table of Contents.
     The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
     Section 1.09 . Successors and Assigns.
     All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.
     Section 1.10 . Separability Clause.
     In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
     Section 1.11 . Benefits of Indenture.
     Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders of Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture.
     Section 1.12 . Governing Law.
     This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York.
     Section 1.13 . Legal Holidays.
     In any case where any Interest Payment Date, Fundamental Change Repurchase Date, Stated Maturity, or the last date on which a Holder has the right to convert his Securities, shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest or
16

 
principal or conversion of the Securities need not be made on such date, but may be made on the next succeeding Business Day (or, with respect to a Fundamental Change Repurchase Date, promptly following the later of (i) such next succeeding Business Day and (ii) the time of book entry transfer or the delivery of the Securities as set forth in Section 5.01) with the same force and effect as if made on the Interest Payment Date, Fundamental Change Repurchase Date, the Stated Maturity, or on such last day for conversion,  provided  that no interest shall accrue for the period from and after such Interest Payment Date, Fundamental Change Repurchase Date or Stated Maturity, as the case may be.
     Section 1.14 . Indenture and Securities Solely Corporate Obligations.
     None of the Company’s past, present or future directors, officers, employees or stockholders, as such, shall have any liability for any of the Company’s obligations under this Indenture or the Securities or for any claim based on, or in respect or by reason of, such obligations or their creation. By accepting a Security, each Holder waives and releases all such liability.
     This waiver and release is part of the consideration for the issuance of the Securities.
     Section 1.15 . Indenture May Be Executed in Counterparts.
     This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute one and the same instrument.
     Section 1.16 . Acceptance of Trust.
     U.S. Bank National Association, the Trustee named herein, hereby accepts the trusts in this Indenture declared and provided, upon the terms and conditions set forth herein.
     Section 1.17 . Calculations in Respect of Notes.
     Except as otherwise provided in this Indenture, the Company shall be responsible for making all calculations called for hereunder and under the Securities or in connection with a conversion. These calculations include, but are not limited to, determinations of the Last Reported Sales Price, accrued interest payable on the Securities and the Conversion Rate on the Securities. The Company shall make all these calculations in good faith and, absent manifest error, the Company’s calculations will be final and binding on the Holders. The Company shall provide a schedule of the Company’s calculations to each of the Trustee and the Conversion Agent, and each of the Trustee and the Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The Trustee will forward its calculations to any Holder upon the request of such Holder.
17

 
ARTICLE 2
SECURITY FORMS
     Section 2.01 . Forms Generally.
     The Securities and the Trustee’s certificates of authentication shall be in substantially the forms set forth in this Article, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or any depositary therefore or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities.
     Notices of Conversion shall be in substantially the form set forth in Section 2.05.
     The definitive Securities shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner permitted by the rules of any securities exchange on which the Securities may be listed, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.
     Section 2.02 . Form of Face of Security.
[INCLUDE IF SECURITY IS A RESTRICTED SECURITY — THE SALE OF THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, THIS SECURITY MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT IT WILL NOT WITHIN THE LATER OF (X) ONE YEAR AFTER THE LATEST ISSUE DATE OF THIS SECURITY AND (Y) THREE MONTHS AFTER IT CEASES TO BE AN AFFILIATE (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF THE ISSUER, OFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY, EXCEPT (A) TO THE ISSUER; (B) UNDER A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT; (C) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER AND TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, ALL IN COMPLIANCE WITH RULE 144A (IF AVAILABLE); OR (D) UNDER ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
18

 
REQUIREMENTS OF THE SECURITIES ACT; AND (2) THAT IT WILL, PRIOR TO ANY TRANSFER OF THIS SECURITY WITHIN THE LATER OF (X) SIX MONTHS (OR, IF THE ISSUER HAS NOT SATISFIED THE CURRENT PUBLIC INFORMATION REQUIREMENTS OF RULE 144, ONE YEAR) AFTER THE LAST ISSUE DATE OF THIS SECURITY (INCLUDING THROUGH THE EXERCISE OF THE OPTION TO PURCHASE ADDITIONAL SECURITIES) AND (Y) THREE MONTHS AFTER IT CEASES TO BE AN AFFILIATE (WITHIN THE MEANING OF RULE 144 ADOPTED UNDER THE SECURITIES ACT) OF THE ISSUER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS MAY BE REQUIRED PURSUANT TO THE INDENTURE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.]
NetApp, Inc.
1.75% Convertible Senior Note due 2013
No.                 $
CUSIP No. 64110D AA2
ISIN No. US64110DAA28
     NetApp, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “ Company ”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of                                            Dollars set forth on the Principal Schedule attached to this Security on June 1, 2013, and to pay interest thereon from June 10, 2008 or from the most recent Interest Payment Date to which interest has been paid or duly provided for to but excluding the next Interest Payment Date, semi-annually on June 1 and December 1 in each year, commencing December 1, 2008, at the rate of 1.75% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the May 15 or November 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than 10 calendar days prior to such Special Record Date (or
19

 
such lesser period that is acceptable to the Trustee), or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Payment of the principal of and interest on this Security will be made at the office or agency of the Company maintained for that purpose, which shall initially be the corporate trust operations office of U.S. Bank National Association in St. Paul, Minnesota, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts;  provided, however , that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.
     Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
     Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
     Dated:
 	 	 	 	 	
 	NETAPP, INC.
 	 	
 	By:  	 	 	
 	 	Name:  	 	 	
 	 	Title:  	 	 	
 	
     Section 2.03 . Form of Reverse of Security.
     This Security is one of a duly authorized issue of Securities of the Company designated as its 1.75% Convertible Senior Notes due 2013 (herein called the “ Initial Securities ”), initially limited in aggregate principal amount to $1,265,000,000, issued and to be issued under an Indenture, dated as of June 10, 2008 (herein called the “ Indenture ”), between the Company and U.S. Bank National Association, as Trustee (herein called the “ Trustee ”, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. The Company
20

 
may from time to time, without notice to or the consent of the Holders of the Securities, create and issue further Securities (the “ Additional Securities ”, and together with the Initial Securities, the “ Securities ”) having the same terms and ranking equally and ratably with the Initial Securities, as part of one series, in all respects and with the same CUSIP number as the Initial Securities, or in all respects except for payment of interest accruing prior to the Issue Date of such Initial Securities,  provided  that such Additional Securities are fungible with the Initial Securities for U.S. federal income tax purposes. Any Additional Securities shall be consolidated and form a single series with the Initial Securities and shall have the same terms as to status, redemption, and otherwise as the Initial Securities. Any Additional Securities may be issued pursuant to authorization provided by a resolution of the Board of Directors of the Company, a supplement to the Indenture, or under an Officer’s Certificate pursuant to the Indenture. No Additional Securities may be issued if an Event of Default has occurred and is continuing with respect to the Initial Securities.
     In any case where the due date for the payment of the principal of or interest on any Security or the last day on which a Holder of a Security has a right to convert his Security shall be, at any Place of Payment or Place of Conversion, as the case may be, a day on which banking institutions at such Place of Payment or Place of Conversion are authorized or obligated by law or executive order to close, then payment of principal, interest or delivery for conversion of such Security need not be made on or by such date at such place but may be made on or by the next succeeding day at such place which is not a day on which banking institutions are authorized or obligated by law, regulation or executive order to close, with the same force and effect as if made on the date for such payment or the date fixed for redemption or repurchase, or by such last day for conversion, and no interest shall accrue on the amount so payable for the period after such date.
     Subject to the provisions of the Indenture, upon the occurrence of a Fundamental Change, the Holder has the right, at such Holder’s option, to require the Company to repurchase all of such Holder’s Securities or any portion thereof (in principal amounts of $1,000 or integral multiples thereof) on the Fundamental Change Repurchase Date at a price equal to 100% of the principal amount of the Securities such Holder elects to require the Company to repurchase, together with accrued and unpaid interest to but excluding the Fundamental Change Repurchase Date. The Company or, at the written request of the Company, the Trustee shall mail to all Holders of record of the Securities a notice of the occurrence of a Fundamental Change and of the repurchase right arising as a result thereof after the occurrence of any Fundamental Change, but on or before the 10 th calendar day following such occurrence.
     Subject to and upon compliance with the provisions of the Indenture (including, without limitation, the conditions of conversion set froth in Article 6 hereof), the Holder of this Security is entitled, at his or her option, to convert this Security (or any portion of the principal amount hereof which is $1,000 or an
21

 
integral multiple thereof), at the principal amount hereof, or of such portion, into cash and fully paid and non-assessable shares of Common Stock of the Company, if any, at the Conversion Rate specified in the Indenture, by surrender of this Security together with a Notice of Conversion, a form of which is set forth in Section 2.05, as provided in the Indenture and this note, duly endorsed or assigned to the Company or in blank, to the Company at its office or agency, which shall be initially the corporate trust operations office of U.S. Bank National Association in St. Paul, Minnesota, and, unless the cash and shares of Common Stock, if any, deliverable on conversion are to be issued in the same name as this note, duly endorsed by, or accompanied by instruments of transfer in form satisfactory to the Company or its agent duly executed by, the Holder or by his duly authorized attorney, or if less than the entire principal amount hereof is to be converted, the portion hereof to be converted, and, in case such surrender shall be made during the period from the close of business on any Regular Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date, also accompanied by payment in dollars of an amount equal to the interest payable on such Interest Payment Date on the principal amount of this Security then being converted. Subject to the aforesaid requirement for payment and, in the case of a conversion after the Regular Record Date next preceding any Interest Payment Date and on or before such Interest Payment Date, to the right of the Holder of this Security (or any Predecessor Security) of record at such Regular Record Date to receive an installment of interest (with certain exceptions provided in the Indenture), no payment or adjustment is to be made on conversion for interest accrued hereon or for dividends on the Common Stock issued on conversion. No fractions of shares or scrip representing fractions of shares will be issued on conversion, but instead of any fractional interest the Company shall pay a cash adjustment as provided in the Indenture. The conversion rate is subject to adjustment as provided in the Indenture. In addition, the Indenture provides that in case of certain consolidations or mergers to which the Company is a party or the transfer of substantially all of the assets of the Company, the Indenture shall be amended, without the consent of any Holders of Securities, so that this Security, if then outstanding, will be convertible thereafter, during the period this Security shall be convertible as specified above, by reference to the kind and amount of cash, securities and other property or assets that a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such transaction would have owned or been entitled to receive.
     No sinking fund is provided for the Securities and the Securities are not subject to redemption at the option of the Company.
     In the event of conversion of this Security in part only, a new Security or Securities for the unconverted portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.
     If an Event of Default shall occur and be continuing, the principal of all the Securities may be declared due and payable in the manner and with the effect provided in the Indenture.
22

 
     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the consent of the Holders of at least a majority in aggregate principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
     No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed or to convert this Security as provided in the Indenture.
     As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
     The Securities are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate principal amount of Securities of a different authorized denomination,  provided  that such denomination is a minimum of $1,000 or an integral multiple thereof, as requested by the Holder surrendering the same.
     Prior to the first anniversary of the Issue Date set forth on the face of this Security, this Security may not be transferred to or sold by any affiliate (within the meaning of Rule 144 under the Securities Act) of the Company, except pursuant to an effective registration statement or an exemption from registration.
23

 
     No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
     Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
     THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
     All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
PRINCIPAL SCHEDULE
NETAPP, INC.
1.75% Convertible Senior Notes due 2013
No.           
     The initial principal amount of this Global Security is $   ,000,000. The following decreases or increases in this Global Security have been made:
 	 	 	 	 	 	 	
Date of decrease or increase	 	Amount of decrease in principal amount of this Global Security	 	Amount of increase in principal amount of this Global Security	 	Principal amount of this Global Security following such increase or decrease	

 	 	 	 	 	 	 	
 	 	 	 	 	 	 	
     Section 2.04 . Form of Legend for Global Securities.
     Unless otherwise specified as contemplated by Section 3.01 for the Securities evidenced thereby, every Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form:
     THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A
24

 
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
     Section 2.05 . Form of Notice of Conversion.
Conversion notices shall be in substantially the following form:
NOTICE OF CONVERSION
     The undersigned Holder of this Security hereby irrevocably exercises the option to convert this Security, or any portion of the principal amount hereof (which is U.S. $1,000 or an integral multiple of U.S. $1,000 in excess thereof, provided that the unconverted portion of such principal amount is U.S. $1,000 or any integral multiple of U.S. $1,000 in excess thereof) below designated, into cash and shares of Common Stock or Reference Property, if any, in accordance with the terms of the Indenture referred to in this Security, and directs that such shares, if any, together with a check in payment for any fractional share and any Securities representing any unconverted principal amount hereof, be delivered to and be registered in the name of the undersigned unless a different name has been indicated below. If cash, shares of Common Stock, Reference Property or Securities are to be delivered to or registered in the name of a Person other than the undersigned, the undersigned shall pay all transfer taxes payable with respect thereto.
     Dated:                      Signature(s):                                                              
     If shares or Securities are to be registered in the name of a Person other than the Holder, please print such Person’s name and address:
(Name)
(Address)
Social Security or other
Identification Number, if any
If only a portion of the Securities are to be converted, please indicate:
1. Principal amount to be converted: U.S. $                      
2. Principal amount and denomination of Securities representing unconverted principal amount to be issued:
Amount: U.S. $                      Denominations: U.S. $                     
25

 
     (U.S. $1,000 or any integral multiple of U.S. $1,000 in excess thereof, provided that the unconverted portion of such principal amount is U.S. $1,000 or any integral multiple of U.S. $1,000 in excess thereof)
     Section 2.06 . Form of Assignment.
ASSIGNMENT
     For value received,                                           hereby sell(s), assign(s) and transfer(s) unto                                           (Please insert Social Security or other identifying number of assignee) the within Security, and hereby irrevocably constitutes and appoints                                             as attorney to transfer the said Security on the books of the Company, with full power of substitution in the premises.
     Dated:                      Signature(s):                                                              
     Signature(s) must be guaranteed by an Eligible Guarantor Institution with membership in an approved signature guarantee program pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934.
     Signature Guaranteed
     In connection with any transfer of this Security occurring prior to the date which is the earlier of (i) the date of the declaration by the Commission of the effectiveness of a registration statement under the Securities Act, as amended (the “ Securities Act ”), covering resales of this Security (which effectiveness shall not have been suspended or terminated at the date of the transfer) and (ii) the first anniversary of the Issue Date set forth on the face of this Security, the undersigned confirms that it has not utilized any general solicitation or general advertising in connection with the transfer and that this Security is being transferred:
     [Check One]
 	 	 	 	 	
(1)	 	o	 	to the Company or a subsidiary thereof; or	
 	 	 	 	 	
(2)	 	o	 	to a “Qualified Institutional Buyer” pursuant to and in compliance with Rule 144A under the Securities Act; or	
 	 	 	 	 	
(3)	 	o	 	pursuant to the exemption from registration provided by Rule 144 under the Securities Act.	
Unless one of the above boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any Person other than the registered Holder thereof,  provided  that if box (3) is checked, the Company may require (and shall deliver to the Trustee and the Security Registrar), prior to registering any such transfer of the Securities, in its sole discretion, such legal
26

 
opinions, certifications and other information as the Company may reasonably request to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Security Registrar shall not be obligated to register this Security in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 3.10 of the Indenture shall have been satisfied.
In connection with any transfer prior to the first anniversary of the Issue Date set forth on the face of this Security (other than transfers pursuant to an effective registration statement), the undersigned represents and warrants that to its knowledge the transferee is not an affiliate (within the meaning of Rule 144 under the Securities Act) of the Company.
     Dated:                      Signature(s):                                                              
     Signature(s) must be guaranteed by an Eligible Guarantor Institution with membership in an approved signature guarantee program pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934.
     Signature Guaranteed
     TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
     The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “ qualified institutional buyer ” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
     TO BE COMPLETED BY ALL PURCHASERS
     In connection with any purchase (except if pursuant to an effective registration statement) of this Security occurring prior the first anniversary of the Issue Date set forth on the face of this Security, the undersigned represents and warrants that it is not an affiliate (within the meaning for Rule 144 under the Securities Act) of the Company.
     Dated:                      Signature(s):                                                              
27

 
     NOTICE: To be executed by an executive officer.
     Section 2.07. Form of Trustee’s Certificate of Authentication.
     This is one of the Securities referred to in the within-mentioned Indenture.
 	 	 	 	 	
 	U.S. BANK NATIONAL ASSOCIATION, as Trustee
 	 	
 	By:  	 	 	
 	 	Authorized Signatory 	 	

     Section 2.08 . Form of Fundamental Change Repurchase Notice.
To: NetApp, Inc.
     The undersigned registered owner of this Security hereby acknowledges receipt of a notice from NetApp, Inc. (the “Company”) as to the occurrence of a Fundamental Change with respect to the Company and hereby directs the Company to pay, or cause the Trustee to pay,                                             an amount in cash equal to 100% of the entire principal amount, or the portion thereof (which is $1,000 principal amount or an integral multiple thereof) below designated, to be repurchased plus interest accrued to, but excluding, the Fundamental Change Repurchase Date, except as provided in the Indenture.
     Dated:                     
     Signature                                         
     Principal amount to be repurchased (at least $1,000 or an integral multiple of $1,000 in excess thereof):                     
     Remaining principal amount following such repurchase:                                          
 	 	 	 	 	
By:	 	 	 	 	
 	 	 	 	 	
 	 	Authorized Signatory	 	 	
     Section 2.09 . Legend on Restricted Securities. During the period beginning on the Issue Date and ending on the date one year from such date, any Security, including any Security issued in exchange therefor or in lieu thereof, shall be deemed a “Restricted Security” and shall be subject to the restrictions on transfer provided in the legends set forth on the face of the form of Security in Section 2.02;  provided , however, that the term “Restricted Security” shall not include any Securities as to which restrictions have been terminated in accordance with Section 3.10. All Securities shall bear the applicable legends set forth on the face of the form of Security in Section 2.02. Except as provided in Section 3.06
28

 
and Section 3.10, the Trustee shall not issue any unlegended Security until it has received an Officers’ Certificate from the Company directing it to do so.
ARTICLE 3
THE SECURITIES
     Section 3.01 . Title and Terms; Principal and Interest.
     The aggregate principal amount of Initial Securities which may be authenticated and delivered under this Indenture is limited to $1,265,000,000 and the aggregate amount of Additional Securities is unlimited, except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to Section 3.03, Section 3.04, Section 3.05, Section 3.06, Section 3.07, Section 12.06 or Section 6.01.
     The Initial Securities and the Additional Securities, if any, shall be known and designated as the “1.75% Convertible Senior Notes due 2013” of the Company.
     The Securities shall mature on June 1, 2013,
     The Securities shall bear interest at the rate of 1.75% per annum, from June 10, 2008 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be, payable semi-annually in arrears on June 1 and December 1, commencing December 1, 2008, until the principal thereof is paid or made available for payment.
     Principal of and interest (including Additional Interest and Reporting Interest) on, Global Securities shall be payable to DTC in immediately available funds.
     Principal on definitive Securities shall be payable at the office or agency of the Company maintained for such purpose, initially the agency of the Trustee at St. Paul, Minnesota (such office and city in which the Paying Agent is located being herein after called the “Place of Payment”). Interest (including Additional Interest and Reporting Interest), on definitive Securities will be payable (i) to each Holder of Securities having an aggregate principal amount of $5,000,000 or less, by check mailed to such Holder and (ii) to each Holder of Securities having an aggregate principal amount of more than $5,000,000, either by check mailed to such Holder or, upon application by such Holder to the Registrar not later than the relevant Regular Record Date, by wire transfer in immediately available funds to that Holder’s account within the United States, which application shall remain in effect until the Holder notifies, in writing, the Registrar to the contrary.
29

 
     The Securities shall be convertible as provided in Article 6 (any city in which the Conversion Agent is located being herein after called the “Place of Conversion”).
     Section 3.02 . Denominations.
     The Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 and any integral multiple thereof.
     Section 3.03 . Global Securities; Non-Global Securities; Book-entry Provisions.
     The Securities may be issued in Global or Non-Global (Definitive) Form as provided in this Indenture.
     (a) Global Securities
     (i) Each Global Security authenticated under this Indenture shall be registered in the name of, and delivered to, Cede & Co., as nominee of DTC (the “ Depositary ”). Each such Global Security shall constitute a single Security for all purposes of this Indenture.
     (ii) Except for exchanges of Global Securities for definitive, non-Global Securities at the sole discretion of the Company, no Global Securities may be exchanged in whole or in part for Securities registered, and no transfer of a Securities in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (A) such Depositary (1) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or (2) has ceased to be a clearing agency registered as such under the Exchange Act or announces an intention permanently to cease business or does in fact do so or (B) there shall have occurred and be continuing an Event of Default with respect to such Global Security. In such event, if a successor Depositary for such Global Security is not appointed by the Company within 90 calendar days after the Company receives such notice or becomes aware of such ineligibility, the Company shall execute, and the Trustee, upon receipt of an Officers’ Certificate directing the authentication and delivery of non-Global Securities, shall authenticate and deliver, non-Global Securities, in any authorized denominations in an aggregate principal amount equal to the principal amount of such Global Security in exchange for such Global Security.
     (iii) If any Global Security is to be exchanged for other Securities or canceled in whole, it shall be surrendered by or on behalf of the Depositary or its nominee to the Trustee, as Registrar, for exchange or cancellation, as provided in this Article. If any Global Security is to be exchanged for other Securities or canceled in part, or if another Security is
30

 
to be exchanged in whole or in part for a beneficial interest in any Global Security, in each case, as provided in Article 2 of this Indenture, then either (A) such Global Security shall be so surrendered for exchange or cancellation, as provided in this Article, or (B) the principal amount thereof shall be reduced or increased by an amount equal to the portion thereof to be so exchanged or canceled, or equal to the principal amount of such other Security to be so exchanged for a beneficial interest therein, as the case may be, by means of an appropriate adjustment made on the records of the Trustee, as Registrar, whereupon the Trustee, in accordance with the Applicable Procedures, shall instruct the Depositary or its authorized representative to make a corresponding adjustment to its records. Upon any such surrender or adjustment of a Global Security, the Trustee shall, subject to this Article, authenticate and deliver any Securities issuable in exchange for such Global Security (or any portion thereof) to or upon the order of, and registered in such names as may be directed by, the Depositary or its authorized representative. The Trustee shall be entitled to receive from the Depositary the names, addresses and tax identification numbers of the Persons in whose name the Securities are to be registered prior to such authentication and delivery. Upon the request of the Trustee in connection with the occurrence of any of the events specified in the preceding paragraph, the Company shall promptly make available to the Trustee a reasonable supply of Securities that are not in the form of Global Securities. The Trustee shall be entitled to rely upon any order, direction or request of the Depositary or its authorized representative which is given or made pursuant to this Article if such order, direction or request is given or made in accordance with the Applicable Procedures (to the extent such procedures are applicable to such direction or request).
     (iv) Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Article or otherwise, shall be authenticated and delivered in the form of, and shall be, a registered Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof, in which case such Security shall be authenticated and delivered in accordance with clause (b) of this Section 3.03.
     (v) The Depositary or its nominee, as registered owner of a Global Security, shall be the Holder of such Global Security for all purposes under this Indenture and the Securities, and owners of beneficial interests in a Global Security shall hold such interests pursuant to the Applicable Procedures. Accordingly, any such owner’s beneficial interest in a Global Security shall be shown only on, and the transfer of such interest shall be effected only through, records maintained by the Depositary or its nominee or its Agent Members and such owners of
31

 
beneficial interests in a Global Security shall not be considered the owners or holders thereof.
     (b) Non-Global Securities. Securities issued upon the events described in Section 3.03(a)(ii) shall be in definitive, fully registered form, without interest coupons.
     Section 3.04 . Execution, Authentication, Delivery and Dating.
     The Securities shall be executed on behalf of the Company by its Chairman of the Board, Vice Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President or one of its Vice Presidents, Treasurer or Assistant Treasurer. The signature of any of these officers on the Securities may be manual or facsimile.
     Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.
     At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities; and the Trustee in accordance with such Company Order shall authenticate and deliver such Securities as in this Indenture provided and not otherwise.
     Each Security shall be dated the date of its authentication.
     No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 3.10, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.
     The Company may, subject to Article 4 of this Indenture and applicable law, issue under this Indenture Additional Securities; provided ,  however , that the Company may not issue Additional Securities if an Event of Default with respect to any Outstanding Securities shall have occurred and be continuing at the time of
32

 
such issuance. All Securities issued under this Indenture shall be treated as a single class for all purposes under this Indenture.
     Section 3.05 . Temporary Securities.
     Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.
     If temporary Securities are issued, the Company will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at any office or agency of the Company designated pursuant to Section 4.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of authorized denominations. Until so exchanged the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities.
     Section 3.06 . Registrar, Registration of Transfer and Exchange; Paying Agent.
     (a) Registrar. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant to Section 4.02 being herein sometimes collectively referred to as the “ Security Register ”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and for the transfers or exchange of Securities. Such Security Register shall distinguish between Initial Securities and Additional Securities. The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers and exchanges of Securities as herein provided. The Company may change the Security Registrar without notice to any Holder. The Company or any of its Subsidiaries may act as Security Registrar.
     Upon surrender for registration of transfer of any Security at an office or agency of the Company designated pursuant to Section 4.02 for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of any authorized denomination, provided that such denomination is a minimum of $1,000 or an integral multiple thereof, and of a like aggregate principal amount,
33

 
each such Security bearing such restrictive legends as may be required by this Indenture.
     At the option of the Holder and subject to the other provisions of this Section 3.06 and to Section 3.10, Securities may be exchanged for other Securities of any authorized denominations and of a like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.
     All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
     Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. As a condition to the registration of transfer of any Restricted Securities, the Company or the Trustee may require evidence satisfactory to them as to the compliance with the restrictions set froth in the legend of such Securities.
     Except as provided in the following sentence and in Section 3.10, all Securities originally issued hereunder and all Securities issued upon registration of transfer or exchange or replacement thereof shall be Restricted Securities and shall bear the legends required by Section 2.02 and Section 2.05, unless the Company shall have delivered to the Trustee (and the Security Registrar, if other than the Trustee) a Company Order stating that the Security is not a Restricted Security and may be issued without such legend thereon. Securities that are issued upon registration of transfer of, or in exchange for, Securities that are not Restricted Securities shall not be Restricted Securities and shall not bear such legend.
     No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.04, Section 12.06 or Section 6.01 not involving any transfer.
     (b) Restrictions on Transfer. Beneficial ownership of every Restricted Security shall be subject to the restrictions on transfer provided in the legends required to be set forth on the face of each Restricted Security pursuant to Section 2.02 and Section 2.05, unless such restrictions on transfer shall be terminated in accordance with this Section 3.06(b) or Section 3.10. The Holder of each
34

 
Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by such restrictions on transfer.
     The restrictions imposed by this Section 3.06 and by Section 2.02, Section 2.05 and Section 3.10 upon the transferability of any particular Restricted Security shall cease and terminate upon such Restricted Security having been sold pursuant to an effective Resale Registration Statement under the Securities Act or transferred in compliance with Rule 144 under the Securities Act (or any successor provision thereto). Any Restricted Security as to which the restrictions on transfer shall have expired in accordance with their terms or shall have terminated may, upon surrender of such Restricted Security for exchange to the Security Registrar in accordance with the provisions of this Section 3.06, be exchanged for a new Security, of like tenor and aggregate Principal Amount, which shall not bear the restrictive legends required by Section 2.02 and Section 2.05. The Company shall inform the Trustee in writing of the effective date of any Resale Registration Statement registering the Securities under the Securities Act. The Trustee shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the aforementioned resale registration statement.
     Prior to the first anniversary of the Issue Date, the Securities may not be transferred to or sold by any affiliate (within the meaning of Rule 144 under the Securities Act) of the Company, except pursuant to an effective registration statement or an exemption from registration.
     As used in the preceding three paragraphs of this Section 3.06, the term “transfer” encompasses any sale, pledge, transfer or other disposition of any Restricted Security.
     (c) Paying Agent. The Company shall maintain an office or agency where Securities may be presented for payment (the “ Paying Agent ”). The Company initially appoints the Trustee as Paying Agent for the Securities. The Company may have one or more additional paying agents and the term “Paying Agent” shall include any such additional paying agent.
     The Company shall enter into an appropriate agency agreement with any Paying Agent not a party to this Indenture, which shall incorporate the terms of the Trust Indenture Act, except in the case of a Paying Agent that acts as Paying Agent solely in connection with an offer to purchase the Securities pursuant to Article 4 of this Indenture. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of each such agent. If the Company fails to maintain a Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 9.07. The Company or any Subsidiaries may act as Paying Agent.
35

 
     The Company may remove any Paying Agent upon written notice to such Paying Agent and to the Trustee; provided, however , that no such removal shall become effective until (i) acceptance of any appointment by a successor as evidenced by an appropriate agreement entered into by the Company and such successor Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee or the Company shall serve as Paying Agent until the appointment of a successor in accordance with clause (i) above. The Paying Agent may resign at any time upon written notice to the Company and the Trustee.
     (d) Paying Agent to Hold Money in Trust. By no later than 11:00 a.m., New York City time, on the date on which any principal of or interest and Additional Interest, if any, on any Security is due and payable, the Company shall deposit with the Paying Agent a sum sufficient in immediately available funds to pay such principal or interest (including any Additional Interest and Reporting Interest), when due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that such Paying Agent shall hold in trust for the benefit of Security holders or the Trustee all money held by such Paying Agent for the payment of principal of or interest (including any Additional Interest and Reporting Interest), on the Securities and shall notify the Trustee in writing of any default by the Company in making any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent (other than the Trustee) to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. Upon complying with this Section 3.06, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money delivered to the Trustee. Upon any bankruptcy, reorganization or similar proceeding with respect to the Company, the Trustee shall serve as Paying Agent for the Securities.
     (e) Custodian. The Company hereby appoints the Trustee as Custodian with respect to any Global Securities.
     Section 3.07 . Mutilated, Destroyed, Lost and Stolen Securities.
     If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding.
     If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of
36

 
any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding.
     In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.
     Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
     Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.
     The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
     Section 3.08 . Payment of Interest; Interest Rights Preserved.
     Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.
     In the case of Securities represented by a Global Security registered in the name of or held by a Depository or its nominee, payment of principal, premium, if any, and interest, if any, will be made to the Depository or its nominee, as the case may be, as the registered owner or Holder of such Global Security. None of the Company, the Trustee and the Paying Agent, any Authenticating Agent or the Security Registrar for such Securities will have any responsibility or liability for any aspect of the records relating to or payments made on account of a beneficial ownership interest in a Global Security or maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
     Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.
     Subject to the provisions of Article 6 hereof, a Holder of any Security at 5:00 p.m., New York City time, on a Regular Record Date shall be entitled to
37

 
receive interest (including any Additional Interest), on such Security on the corresponding Interest Payment Date. Holders of Securities at 5:00 p.m., New York City time, on a Regular Record Date will receive payment of interest (including any Additional Interest) payable on the corresponding Interest Payment Date notwithstanding the conversion of such Securities at any time after 5:00 p.m., New York City time on such Regular Record Date. Securities surrendered for conversion during the period after 5:00 p.m., New York City time, on any Regular Record Date to 9:00 a.m., New York City time, on the corresponding Interest Payment Date must be accompanied by payment of an amount equal to the interest (including any Additional Interest) that the Holder is to receive on the Securities. Notwithstanding the foregoing, no such payment of interest (including any Additional Interest) need be made by any converting Holder (i) if the Company has specified a Fundamental Change Repurchase Date that is after a Regular Record Date and on or prior to the next Scheduled Trading Day following the corresponding Interest Payment Date, (ii) to the extent of any overdue interest (including any overdue Additional Interest) existing at the time of conversion of such Security, or (iii) for conversions with a Conversion Date on or after May 15, 2013. Except where Securities surrendered for conversion must be accompanied by payment as described above, no interest or Additional Interest on converted Securities will be payable by the Company on any Interest Payment Date subsequent to the Conversion Date and delivery of the cash and shares of Common Stock, if applicable, pursuant to Article 6 hereunder, together with any cash payment for any fractional share, upon conversion will be deemed to satisfy the Company’s obligation to pay the principal amount of the Securities and accrued and unpaid interest and Additional Interest, if any, to, but not including, the related Conversion Date. As a result, accrued and unpaid interest to, but not including, the Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited
     Section 3.09 . Persons Deemed Owners.
     Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and (subject to Section 3.08) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
     In the case of a Global Security, so long as the Depository for such Global Security, or its nominee, is the registered owner of such Global Security, such Depository or such nominee, as the case may be, will be considered the sole owner or Holder of the Securities represented by such Global Security for all purposes under this Indenture. Except as provided in Section 3.06, owners of beneficial interests in a Global Security will not be entitled to have Securities that are represented by such Global Security registered in their names, will not receive
38

 
or be entitled to receive physical delivery of such Securities in definitive form and will not be considered the owners or Holders thereof under this Indenture.
     Notwithstanding the foregoing, with respect to any Global Security, nothing herein shall (a) prevent the Company, the Trustee, or any agent of the Company or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by a Depository or (b) impair, as between a Depository and holders of beneficial interest in any Global Security, the operation of customary practices governing the exercise of the rights of the Depository as Holder of such Global Security.
     Section 3.10 . Cancellation and Transfer Provisions.
     (a) All Securities surrendered for payment, redemption, registration of transfer or exchange or conversion shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of in accordance with its customary procedures. Copies of all cancelled Securities shall be provided to the Company by the Trustee, promptly following cancellation of such Securities.
     (b) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of a Security constituting a Restricted Security to a QIB:
     (i) the Security Registrar shall register the transfer if such transfer is being made by a proposed transferor who has checked the box provided for on the form of Security stating, or has otherwise advised the Company and the Security Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on the form of Security stating, or has otherwise advised the Company and the Security Registrar in writing, that it is purchasing the Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its
39

 
foregoing representations in order to claim the exemption from registration provided by Rule 144A; and
     (ii) if the proposed transferee is an Agent Member, and the Securities to be transferred consist of non-Global Securities which after transfer are to be evidenced by an interest in the Global Security, upon receipt by the Security Registrar of instructions given in accordance with the Depositary’s and the Security Registrar’s procedures, the Security Registrar shall reflect on its books and records the date and an increase in the Principal Amount of the Global Security in an amount equal to the Principal Amount of the non-Global Securities to be transferred, and the Trustee shall cancel the non-Global Securities so transferred.
     (c) Private Placement Legend. Upon the registration of transfer, exchange or replacement of Securities not bearing the legends required by Section 2.02 and Section 2.05, the Security Registrar shall deliver Securities that do not bear such legends. Except in the case of a registration of transfer, exchange or replacement pursuant to an effective shelf registration statement as contemplated by the Registration Rights Agreement upon the registration of transfer, exchange or replacement of Securities bearing the legends required by Section 2.02 and Section 2.05, the Security Registrar shall, within the later of six months after the latest issue date of such Security (or, if the Company has not satisfied the current public information requirements of Rule 144, one year) deliver only Securities that bear such legends unless (x) there is delivered to the Security Registrar an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act and (y) the Security Registrar shall have received a representation and warranty that the Holder in whose name the Security is to be registered is not, and has not been for a period of three months prior to the date such Security is to be delivered, an affiliate within the meaning of Rule 144.
     (d) General. By its acceptance of any Security bearing the legends required by Section 2.02 and Section 2.05, each Holder of such a Security acknowledges the restrictions on transfer of such Security set forth in this Indenture and in such legends and agrees that it will transfer such Security only as provided in this Indenture. None of the Company or any Subsidiary of the Company shall purchase or sell any Security after the date hereof, except as required under the terms of this Indenture.
     The Security Registrar shall retain, in accordance with its customary procedures, copies of all letters, notices and other written communications received pursuant to this Section 3.10. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Security Registrar.
40

 
     Section 3.11 . CUSIP Numbers.
     The Company in issuing the Securities may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use CUSIP numbers in all notices to Holders as a convenience to Holders of the Securities;  provided , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or on such notice and that reliance may be placed only on the other identification numbers printed on the Securities. The Company will promptly notify the Trustee in writing of any change in the CUSIP numbers.
     Section 3.12 . Computation of Interest.
     Interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months.
     Section 3.13 . Special Record Date.
     Any interest on any Security that is payable but not punctually paid or duly provided for on any Interest Payment Date (“ Defaulted Interest ”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of his, her or its having been such a Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (a) or (b) below:
     (a) The Company may elect to make payment of any Defaulted Interest to Holders in whose names the Securities are registered at the close of business on a special record date for the payment of such Defaulted Interest (a “ Special Record Date ”), which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Holders entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 calendar days and not less than 10 calendar days prior to the date of the proposed payment and not less than 10 calendar days after the receipt by the Trustee of the notice of the proposed payment (unless, in each case, a lesser period shall be acceptable to the Trustee). The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to the Holders of the Securities at their addresses as they appear in the Note Register, or by such other means reasonably acceptable to such Holders (or such lesser period that is acceptable to the Trustee),
41

 
not less than 10 calendar days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).
     (b) The Company may make payment of any Defaulted Interest on the Securities in any other lawful manner not inconsistent with the requirements of any automated quotation system or securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
ARTICLE 4
COVENANTS
     Section 4.01 . Payment of Principal and Interest.
     The Company will duly and punctually pay the principal of and interest on the Securities in accordance with the terms of the Securities and this Indenture.
     Section 4.02 . Maintenance of Office or Agency.
     The Company will maintain an office or agency (which shall be initially the Trustee’s Corporate Trust Office) where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange, where Securities may be surrendered for conversion and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee of any change in the location of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.
     The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations;  provided ,  however , that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency for such purposes as provided above. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
42

 
     Section 4.03 . Money for Security Payments to Be Held in Trust.
     If the Company shall at any time act as its own Paying Agent, it will, on or before each due date of the principal of or interest on any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.
     Whenever the Company shall have one or more Paying Agents, it will, prior to each due date of the principal of or interest on any Securities, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.
     The Company will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (i) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the continuance of any default by the Company (or any other obligor upon the Securities) in the making of any payment in respect of the Securities, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent as such.
     The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.
     Subject to any applicable abandoned property law, any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or interest on any Security and remaining unclaimed for two years after such principal or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease;  provided ,  however , that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in New York, New York, notice that such money remains unclaimed and that,
43

 
after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.
     Section 4.04 . Statement by Officers as to Default.
     The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers’ Certificate, stating whether or not to the knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.
     In addition, the Company will deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any events that would constitute an Event of Default, the status of those events and what action the Company is taking or propose to take in respect thereof.
     Section 4.05 . Existence.
     Subject to Article 8, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises;  provided ,  however , that the Company shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Holders.
     Section 4.06 . Maintenance of Properties.
     The Company will cause all properties used or useful in the conduct of its business or the business of any Subsidiary to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times;  provided ,  however , that nothing in this Section shall prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business or the business of any Subsidiary and not disadvantageous in any material respect to the Holders.
     Section 4.07 . Payment of Taxes and Other Claims.
44

 
     The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (a) all taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income, profits or property of the Company or any Subsidiary, and (b) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of the Company or any Subsidiary;  provided ,  however , that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings.
     Section 4.08 . Additional Interest Under the Registration Rights Agreement.
     If at any time Additional Interest becomes payable by the Company pursuant to the Registration Rights Agreement, the Company shall promptly deliver to the Trustee a certificate executed by an officer of the Company who may execute a Company Order to that effect and stating (i) the amount of such Additional Interest that is payable and (ii) the date on which such Additional Interest is payable pursuant to the terms of the Registration Rights Agreement. Unless and until a Responsible Officer of the Trustee receives such a certificate, the Trustee may assume without inquiry that no Additional Interest is payable. If the Company has paid Additional Interest directly to the Persons entitled to such Additional Interest, the Company shall deliver to the Trustee a certificate setting forth the particulars of such payment.
     Notwithstanding the foregoing, in the event that Reporting Interest is payable under this Indenture at any time when Additional Interest becomes payable pursuant to the Registration Rights Agreement, no Additional Interest shall be payable under this Indenture unless the amount of such Additional Interest payable exceeds the amount of such Reporting Interest then payable, in which case Additional Interest shall be payable in lieu of Reporting Interest.
     Section 4.09 . Waiver of Certain Covenants.
     The Company may omit in any particular instance to comply with any covenant or condition set forth in second and third paragraph of Section 10.04, if before the time for such compliance, the Holders of at least a majority in principal amount of the Outstanding Securities shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect.
45

 
ARTICLE 5
REPURCHASE AT OPTION OF THE HOLDER
     Section 5.01 . Repurchase at the Option of the Holder Upon a Fundamental Change.
     (a) If a Fundamental Change occurs at any time, then each Holder shall have the right, at such Holder’s option, to require the Company to repurchase all of such Holder’s Securities or any portion thereof that is a multiple of $1,000 principal amount, for cash on the date (the “ Fundamental Change Repurchase Date ”) specified by the Company that is not less than 15 calendar days and not more than 45 calendar days after the date of the Fundamental Change Repurchase Right Notice at a repurchase price equal to 100% of the principal amount thereof, together with accrued and unpaid interest thereon to, but excluding, the Fundamental Change Repurchase Date (the “ Fundamental Change Repurchase Price ”).
     Repurchases of Securities under this Section 5.01 shall be made, at the option of the Holder thereof, upon:
     (i) if the Securities are held in certificated form, delivery to the Trustee (or other Paying Agent appointed by the Company) by a Holder of a duly completed notice (the “ Fundamental Change Repurchase Notice ”) in the form set forth on the reverse of the Security or, if the Securities are held in global form, a notice that complies with the Applicable Procedures, prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date; and
     (ii) delivery or book-entry transfer of the Securities to the Trustee (or other Paying Agent appointed by the Company) at any time after delivery of the Fundamental Change Repurchase Notice and prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date (together with all necessary endorsements) at the Corporate Trust Office of the Trustee (or other Paying Agent appointed by the Company), such delivery being a condition to receipt by the Holder of the Fundamental Change Repurchase Price therefor;  provided  that such Fundamental Change Repurchase Price shall be so paid pursuant to this Section 5.01 only if the Security so delivered to the Trustee (or other Paying Agent appointed by the Company) shall conform in all respects to the description thereof in the related Fundamental Change Repurchase Notice.
     The Fundamental Change Repurchase Notice shall state:
     (A) if certificated, the certificate numbers of Securities to be delivered for repurchase;
46

 
     (B) the portion of the principal amount of Securities to be repurchased, which must be $1,000 or an integral multiple thereof; and
     (C) that the Securities are to be repurchased by the Company pursuant to the applicable provisions of the Securities and this Indenture.
     Any purchase by the Company contemplated pursuant to the provisions of this Section 5.01 shall be consummated by the delivery of the consideration to be received by the Holder promptly following the later of the Fundamental Change Repurchase Date and the time of the book-entry transfer or delivery of the Security.
     The Trustee (or other Paying Agent appointed by the Company) shall promptly notify the Company of the receipt by it of any Fundamental Change Repurchase Notice or written notice of withdrawal thereof in accordance with the provisions of subsection (c) of this Section 5.01.
     Any Security that is to be repurchased only in part shall be surrendered to the Trustee (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Security without service charge, a new Security or Securities, containing identical terms and conditions, each in an authorized denomination in aggregate principal amount equal to and in exchange for the unrepurchased portion of the principal of the Security so surrendered.
     (b) After the occurrence of a Fundamental Change, but on or before the 10th calendar day after the Effective Date of such Fundamental Change, the Company shall provide to all Holders of record of the Securities and the Trustee and Paying Agent a notice (the “ Fundamental Change Repurchase Right Notice ”) of the occurrence of such Fundamental Change and of the repurchase right, if any, at the option of the Holders arising as a result thereof. Such mailing shall be by first class mail. Simultaneously with providing such Fundamental Change Repurchase Right Notice, the Company shall publish a notice containing the information included therein on the Company’s website or through such other public medium as the Company may use at such time.
     Each Fundamental Change Repurchase Right Notice shall specify (if applicable):
     (i) the events causing the Fundamental Change;
     (ii) the date of the Fundamental Change;
47

 
     (iii) the last date on which a Holder may exercise its repurchase rights under Section 5.01, if applicable;
     (iv) the Fundamental Change Repurchase Price, if applicable;
     (v) the Fundamental Change Repurchase Date, if applicable;
     (vi) the name and address of the Paying Agent and the Conversion Agent, if applicable;
     (vii) the applicable Conversion Rate and any adjustments to the applicable Conversion Rate;
     (viii) that the Securities with respect to which a Fundamental Change Repurchase Notice has been delivered by a Holder may be converted only if the Holder withdraws the Fundamental Change Repurchase Notice in accordance with the terms of this Indenture; and
     (ix) the procedures the Holder must follow to require the Company to purchase its Securities under Section 5.01, if applicable.
     No failure of the Company to give the foregoing notices and no defect therein shall limit the Holders’ repurchase rights or affect the validity of the proceedings for the repurchase of the Securities pursuant to this Section 5.01.
     (c) A Fundamental Change Repurchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the Paying Agent in accordance with the Fundamental Change Repurchase Right Notice at any time prior to the close of business on the Business Day prior to the Fundamental Change Repurchase Date (the “ Fundamental Change Expiration Time ”), specifying:
     (i) the principal amount of the withdrawn Securities and, if certificated Securities have been issued, the certificate numbers of the withdrawn Securities,
     (ii) the principal amount of the Security with respect to which such notice of withdrawal is being submitted, and
     (iii) the principal amount, if any, of such Security that remains subject to the original Fundamental Change Repurchase Notice, which portion must be in principal amounts of $1,000 or an integral multiple of $1,000;
provided, however, that if the Securities are not in certificated form, the notice must comply with the Applicable Procedures.
48

 
     (d) On or prior to 11:00 a.m., New York City time, on the Fundamental Change Repurchase Date, the Company shall deposit with the Trustee (or other Paying Agent appointed by the Company or if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in Section 9.06) an amount of money sufficient to repurchase on the Fundamental Change Repurchase Date all of the Securities to be repurchased on such date at the Fundamental Change Repurchase Price. Subject to receipt of funds and/or Securities by the Trustee (or other Paying Agent appointed by the Company), payment for Securities properly surrendered for repurchase (and not withdrawn) prior to the Fundamental Change Expiration Time shall be made promptly after the later of (x) the Fundamental Change Repurchase Date with respect to such Security (provided the Holder has satisfied the conditions to the payment of the Fundamental Change Repurchase Price in this Section 5.01), and (y) the time of book-entry transfer or the delivery of such Security to the Trustee (or other Paying Agent appointed by the Company) by the Holder thereof in the manner required by this Section 5.01 by mailing checks for the amount payable to the Holders of such Securities entitled thereto as they shall appear in the Register;  provided , however, that all payments shall be subject to Section 5.01(a) and payments to the Depositary shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee. The Trustee shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Fundamental Change Repurchase Price.
     (e) If the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to repurchase on the Fundamental Change Repurchase Date all the Securities or portions thereof that are to be purchased as of the Business Day following the Fundamental Change Repurchase Date, then on and after the Fundamental Change Repurchase Date (i) such Securities shall cease to be outstanding, (ii) interest shall cease to accrue on such Securities, and (iii) all other rights of the Holders of such Securities shall terminate, in each case, whether or not book-entry transfer of the Securities has been made or the Securities have been delivered to the Trustee or Paying Agent, other than the right to receive the Fundamental Change Repurchase Price upon delivery or transfer of the Securities.
     (f) No Securities may be repurchased at the option of Holders upon a Fundamental Change if the principal amount of the Securities has been accelerated, and such acceleration has not been rescinded on or prior to such date.
     (g) In connection with any repurchase upon the occurrence of a Fundamental Change, to the extent required by applicable law, the Company shall:
     (i) comply with the provisions of Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act that may then be applicable; and
49

 
     (ii) otherwise comply with all federal and state securities laws as necessary to effect a repurchase of Securities by the Company at the option of such Holder.
ARTICLE 6
CONVERSION OF SECURITIES
     Section 6.01 . Conversion of Securities. (a) Right to Convert. Subject to the procedures for conversion set forth in this Article 6, a Holder may convert its Securities at a conversion rate (the “ Conversion Rate ”) equivalent to 31.4006 shares of Common Stock per $1,000 principal amount of Securities, subject to adjustment as set forth in this Article 6 (i) prior to March 1, 2013, when any of the conditions specified below are met and during the related specified period, and (ii) at any time on or after March 1, 2013, on or prior to the close of business on the Scheduled Trading Day immediately preceding the Stated Maturity. Whenever the Securities shall become convertible upon one or more of the conditions stated in clauses (i), (ii) or (iv)(A) below, the Company or, at the Company’s request, the Trustee in the name and at the expense of the Company, shall notify the Holders of the event triggering such convertibility in the manner provided in Section 1.06 and the Company shall also publicly announce such information by publication on the Company’s website or through such other public medium as it may use at such time. Whenever the Securities shall become convertible upon one or more of the conditions stated in clauses (iii)(B) or (iii)(C), notice of the event triggering such convertibility shall be given in accordance with the provisions of Section 5.01(a) and Section 5.01(b). Any notice so given shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice. A Holder may convert a portion of the principal amount of Securities if the portion is $1,000 or a multiple of $1,000. The cash payable, and the number of shares of Common Stock issuable, if any, upon conversion of a Security shall be determined as set forth in Section 6.01(c).
     (i) Conversion Upon Satisfaction of Trading Price Condition. A Holder may surrender its Securities for conversion during the five Business Day period after any five consecutive Trading Day period (the “ Measurement Period ”) in which the Trading Price per $1,000 principal amount of Securities of such series, as determined following a request by a Holder in accordance with the procedures set forth in this Section 6.01(a)(i), for each day of that period was less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate. In connection with any conversion in accordance with this Section 6.01(a)(i), the Bid Solicitation Agent shall have no obligation to determine the Trading Price of the Securities unless requested by the Company; and the Company shall have no obligation to make such request unless a Holder provides the Company with reasonable evidence that the Trading Price per $1,000 principal amount of Securities of either series
50

 
would be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate. Promptly after receiving such evidence, the Company shall instruct the Bid Solicitation Agent to determine the Trading Price of the Securities of such series beginning on the next Trading Day and on each successive Trading Day until the Trading Price per $1,000 principal amount of Securities of such series is greater than or equal to 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate. If the Company does not, when obligated to do so, make a request to the Bid Solicitation Agent to determine the Trading Price per $1,000 principal amount of Securities, or if the Company makes such request to the Bid Solicitation Agent and the Bid Solicitation Agent does not make such determination, then the Trading Price per $1,000 principal amount of Securities will be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate for such day. If the condition set forth in this Section 6.01(a)(i) has been met, the Company shall so notify the Trustee and the Holders. If at any time after the condition set forth in this Section 6.01(a)(i) has been met, the Trading Price per $1,000 principal amount of the applicable Securities is greater than or equal to 98% of the product of the Last Reported Sale Price of Common Stock and the Conversion Rate for such date, the Company shall so notify the Trustee and the Holders.
     (ii) Conversion Upon Satisfaction of Sale Price Condition. A Holder may surrender all or a portion of its Securities for conversion during any calendar quarter (and only during such calendar quarter) commencing after June 30, 2008 if the Last Reported Sale Price for the Common Stock for at least 20 Trading Days during the period of 30 consecutive Trading Days ending on the last Trading Day of the immediately preceding calendar quarter is greater than 130% of the Conversion Price in effect on such last Trading Day.
     (iii) Conversion Upon Specified Corporate Events.
     (A) If the Company (1) distributes to all or substantially all holders of Common Stock any rights or warrants entitling them, for a period expiring within 60 days after the date of the distribution, to subscribe for or purchase, shares of Common Stock at a price per share less than the Last Reported Sale Price of a share of Common Stock on the Trading Day immediately preceding the declaration date for such distribution, or (2) distributes to all or substantially all holders of Common Stock Capital Stock, evidences of indebtedness or other assets or property (including cash), which distribution has a per share Fair Market Value, as determined by the Company’s Board of Directors, exceeding 15% of the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the
51

 
declaration date for such distribution, then, in each case, the Company must notify the Holders, in the manner provided in Section 1.06, and the Trustee, in the manner provided in Section 1.05, at least 25 Scheduled Trading Days prior to the Ex-Date for such distribution. Once the Company has given such notice, Holders may surrender Securities for conversion at any time until the earlier of 5:00 p.m., New York City time, on the Business Day immediately prior to such Ex-Date for such distribution, or the Company’s announcement that such distribution will not take place, even if the Securities are not otherwise convertible at such time pursuant to the terms of this Indenture.
     (B) If the Company is party to an event constituting a Fundamental Change, the Company shall use its reasonable efforts to notify (i) Holders, in the manner provided in Section 1.06 and (ii) the Trustee, in the manner provided in Section 1.05, at least 25 Scheduled Trading Days prior to the anticipated effective date of any such event, and in no event later than the effective date of such event. Once the Company has given such notice, Holders may surrender Securities for conversion at any time from date of such notice until the related Fundamental Change Repurchase Date.
     (C) If the Company is party to a transaction described in clause (ii) of the definition of Fundamental Change (without giving effect to the proviso set forth in clause (ii) of such definition or to the proviso set forth in such definition relating to Publicly Traded Securities), the Company shall use its reasonable efforts to notify Holders, to the extent practicable, in the manner provided in Section 1.06, at least 25 Scheduled Trading Days prior to the anticipated effective date for such transaction. Upon the earlier of the date the Company has given such notice and the effective date of such transaction, Holders may surrender Securities for conversion at any time until 35 Scheduled Trading Days after the actual effective date of such transaction (or if such transaction also constitutes a Fundamental Change, the related Fundamental Change Repurchase Date).
Holders shall not have the right to convert their Securities pursuant to this Section 6.01(a)(iii) if in connection with the distribution described in this Section 6.01(a)(iii) that gives rise to a right to convert their Securities, such Holders are entitled to participate (as a result of holding their Securities, and at the same time as holders of Common Stock participate) in any such transaction as if such Holders held a number of shares of Common Stock equal to the applicable Conversion Rate on the Ex-Date for such distribution,  multiplied by  the principal amount of Securities held
52

 
by such Holder divided by $1,000, without having to convert their Securities.
     (b) Conversion Procedures. The following procedures shall apply to the conversion of Securities:
     (i) In respect of a Definitive Security, a Holder must (A) complete and manually sign the conversion notice attached to the Security (the “ Notice of Conversion ”), or facsimile of such Notice of Conversion; (B) deliver such Notice of Conversion, which is irrevocable, and the Security to the Conversion Agent at the office maintained by the Conversion Agent for such purpose; (C) to the extent any shares of Common Stock issuable upon conversion are to be issued in a name other than the Holder’s, furnish endorsements and transfer documents as may be required by the Conversion Agent and, if required pursuant to Section 6.06 below, pay all transfer or similar taxes; and (D) if required pursuant to Section 3.01 above, pay funds equal to interest payable on the next interest payment date to which such Holder is not entitled.
     (ii) In respect of a beneficial interest in a Global Security, a Beneficial Owner must comply with DTC’s procedures for converting a beneficial interest in a Global Security and, if required pursuant to Section 3.01 above, pay funds equal to interest payable on the next interest payment date to which such Beneficial Owner is not entitled, and if required, taxes or duties, if any.
The date a Holder satisfies the foregoing requirements is the “Conversion Date” hereunder.
     No Notice of Conversion with respect to any Securities may be tendered by a Holder thereof if such Holder has also tendered a Fundamental Change Repurchase Notice and not validly withdrawn such Fundamental Change Repurchase Notice in accordance with the applicable provisions of Section 5.01.
     If a Holder converts more than one Security at the same time, the cash and number of shares of Common Stock issuable upon the conversion, if any, shall be based on the total principal amount of the Securities converted.
     Upon surrender of a Security that is converted in part, the Company shall execute, and the Trustee or the Authenticating Agent shall authenticate and deliver to the Holder, a new Security in an authorized denomination equal in principal amount to the unconverted portion of the Security surrendered.
     (c) Payment Upon Conversion. Upon any conversion of any Security, the Company will deliver to converting Holders, in respect of each $1,000 principal amount of Securities being converted, a “ Settlement Amount ” equal to the sum of the Daily Settlement Amounts for each of the 20 VWAP Trading Days
53

 
during the Observation Period for such Security. Except as provided in Section 6.03, the Settlement Amount will be delivered by the Company on the third Business Day immediately following the last day of the related Observation Period.
     (d) Cash Payments in Lieu of Fractional Shares. The Company shall not issue a fractional share of Common Stock upon conversion of Securities. Instead the Company shall deliver cash for the current market value of the fractional share. The current market value of a fractional share shall be determined to the nearest 1/10,000th of a share by multiplying the Daily VWAP of a full share of Common Stock on the last VWAP Trading Day of the related Observation Period by the fractional amount and rounding the product to the nearest whole cent. The Company shall determine the number of fractional shares for which cash shall be delivered by aggregating (i) all Securities a Holder surrenders for conversion and (ii) fractional shares included in the Daily Settlement Amounts over the entire related Observation Period rather than delivering cash in lieu of fractional shares for (x) each individual Security of such Holder surrendered for conversion or (y) each day of the related Observation Period.
     Section 6.02 . Adjustments to Conversion Rate. The Conversion Rate shall be adjusted from time to time by the Company as follows:
     (a) If the Company issues shares of Common Stock as a dividend or distribution on shares of the Common Stock, or effects a share split or share combination, the Conversion Rate will be adjusted based on the following formula:

     where,
 	 	 	 	 	 	 	
 	 	CR0	 	=	 	the Conversion Rate in effect immediately after the close of business on the day preceding the Ex-Date for such dividend or distribution, or the effective date of such share split or combination, as the case may be;	
 	 	 	 	 	 	 	
 	 	CR’	 	=	 	the Conversion Rate in effect as of the opening of business on the Ex-Date for such dividend or distribution or the effective date of such share split or combination, as the case may be;	
 	 	 	 	 	 	 	
 	 	OS0	 	=	 	the number of shares of Common Stock outstanding immediately prior to the Ex- Date for such dividend or distribution or the effective date of such share split or combination, as the case may be; and	
 	 	 	 	 	 	 	
 	 	OS’	 	=	 	the number of shares of Common Stock that will be	
54

 
 	 	 	 	 	 	 	
 	 	 	 	 	 	outstanding as of the Ex-Date for such dividend or distribution immediately after giving effect to such dividend or distribution or immediately after the effective date of such share split or combination, as the case may be.	
Any adjustment made pursuant to this subsection (a) shall become effective on the date immediately following (x) the Ex-Date for such dividend or other distribution or (y) the effective date of such split or combination, as applicable. If any dividend or distribution of the type described in this Section 6.02(a) is declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.
     (b) If the Company distributes to all or substantially all holders of its Common Stock any rights or warrants entitling them for a period of not more than 60 days after such distribution to subscribe for or purchase shares of Common Stock at a price per share less than the average of the Last Reported Sale Prices of the Common Stock on the 10 Trading Days immediately preceding the Ex-Date for such distribution, the Conversion Rate will be adjusted based on the following formula:

     where,
 	 	 	 	 	 	 	
 	 	CR0	 	=	 	the Conversion Rate in effect immediately after the close of business on the day preceding the Ex- Date for such distribution;	
 	 	 	 	 	 	 	
 	 	CR’	 	=	 	the Conversion Rate in effect as of the opening of business on the Ex-Date for such distribution;	
 	 	 	 	 	 	 	
 	 	OS0	 	=	 	the number of shares of Common Stock outstanding immediately prior to the Ex-Date for such distribution;	
 	 	 	 	 	 	 	
 	 	X	 	=	 	the total number of shares of Common Stock issuable pursuant to such rights or warrants; and	
 	 	 	 	 	 	 	
 	 	Y	 	=	 	the number of shares of Common Stock equal to the aggregate price payable to exercise such rights or warrants divided by the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the Ex-Date for the issuance of such rights or warrants.	
For purposes of this subsection (b), in determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less
55

 
than such Last Reported Sale Price, and in determining the aggregate exercise or offering price payable for such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights or warrants and any amount payable on exercise or conversion thereof, with the value of such consideration, if other than cash, to be determined by the Board of Directors. If any such rights or warrants are not exercised or converted prior to the expiration of the exercisability or convertibility thereof, the new Conversion Rate shall be readjusted to the Conversion Rate that would have been in effect if such right or warrant had not been issued.
     (c) If the Company distributes shares of Capital Stock, evidences of its indebtedness or other assets or property of the Company to all or substantially all holders of the Common Stock, excluding:
     (i) dividends or distributions referred to in clause (a) or (b) above or (e) below;
     (ii) dividends or distributions paid exclusively in cash referred to in subsection (d) below; and
     (iii) Spin-Offs described below in this subsection (c);
then the Conversion Rate will be adjusted based on the following formula:

where,
 	 	 	 	 	
CR0	 	=	 	the Conversion Rate in effect immediately after the close of business on the day preceding the Ex-Date for such distribution;	
 	 	 	 	 	
CR’	 	=	 	the Conversion Rate in effect as of the opening of business on the Ex-Date for such distribution;	
 	 	 	 	 	
SP0	 	=	 	the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the Ex-Date for such distribution; and	
 	 	 	 	 	
FMV	 	=	 	the Fair Market Value as determined by the Board of Directors of the shares of Capital Stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of Common Stock on the Ex-Date for such distribution.	
With respect to an adjustment pursuant to this subsection (c) where there has been a payment of a dividend or other distribution on the Common Stock or in shares of Capital Stock of any class or series, or similar equity interest, of or relating to a
56

 
Subsidiary or other business units of the Company (a “Spin-Off”), the Conversion Rate in effect immediately before 5:00 p.m., New York City time, on the 10 th  Trading Day immediately following, and including, the effective date of such Spin-Off will be increased based on the following formula:

where,
 	 	 	 	 	
CR0	 	=	 	the Conversion Rate in effect immediately prior to the 10th Trading Day immediately following the effective date of the Spin-Off;	
 	 	 	 	 	
CR’	 	=	 	the Conversion Rate in effect immediately after the 10th Trading Day immediately following the effective date of the Spin-Off;	
 	 	 	 	 	
FMV0	 	=	 	the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock over the first 10 consecutive Trading Day period immediately following the effective date of the Spin-Off; and	
 	 	 	 	 	
MP0	 	=	 	the average of the Last Reported Sale Prices of Common Stock over the first 10 consecutive Trading Day period immediately following the effective date of the Spin-Off.	
Such adjustment shall occur on the 10th Trading Day from the effective date of the Spin-Off; provided that in respect of any conversion within the 10 Trading Days immediately following, and including, the effective date of any Spin-Off, references in this subsection (c) with respect to the Spin-Off to 10 Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed between the effective date of such Spin-Off and the Conversion Date in determining the applicable Conversion Rate.
     If any such dividend or distribution described in this subsection (c) is declared but not paid or made, the Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.
     (d) If any cash dividend or distribution is paid to all or substantially all holders of Common Stock, the Conversion Rate will be adjusted based on the following formula:
57

 

where,
 	 	 	 	 	
CR0	 	=	 	the Conversion Rate in effect immediately after the close of business on the day preceding the Ex-Date for such distribution;	
 	 	 	 	 	
CR’	 	=	 	the Conversion Rate in effect immediately as of the opening of business on the Ex-Date for such distribution;	
 	 	 	 	 	
SP0	 	=	 	the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Ex-Date for such distribution; and	
 	 	 	 	 	
C	 	=	 	the amount in cash per share the Company distributes to holders of Common Stock.	
     Such adjustment shall become effective immediately after the opening of business on the Ex-Date for such dividend or distribution. If any such dividend or distribution is declared but not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.
     (e) If the Company or any of its Subsidiaries make a payment in respect of a tender or exchange offer for Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of Common Stock exceeds the Last Reported Sale Price of the Common Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate will be increased based on the following formula:

where,
 	 	 	 	 	
CR0	 	=	 	the Conversion Rate in effect on the date such tender or exchange offer expires;	
 	 	 	 	 	
CR’	 	=	 	the Conversion Rate in effect immediately after the closing of trading on the Trading Day next succeeding the date such tender or exchange offer expires;	
58

 
 	 	 	 	 	
AC	 	=	 	the aggregate value of all cash and any other consideration as determined by the Board of Directors paid or payable for shares purchased in such tender or exchange offer;	
 	 	 	 	 	
OS0	 	=	 	the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires;	
 	 	 	 	 	
OS’	 	=	 	the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to such tender or exchange offer); and	
 	 	 	 	 	
SP’	 	=	 	the average of the Last Reported Sale Prices of Common Stock over the 10 consecutive Trading Day period beginning on the Trading Day next succeeding the date such tender or exchange offer expires.	
Such adjustment to the Conversion Rate shall occur at the close of business on the tenth Trading Day from, and including, the Trading Day next succeeding the date such tender or exchange offer expires;  provided  that in respect of any conversion within 10 Trading Days immediately following, and including, the expiration date of any tender or exchange offer, references in this subsection (e) to 10 Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed between the expiration date of such tender or exchange offer and the Conversion Date in determining the applicable Conversion Rate. If the Company is obligated to purchase shares pursuant to any such tender or exchange offer, but the Company is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Date that would then be in effect if such tender or exchange offer had not been made.
     (f) In the event of an increase in the Conversion Rate pursuant to clauses (b) through (e) of this Section 6.02 or Section 6.03, that would result in the Securities, in the aggregate, becoming convertible into shares of Common Stock in excess of limitation set forth in NASDAQ Rule 4350, or a successor to such rule, as may then be in effect and interpreted by NASDAQ, the Company shall, at its option, either obtain stockholder approval of such issuances or deliver cash in lieu of any shares otherwise deliverable upon conversions in excess of such limitations (based on the Daily VWAP on the last VWAP Trading Day of the applicable Observation Period).
     (g) Notwithstanding the foregoing provisions of this Section 6.02, (i) no adjustment shall be made thereunder, nor shall an adjustment be made to the ability of a Holder to convert, for any distribution described therein if the Holder will otherwise participate in such distribution as a result of holding their Securities and at the same time as holders of the Common Stock participate, without conversion of such Holder’s Securities as if such Holders held a number of shares of Common Stock equal to (x) the applicable Conversion Rate multiplied by the principal amount of Securities held by such Holders (y) divided
59

 
by one thousand and (ii) no adjustment shall be made hereunder if the application of the foregoing formulas would result in a decline in the Conversion Rate (other than as a result of a share split or share combination pursuant to Section 6.02(a)), unless such application is a result of a readjustment to the Conversion Rate specifically contemplated by this Indenture.
     (h) In addition to any increases to the Conversion Rate required by subsections(a), (b), (c), (d), and (e) of this Section 6.02, and to the extent permitted by applicable law and the rules of the Nasdaq Global Select Stock Market or any other securities exchange on which the Common Stock is then listed, the Company from time to time may increase the Conversion Rate by any amount for a period of at least 20 calendar days if the Board of Directors determines that such increase would be in the Company’s best interest. Whenever the Conversion Rate is increased pursuant to the preceding sentence, the Company shall mail to the Holder of each Security at his last address appearing on the register provided for in Section 10.01 and the Trustee a notice of the increase at least 15 calendar days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect. In addition, the Company may also (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in connection with any dividend or distribution of shares (or rights to acquire shares) or similar event.
     (i) Except as set forth in this Section 6.02 or Section 6.03, no adjustment to the Conversion Rate will be made. Without limiting the foregoing, the Conversion Rate will not be adjusted:
     (i) upon the issuance of any shares of Common Stock pursuant to any plan providing for the reinvestment of dividends or interest payable on securities of the Company and the investment of additional optional amounts in shares of Common Stock under any plan;
     (ii) upon the issuance of any shares of Common Stock or options or rights to purchase or acquire such shares of Common Stock pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of its Subsidiaries;
     (iii) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security not described in clause (ii) above and outstanding prior to the Issue Date;
     (iv) for a change in the par value of the Common Stock; or
     (v) for accrued and unpaid interest.
60

 
     (j) All calculations under this Section 6.02 shall be made by the Company and shall be made to the nearest cent or to the nearest one-ten thousandth (1/10,000) of a share, as the case may be.
     (k) For purposes of this Section 6.02, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. If the Company pays any dividend or makes any distribution on, or issues any rights, options or warrants in respect of, shares of Common Stock held in treasury by the Company, the Company shall not issue, transfer or convey such shares of Common Stock in a manner that would have the effect of circumventing the provisions of this Section 6.02.
     (l) Whenever any provision of this Article 6 requires a calculation of the Last Reported Sale Prices or Daily VWAP over a span of multiple days, the Company will make appropriate adjustments (determined in good faith by the Board of Directors) to account for any adjustment or multiple simultaneous adjustments to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Date of the event occurs, at any time during the period from which such prices are to be calculated.
     (m) Notwithstanding the foregoing, no adjustment to the Conversion Rate will be required unless the adjustment would require an increase or decrease of at least 1% of the Conversion Rate. However, the Company will carry forward any adjustments that are less than 1% of the Conversion Rate that the Company elects not to make and take them into account upon the earlier of (i) any conversion of Securities and (ii) such time as all adjustments that have not been made prior thereto would have the effect of adjusting the Conversion Rate by at least 1%.
     Section 6.03. Adjustment Upon Fundamental Changes.
     (a) If a Fundamental Change occurs, the Company shall notify each of the Holders and the Trustee of the occurrence of any such event or transaction on the Effective Date of such Fundamental Change.
     (b) If a Holder elects to convert Securities in connection with a Fundamental Change (after giving effect to any exception or exclusion in such definition) that occurs prior to the Maturity Date, the Conversion Rate applicable to each $1,000 principal amount of Securities so converted shall be increased by an additional number of shares of Common Stock (the “ Additional Shares ”) as described below. A conversion shall be deemed to be in connection with a Fundamental Change if such conversion occurs on or after the Effective Date of a Fundamental Change and prior to the close of business on the Business Day immediately preceding the related Fundamental Change Repurchase Date. The Company shall notify the Holders and the Trustee of the Effective Date of a Fundamental Change on the Effective Date of such transaction.
61

 
     (i) The number of Additional Shares by which the Conversion Rate will be increased shall be determined by the Company by reference to the table attached as Schedule A hereto, based on the earliest of date on which the Fundamental Change is publicly announced, occurs or becomes effective (the “ Make-Whole Reference Date ”) and the Stock Price; provided  that if the actual Stock Price is between two Stock Price amounts in the table or the Make-Whole Reference Date is between two Make-Whole Reference Dates in the table, the number of Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the next higher and next lower Stock Price amounts and the two nearest Effective Dates, as applicable, based on a 365-day year;  provided further  that if (A) the Stock Price is greater than $150.00 per share of Common Stock (subject to adjustment in the same manner as set forth in Section 6.02), no Additional Shares shall be added to the Conversion Rate, and (B) the Stock Price is less than $23.59 per share (subject to adjustment in the same manner as set forth in Section 6.02), no Additional Shares shall be added to the Conversion Rate. Notwithstanding the foregoing, in no event shall the Conversion Rate exceed 42.3908 shares of common stock per $1,000 principal amount of Securities (subject to adjustment in the same manner as set forth in Section 6.02).
     (ii) The Stock Prices set forth in the first column of the table in Schedule A hereto (i.e., the row headers) shall be adjusted by the Company as of any date on which the Conversion Rate of the Securities is adjusted. The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the applicable Conversion Rate in effect immediately prior to the adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of Additional Shares within the table shall be adjusted in the same manner as the Conversion Rate as set forth in Section 6.02.
     (c) Settlement of Securities tendered for conversion as to which the Conversion Rate will be increased by Additional Shares pursuant to this Section 6.03 shall occur on the third Business Day immediately following the later of (i) last day of the Observation Period for such Security or (ii) the date the Stock Price relating to the relevant Make-Whole Reference Date becomes known.
     (d) For the avoidance of doubt, if a Holder converts Securities prior to the Effective Date of a Fundamental Change, and the Fundamental Change does not occur, the Holder shall not be entitled to Additional Shares in connection with such conversion.
     Section 6.04. Notice of Adjustments of Conversion Rate.
62

 
     Whenever the Conversion Rate is adjusted as herein provided:
     (a) the Company shall compute the adjusted Conversion Rate in accordance with Section 6.02 and shall prepare a certificate signed by the Chief Financial Officer of the Company setting forth the adjusted Conversion Rate and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall promptly be filed with the Trustee and with each Conversion Agent (if other than the Trustee); and
     (b) upon each such adjustment, a notice stating that the Conversion Rate has been adjusted and setting forth the adjusted Conversion Rate shall be required, such notice shall be provided by the Company to all Holders in accordance with Section 1.06.
     Neither the Trustee nor any Conversion Agent shall be under any duty or responsibility with respect to any such certificate or the information and calculations contained therein, except to exhibit the same to any Holder of Securities desiring inspection thereof at its office during normal business hours.
     Section 6.05. Company to Reserve Common Stock.
     The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock, for the purpose of effecting the conversion of Securities, the full number of shares of Common Stock then issuable upon the conversion of all Outstanding Securities.
     Section 6.06. Taxes on Conversions.
     Except as provided in the next sentence, the Company shall pay all documentary, stamp or similar issue or transfer tax due that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of Securities pursuant hereto. The Company shall not, however, be required to pay any tax or duty that may be payable in respect of (i) income of the Holder, or (ii) any transfer involved in the issue and delivery of shares of Common Stock in a name other than that of the Holder of the Security or Securities to be converted, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Company the amount of any such tax or duty, or has established to the satisfaction of the Company that such tax or duty has been paid.
     Section 6.07. Certain Covenants.
     Before taking any action which would cause an adjustment reducing the Conversion Rate below the then par value, if any, of the shares of Common Stock issuable upon conversion of the Securities, the Company shall take all corporate action which it reasonably determines may be necessary in order that the Company may validly and legally issue shares of such Common Stock at such adjusted Conversion Rate.
63

 
     The Company covenants that all shares of Common Stock issued upon conversion of Securities shall be fully paid and non-assessable by the Company and free from all taxes, liens and charges with respect to the issue thereof.
     The Company further covenants that if at any time the Common Stock shall be listed for trading on any other national securities exchange the Company shall, if permitted and required by the rules of such exchange, list and keep listed, so long as the Common Stock shall be so listed on such exchange, all Common Stock issuable upon conversion of the Securities.
     Section 6.08. Cancellation of Converted Securities.
     All Securities surrendered for the purpose of payment, repurchase, conversion or registration of transfer, shall, if surrendered to the Company or any Paying Agent or any Security Registrar, be surrendered to the Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by it, and no Securities shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall dispose of canceled Securities in accordance with its customary procedures and shall promptly provide copies of all cancelled certificates to the Company. If the Company shall acquire any of the Securities, such acquisition shall not operate as satisfaction of the debt represented by such Securities unless and until the same are delivered to the Trustee for cancellation.
     Section 6.09. Provision in Case of Effect of Reclassification, Consolidation, Merger or Sale.
     In the event of (i) any Fundamental Change described in clause (2) of the definition of Fundamental Change, (ii) any reclassification or change of the outstanding shares of Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a split, subdivision or combination), (iii) any consolidation, binding share exchange, recapitalization, reclassification, merger, combination or other similar event of the Company with another Person or (iv) any sale, transfer or conveyance of all or substantially all of the property and assets of the Company to any other Person, in each case as a result of which holders of Common Stock shall be entitled to receive cash, securities or other property or assets with respect to or in exchange for such Common Stock (any such event described in clauses (i) through (iv) a “ Merger Event ”), then:
     (a) the Company or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force at the date of execution of such supplemental indenture if such supplemental indenture is then required to so comply) permitted under Section 12.01(d) providing for the conversion and settlement of the Securities as set forth in this Indenture. Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may
64

 
be practicable to the adjustments provided for in this Article and the Trustee may conclusively rely on the determination by the Company of the equivalency of such adjustments. If, in the case of any Merger Event, the Reference Property includes shares of stock or other securities and assets of a company other than the successor or purchasing company, as the case may be, in such change of control, consolidation, binding share exchange, recapitalization, reclassification, merger, combination, sale, transfer or conveyance or Fundamental Change described in clause (2) of the definition of Fundamental Change, then such supplemental indenture shall also be executed by such other company and shall contain such additional provisions to protect the interests of the Holders of the Securities as the Board of Directors shall reasonably consider necessary by reason of the foregoing.
     In the event a supplemental indenture is executed pursuant to this Section 6.09, the Company shall promptly file with the Trustee an Officers’ Certificate briefly stating the reasons therefore, the kind or amount of cash, securities or property or assets that will constitute the Reference Property after any such Merger Event, any adjustment to be made with respect thereto and that all conditions precedent have been complied with, and shall promptly mail notice thereof to all Holders.
     If any securities to be provided for the purpose of conversion of Securities hereunder require registration with or approval of any governmental authority under any federal or state law before such securities may be validly issued upon conversion, each supplemental indenture executed pursuant to this Section shall provide that the Company or the successor or the purchasing Person, as the case may be, or if the Reference Property includes shares of stock or other securities and assets of a company other than the successor or purchasing company, as the case may be, then such company, shall use all commercially reasonable efforts, to the extent then permitted by the rules and interpretations of the SEC (or any successor thereto), to secure such registration or approval in connection with the conversion of Securities.
     (b) Notwithstanding, and subject to the provisions of Section 6.01, at the effective time of such Merger Event, the right to convert each $1,000 principal amount of Securities shall be changed to a right to convert such Securities by reference to the kind and amount of cash, securities or other property or assets that a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such transaction would have owned or been entitled to receive (the “ Reference Property ”). For purposes of determining the constitution of Reference Property, the type and amount of consideration that a holder of Common Stock would have been entitled to in the case of consolidations, binding share exchanges, recapitalizations, reclassifications, mergers, combinations, sales or transfers of assets or Fundamental Changes described in clause (2) of the definition of Fundamental Change or other transactions that cause the Common Stock 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) shall be deemed to be the (i) weighted average of the types and amounts of
65

 
consideration received by the holders of Common Stock that affirmatively make such an election or (ii) if no holders of Common Stock affirmatively make such election, the types and amounts of consideration actually received by such holders. None of the foregoing provisions shall affect any right of a Holder of Securities to convert its Securities in accordance with the provisions of this Article prior to the effective date.
     (c) Following the effective time of any such Merger Event, settlement of Securities converted shall be in cash and units of Reference Property determined in accordance with Section 6.01(c) above based on the Daily Conversion Value and Daily VWAP of such Reference Property. For the purposes of determining such Daily Conversion Value and Daily VWAP, (i) if the Reference Property includes securities for which the price can be determined in a manner contemplated by the definition of Daily VWAP, then the value of such securities shall be determined in accordance with the principles set forth in such definition, as determined in good faith by the Company (which determination shall be conclusive and binding); (ii) if the Reference Property includes other property (other than securities as to which clause (i) applies or cash), then the value of such property shall be the Fair Market Value of such property as determined by the Company’s Board of Directors in good faith; and (iii) if the Reference Property includes cash, then the value of such cash shall be the amount thereof.
     (d) The Company shall cause notice of the execution of a supplemental indenture required by this Section 6.09 to be mailed to each Holder, at his address appearing on the register provided for in Section 10.01, or by such other means reasonably acceptable to such Holder, within 20 calendar days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.
     (e) The above provisions of this Section shall similarly apply to successive Merger Events.
     Section 6.10. Responsibility of Trustee for Conversion Provisions.
     The Trustee and any Conversion Agent shall not at any time be under any duty or responsibility to any Holder of Securities to determine whether any facts exist which may require any adjustment of the Conversion Rate, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed, herein or in any supplemental indenture provided to be employed, in making the same, or whether a supplemental indenture need be entered into. Neither the Trustee nor any Conversion Agent shall be accountable with respect to the validity or value (or the kind or amount) of any Common Stock, or of any other securities or property or cash, which may at any time be issued or delivered upon the conversion of any Securities; and it or they do not make any representation with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to make or
66

 
calculate any cash payment or to issue, transfer or deliver any shares of Common Stock or share certificates or other securities or property or cash upon the surrender of any Security for the purpose of conversion; and the Trustee and any Conversion Agent shall not be responsible for any failure of the Company to comply with any of the covenants of the Company contained in this Article.
     Section 6.11. Stockholder Rights Plan. To the extent that the Company has a rights plan in effect upon conversion of the Securities into Common Stock, the Holder will receive, in addition to the Common Stock, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Stock, in which case, and only in such case, the Conversion Rate will be adjusted at the time of separation as if the Company distributed to all holders of Common Stock shares of the Company’s Capital Stock, evidences of indebtedness or assets as described in Section 6.02(c) above, subject to readjustment in the event of the expiration, termination or redemption of such rights. In lieu of any such adjustment, the Company may amend such applicable stockholder rights agreement to provide that upon conversion of the Securities the Holders will receive, in addition to the Common Stock issuable upon such conversion, the rights which would have attached to such Common Stock if the rights had not become separated from the Common Stock under such applicable stockholder rights agreement. Any distribution of rights or warrants pursuant to a rights plan that would allow a Holder to receive upon conversion, in addition to shares of Common Stock, the rights described therein with respect to such Common Stock (unless such rights or warrants have separated from the Common Stock) shall not constitute a distribution of rights or warrants that would entitle the Holder to an adjustment to the Conversion Rate.
     Section 6.12. Right to Set-off Withholding Taxes.
     The Company may, at its option, set-off withholding taxes due with respect to Securities as a result of an adjustment to the Conversion Rate against payments of cash and shares on the Securities.
ARTICLE 7
REMEDIES
     Section 7.01. Events of Default.
     “Event of Default”, wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be 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):
67

 
     (a) default in the payment of any interest (including Additional Interest) upon any Security when it becomes due and payable, and continuance of such default for a period of 30 days; or
     (b) default in the payment of the principal of any Security when due and payable at its Stated Maturity, upon required repurchase, upon acceleration or otherwise; or
     (c) failure by the Company to comply with its obligation to convert the Securities into cash and, if applicable, shares of Common Stock or Reference Property (as defined in Section 12.11(b) of this Indenture) upon exercise of a Holder’s conversion right; or;
     (d) failure by the Company to comply with its obligations under Article 8; or
     (e) failure by the Company to issue a Fundamental Change Repurchase Right Notice in accordance with Section 5.01; or
     (f) failure by the Company for 60 days after written notice from the Trustee or the Holders of at least 25% principal amount of the Outstanding Securities has been received by the Company to comply with any of its other agreements contained in the Securities or this Indenture; or
     (g) default by the Company or any Significant Subsidiary of the Company with respect to any debt for money borrowed in excess of $50,000,000 in the aggregate of the Company and/or any Significant Subsidiary of the Company, whether such debt now exists or shall hereafter be created, which default shall have resulted (i) in such debt in an amount exceeding $50,000,000 being accelerated and not rescinded or (ii) from a failure to pay the principal of any such debt in an amount exceeding $50,000,000 when due and payable at its Stated Maturity (and including any grace period relating to such debt), upon required repurchase or declaration; or
     (h) the Company or any of its Significant Subsidiaries shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or any of its Significant Subsidiaries or any substantial part of its respective property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or
     (i) an involuntary case or other proceeding shall be commenced against the Company or any of its Significant Subsidiaries seeking liquidation,
68

 
reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or any of its Significant Subsidiaries or any substantial part of its respective property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of sixty (60) consecutive calendar days.
     Section 7.02. Acceleration of Maturity; Rescission and Annulment.
     (a) If an Event of Default occurs and is continuing, then and in every such case except as provided below, the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities may declare the principal of all the Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal shall become immediately due and payable. However, upon an Event of Default arising out of Section 7.01(h) or Section 7.01(i) (except with respect to any Significant Subsidiary) the principal of all the Securities, plus accrued and unpaid interest to the acceleration date, shall be due and payable immediately without notice from the Trustee or Holders.
     (b) Notwithstanding the foregoing, at the election of the Company, the sole remedy with respect to an Event of Default for the failure by the Company to comply with its obligations under Section 314(a)(1) of the Trust Indenture Act relating to the Company’s failure to file any documents or reports that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act or of its covenants set forth in Section 10.04 (any such Event of Default, a “ Reporting Default ”), shall for the first 180 calendar days after the occurrence of such Reporting Default consist exclusively of the right to receive additional interest (the “ Reporting Interest ”) on the Securities at an annual rate equal to (i) 0.25% of the principal amount of the Securities for the first 90 calendar days after the occurrence of such Reporting Default and (ii) 0.50% of the principal amount of the Securities from the 91 st  day to, and including, the 180 th  day after the occurrence of such Reporting Default. If the Company so elects, the Reporting Interest shall accrue on all Outstanding Securities from and including the date on which such Reporting Default first occurs until such violation is cured or waived and shall be payable as provided in Section 3.08. On the 181 st  day after such Reporting Default (if such violation is not cured or waived prior to such 181 st  calendar day), then the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities may declare the principal of and accrued and unpaid interest on all such Securities to be due and payable immediately. Subject to Section 4.08, the payment of Reporting Interest as described in this Section 7.02 shall also constitute the payment of Additional Interest during such period as it is paid in connection with any requirement to pay Additional Interest under the Registration Rights Agreement, and the payment of such Additional Interest shall likewise constitute the payment of Reporting Interest during such period as it is paid in connection with any election by the
69

 
Company to pay Reporting Interest as the sole remedy for a Reporting Default as described in this paragraph.
     (c) If the Company elects to pay the Reporting Interest as the sole remedy for the Reporting Default, the Company shall notify in writing, by a certificate, the Holders, the Paying Agent and the Trustee of such election at any time on or before the close of business on the first Business Day following the date on which such Event of Default first occurs. Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that Reporting Interest is not payable. The Company shall pay the Reporting Interest semi-annually in arrears, with the first semi-annual payment due on the first Interest Payment Date following the date of such Reporting Default, in the same manner as described on the face of the Security.
     This Section 7.02, however, is subject to the conditions that if, at any time after the principal of the Securities shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay installments of accrued and unpaid interest upon all Securities and the principal of any and all Securities that shall have become due otherwise than by acceleration (with interest on overdue installments of accrued and unpaid interest (to the extent that payment of such interest is enforceable under applicable law) and on such principal at the rate borne by the Securities during the period of such Default), and if (a) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (b) any and all Events of Default under this Indenture with respect to such Securities, other than the nonpayment of principal of and accrued and unpaid interest on such Securities or failure to deliver amounts due upon conversion that shall have become due solely by such acceleration, shall have been cured or waived pursuant to Section 7.13, then and in every such case the Holders of a majority in aggregate principal amount of the Outstanding Securities, by written notice to the Company and to the Trustee, may waive all Defaults or Events of Default with respect to the Securities and rescind and annul such declaration and its consequences and such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver or rescission and annulment shall extend to or shall affect any subsequent Default or Event of Default, or shall impair any right consequent thereon. No rescission or annulment referred to above shall affect any subsequent Default or impair any right consequent thereon.
     Section 7.03. Collection of Indebtedness and Suits for Enforcement by Trustee.
     The Company covenants that if
70

 
     (a) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or
     (b) default is made in the payment of the principal of any Security at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and interest, and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and on any overdue interest, at the rate borne by the Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
     If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.
     Section 7.04. Trustee May File Proofs of Claim.
     In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 9.07.
     No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
71

 
     Section 7.05. Trustee May Enforce Claims Without Possession of Securities.
     All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.
     Section 7.06. Application of Money Collected.
     Subject to Article 6, any money or property money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
     FIRST: To the payment of all amounts due the Trustee under Section 9.07;
     SECOND: To the payment of the amounts then due and unpaid for principal of and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and interest, respectively; and
     THIRD: The balance, if any, to the Company or an other Person or Persons entitled thereto.
     Section 7.07. Limitation on Suits.
     Subject to Section 7.08, no Holder of any Security shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless
     (a) such Holder has previously given written notice to the Trustee of a continuing Event of Default;
     (b) the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
72

 
     (c) such Holder or Holders have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;
     (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and
     (e) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders.
     Section 7.08. Unconditional Right of Holders to Receive Principal and Interest and to Convert.
     Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and (subject to Section 3.08) interest on such Security on the respective Stated Maturities expressed in such Security and to convert such Security in accordance with Article 6 and to institute suit for the enforcement of any such payment and right to convert, and such rights shall not be impaired without the consent of such Holder.
     Section 7.09. Restoration of Rights and Remedies.
     If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
     Section 7.10. Rights and Remedies Cumulative.
     Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 3.07, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to
73

 
every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
     Section 7.11. Delay or Omission Not Waiver.
     No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee (subject to the limitations contained in this Indenture) or by the Holders, as the case may be.
     Section 7.12. Control by Holders.
     The Holders of a majority in principal amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee,  provided  that
     (a) such direction shall not be in conflict with any rule of law or with this Indenture, and
     (b) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction or this Indenture.
     Section 7.13. Waiver of Past Defaults.
     The Holders of not less than a majority in principal amount of the Outstanding Securities may on behalf of the Holders of all the Securities waive any past default hereunder and its consequences, except a default
     (a) in the payment of the principal of or interest on any Security that remains uncured,
     (b) in respect of the failure to deliver the amounts due upon conversion of a Security in accordance with Section 6.01 hereunder, or
     (c) in respect of a covenant or provision hereof which under Article 12 cannot be modified or amended without the consent of the Holder of each Outstanding Security affected.
     Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
74

 
     Section 7.14. Undertaking for Costs.
     In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act;  provided , that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company or in any suit for the enforcement of the right to convert any Security in accordance with Article 12.
     Section 7.15. Waiver of Stay or Extension Laws.
     The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
     Section 8.01. Company May Consolidate, Etc., Only on Certain Terms.
     The Company shall not consolidate with or merge with or into any other Person or convey, transfer or lease all or substantially all of its properties and assets to any Person, unless:
     (a) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety (i) shall be a corporation, partnership or trust, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and (ii) such Person (if not the Company) shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, all obligations of the Company under the Securities and this Indenture, and, to the extent that the Company has ongoing obligations pursuant to the Registration Rights Agreement, the Registration Rights Agreement;
75

 
     (b) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and
     (c) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.
     Section 8.02. Successor Substituted.
     Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 8.01, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease of all or substantially all the properties or assets of such predecessor Person, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities. If the Company is still in existence after the transaction, it will be released from its obligations and covenants hereunder and the under the Securities, except in the case of a lease of all or substantially all the properties or assets of the Company.
ARTICLE 9
THE TRUSTEE
     Section 9.01. Certain Duties and Responsibilities.
     The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, subject to Section 9.03.
76

 
     In case an Event of Default has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. The Trustee, however, may refuse to follow any direction that (i) conflicts with law or this Indenture, (ii) that the Trustee determines is unduly prejudicial to the rights of any other Holder or (iii) that would involve the Trustee in personal liability. Prior to taking any action under this Indenture, the Trustee will be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.
     Section 9.02. Notice of Defaults.
     The Trustee shall give the Holders notice of any default known to the Trustee that has occurred and is continuing hereunder within 90 days after such default has occurred. Except in the case of the default in the payment of principal of or interest on any Security or conversion default, the Trustee need not deliver the notice if and so long as a committee of trust officers of the Trustee in good faith determines that withholding the notice is in the interests of Holders. In addition, the Trustee shall give the Holders of Securities notice of any default actually known to it as and to the extent provided by the Trust Indenture Act. For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default.
     Section 9.03. Certain Rights of Trustee.
     Subject to the provisions of Section 9.01:
     (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
     (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;
     (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers’ Certificate;
     (d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and
77

 
protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
     (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;
     (f) the Trustee shall not be 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 shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and
     (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.
     Section 9.04. Not Responsible for Recitals or Issuance of Securities.
     The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof.
     Section 9.05. May Hold Securities.
     The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Section 9.08 and Section 9.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.
     Section 9.06. Money Held in Trust.
     Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.
78

 
     Section 9.07. Compensation and Reimbursement.
     The Company agrees
     (a) to pay to the Trustee from time to time reasonable compensation as shall be agreed in writing between the Company and the Trustee for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
     (b) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and
     (c) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.
     Section 9.08. Disqualification; Conflicting Interests.
     If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.
     Section 9.09. Corporate Trustee Required; Eligibility.
     There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has (or, in the case of a subsidiary of a bank holding company, its holding company parent shall have) a combined capital and surplus of at least $50,000,000. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.
     Section 9.10. Resignation and Removal; Appointment of Successor.
79

 
     (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 9.11.
     (b) The Trustee may resign at any time by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may, at the expense of the Company, petition any court of competent jurisdiction for the appointment of a successor Trustee.
     (c) The Trustee may be removed at any time by Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee and to the Company.
     (d) If at any time:
     (i) the Trustee shall fail to comply with Section 9.08 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or
     (ii) the Trustee shall cease to be eligible under Section 9.09 and shall fail to resign after written request therefor by the Company or by any such Holder, or
     (iii) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the Trustee, or (B) subject to Section 7.14, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
     (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, any Holder who has
80

 
been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. Notwithstanding replacement of the Trustee pursuant to this Section 9.10, the Company’s obligations under Section 9.07 hereof shall continue for the benefit of the retiring Trustee.
     (f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to all Holders in the manner provided in Section 1.06. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.
     Section 9.11. Acceptance of Appointment by Successor.
     In case of the appointment hereunder of a successor Trustee, such successor Trustee shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon the reasonable written request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.
     No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.
     Section 9.12. Merger, Conversion, Consolidation or Succession to Business.
     Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee (including the administration of the trust created by this Indenture), shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so
81

 
authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.
     Section 9.13. Preferential Collection of Claims Against Company.
     If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).
     Section 9.14. Appointment of Authenticating Agent.
     The Trustee may appoint an Authenticating Agent or Agents which shall be authorized to act on behalf of the Trustee to authenticate Securities issued upon original issue and upon exchange, registration of transfer, partial conversion or pursuant to Section 3.06, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.
     Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.
82

 
     An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall deliver written notice of such appointment by first-class mail, postage prepaid, to all Holders as their names and addresses appear in the Security Register, or by such other means reasonably acceptable to such Holders. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.
     The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 9.07.
     If an appointment is made pursuant to this Section, the Securities may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:
     This is one of the Securities described in the within-mentioned Indenture.
 	 	 	 	 	
 	U.S. Bank National Association,
    as Trustee
 	 	
 	By:  	 	 	
 	 	 	 	
 	 	as Authenticating Agent 	 	

 	By:  	 	 	
 	 	Name:  	 	 	
 	 	Title:  	Authorized Signatory 	 	
 	
ARTICLE 10
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY
     Section 10.01. Company to Furnish Trustee Names and Addresses of Holders.
     The Company will furnish or cause to be furnished to the Trustee
83

 
     (a) semi-annually, not more than 15 days after each Regular Record Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of such Regular Record Date, and
     (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar.
     Section 10.02. Preservation of Information; Communications to Holders.
     (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 10.01 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 10.01 upon receipt of a new list so furnished.
     (b) The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and duties of the Trustee, shall be as provided by the Trust Indenture Act.
     (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.
     Section 10.03. Reports by Trustee.
     (a) The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.
     (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which the Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when the Securities are listed on any stock exchange.
     Section 10.04. Reports by Company.
     The Company shall file with the Commission information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 and shall file with the Trustee within 15
84

 
days after the same is so required to be filed with the Commission and shall otherwise comply with the requirements of Trust Indenture Act Section 314(a); provided that any such information, documents or reports filed or furnished with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval (or EDGAR) system shall be deemed to be filed with the Trustee as of the time such information, documents or reports are filed or furnished via EDGAR.
     If at any time the Company is not subject to Sections 13 or 15(d) of the Exchange Act, the Company shall, during the first 12 months following the latest issue date of the Securities, use commercially reasonable efforts to provide to the Trustee, each Holder, beneficial owner or prospective purchaser of such Securities or the Common Stock issuable upon conversion thereof, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such Securities pursuant to Rule 144A under the Securities Act and to take such other actions as any such Person may reasonably request, all to the extent required from time to time to enable such Person to sell its Securities or Common Stock issuable upon conversion thereof in accordance with Rule 144A under the Securities Act, as such rule may be amended from time to time.
     Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely exclusively on an Officers’ Certificate).
ARTICLE 11
SATISFACTION AND DISCHARGE
     Section 11.01. Satisfaction and Discharge of Indenture.
     This Indenture shall cease to be of further effect (except as to any surviving rights of conversion, registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when
     (a) either
     (i) all Securities theretofore authenticated and delivered (other than (A) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.07 and (B) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 4.03) have been delivered to the Trustee for cancellation; or
85

 
     (ii) all such Securities not theretofore delivered to the Trustee for cancellation
     (A) have become due and payable, or
     (B) at their Stated Maturity, and
     (C) the Company, in the case of (A) or (B) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose, shares of Common Stock, lawful money of the United States or U.S. Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will provide lawful money not later than the due dates of principal or interest, or any combination thereof in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Fundamental Change Repurchase Date, as the case may be;
     (b) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and
     (c) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 9.07, the obligations of the Trustee to any Authenticating Agent under Section 9.14 and, if money shall have been deposited with the Trustee pursuant to subclause (ii) of Clause (a) of this Section, the obligations of the Trustee under Section 11.02 and the last paragraph of Section 4.03 shall survive.
     Section 11.02. Application of Trust Money.
     Subject to the provisions of the last paragraph of Section 4.03, all funds or U.S. Government Obligations deposited with the Trustee pursuant to Section 11.01 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and interest for whose payment such funds or U.S. Government Obligations have been deposited with the Trustee. Upon termination of the trust established pursuant to Section 11.01, all funds and/or U.S. Government Obligations deposited with the
86

 
Trustee pursuant to Section 11.01 (and held by it or any Paying Agent) for the payment of Securities subsequently converted shall promptly be returned to the Company upon Company Request.
ARTICLE 12
MODIFICATION AND AMENDMENT
     Section 12.01. Supplemental Indentures Without Consent of Holders.
     Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, for any of the following purposes:
     (a) to cure any ambiguity, manifest error, defect or omission or inconsistency; provided that in the case of any omission or inconsistency the rights of the Holders are not adversely affected in any material respect; or
     (b) to provide for the assumption by a successor corporation of our obligations under this Indenture; or
     (c) to add guarantees with respect to the Securities; or
     (d) to provide for a successor Trustee in accordance with the terms of this Indenture or to otherwise comply with any requirement of this Indenture; or
     (e) to provide for the issuance of additional Securities, to the extent that the Company deems such amendment necessary or advisable in connection with such issuance;  provided  that no such amendment or supplement may impair the rights or interests of any Holder; or
     (f) to increase the Conversion Rate; or
     (g) to secure the Securities; or
     (h) to add to the Company’s covenants for the benefit of the Holders or to surrender any right or power conferred upon the Company; or
     (i) to provide for the conversion of Securities in accordance with the terms of this Indenture; or
     (j) to conform the terms of this Indenture or the Securities to the “Description of Notes” section of the Company’s final offering memorandum dated June 4, 2008 relating to the offering of the Securities; or
     (k) to comply with any requirement of the SEC in connection with the qualification of this Indenture under the Trust Indenture Act.
87

 
     Section 12.02. Supplemental Indentures with Consent of Holders.
     With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders under this Indenture;  provided ,  however , that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,
     (a) reduce the percentage in principal amount of the Outstanding Securities, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture; or
     (b) reduce the rate, or extend the stated time for payment, of interest (including Additional Interest and Reporting Interest) on any Security; or
     (c) reduce the principal, or extend the Stated Maturity, of any Security; or
     (d) adversely affect the right to convert any Security as provided in Article 6; or
     (e) reduce the Fundamental Change Repurchase Price of any Security or amend or modify in any manner adverse to any Holder the Company’s obligation to make such payments, whether through an amendment or waiver of provisions in this Indenture (including the covenants or definitions contained herein); or
     (f) change the place of payment where, or the coin or currency in which, any the principal of, interest on, or Additional Interest or Reporting Interest, in respect of any Security is payable; or
     (g) impair the right of any Holder to receive payment of principal of and interest on such Holder’s Securities on or after the due dates therefore or to institute suit for the enforcement of any payment on or with respect to such Holder’s Securities; or
     (h) adversely affect the ranking of the Securities as our senior unsecured indebtedness; or
     (i) modify any of the provisions of this Section or Section 7.13, except to increase (i) the percentage in principal amount of the Outstanding Securities, the consent or waiver of whose Holders is required thereunder or (ii) to provide
88

 
that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby.
     It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
     Section 12.03. Execution of Supplemental Indentures.
     In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 9.01) shall be fully protected in relying upon, an Opinion of Counsel and an Officers’ Certificate stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.
     Section 12.04. Effect of Supplemental Indentures; Notices.
     Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
     After an amendment, supplement or waiver under this Article 12 becomes effective, the Company will send to the Holders a notice briefly describing the amendment, supplement or waiver.  The Company will send supplemental indentures to Holders upon request.  Any failure of the Company to send such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.
     Section 12.05. Conformity with Trust Indenture Act.
     Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.
     Section 12.06. Reference in Securities to Supplemental Indentures.
     Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by
89

 
the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities.
90

 
     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.
 	 	 	 	 	
 	NETAPP, INC.
 	 	
 	By:  	/s/ Steven J. Gomo	 	
 	 	Name:  	Steven J. Gomo	 	
 	 	Title:  	Executive Vice President, Finance and Chief Financial Officer	 	
 	
[Signature Page to the Indenture — Trustee Signature Follows]

 
 	 	 	 	 	
 	U.S. BANK NATIONAL ASSOCIATION
     As Trustee
 	 	
 	By:  	/s/ Paula Oswald	 	
 	 	Name:  	Paula Oswald	 	
 	 	Title:  	Vice President	 	
 	
[Signature Page to the Indenture]

 
Schedule A
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Make-Whole Reference Date	
 	 	 	 	 	 	June 10,	 	June 1,	 	June 1,	 	June 1,	 	June 1,	 	June 1,	
 	 	Stock Price	 	2008	 	2009	 	2010	 	2011	 	2012	 	2013	
 	 	$	23.59	 	 	 	10.9902	 	 	 	10.9902	 	 	 	10.9902	 	 	 	10.9902	 	 	 	10.9902	 	 	 	10.9902	 	
 	 	$	25.00	 	 	 	9.7689	 	 	 	9.3772	 	 	 	9.0269	 	 	 	8.7245	 	 	 	8.5994	 	 	 	8.5994	 	
 	 	$	26.00	 	 	 	8.9899	 	 	 	8.5711	 	 	 	8.1725	 	 	 	7.7860	 	 	 	7.2766	 	 	 	7.0609	 	
 	 	$	28.00	 	 	 	7.6642	 	 	 	7.2082	 	 	 	6.7394	 	 	 	6.2277	 	 	 	5.4821	 	 	 	4.3137	 	
 	 	$	30.00	 	 	 	6.5885	 	 	 	6.1126	 	 	 	5.6016	 	 	 	5.0116	 	 	 	4.1219	 	 	 	1.9327	 	
 	 	$	32.00	 	 	 	5.7072	 	 	 	5.2243	 	 	 	4.6920	 	 	 	4.0597	 	 	 	3.1002	 	 	 	0.0000	 	
 	 	$	35.00	 	 	 	4.6621	 	 	 	4.1851	 	 	 	3.6483	 	 	 	3.0004	 	 	 	2.0358	 	 	 	0.0000	 	
 	 	$	37.50	 	 	 	3.9825	 	 	 	3.5202	 	 	 	2.9963	 	 	 	2.3640	 	 	 	1.4523	 	 	 	0.0000	 	
 	 	$	40.00	 	 	 	3.4332	 	 	 	2.9908	 	 	 	2.4889	 	 	 	1.8876	 	 	 	1.0552	 	 	 	0.0000	 	
 	 	$	45.00	 	 	 	2.6148	 	 	 	2.2196	 	 	 	1.7745	 	 	 	1.2558	 	 	 	0.6019	 	 	 	0.0000	 	
 	 	$	50.00	 	 	 	2.0493	 	 	 	1.7029	 	 	 	1.3184	 	 	 	0.8854	 	 	 	0.3888	 	 	 	0.0000	 	
 	 	$	60.00	 	 	 	1.3493	 	 	 	1.0887	 	 	 	0.8096	 	 	 	0.5165	 	 	 	0.2254	 	 	 	0.0000	 	
 	 	$	75.00	 	 	 	0.8174	 	 	 	0.6471	 	 	 	0.4735	 	 	 	0.3041	 	 	 	0.1472	 	 	 	0.0000	 	
 	 	$	90.00	 	 	 	0.5448	 	 	 	0.4301	 	 	 	0.3171	 	 	 	0.2102	 	 	 	0.1081	 	 	 	0.0000	 	
 	 	$	120.00	 	 	 	0.2788	 	 	 	0.2212	 	 	 	0.1664	 	 	 	0.1147	 	 	 	0.0615	 	 	 	0.0000	 	
 	 	$	150.00	 	 	 	0.1523	 	 	 	0.1204	 	 	 	0.0907	 	 	 	0.0627	 	 	 	0.0339	 	 	 	0.0000	 	
1

Exhibit 4.2
NETAPP, INC.
1.75% Convertible Senior Notes due 2013
Registration Rights Agreement
June 10, 2008
Goldman, Sachs & Co.,
Morgan Stanley & Co. Incorporated
     As representatives of the several Purchasers
     Named in Schedule I to the Purchase Agreement,
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
     and
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
          NetApp, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to the Purchasers (as defined herein) upon the terms set forth in the Purchase Agreement (as defined herein) its 1.75% Convertible Senior Notes due 2013 (the “Securities”). As an inducement to the Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to the obligations of the Purchasers thereunder, the Company agrees with the Purchasers for the benefit of Holders (as defined herein) from time to time of the Registrable Securities (as defined herein) as follows:
          1. Definitions.
          (a) Capitalized terms used herein without definition shall have the meanings ascribed to them in the Purchase Agreement. As used in this Agreement, the following defined terms shall have the following meanings:
          “Additional Interest” has the meaning assigned thereto in Section 6(a) hereof.
          “Affiliate” of any specified person means any other person which, directly or indirectly, is in control of, is controlled by, or is under common control with such specified person. For purposes of this definition, control of a person means the power, direct or indirect, to direct or cause the direction of the management and policies of such person whether by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
          “Business day” means any day, other than a Saturday or a Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law, regulation or executive order to close in The City of New York.
          “Closing Date” means the Closing Date as defined in the Purchase Agreement.
          “Commission” means the United States Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose.

 
          “Common Stock” means the Company’s common stock, par value $0.001 per share.
          “Company” has the meaning assigned thereto in the introductory paragraph hereof.
          “DTC” means The Depository Trust Company.
          “Effective Failure” has the meaning assigned thereto in Section 6(b) hereof.
          “Effectiveness Period” has the meaning assigned thereto in Section 2(a)(ii) hereof.
          “Effective Time” means the time at which the Commission declares the Shelf Registration Statement required by Section 2(a)(i) effective or at which the Shelf Registration Statement otherwise becomes effective.
          “Electing Holder” has the meaning assigned thereto in Section 3(a)(iii) hereof.
          “End Date” has the meaning assigned thereto in Section 2(a)(i) hereof.
          “Exchange Act” means the United States Securities Exchange Act of 1934, as amended.
          “FINRA Rules” means the Rules of the Financial Industry Regulatory Authority, Inc., as amended from time to time.
          “Holder” means any person that is the record owner of Registrable Securities (and includes any person that has a beneficial interest in any Registrable Security in book-entry form).
          “Indenture” means the Indenture, dated as of June 10, 2008, between the Company and U.S. Bank National Association ,  as amended and supplemented from time to time in accordance with its terms.
          “No Obligation Period” means any period during which the Registrable Securities are eligible to be sold by Persons that are not Affiliates of the Company pursuant to Rule 144 under the Securities Act without any volume or manner of sale restrictions.
          “Notice and Questionnaire” means a Notice of Registration Statement and Selling Securityholder Questionnaire substantially in the form of Appendix A hereto.
          “Option Closing Date” means the last Additional Closing Date as defined in the Purchase Agreement.
          The term “person” means an individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.
          “Prospectus” means the prospectus (including, without limitation, any preliminary prospectus, any final prospectus and any prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A, 430B or 430C under the Securities Act) included in the Shelf Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by the Shelf Registration Statement and by all other amendments and supplements to such prospectus, including all material incorporated by reference in such prospectus and all documents filed after the date of such prospectus by the Company under the Exchange Act and incorporated by reference therein.
          “Purchase Agreement” means the purchase agreement, dated as of June 4, 2008, among the Purchasers and the Company relating to the Securities.
          “Purchasers” means the Purchasers named in Schedule I to the Purchase Agreement.
2

 
          “Registrable Securities” means all or any portion of the Securities issued from time to time under the Indenture in registered form and the shares of Common Stock issuable upon conversion of such Securities;  provided ,  however , that a security ceases to be a Registrable Security for such period as it is no longer a Restricted Security pursuant to clause (i) or (ii) of the definition of Restricted Security (or pursuant to clause (iii) of such definition after the day that is one year following the later of the Closing Date and the Option Closing Date).
          “Registration Default Date” has the meaning assigned thereto in Section 6(a) hereof.
          “Restricted Security” means any Security or share of Common Stock issuable upon conversion of such Securities except any such Security or share of Common Stock that (i) ceases to be outstanding, (ii) has been effectively registered under the Securities Act and sold or otherwise transferred in a manner contemplated by the Shelf Registration Statement or (iii) has been transferred in compliance with Rule 144 under the Securities Act (or any successor provision thereto) or is transferable by a person who is not an affiliate of the Company pursuant to Rule 144 (or any successor provision thereto) without any volume or manner of sale restrictions thereunder.
          “Rules and Regulations” means the published rules and regulations of the Commission promulgated under the Securities Act or the Exchange Act, as in effect at any relevant time.
          “Securities” has the meaning assigned hereto in the introductory paragraph hereof.
          “Securities Act” means the United States Securities Act of 1933, as amended.
          “Shelf Registration” means a registration effected pursuant to Section 2 hereof.
          “Shelf Registration Statement” means a “shelf” registration statement filed under the Securities Act providing for the registration of, and the sale on a continuous or delayed basis by the Holders of, all of the Registrable Securities pursuant to Rule 415 under the Securities Act and/or any similar rule that may be adopted by the Commission, filed by the Company pursuant to the requirements of Section 2(a)(i) of this Agreement, including the Prospectus contained therein, any amendments and supplements to such registration statement, including post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement.
          “Suspension Period” has the meaning assigned thereto in Section 2(b).
          “Trust Indenture Act” means the Trust Indenture Act of 1939, or any successor thereto, and the rules, regulations and forms promulgated thereunder, as the same shall be amended from time to time.
          The term “underwriter” means any underwriter of Registrable Securities in connection with an offering thereof under a Shelf Registration Statement.
          (b) Wherever there is a reference in this Agreement to a percentage of the “principal amount” of Registrable Securities or to a percentage of Registrable Securities, Common Stock shall be treated as representing the principal amount of Securities that was surrendered for conversion in order to receive such number of shares of Common Stock.
          2. Shelf Registration.
          (a) The Company shall use its reasonable efforts:
          (i) to cause the Shelf Registration Statement to be declared effective under the Securities Act no later than the 181st calendar day following the later of the Closing Date and the Additional Closing Date;
          (ii) to keep the Shelf Registration Statement continuously effective under the Securities Act in order to permit the Prospectus forming a part thereof to be usable by Holders until the date (the “End
3

 
Date”) that is the earliest of the date (x) that is one year following the later of the Closing Date and the Option Closing Date and (y) as of which all there are no longer any Registrable Securities (such period being referred to herein as the “Effectiveness Period”);
          (iii) after the Effective Time, within 10 Business Days after receipt of the completed Notice and Questionnaire from any Holder that is not then an Electing Holder, the Company shall file such amendments to the Shelf Registration Statement or supplements to the related Prospectus as are reasonably necessary to permit the Holder to deliver the Prospectus to purchasers of Registrable Securities (subject to the Company’s right to suspend the use of the Prospectus as set forth in Section 2(b));  provided ,  however , that the Company shall not be required to make more than one such filing in any calendar quarter in the form of a post-effective amendment to the Shelf Registration Statement; and  provided ,  further , that nothing in this subparagraph shall relieve such Holder of the obligation to return a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(a)(ii) hereof; and
          (iv) if at any time during the Effectiveness Period the Securities are convertible into securities other than Common Stock, to cause, or to cause any successor under the Indenture to cause, such securities to be included in the Shelf Registration Statement no later than the date on which the Securities may then be convertible into such securities;
provided, however, that notwithstanding any other provision of this Agreement, the Company’s obligation to have declared effective or maintain the effectiveness of the Shelf Registration Statement required above shall be suspended during any No Obligation Period.
The Company shall be deemed not to have used its reasonable efforts to keep the Shelf Registration Statement effective during the requisite period if, during any period that is not a No Obligation Period, the Company voluntarily takes any action that would result in Holders of Registrable Securities covered thereby not being able to offer and sell any of such Registrable Securities during that period, unless such action is (A) required by applicable law and the Company thereafter promptly complies with the requirements of Section 3(j) below or (B) permitted pursuant to Section 2(b) below.
          (b) The Company may suspend the use of the Prospectus for a period not to exceed 60 days in any six-month period (a “Suspension Period”) if the Company shall have determined in good faith that because of valid business reasons (not including avoidance of the Company’s obligations hereunder), including the acquisition or divestiture of assets, pending corporate developments and similar events, it is in the interests of the Company to suspend such use, and prior to suspending such use the Company provides the Holders with written notice of such suspension, which notice need not specify the nature of the event giving rise to such suspension.
          (c) The Company agrees that the Company will:
          (i) Cooperate with Holders of Securities to facilitate the delivery of Securities to be sold pursuant to Rule 144(b)(1)(i) free of any restrictive legends and in such denominations and registered in such names as the Holders thereof may request in writing as promptly as practicable but in any event within three Business Days of receipt of a written request and in any event, on the day that is one year following the later of the Closing Date and the Option Closing Date, facilitate the removal of any restrictive legends (if any) and cause the Securities to be represented by a CUSIP that represents that a person who is not an Affiliate of the Company pursuant to Rule 144 (or any successor provision thereto) can resell such Securities without any volume or manner of sale restrictions thereunder; and
          (ii) Represent and agree with the Holders that the Company and its Affiliates have not since the Closing Date resold any Securities that have been acquired or reacquired by any of them except pursuant to an effective registration statement under the Securities Act and will not resell any Securities acquired by them except pursuant to an effective Registration Statement under the Securities Act until such time as none of the Securities are Registrable Securities.
4

 
          3. Registration Procedures. In connection with the Shelf Registration Statement, the following provisions shall apply during any period that is not a No Obligation Period:
          (a) (i) Not less than 30 calendar days prior to the anticipated Effective Time of the Shelf Registration Statement, the Company shall mail the Notice and Questionnaire to the Holders of Registrable Securities. No Holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement as of the Effective Time, and no Holder shall be entitled to use the Prospectus forming a part thereof for resales of Registrable Securities at any time, unless such Holder has returned a completed and signed Notice and Questionnaire to the Company by the deadline for response set forth therein;  provided, however , Holders of Registrable Securities shall have at least 28 calendar days from the date on which the Notice and Questionnaire is first mailed to such Holders to return a completed and signed Notice and Questionnaire to the Company;
          (ii) After the Effective Time of the Shelf Registration Statement, the Company shall, upon the request of any Holder of Registrable Securities that is not then an Electing Holder, promptly send a Notice and Questionnaire to such Holder. The Company shall not be required to take any action to name such Holder as a selling securityholder in the Shelf Registration Statement or to enable such Holder to use the Prospectus forming a part thereof for resales of Registrable Securities until such Holder has returned a completed and signed Notice and Questionnaire to the Company, in which case the Company’s obligations shall be as set forth in Section 2(a)(iii) above; and
          (iii) The term “Electing Holder” shall mean any Holder of Registrable Securities that has returned a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(a)(i) or 3(a)(ii) hereof.
          (b) If requested by an Electing Holder, the Company shall furnish to such Electing Holder, prior to the Effective Time, a copy of the Shelf Registration Statement initially filed with the Commission, and shall furnish to such Holder, prior to the filing thereof with the Commission, copies of each amendment thereto and each amendment or supplement, if any, to the Prospectus included therein, and shall use its reasonable efforts to reflect in each such document, at the Effective Time or when so filed with the Commission, as the case may be, such comments as the Holders and their respective counsel reasonably may propose.
          (c) The Company shall promptly take such action as may be necessary so that (i) each of the Shelf Registration Statement and any amendment thereto and the Prospectus forming a part thereof and any amendment or supplement thereto (and each report or other document incorporated therein by reference in each case) complies in all material respects with the Securities Act and the Exchange Act and the respective rules and regulations thereunder, (ii) each of the Shelf Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) each of the Prospectus forming a part of the Shelf Registration Statement and any amendment or supplement to such Prospectus, does not at any time during the Effectiveness Period include 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 the Company shall not be required to take such action in respect of the Shelf Registration Statement or any amendment thereto or of the Prospectus or any amendment or supplement to the Prospectus during any Suspension Period.
          (d) The Company shall promptly advise each Electing Holder (which advice may be effected by posting the required information on the systems of DTC), and shall confirm such advice in writing if so requested by any such Electing Holder:
          (i) when a Shelf Registration Statement and any amendment thereto has been filed with the Commission and when a Shelf Registration Statement or any post-effective amendment thereto has become effective;
5

 
          (ii) of any request by the Commission for amendments or supplements to the Shelf Registration Statement or the Prospectus included therein or for additional information;
          (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration Statement or the initiation of any proceedings for such purpose;
          (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the securities included in the Shelf Registration Statement for sale in any jurisdiction or the initiation of any proceeding for such purpose; and
          (v) of the occurrence of any event or the existence of any state of facts that requires the making of any changes in the Shelf Registration Statement or the Prospectus included therein so that, as of such date, such Shelf Registration Statement and Prospectus do not contain an untrue statement of a material fact and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading (which advice shall be accompanied by an instruction to such Holders to suspend the use of the Prospectus until the requisite changes have been made).
          (e) The Company shall use its reasonable efforts to prevent the issuance, and if issued to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Shelf Registration Statement or, if any such order of suspension is made effective during or results in any Suspension Period, promptly following the end of such Suspension Period.
          (f) The Company shall furnish to each Electing Holder, without charge, at least one copy of the Shelf Registration Statement and all post-effective amendments thereto, including financial statements and schedules, and, if such Electing Holder so requests in writing, all reports, other documents and exhibits that are filed with or incorporated by reference in the Shelf Registration Statement.
          (g) The Company shall, during the Effectiveness Period, deliver to each Electing Holder, without charge, as many copies of the Prospectus (including each preliminary Prospectus) included in the Shelf Registration Statement and any amendment or supplement thereto as such Electing Holder may reasonably request; and the Company consents (except during the periods specified in Section 2(b) above or during the continuance of any event or the existence of any state of facts described in Section 3(d)(iii), (iv) or (v) above) to the use of the Prospectus and any amendment or supplement thereto by each of the Electing Holders in connection with the offering and sale of the Registrable Securities covered by the Prospectus and any amendment or supplement thereto during the Effectiveness Period.
          (h) Prior to any offering of Registrable Securities pursuant to the Shelf Registration Statement, the Company shall use its reasonable efforts to (i) register or qualify or cooperate with the Electing Holders and their respective counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or “blue sky” laws of such jurisdictions within the United States as any Electing Holder may reasonably request, (ii) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers and sales in such jurisdictions for so long as may be necessary to enable any Electing Holder or underwriter, if any, to complete its distribution of Registrable Securities pursuant to the Shelf Registration Statement, and (iii) take any and all other actions necessary or advisable to enable the disposition in such jurisdictions of such Registrable Securities;  provided ,  however , that in no event shall the Company be obligated to (A) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to so qualify but for this Section 3(h) or (B) file any general consent to service of process or become subject to taxation in any jurisdiction where it is not as of the date hereof so subject.
          (i) Unless any Registrable Securities shall be in book-entry only form, the Company shall cooperate with the Electing Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to the Shelf Registration Statement, which certificates, if so required by any securities
6

 
exchange upon which any Registrable Securities are listed, shall be penned, lithographed or engraved, or produced by any combination of such methods, on steel engraved borders, and which certificates shall be free of any restrictive legends and in such permitted denominations and registered in such names as Electing Holders may request in connection with the sale of Registrable Securities pursuant to the Shelf Registration Statement.
          (j) Upon the occurrence of any event or the existence of any state of facts contemplated by Section 3(d)(v) above, the Company shall prepare a post-effective amendment to any Shelf Registration Statement or an amendment or supplement to the related Prospectus or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however,  that the Company shall not be required to take such action in respect of the Shelf Registration Statement or any amendment thereto or of the Prospectus or any amendment or supplement to the Prospectus during any Suspension Period. If the Company notifies the Electing Holders of the occurrence of any event or the existence of any state of facts contemplated by Section 2(b) or Section 3(d)(v) above, the Electing Holder shall suspend the use of the Prospectus until the requisite changes to the Prospectus have been made.
          (k) Not later than the Effective Time of the Shelf Registration Statement, the Company shall provide a CUSIP number for the Registrable Securities that are debt securities.
          (l) To the extent that the Company files a Shelf Registration Statement, the Company shall use its reasonable efforts to comply with all applicable Rules and Regulations, and to make generally available to its securityholders as soon as practicable, but in any event not later than eighteen months after (i) the effective date (as defined in Rule 158(c) under the Securities Act) of the Shelf Registration Statement, (ii) the effective date of each post-effective amendment to the Shelf Registration Statement, and (iii) the date of each filing by the Company with the Commission of an Annual Report on Form 10-K that is incorporated by reference in the Shelf Registration Statement, an earnings statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158).
          (m) At or prior to any Effective Time of the Shelf Registration Statement, the Company shall cause the Indenture to be qualified under the Trust Indenture Act; in connection with such qualification, the Company shall cooperate with the Trustee under the Indenture and the Holders (as defined in the Indenture) to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and the Company shall execute, and shall use all reasonable efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner. In the event that any such amendment or modification referred to in this Section 3(m) involves the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture, and shall use all reasonable efforts to cause such new trustee to take all action necessary to be qualified under the Trust Indenture Act, as required.
          (n) The Company shall enter into such customary agreements and take all other appropriate action reasonably acceptable to it in order to expedite and facilitate the registration and disposition of the Registrable Securities, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures substantially identical to those set forth in Section 5 hereof with respect to all parties to be indemnified pursuant to Section 5 hereof.
          (o) The Company shall:
          (i)(A) make reasonably available for inspection by the Electing Holders, any underwriter participating in any disposition pursuant to the Shelf Registration Statement, and any attorney, accountant or other agent retained by such Electing Holders or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and (B) cause
7

 
the Company’s officers, directors and employees to supply all information reasonably requested by such Electing Holders or any such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as is customary for similar due diligence examinations;  provided ,  however , that all records, information and documents that are designated in writing by the Company, in good faith, as confidential shall be kept confidential by such Electing Holders and any such underwriter, attorney, accountant or agent, unless such disclosure is made in connection with a court proceeding or required by law, or such records, information or documents become available to the public generally or through a third party without an accompanying obligation of confidentiality; and  provided further  that, if the foregoing inspection and information gathering would otherwise disrupt the Company’s conduct of its business, such inspection and information gathering shall, to the greatest extent possible, be coordinated on behalf of the Electing Holders and the other parties entitled thereto by one counsel designated by and on behalf of the Electing Holders and other parties.
          (p) The Company will use its reasonable efforts to cause the Common Stock issuable upon conversion of the Securities to be listed on the Nasdaq Global Select Market or other stock exchange or trading system on which the Common Stock primarily trades on or prior to the Effective Time of the Shelf Registration Statement hereunder.
          (q) Notwithstanding the foregoing, in the event the Company elects not to file the Shelf Registration Statement and is instead paying Additional Interest in accordance with Section 6 of this Agreement, the Company shall not be required to comply with any of subsections (a) through (p) of this Section 3.
          4. Registration Expenses. Except as otherwise provided in Section 3, the Company shall bear all fees and expenses incurred in connection with the performance of its obligations under Sections 2 and 3 hereof and shall bear or reimburse the Electing Holders for the reasonable fees and disbursements of a single counsel selected by a plurality of all Electing Holders who own an aggregate of not less than 25% of the Registrable Securities covered by the Shelf Registration Statement to act as counsel therefore in connection therewith. Each Electing Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Electing Holder’s Registrable Securities pursuant to the Shelf Registration Statement.
          5. Indemnification and Contribution.
          (a) Indemnification by the Company. Upon the registration of the Registrable Securities pursuant to Section 2 hereof, the Company shall indemnify and hold harmless each Electing Holder and each underwriter, selling agent or other securities professional, if any, which facilitates the disposition of Registrable Securities, and each of their respective officers and directors and each person who controls such Electing Holder, underwriter, selling agent or other securities professional within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each such person being sometimes referred to as an “Indemnified Person”) against any losses, claims, damages or liabilities, joint or several, to which such Indemnified Person may become subject under the Securities 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 Shelf Registration Statement under which such Registrable Securities are to be registered under the Securities Act, or any Prospectus contained therein or furnished by the Company to any Indemnified Person, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company hereby agrees to reimburse such Indemnified Person for any legal or other expenses reasonably incurred by them 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 to any such Indemnified Person 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 such Shelf Registration Statement or Prospectus, or amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by such Indemnified Person expressly for use therein.
8

 
          (b) Indemnification by the Electing Holders and any Agents and Underwriters. Each Electing Holder agrees, as a consequence of the inclusion of any of such Electing Holder’s Registrable Securities in such Shelf Registration Statement, and each underwriter, selling agent or other securities professional, if any, which facilitates the disposition of Registrable Securities shall agree, as a consequence of facilitating such disposition of Registrable Securities, severally and not jointly, to (i) indemnify and hold harmless the Company, its directors, officers who sign any Shelf Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities to which the Company or such other persons may become subject, under the Securities 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 such Shelf Registration Statement or Prospectus, or any amendment or supplement, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein 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 reliance upon and in conformity with written information furnished to the Company by or on behalf of such Electing Holder, underwriter, selling agent or other securities professional expressly for use therein, and (ii) reimburse the Company and such other persons 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.
          (c) Notices of Claims, Etc. 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 an indemnifying party under this Section 5, notify such indemnifying party in writing of the commencement thereof; however, 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 the indemnification provisions of or contemplated by subsection (a) or (b) above. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, such 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 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, such indemnifying party shall not be liable to such indemnified party under this Section 5 for any legal expenses of other 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. 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) Contribution. If the indemnification provided for in this Section 5 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 fault of the indemnifying party and the indemnified party 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 fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation (even if the Electing Holders or any underwriters, selling agents or other
9

 
securities professionals or all of them 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 in this Section 5(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 shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. 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. The obligations of the Electing Holders and any underwriters, selling agents or other securities professionals in this Section 5(d) to contribute shall be several in proportion to the percentage of principal amount of Registrable Securities registered or underwritten, as the case may be, by them and not joint.
          (e) Notwithstanding any other provision of this Section 5, in no event will any (i) Electing Holder be required to undertake liability to any person under this Section 5 for any amounts in excess of the dollar amount of the proceeds to be received by such Holder from the sale of such Holder’s Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) pursuant to any Shelf Registration Statement under which such Registrable Securities are to be registered under the Securities Act and (ii) underwriter, selling agent or other securities professional be required to undertake liability to any person hereunder for any amounts in excess of the discount, commission or other compensation payable to such underwriter, selling agent or other securities professional with respect to the Registrable Securities underwritten by it and distributed to the public.
          (f) The obligations of the Company under this Section 5 shall be in addition to any liability which the Company may otherwise have to any Indemnified Person and the obligations of any Indemnified Person under this Section 5 shall be in addition to any liability which such Indemnified Person may otherwise have to the Company. The remedies provided in this Section 5 are not exclusive and shall not limit any rights or remedies which may otherwise be available to an indemnified party at law or in equity.
          6. Additional Interest.
          (a) Subject to the proviso contained in Section 2(a), if on or prior to the 181st day following the Closing Date, a Shelf Registration Statement is not declared effective by the Commission, the Company shall be required to pay additional interest (“Additional Interest”), from and including the day following the date on which the Company was required to have declared effective a Shelf Registration Statement (the “Registration Default Date”) until a Shelf Registration Statement is declared effective, at a rate per annum equal to an additional one-quarter of one percent (0.25%) of the outstanding principal amount of the Securities, to and including the 90th day following such Registration Default Date and one-half of one percent (0.50%) thereof from and after the 91st day following such Registration Default Date until the earlier of (1) the time such Shelf Registration Statement is declared effective, (2) the expiration of the Effectiveness Period or (3) the commencement of a No Obligation Period.
          (b) In the event that (i) the Shelf Registration Statement ceases to be effective when it is required to be so effective, (ii) the Company suspends the use of the Prospectus pursuant to Section 2(b) or 3(j) hereof, (iii) the Holders are not authorized to use the Prospectus pursuant to Section 3(g) hereof, (iv) the Holders are otherwise prevented or restricted by the Company from effecting sales pursuant to the Shelf Registration Statement in violation of this Agreement or (v) the Company shall fail to comply with its obligations under Section 2(c) (any such event being referred to as a “Effective Failure”) for more than an aggregate of 60 days, whether or not consecutive, in any six-month period, then the Company shall pay the Additional Interest at a rate per annum equal to an additional one-quarter of one percent (0.25%) of the outstanding principal amount of the Securities, to and including the 90th day following such Effective Failure and one-half of one percent (0.50%) thereof from and after the 91st day following such Effective Failure until the earlier of (1) the time the Holders of Registrable Securities are again able to make sales under the Shelf Registration Statement, (2) the expiration of the Effectiveness Period or (3) the commencement of a No Obligation Period.
10

 
          (c) Any amounts to be paid as the Additional Interest pursuant to paragraphs (a) or (b) of this Section 6 shall be paid in cash semi-annually in arrears, with the first semi-annual payment due on the first Interest Payment Date (as defined in the Indenture), as applicable, following such Registration Default Date or the date of such Effective Failure, as applicable. Such Additional Interest will accrue in respect of the Securities at the rates set forth in paragraphs (a) or (b) of this Section 6, as applicable, on the outstanding principal amount of the Securities.
          (d) No Additional Interest shall be payable in respect of Common Stock issued upon conversion of the Securities.
          (e) In no event shall the Company be required to pay Additional Interest in excess of 0.25% during and including the first 90 days following an Effective Failure and in excess of one-half of one percent (0.50%) from and after the 91 st  day following such Effective Failure as set forth above, regardless of whether there have occurred one or multiple Registration Default Dates or Effective Failures.
          7. Miscellaneous.
          (a) Other Registration Rights. The Company may grant registration rights that would permit any person that is a third party the right to piggy-back on any Shelf Registration Statement.
          (b) Sole Remedy; Specific Performance. Except as provided in Section 5, the payment of Additional Interest as set forth in Section 6 shall be the exclusive remedy available to the Holders of Registrable Securities for any failure by the Company to perform any of its obligations hereunder, and the parties agree that neither the Purchasers nor any of the Holders shall be entitled to compel specific performance of any obligation or term of this Agreement.
          (c) Amendments and Waivers. This Agreement, including this Section 7(c), may be amended, and waivers or consents to departures from the provisions hereof may be given, only by a written instrument duly executed by the Company and the holders of a majority in aggregate principal amount of Registrable Securities then outstanding. Each Holder of Registrable Securities outstanding at the time of any such amendment, waiver or consent or thereafter shall be bound by any amendment, waiver or consent effected pursuant to this Section 7(c), whether or not any notice, writing or marking indicating such amendment, waiver or consent appears on the Registrable Securities or is delivered to such Holder.
          (d) Notices. All notices and other communications provided for or permitted hereunder shall be given as provided in the Indenture;  provided,  that the Company may deliver notices and other communications provided for or permitted hereunder to any Electing Holder to its address as set forth in its Notice and Questionnaire.
          (e) Parties in Interest. The parties to this Agreement intend that all Holders of Registrable Securities shall be entitled to receive the benefits of this Agreement and that any Electing Holder shall be bound by the terms and provisions of this Agreement by reason of such election with respect to the Registrable Securities which are included in a Shelf Registration Statement. All the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the respective successors and assigns of the parties hereto and any Holder from time to time of the Registrable Securities to the aforesaid extent. In the event that any transferee of any Holder of Registrable Securities shall acquire Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall, without any further writing or action of any kind, be entitled to receive the benefits of and, if an Electing Holder, be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement to the aforesaid extent.
          (f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
          (g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
11

 
          (h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
          (i) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the rights and privileges of the parties hereto shall be enforceable to the fullest extent permitted by law.
          (j) Survival. The respective indemnities, agreements, representations, warranties and other provisions set forth in this Agreement or made pursuant hereto 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 Electing Holder, any director, officer or partner of such Holder, any agent or underwriter, any director, officer or partner of such agent or underwriter, or any controlling person of any of the foregoing, and shall survive the transfer and registration of the Registrable Securities of such Holder.
          (k) Termination. This Agreement and the obligations of the parties hereunder shall terminate upon the end of the Effectiveness Period, except for any liabilities under Sections 4 and 5 hereof, and the obligations to make payments of and provide for Additional Interest under Section 6 hereof to the extent such Additional Interest accrues prior to the end of the Effectiveness Period, each of which shall remain in effect in accordance with its terms.
12

 
Please confirm that the foregoing correctly sets forth the agreement between the Company and you.
 	 	 	 	 	
 	Very truly yours,

NetApp, Inc.
 	 	
 	By:  	/s/ Steven J. Gomo	 	
 	 	Name:  	Steven J. Gomo	 	
 	 	Title:  	Executive Vice President, Finance and Chief Financial Officer	 	
 	
Accepted as of the date hereof
on behalf of each of the Purchasers:
Goldman, Sachs & Co.
 	 	 	 	 	
By:	 	/s/ Goldman, Sachs & Co.	 	 	
 	 	  (Goldman, Sachs & Co.)	 	 	
Morgan Stanley & Co. Incorporated
 	 	 	 	 	
By:	 	/s/ Kamal Ahmed	 	 	
 	 	  Name: Kamal Ahmed	 	 	
 	 	Title: Managing Director	 	 	
[Signature Page to the Registration Rights Agreement]

 
Appendix A
NetApp, Inc.
Instruction to DTC Participants
[(Date of Mailing)]
URGENT — IMMEDIATE ATTENTION REQUESTED
               The Depository Trust Company (“DTC”) has identified you as a DTC Participant through which beneficial interests in NetApp, Inc. (the “Company”) 1.75% Convertible Senior Notes 2013 (the “Securities”) are held.
               The Company is in the process of registering the Securities under the Securities Act of 1933 for resale by the beneficial owners thereof. In order to have their Securities included in the registration statement, beneficial owners must complete and return the enclosed Notice of Registration Statement and Selling Securityholder Questionnaire.
               It is important that beneficial owners of the Securities receive a copy of the enclosed materials as soon as possible as their rights to have the Securities included in the registration statement depend upon their returning the Notice and Questionnaire. Please forward a copy of the enclosed documents to each beneficial owner that holds interests in the Securities through you. If you require more copies of the enclosed materials or have any questions pertaining to this matter, please contact
NetApp, Inc.
495 East Java Drive
Sunnyvale, California 94089
Attention: General Counsel
2

 
NetApp, Inc.
Form of Notice of Registration Statement
and
Selling Securityholder Questionnaire
     NetApp, Inc. (the “Company”) has filed with the Securities and Exchange Commission (the “ Commission ”) a registration statement on Form S-3 (the “ Shelf Registration Statement ”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “ Securities Act ”), of the Company’s 1.75% Convertible Senior Notes due 2013 (the “ Securities ”), and the shares of common stock, par value $0.001 per share (the “ Common Stock ”) issuable upon conversion, in accordance with the Registration Rights Agreement, dated as of June 10, 2008 (the “ Registration Rights Agreement ”), among the Company and the purchasers named therein. A copy of the Registration Rights Agreement is attached hereto. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.
     In order to have Registrable Securities included in the Shelf Registration Statement (or a supplement or amendment thereto), this Notice of Registration Statement and Selling Securityholder Questionnaire (“ Notice and Questionnaire ”) must be completed, executed and delivered to the Company at the address set forth herein for receipt. Beneficial owners of Registrable Securities who do not complete, execute and return this Notice and Questionnaire by such date (i) will not be named as selling securityholders in the Shelf Registration Statement and (ii) may not use the Prospectus forming a part thereof for resales of Registrable Securities.
     Certain legal consequences arise from being named as a selling securityholder in the Shelf Registration Statement and related Prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Shelf Registration Statement and related Prospectus.
     The term “Registrable Securities’’ is defined in the Registration Rights Agreement to mean all or any portion of the Securities issued from time to time under the Indenture in registered form and the shares of Common Stock issuable upon conversion of such Securities;  provided, however , that a security ceases to be a Registrable Security for such period as it is no longer a Restricted Security pursuant to clause (i) or (ii) of the definition of Restricted Security (or pursuant to clause (iii) of such definition after the day that is one year following the later of the closing date for the original issuance and any closing date for the purchase by the Initial Purchasers of additional Securities.
     The term “Restricted Security’’ is defined in the Registration Rights Agreement to mean any Security or share of Common Stock issuable upon conversion of such Securities except any such Security or share of Common Stock that (i) ceases to be outstanding, (ii) has been effectively registered under the Securities Act and sold or otherwise transferred in a manner contemplated by the Shelf Registration Statement or (iii) has been transferred in compliance with Rule 144 under the Securities Act (or any successor provision thereto) or is transferable by a person who is not an affiliate of the Company pursuant to Rule 144 (or any successor provision thereto) without any volume or manner of sale restrictions thereunder.
3

 
ELECTION
     The undersigned holder (the “Selling Securityholder”) of Registrable Securities hereby elects to include in the Shelf Registration Statement the Registrable Securities beneficially owned by it and listed below in Item (3). The undersigned, by signing and returning this Notice and Questionnaire, agrees to be bound with respect to such Registrable Securities by the terms and conditions of this Notice and Questionnaire and the Registration Rights Agreement, including, without limitation, Section 5 of the Registration Rights Agreement, as if the undersigned Selling Securityholder were an original party thereto.
     Upon any sale of Registrable Securities pursuant to the Shelf Registration Statement, the Selling Securityholder will be required to deliver to the Company and the Trustee the Notice of Transfer (completed and signed) set forth in Exhibit 1 to this Notice and Questionnaire.
     The Selling Securityholder hereby provides the following information to the Company and represents and warrants that such information is true, accurate and complete:
QUESTIONNAIRE
 	 	 	 	 	
(1)	 	(a)	 	Full Legal Name of Selling Securityholder:	

 	 	 	 	 	
 	 	(b)	 	Full Legal Name of Registered Holder (if not the same as in (a) above) of Registrable Securities Listed in Item (3) below:	

 	 	 	 	 	
 	 	(c)	 	Full Legal Name of DTC Participant (if applicable and if not the same as (b) above) Through Which Registrable Securities Listed in Item (3) below are Held:	

 	 	 	 	 	
(2)	 	Address for Notices to Selling Securityholder:	

 	 	 	 	 	

 	 	 	 	 	

 	 	 	 	 	
 	 	 	 	 	
 	 	Telephone:	 	 	

 	 	Fax:	 	 	

 	 	Contact Person:	 	 	

 	 	 	 	 	
(3)	 	Beneficial Ownership of Securities:	
 	 	 	 	 	
 	 	Except as set forth below in this Item (3), the undersigned Selling Securityholder does not beneficially own any Securities or shares of Common Stock issued upon conversion, repurchase or redemption of any Securities.	

 	 	(a)	 	Principal amount of Registrable Securities (as defined in the Registration Rights Agreement) beneficially owned:	

 	 	 	 	 	
 	 	 	 	CUSIP No(s). of such Registrable Securities:	

 	 	 	 	 	
 	 	 	 	Number of shares of Common Stock (if any) issued upon conversion, repurchase or redemption of Registrable Securities:	

 	 	 	 	 	
 	 	(b)	 	Principal amount of Securities other than Registrable Securities beneficially owned:	
4

 

 	 	 	 	 	
 	 	 	 	CUSIP No(s). of such other Securities:	

 	 	 	 	 	
 	 	 	 	Number of shares of Common Stock (if any) issued upon conversion of such other Securities:	

 	 	 	 	 	
 	 	(c)	 	Principal amount of Registrable Securities which the undersigned wishes to be included in the Shelf Registration Statement:	

 	 	 	 	 	
 	 	 	 	CUSIP No(s). of such Registrable Securities to be included in the Shelf Registration Statement:	

 	 	 	 	 	

 	 	 	 	Number of shares of Common Stock (if any) issued upon conversion of Registrable Securities which are to be included in the Shelf Registration Statement:	

 	 	 	 	 	
(4)	 	Beneficial Ownership of Other Securities of the Company:	
 	 	 	 	 	
 	 	Except as set forth below in this Item (4), the undersigned Selling Securityholder is not the beneficial or registered owner of any shares of Common Stock or any other securities of the Company, other than the Securities and shares of Common Stock listed above in Item (3).	
 	 	 	 	 	
 	 	State any exceptions here:	

 	 	 	 	 	

(5)	 	Relationships with the Company:	
 	 	 	 	 	
 	 	Except as set forth below, neither the Selling Securityholder nor any of its affiliates, officers, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.	
 	 	 	 	 	
 	 	State any exceptions here:	

 	 	 	 	 	

(6)	 	Plan of Distribution:	
 	 	 	 	 	
 	 	Except as set forth below, the undersigned Selling Securityholder intends to distribute the Registrable Securities listed above in Item (3) only as follows (if at all): Such Registrable Securities may be sold from time to time directly by the undersigned Selling Securityholder or, alternatively, through underwriters, broker-dealers or agents. Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices. Such sales may be effected in transactions (which may involve crosses or block transactions) (i) on any national securities exchange or quotation service on which the Registrable Securities may be listed or quoted at the time of sale, (ii) in the over-the-counter market, (iii) in transactions otherwise than on such exchanges or services or in the over-the-counter market, or (iv) through the writing of options. In connection with sales of the Registrable Securities or otherwise, the Selling Securityholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Registrable Securities in the course of hedging the	
5

 
 	 	 	 	 	
 	positions they assume. The Selling Securityholder may also sell Registrable Securities short and deliver Registrable Securities to close out such short positions, or loan or pledge Registrable Securities to broker-dealers that in turn may sell such securities.	
 	 	 	 	 	
 	State any exceptions here:	

 	 	 	 	 	
 	 	
     Note: In no event may such method(s) of distribution take the form of an underwritten offering of the Registrable Securities without the prior agreement of the Company.
     By signing below, the Selling Securityholder acknowledges that it understands its obligation to comply, and agrees that it will comply, with the prospectus delivery and other provisions of the Securities Act and the Exchange Act and the rules and regulations thereunder, particularly Regulation M.
     In the event that the Selling Securityholder transfers all or any portion of the Registrable Securities listed in Item (3) above after the date on which such information is provided to the Company, the Selling Securityholder agrees to notify the transferee(s) at the time of the transfer of its rights and obligations under this Notice and Questionnaire and the Registration Rights Agreement.
     By signing below, the Selling Securityholder consents to the disclosure of the information contained herein in its answers to Items (1) through (6) above and the inclusion of such information in the Shelf Registration Statement and related Prospectus. The Selling Securityholder understands that such information will be relied upon by the Company in connection with the preparation of the Shelf Registration Statement and related Prospectus.
     In accordance with the Selling Securityholder’s obligation under Section 3(a) of the Registration Rights Agreement to provide such information as may be required by law for inclusion in the Shelf Registration Statement, the Selling Securityholder agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein which may occur subsequent to the date hereof at any time while the Shelf Registration Statement remains in effect. All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing, by hand-delivery, first-class mail, or air courier guaranteeing overnight delivery to the Company as follows:
NetApp, Inc.
495 East Java Drive
Sunnyvale, California 94089
Attention: General Counsel
     Once this Notice and Questionnaire is executed by the Selling Securityholder and received by the Company, the terms of this Notice and Questionnaire, and the representations and warranties contained herein, shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives, and assigns of the Company and the Selling Securityholder (with respect to the Registrable Securities beneficially owned by such Selling Securityholder and listed in Item (3) above). This Agreement shall be governed in all respects by the laws of the State of New York
6

 
     IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.
 	 	 	 	 	
Dated:	 	 	 	 	

Selling Securityholder
(Print/type full legal name of beneficial owner of Registrable Securities)

By:	 	 	

Name:	 	 	

Title:	 	 	
 	 	 	
     PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT TO THE COMPANY AT:
NetApp, Inc.
495 East Java Drive
Sunnyvale, California 94089
Attention: General Counsel
7

Exhibit 10.1
[INSERT DEALER NAME] [INSERT DEALER ADDRESS] | TEL: [INSERT DEALER TELEPHONE NUMBER]
Opening Transaction
 	 	 	
To:	 	NetApp, Inc.
495 East Java Drive
Sunnyvale, California 94089	
 	 	 	
A/C:	 	[Insert Account Number]	
 	 	 	
From:	 	[Insert Dealer Name]	
 	 	 	
Re:	 	Convertible Bond Hedge Transaction	
 	 	 	
Ref. No:	 	[Insert Reference Number]	
 	 	 	
Date:	 	June 4, 2008	
Dear Sir(s):
     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 [          ] (“ Dealer ”) and NetApp, 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 2000 ISDA Definitions (including the Annex thereto) (the “ 2000 Definitions ”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “ Equity Definitions ”, and together with the 2000 Definitions, the “ Definitions ”), in each case as published by the International Swaps and Derivatives Association, Inc. (“ ISDA ”). In the event of any inconsistency between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern. Certain defined terms used herein have the meanings assigned to them in the Indenture to be dated as of June 10, 2008 between Counterparty and U.S. Bank National Association, as trustee (the “ Indenture ”) relating to the USD1,100,000,000 principal amount of 1.75% convertible senior notes due June 1, 2013 (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 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 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. The parties further 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 amended following its execution, any such amendment will be disregarded for purposes of this Confirmation unless the parties agree otherwise in writing. The Transaction is subject to early unwind if the closing of the Convertible Securities is not consummated for any reason, as set forth below in Section 8(k).
     Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
     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, New York law (without reference to its choice of laws doctrine, other than Title 14 of the New York General Obligations Law) as the governing law and US Dollars (“ USD ”) as the Termination Currency and (ii) the replacement of the word “third” in the last line of Section 5(a)(i) of the Agreement with the word “second.”
     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 between this Confirmation and either the Definitions or the Agreement, this Confirmation shall govern.
     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:	 	June 4, 2008	
 	 	 	 	 	
 	 	Effective Date:	 	The closing date of the initial issuance of the Convertible Securities.	
 	 	 	 	 	
 	 	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 USD0.001 (Ticker Symbol: “NTAP”).	
 	 	 	 	 	
 	 	Number of Options:	 	The number of Convertible Securities in denominations of USD1,000 principal amount issued by Counterparty on the closing date for the initial issuance of the Convertible Securities;  provided  that the Number of Options shall be automatically increased as of the date of exercise by Goldman, Sachs & Co. of the Initial Purchasers’ option pursuant to Section 2 of the Purchase Agreement dated as of June 4, 2008, between Counterparty and Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated as representatives of the Initial Purchasers party thereto (the “ Purchase Agreement ”) by the number of Convertible Securities in denominations of USD1,000 principal amount issued pursuant to such exercise (such Convertible Securities, the “ Additional Convertible Securities ”). For the avoidance of doubt, the Number of Options outstanding shall be reduced by each exercise of Options hereunder.	
2

 
 	 	 	 	 	
 	 	Applicable Percentage:	 	[  ]%	
 	 	 	 	 	
 	 	Option Entitlement:	 	As of any date, a number of Shares per Option equal to the “Conversion Rate” (as defined in the Indenture, but without regard to any adjustments to the Conversion Rate pursuant to Sections 6.02(h) or 6.03 of the Indenture).	
 	 	 	 	 	
 	 	Strike Price:	 	As of any date, an amount in USD, rounded to the nearest cent (with 0.5 cents being rounded upwards), equal to USD1,000  divided by  the Option Entitlement as of such date.	
 	 	 	 	 	
 	 	Number of Shares:	 	The product of the Number of Options and the Option Entitlement and the Applicable Percentage.	
 	 	 	 	 	
 	 	Premium:	 	USD[          ] (Premium per Option USD[          ]); provided that if the Number of Options is increased pursuant to the proviso to the definition of “Number of Options” above, an additional Premium equal to the product of the number of Options by which the Number of Options is so increased and the Premium per Option shall be paid on the Additional Premium Payment Date.	
 	 	 	 	 	
 	 	Premium Payment Date:	 	The Effective Date	
 	 	 	 	 	
 	 	Additional Premium Payment Date:	 	The closing date for the purchase and sale of the Additional Convertible Securities.	
 	 	 	 	 	
 	 	Exchange:	 	NASDAQ Global Select Market	
 	 	 	 	 	
 	 	Related Exchange:	 	All Exchanges located in the United States.	
 	 	 	 	 	
Procedures	 	for Exercise:	 	 	
 	 	 	 	 	
 	 	Exercise Date:	 	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, the “ Relevant Convertible Securities ” for such Conversion Date).	
 	 	 	 	 	
 	 	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 “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.	
 	 	 	 	 	
 	 	Notice Deadline:	 	In respect of any exercise of Options hereunder, 12:00 P.M., New York City time, on the Scheduled	
3

 
 	 	 	 	 	
 	 	 	 	Trading Day immediately preceding the first Scheduled Trading Day (as defined in the Indenture) of the relevant “Observation Period” (as defined in the Indenture) (such day and time, the “ Notice Deadline ”);  provided  that, notwithstanding the foregoing, such notice (and the related automatic exercise of such Options) shall be effective if given after the relevant Notice Deadline but prior to 5:00 P.M. New York City time on the fifth Scheduled Trading Day of such Observation Period, in which case the Calculation Agent shall have the right to adjust the Delivery Obligation as appropriate to reflect the additional costs (including, but not limited to, hedging mismatches and market losses) and reasonable expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) as a result of its not having received such notice prior to the Notice Deadline; and  provided further  that in the case of any exercise of Options hereunder in connection with the conversion of any Relevant Convertible Securities for any Conversion Dates occurring during the period from and including the 25 th  Scheduled Trading Day (as defined in the Indenture) prior to the Maturity Date to and including the Expiration Date (the “ Final Conversion Period ”), the Notice Deadline shall be 12:00 P.M., New York City time, on the Scheduled Trading Day (as defined in the Indenture) immediately following the relevant Exercise Date.	
 	 	 	 	 	
 	 	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 unless Counterparty notifies Dealer in writing prior to 12:00 P.M., New York City time, on the Notice Deadline (subject to the first proviso under Notice Deadline above) in respect of such exercise, of (i) the number of Relevant Convertible Securities being converted on the related Conversion Date, (ii) the scheduled settlement date under the Indenture for the Relevant Convertible Securities for such Conversion Date and (iii) the first Scheduled Trading Day of the relevant Observation Period;  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 content of such notice shall be as set forth in clauses (i) and (ii) above. For the avoidance of doubt, if Counterparty fails to give such notice prior to 12:00 P.M., New York City time, on the Notice Deadline (subject to the first proviso under Notice Deadline above) in respect of any exercise of Options hereunder, Dealer’s obligation to make any payment or delivery in respect of such exercise shall	
4

 
 	 	 	 	 	
 	 	 	 	be permanently extinguished, and late notice shall not cure such failure.	

 	 	Dealer’s Telephone Number and Telex and/or Facsimile Number and Contact Details for purpose of Giving Notice:	 	To:	 	[     ]	
 	 	 	 	 	 	[     ]	
 	 	 	 	 	 	[     ]	
 	 	 	 	 	 	 	
 	 	 	 	Attn:	 	[     ]	
 	 	 	 	 	 	[     ]	
 	 	 	 	Telephone:	 	[     ]	
 	 	 	 	Facsimile:	 	[     ]	
 	 	 	 	 	 	 	
 	 	 	 	With a copy to:	 	 	
 	 	 	 	 	 	 	
 	 	 	 	Attn:	 	[     ]	
 	 	 	 	 	 	[     ]	
 	 	 	 	Telephone:	 	[     ]	
 	 	 	 	Facsimile:	 	[     ]	

Settlement Terms:	 	 	
 	 	 	 	 	
 	 	Settlement Date:	 	For any Exercise Date, the settlement date for the Shares to be delivered in respect of the Relevant Convertible Securities for the relevant Conversion Date under the terms of the Indenture;  provided  that the Settlement Date shall not be prior to the Exchange Business Day immediately following the date Counterparty provides the Notice of Convertible Obligation prior to 12:00 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, in respect of an Exercise Date, Dealer will deliver to Counterparty on the related Settlement Date (the “ Delivery Obligation ”), a number of Shares equal to the product of the Applicable Percentage and the aggregate number of Shares (the “ Deliverable Shares ”) included in the “Settlement Amount” (as defined in the Indenture) pursuant to clause (ii) of the definition of “Daily Settlement Amount” in the Indenture, if any, that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Securities for such Conversion Date pursuant to Section 6.01(c) of the Indenture (except that such number of Deliverable Shares shall be determined without taking into consideration any rounding pursuant to Section 6.02(d) of the Indenture or any election by Counterparty to deliver to holders cash in lieu of Shares pursuant to Section 6.02(f) of the Indenture, and shall be rounded down to the nearest whole number) and cash in lieu of fractional Shares, if any, resulting from such rounding (collectively, the “ Convertible Obligation ”);  provided  that the	
5

 
 	 	 	 	 	
 	 	 	 	Delivery Obligation shall be determined excluding any Shares (and cash in lieu of fractional Shares, if any) 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 Sections 6.02(h) and 6.03 of the Indenture 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;  provided further  that to the extent Counterparty elects to deliver to holders an amount of cash per $1,000 principal amount of Relevant Convertible Securities in lieu of Shares pursuant to Section 6.02(f) of the Indenture (the “ Cash Amount ”), the number of Shares included in the Delivery Obligation shall be capped so that such number does not exceed the product of the Applicable Percentage and the sum of (x) the number of Deliverable Shares (after giving effect to Counterparty’s election to deliver the Cash Amount in lieu of Shares) and (y) a number of Shares equal to the Cash Amount divided by the “Daily VWAP” (as defined in the Indenture) on the last day of the relevant Observation Period; and  provided further  that if such exercise relates to the conversion of Relevant Convertible Securities in connection with which holders thereof are entitled to receive additional Shares (and cash in lieu of fractional Shares) pursuant to the adjustments to the Conversion Rate set forth in Section 6.03 of the Indenture, then, notwithstanding the foregoing, the Delivery Obligation shall include such additional Shares (and cash in lieu of fractional Shares), except that the Delivery Obligation shall be capped so that the product of the Applicable Percentage and the value of the Delivery Obligation (with the value of any Shares included in the Delivery Obligation determined by the Calculation Agent using the Daily VWAP on the last day of the relevant Observation Period) does not exceed the amount (the “ Makewhole Cap Amount ”) as determined by the Calculation Agent that would be payable by Dealer pursuant to Section 6 of the Agreement if such Conversion Date were an Early Termination Date resulting from an Additional Termination Event with respect to which the Transaction (except that, for purposes of determining such amount (x) the Number of Options shall be deemed to be equal to the number of Options exercised on such Exercise Date and (y) such amount payable will be determined as if Section 6.03 of the Indenture were deleted) was the sole Affected Transaction and Counterparty was the sole Affected Party (determined without regard to Section 8(c) of this Confirmation). For the avoidance of doubt, the Calculation Agent shall determine the Makewhole Cap Amount in good faith and in a commercially	
6

 
 	 	 	 	 	
 	 	 	 	reasonable manner, including without limitation by making reference to the bid-side market volatility of the Shares immediately prior to the Makewhole Event Time. The “ Makewhole Event Time ” means the time of the first public announcement by any person of a firm intention to engage in a transaction or other event (whether or not subsequently amended) that leads to the transaction or event that results in converting holders of the Relevant Convertible Securities being so entitled to receive to receive additional Shares (and cash in lieu of fractional shares). In addition, for the avoidance of doubt, if the “Daily Conversion Value” (as defined in the Indenture) for every “VWAP Trading Day” (as defined in the Indenture) occurring in the relevant Observation Period is less than or equal to USD 50, Dealer will have no delivery obligation hereunder in respect of the related Exercise Date.	
 	 	 	 	 	
 	 	Notice of Convertible Obligation:	 	No later than the Exchange Business Day immediately following the last day of the relevant Observation Period, Counterparty shall give Dealer notice of the final number of Shares (and cash in lieu of fractional Shares, if any) comprising the relevant Convertible Obligation;  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 cash in lieu of fractional Shares) comprising the Convertible Obligations 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 Notice of Exercise, as set forth above, in any way).	
 	 	 	 	 	
 	 	Other Applicable Provisions:	 	To the extent Dealer is obligated to deliver Shares hereunder, the provisions of Sections 9.1(c), 9.8, 9.9, 9.10 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 in certificated form representing the Number of Shares to be Delivered to Counterparty in lieu of delivery through the Clearance System.	
 	 	 	 	 	
Adjustments:	 	 	
 	 	 	 	 	
 	 	Method of Adjustment:	 	Notwithstanding Section 11.2 of the Equity	
7

 
 	 	 	 	 	
 	 	 	 	Definitions, upon the occurrence of any event or condition set forth in Section 6.02(a), (b), (c), (d) or (e) of the Indenture (each an “ Adjustment Event ”), the Calculation Agent shall make the corresponding adjustment in respect of any one or more of the Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement or payment of the Transaction, to the extent an analogous adjustment is made under the Indenture. Promptly upon the occurrence of any Adjustment Event Counterparty shall notify the Calculation Agent of such Adjustment Event; and once the adjustments to be made to the terms of the Indenture and the Convertible Securities in respect of such Adjustment Event have been determined, Counterparty shall promptly notify the Calculation Agent in writing of the details of such adjustments. The Calculation Agent shall, promptly after receiving such notice, make any corresponding adjustments to the terms of the Transaction and promptly notify Dealer and Counterparty thereof.	
 	 	 	 	 	
Extraordinary Events:	 	 	
 	 	 	 	 	
 	 	Merger Events:	 	Notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in Section 6.09 or 8.02 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 the corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares, the Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction, to the extent an analogous adjustment is made under the Indenture in respect of such Merger Event; provided  that such adjustment shall be made without regard to any adjustment to the Conversion Rate for the issuance of additional Shares as set forth in Sections 6.02(h) and 6.03 of the Indenture.	
 	 	 	 	 	
 	 	Notice of Merger Consideration and Consequences:	 	Upon the occurrence 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), Counterparty shall reasonably promptly (but in any event prior to the Merger Date) notify the Calculation Agent of (i) the type and amount of consideration that a holder of Shares would have been entitled to in the case of reclassifications, consolidations, mergers, sales or transfers of assets or other transactions that cause Shares to be converted into the right to receive more than a single type of consideration, (ii) the weighted average of the types and amounts of	
8

 
 	 	 	 	 	
 	 	 	 	consideration received by the holders of Shares that affirmatively make such an election (or if no holders of Shares affirmatively make such an election, the types and amount of consideration actually received by such holders), and (iii) the details of the adjustment 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 Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange.	
 	 	 	 	 	
Additional Disruption Events:	 	 	
 	 	 	 	 	
 	 	(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 announcement or statement of the formal or informal interpretation” and (ii) immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by Hedging Party on the Trade Date.”	
 	 	 	 	 	
 	 	(b) Failure to Deliver:	 	Applicable	
 	 	 	 	 	
 	 	(c) Insolvency Filing:	 	Applicable	
 	 	 	 	 	
 	 	(d) Hedging Disruption:	 	Applicable	
 	 	 	 	 	
Hedging Party:	 	Dealer	
 	 	 	 	 	
Determining Party:	 	Dealer	
 	 	 	 	 	
Non-Reliance:	 	Applicable	
 	 	 	 	 	
Agreements and Acknowledgments Regarding Hedging Activities:	 	Applicable	
 	 	 	 	 	
Additional Acknowledgments:	 	Applicable	
9

 
 	 	 	 	 	
 	 	3. Calculation Agent:	 	4. Dealer. All determinations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. Following any calculation by the Calculation Agent hereunder, upon a prior written request by Counterparty, the Calculation Agent will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such prior 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. No transferee of Dealer with respect to any Options in accordance with the terms of this Confirmation shall act as Calculation Agent with respect to such transferred Options without the prior consent of Counterparty, such consent not to be unreasonably withheld.	
4. Account Details:
     Dealer Payment Instructions:
          [          ]
     Counterparty Payment Instructions:
          To be provided by Counterparty.
5. Offices:
     The Office of Dealer for the Transaction is:
          [          ]
     The Office of Counterparty for the Transaction is:
          [          ]
6. Notices: For purposes of this Confirmation:
 	 	 	 	 	 	
(a)	 	Address for notices or communications to Counterparty:	 	
 	 	 	 	 	 	
 	 	To:	 	NetApp, Inc.
495 East Java Drive
Sunnyvale, CA 94089	 	
 	 	Attn:	 	Treasurer	 	
 	 	 	 	 	 	
 	 	Telephone:	 	(408) 822-6000	 	
 	 	Facsimile:	 	(408) 822-4501	 	
 	 	 	 	 	 	
 	 	With a copy to:	 	NetApp, Inc.
495 East Java Drive
Sunnyvale, CA 94089	 	
 	 	 	 	 	 	
 	 	Attn:	 	General Counsel	 	
 	 	 	 	 	 	
 	 	Telephone:	 	(408) 822-6000	 	
 	 	Facsimile:	 	(408) 822-4501	 	
 	 	 	 	 	 	
(b)	 	Address for notices or communications to Dealer:	 	
 	 	 	 	 	 	
 	 	To:	 	[          ]	 	
 	 	Attn:	 	[          ]	 	
 	 	 	 	[          ]	 	
 	 	Telephone:	 	[          ]	 	
 	 	Facsimile:	 	[          ]	 	
 	 	 	 	 	 	
 	 	With a copy to:	 	 	 	
10

 
 	 	 	 	 	
 	 	Attn:	 	[          ]	
 	 	 	 	[          ]	
 	 	Telephone:	 	[          ]	
 	 	Facsimile:	 	[          ]	
     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, (A) none of Counterparty and its executive 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, 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.
     (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 a position or expressing any view with respect to the treatment of the Transaction under any accounting standards, including FASB Statements 128, 133 (as amended), 149 or 150, EITF Issue No. 00-19, 01-6, 03-6 or 07-5 (or any successor issue statements) or under the FASB’s Liabilities & Equity Project.
     (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.
     (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 otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or to otherwise violate 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, the Premium Payment Date and the Additional Premium Payment Date, if any, 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 Shares hereunder in compliance with the laws of the jurisdiction of Counterparty’s incorporation.
     (b) Each of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended.
11

 
     (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(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,” “swap participant” and/or “financial participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11 of the Bankruptcy Code. The parties hereto further agree and acknowledge (A) that this Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 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 due incorporation, existence and good standing of the Counterparty in Delaware, its qualifications as a foreign corporation and good standing in California, the due authorization, execution and delivery of the Confirmation, and the absence of conflict of the execution and delivery of the Confirmation with any material agreement required to be filed as any exhibit to the Counterparty’s Annual Report on Form 10-K and the Counterparty’s charter documents.
     (f) 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” .
     Each party acknowledges and agrees to be bound by the Conduct Rules of the National Association of Securities Dealers, 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 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 reasonable discretion, that such extension is reasonably necessary or appropriate to preserve Dealer’s 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 purchases of Shares in connection with its 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 applicable to Dealer.
12

 
     (b) Additional Termination Events. The occurrence of (i) 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, or (ii) an Amendment Event shall be 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 or obtains a waiver in respect of any term of the Indenture or the Convertible Securities governing the principal amount, coupon (but only if such event results in a decrease to such coupon), maturity, the amount payable upon a repurchase obligation of Counterparty, upon a fundamental change, any term relating to conversion of the Convertible Securities (including changes to the conversion price, 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, in each case without the prior consent of Dealer.
     (c) Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Dealer shall owe Counterparty any amount pursuant to Section 12.2 of the Equity Definitions or “Consequences of Merger Events” above, or Section 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of a Merger Event, Insolvency or Nationalization, in each case in which the consideration or proceeds to be paid to holders of Shares consists solely of cash) or pursuant to Section 6(d)(ii) of the Agreement (except in the event of an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party, that resulted from an event or events within Counterparty’s control) (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, between the hours of 9:00 A.M. and 4:00 P.M., New York City time, on the Merger Date, Announcement Date or Early Termination Date, as applicable (“ Notice of Share Termination ”). If no Notice of Share Termination is received by Dealer within the time specified in the preceding sentence, Dealer shall have the right, in its sole discretion, to satisfy any Payment Obligation by the Share Termination Alternative by promptly giving Counterparty a Notice of Share Termination. Upon delivery of a Notice of Share Termination by either party, the following provisions shall apply on the Scheduled Trading Day immediately following the Merger Date, Announcement Date or Early Termination Date, as applicable:
 	 	 	
Share Termination Alternative:	 	Applicable and 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 “Consequences of Merger Events” above or Section 12.2, 12.6, 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable (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 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, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation.	
 	 	 	
Share Termination Delivery Unit:	 	In the case of a Termination 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	
13

 
 	 	 	
 	 	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. 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 or Counterparty, based on the advice of counsel, the Shares (the “ Hedge Shares ”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction 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 satisfactory to Dealer, substantially in the form of an underwriting agreement for underwritten follow-on offerings of equity securities of companies of comparable size, maturity and lines of business, (B) provide accountant’s “comfort” letters in customary form for underwritten follow-on offerings of equity securities, (C) provide disclosure opinions of nationally recognized outside counsel to Counterparty as are customarily requested in connection with underwritten follow-on offerings of equity securities of companies of comparable size, maturity and lines of business, (D) provide other customary opinions, certificates and closing documents customary in form for underwritten follow-on offerings of equity securities of companies of comparable size, maturity and lines of business and (E) afford Dealer a reasonable opportunity to conduct a “due diligence” investigation with respect to Counterparty customary in scope for underwritten follow-on offerings of equity securities of companies of comparable size, maturity and lines of business; provided, however , that if Dealer, in its sole commercially reasonable 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,  provided  that Dealer has given the Counterparty reasonable notice of its determination and provided the Counterparty with reasonable opportunity to satisfy Dealer’s concerns; (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 of companies of comparable size, maturity and lines of business, in form and substance 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), opinions and certificates and such other documentation as is customary for private placements agreements, all reasonably acceptable to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable judgment, to compensate Dealer for any 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, and determined as if the relevant Exchange Business Days were VWAP Trading Days during the Observation Period, each as defined in the Indenture) on such Exchange Business Days, and in the amounts, requested by Dealer.
     (e) Repurchase and Conversion Rate Adjustment Notices. Counterparty shall, at least two
14

 
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 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 underlying all Convertible Securities outstanding on such day 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, to the extent permitted by applicable law, 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, claims, damages and liabilities (or actions in respect thereof), joint or several, to which such Indemnified Party is 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, as a result 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 any reasonable expenses (including reasonable counsel fees and expenses) as they are incurred (after notice to Counterparty) 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. 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 shall inure to the benefit of any permitted assignee of Dealer.
     (f) Transfer and Assignment. Either party may transfer 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;  provided  that Dealer may transfer or assign without any consent of Counterparty its rights and obligations hereunder, in whole or in part, to any person, or any person whose obligations would be guaranteed by a person, in either case, of credit quality equivalent to Dealer’s (or its guarantor’s), but in no event with a rating for its long term, unsecured and unsubordinated indebtedness of less than A by Standard and Poor’s Rating Group, Inc. or its successor (“ S&P ”), and less than A2 by Moody’s Investor Service, Inc. (“ Moody’s ”), or, if either S&P or Moody’s ceases to rate such debt, less than an equivalent rating by a substitute agency mutually agreed by Counterparty and Dealer. Dealer shall as soon as reasonably practicable notify Counterparty of any such transfer or assignment. If at any time at which (1) the Equity Percentage exceeds 9.0% 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 Section 203 of the Delaware General Corporation Law (the “ DGCL Takeover Statute ”) or other federal, state or local regulations or regulatory orders applicable to ownership of Shares (“ Applicable Laws ”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership in excess of a number of Shares equal to (x) the number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval by a state or federal regulator) of a Dealer Person under Applicable Laws (including, without limitation, “interested stockholder” or “acquiring person” status under the DGCL Takeover Statute) and with respect to which such requirements have not been met or the relevant approval has not been received  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 terms 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 Equity Ownership Position no longer exists following such partial termination. In the event that Dealer so designates an Early
15

 
Termination Date with respect to a portion of the Transaction, a payment or delivery shall be made pursuant to Section 6 of the Agreement and 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 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 following reasonable conditions that Dealer may impose:
     (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 U.S. person (as defined in the Internal Revenue Code of 1986, as amended);
     (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 and reasonably satisfactory to Dealer;
     (D) Dealer will 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 will 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) Staggered Settlement. Dealer may, by notice to Counterparty prior to any Settlement Date (a “Nominal Settlement Date ”), elect to deliver the Shares on one or more dates (each, a “ Staggered Settlement Date ”) or at two or more times on the Nominal Settlement Date as follows:
     (i) in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to the 20 th  Exchange Business Day after such Nominal Settlement Date, but not prior to the earlier of the relevant Conversion Date and the first day of the relevant Observation Period) or delivery times and how it will allocate the Shares it is required to deliver under “Delivery Obligation” (above) among the Staggered Settlement Dates or delivery times; and
16

 
     (ii) the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates and delivery times will equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement 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 Convertible Securities is not consummated pursuant to the Purchase Agreement for any reason by the close of business in New York on June 10, 2008 (or such later date as agreed upon by the parties, which in no event shall be later than June 17, 2008) June 10, 2008 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[, other than in cases involving a breach of the Purchase Agreement by the initial purchasers,] 1  an amount in cash equal to the aggregate amount of reasonable 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) or, at the election of Counterparty, deliver to Dealer Shares with a value equal to such amount, as reasonably determined by the Calculation Agent, in which event the parties shall enter into customary and commercially reasonable documentation relating to the registered or exempt resale of such Shares. Following such termination and cancellation and payment or delivery, 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) Payments by Counterparty upon Early Termination. The parties hereby agree that, notwithstanding anything to the contrary herein, in the Definitions or in the Agreement, following the payment of the Premium and the Additional Premium, if any, in the event that an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to the Transaction or the Transaction is terminated or cancelled pursuant to Article 12 of the Equity Definitions and, as a result, Counterparty would owe to Dealer an amount calculated under Section 6(e) of the Agreement or Article 12 of the Equity Definitions, such amount shall be deemed to be zero.
     (m) Governing Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL

1	 	To be deleted if Dealer is not an Initial Purchaser.	
17

 
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 THE NEW YORK GENERAL OBLIGATIONS LAW).
     (n) Amendment. This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty and Dealer.
     (o) 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.
     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 The New York Stock Exchange, Inc. (“NYSE”) or NASD Dispute Resolution (“NASD-DR”), or, if the NYSE and NASD-DR decline 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.
18

 
     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 [          ], Facsimile No. [          ].
 	 	 	 	 	
 	Yours faithfully,

[INSERT DEALER NAME]
 	 	
 	By:  	 	 	
 	 	Name:  	 	 	
 	 	Title:  	 	 	
 	
Agreed and Accepted By:
NETAPP, INC.
 	 	 	 	 	
By:	 	 	 	 	
 	 	  Name:	 	 	
 	 	Title:	 	 	

Exhibit 10.2
THE SECURITIES REPRESENTED HEREBY (THE “WARRANTS”) WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE WARRANTS MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF.
[INSERT DEALER NAME] [INSERT DEALER ADDRESS] | TEL: [INSERT DEALER TELEPHONE NUMBER]
Opening Transaction
 	 	 	
To:	 	NetApp, Inc.	
 	 	495 East Java Drive	
 	 	Sunnyvale, CA 94089	
 	 	 	
A/C:	 	[Insert Account Number]	
 	 	 	
From:	 	[Insert Dealer Name]	
 	 	 	
Re:	 	Issuer Warrant Transaction	
 	 	 	
Ref. No:	 	[Insert Reference Number]	
 	 	 	
Date:	 	June 4, 2008	
Dear Sir(s):
     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 [      ] (“ Dealer ”) and NetApp, Inc. (“ Issuer ”). 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 2000 ISDA Definitions (including the Annex thereto) (the “ 2000 Definitions ”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “ Equity Definitions ”, and together with the 2000 Definitions, the “ Definitions ”), in each case as published by the International Swaps and Derivatives Association, Inc. (“ ISDA ”). In the event of any inconsistency between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern. 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.
     Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
     This Confirmation evidences a complete and binding agreement between Dealer and Issuer 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 Issuer 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, New York law (without reference to its choice of laws doctrine, other than Title 14 of the New York General Obligations Law) as the governing law 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 “second,” (iii) the election that the “Cross Default” provisions of Section 5(a)(vi) of the Agreement shall apply to Issuer with a “Threshold Amount”

 
of USD50 million and (iv) the deletion of the phrase “, or becoming capable at such time of being declared,” in the seventh line of Section 5(a)(vi) of the Agreement).
     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 between this Confirmation and either the Definitions or the Agreement, this Confirmation shall govern.
     The Transaction hereunder shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Issuer or any confirmation or other agreement between Dealer and Issuer pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Issuer, then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to which Dealer and Issuer 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:	 	June 4, 2008	
 	 	 	 	 	
 	 	Effective Date:	 	June 10, 2008, or such other date as agreed between the parties, subject to Section 8(k) 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:	 	Issuer	
 	 	 	 	 	
 	 	Buyer:	 	Dealer	
 	 	 	 	 	
 	 	Shares:	 	The Common Stock of Issuer, par value USD0.001 (Ticker Symbol: “NTAP”).	
 	 	 	 	 	
 	 	Number of Warrants:	 	For each Component, as provided in Annex A to this Confirmation.	
 	 	 	 	 	
 	 	Warrant Entitlement:	 	One Share per Warrant	
 	 	 	 	 	
 	 	Strike Price:	 	USD41.28	
 	 	 	 	 	
 	 	Premium:	 	USD[       ]	
 	 	 	 	 	
 	 	Premium Payment Date:	 	The Effective Date	
 	 	 	 	 	
 	 	Exchange:	 	NASDAQ Global Select Market	
 	 	 	 	 	
 	 	Related Exchange:	 	All Exchanges located in the United States.	
2

 
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 or is not deemed to be an Expiration Date in respect of any other Component of the Transaction hereunder; and  provided further  that if the Expiration Date has not occurred pursuant to the preceding proviso as of the Final Disruption Date, the Calculation Agent shall have the right to elect, in its reasonable 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). “ Final Disruption Date ” means November 12, 2013. 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 reasonably determine that such Expiration Date is a Disrupted Day only in part, in which case the Calculation Agent shall make adjustments to the Number of Warrants for the relevant Component for which such day shall be the Expiration Date and shall designate the Scheduled Trading Day determined in the manner described in the immediately preceding sentence as the Expiration Date for the remaining Warrants for such Component. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on an Expiration Date.	
 	 	 	 	 	
 	 	Market Disruption Event:	 	Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof.	
 	 	 	 	 	
 	 	Automatic Exercise:	 	Applicable; and means that 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.	
 	 	 	 	 	
 	 	Issuer’s Telephone Number and Telex and/or Facsimile Number	 	 	
3

 
 	 	 	 	 	
 	 	and Contact Details for purpose of Giving Notice:	 	 	

 	 	 	 	To:	 	NetApp, Inc.	
 	 	 	 	 	 	495 East Java Drive	
 	 	 	 	 	 	Sunnyvale, CA 94089	
 	 	 	 	Attn:	 	Treasurer	
 	 	 	 	Telephone:	 	(408) 822-6000	
 	 	 	 	Facsimile:	 	(408) 822-4501	
 	 	 	 	 	 	 	
 	 	 	 	With a copy to:	 	NetApp, Inc.	
 	 	 	 	 	 	495 East Java Drive	
 	 	 	 	 	 	Sunnyvale, CA 94089	
 	 	 	 	Attn:	 	General Counsel	
 	 	 	 	Telephone:	 	(408) 822-6000	
 	 	 	 	Facsimile:	 	(408) 822-4501	
Settlement Terms:
     In respect of any Component:
 	 	 	 	 	
 	 	Settlement Currency:	 	USD	
 	 	 	 	 	
 	 	Settlement Method Election:	 	Applicable; provided that (i) Issuer may elect Cash Settlement only if Issuer represents and warrants to Dealer in writing on the date of such election that, as of such date, (A) none of Issuer and its executive officers is aware of any material nonpublic information regarding Issuer or the Shares, (B) Issuer is electing Cash Settlement in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws, (C) the assets of Issuer at their fair valuation exceed the liabilities of Issuer, including contingent liabilities, (D) the capital of Issuer is adequate to conduct the business of Issuer, (E) Issuer 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, (F) it would be able to purchase the Number of Shares in compliance with the laws of Issuer’s jurisdiction or organization, (G) it 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, and (H) 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 (ii) any election of settlement method shall apply to all Components. At any time prior to making a Settlement Method Election, Issuer may, without the consent of Dealer, amend this Confirmation by notice to Dealer to eliminate Issuer’s right to elect Cash Settlement.	
4

 
 	 	 	 	 	
 	 	Electing Party:	 	Issuer	
 	 	 	 	 	
 	 	Settlement Method Election Date:	 	The third Scheduled Trading Day immediately preceding the Expiration Date for the Component with the earliest Expiration Date.	
 	 	 	 	 	
 	 	Default Settlement Method:	 	Net Share Settlement	
 	 	 	 	 	
 	 	Net Share Settlement:	 	On each Settlement Date, Issuer 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 judgment of Issuer or 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(b) below apply.	
 	 	 	 	 	
 	 	 	 	The Number of Shares to be Delivered shall be delivered by Issuer 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, subject to the last sentence of Section 9.5 of the Equity Definitions, 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 on 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 reasonably determined by the Calculation Agent based on NASDAQ 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 “NTAP.UQ <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 reasonably determined by the Calculation Agent using a volume weighted method).	
5

 
 	 	 	 	 	
 	 	Option Cash Settlement Amount:	 	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 on such Exercise Date over the Strike Price (or, if there is no such excess, zero).	
 	 	 	 	 	
 	 	Other Applicable Provisions:	 	The provisions of Sections 9.1(c), 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 Issuer is the issuer of the Shares.	
Adjustments:
     In respect of any Component:
 	 	 	 	 	
 	 	Method of Adjustment:	 	Calculation Agent Adjustment; provided that in respect of an Extraordinary Dividend, “Calculation Agent Adjustment” shall be as described under “Extraordinary Dividend Adjustment” below; and  provided further  that the parties agree that open market Share repurchases at prevailing market prices or accelerated share repurchases, forward contracts or similar transactions on customary terms (including without limitation any discount to average VWAP prices) shall not be considered Potential Adjustment Events. For the avoidance of doubt, Calculation Agent Adjustment (including, without limitation, in respect of Extraordinary Dividends) shall continue to apply until the obligations of the parties (including any obligations of Issuer pursuant to Section 8(e) below) under the Transaction have been satisfied in full.	
 	 	 	 	 	
 	 	Extraordinary Dividend:	 	Any cash dividend or distribution on the Shares with an ex-dividend date occurring on or after the Trade Date and on or prior to the Expiration Date (or, if any Deficit Shares are owed pursuant to Section 8(e) below, such later date on which Issuer’s obligations under this Transaction have been satisfied in full).	
 	 	 	 	 	
 	 	Extraordinary Dividend Adjustment:	 	If at any time during the period from and including the Trade Date, to but excluding the Expiration Date for the Component with the latest Expiration Date (or, if any Deficit Shares are owed pursuant to Section 8(e) below, such later date on which Issuer’s obligations under this Transaction have been satisfied in full), an ex-dividend date for an Extraordinary Dividend occurs, then the Calculation Agent will make adjustments to any one or more of the Strike Price, the Number of Warrants, the Warrant Entitlement and/or any other variable relevant to the	
6

 
 	 	 	 	 	
 	 	 	 	exercise, settlement, payment or other terms of the Transaction as it reasonably determines appropriate to account for the economic effect on the Transaction of such Extraordinary Dividend (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).	
Extraordinary Events:
     Consequences of Merger Events:
 	 	 	 	 	
 	 	     (a) Share-for-Share:	 	Modified Calculation Agent Adjustment	
 	 	 	 	 	
 	 	     (b) Share-for-Other:	 	Cancellation and Payment (Calculation Agent Determination)	
 	 	 	 	 	
 	 	     (c) Share-for-Combined:	 	Cancellation and Payment (Calculation Agent Determination); provided that the Calculation Agent may elect Component Adjustment for all or part of the Transaction.	
 	 	 	 	 	
 	 	Tender Offer:	 	Applicable; provided that for the purposes of Section 12.3(d)(ii) of the Equity Definitions, references in the definition of Tender Offer under the Equity Definitions to 10% shall be replaced with 20%.	
 	 	 	 	 	
 	 	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	

 	 	Modified Calculation
Agent Adjustment:	 	Upon the occurrence of any Merger Event pursuant to which the holders of Issuer’s Shares would be entitled to receive cash, securities or other property for their Shares and for which Modified Calculation Agent Adjustment would apply, if, as a result of such Merger Event, Issuer would be different from the issuer of the Shares under this Confirmation, then, on or prior to the effective date of such Merger Event, the Issuer and the issuer of the Shares under this Confirmation will enter into a supplemental confirmation as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity Definitions, with such supplemental confirmation containing representations, warranties and agreements relating to securities law and other issues as reasonably 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	
7

 
 	 	 	 	 	
 	 	 	 	and procedures applicable to Dealer, and if such conditions are not met in all material respects 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.	
 	 	 	 	 	
 	 	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 shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange.	

 	 	Additional Disruption Events:	 	 	
 	 	 	 	 	
 	 	     (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 announcement or statement of the formal or informal interpretation” and (ii) immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by Hedging Party on the Trade Date.”	
 	 	 	 	 	
 	 	     (b) Failure to Deliver:	 	Applicable	
 	 	 	 	 	
 	 	     (c) Insolvency Filing:	 	Applicable	
 	 	 	 	 	
 	 	     (d) Hedging Disruption:	 	Applicable	
 	 	 	 	 	
 	 	     (e) Loss of Stock Borrow:	 	Applicable	
 	 	 	 	 	
 	 	          Maximum Stock Loan Rate:	 	2.00% per annum	
 	 	 	 	 	
 	 	     (f) Increased Cost of Stock Borrow:	 	Applicable	
 	 	 	 	 	
 	 	          Initial Stock Loan Rate:	 	0.25% per annum	

 	 	Hedging Party:	 	Dealer	
 	 	 	 	 	
 	 	Determining Party:	 	Dealer	
 	 	 	 	 	
 	 	Non-Reliance:	 	Applicable	
 	 	 	 	 	
 	 	Agreements and Acknowledgments	 	 	
 	 	Regarding Hedging Activities:	 	Applicable	
 	 	 	 	 	
 	 	Additional Acknowledgments:	 	Applicable	
8

 
 	 	 	 	 	
 	 	3. Calculation Agent:	 	Dealer. All determinations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. Following any calculation by the Calculation Agent hereunder, upon a prior written request by Issuer, the Calculation Agent will provide to Issuer by e-mail to the e-mail address provided by Issuer in such prior 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. No transferee of Dealer with respect to any Options in accordance with the terms of this Confirmation shall act as Calculation Agent with respect to such transferred Options without the prior consent of Issuer, such consent not to be unreasonably withheld.	
     4. Account Details:
          Dealer Payment Instructions:
               [       ]
          Account for delivery of Shares to Dealer:
               To be provided by Dealer
          Issuer Payment Instructions:
                To be provided by Issuer.
     5. Offices:
          The Office of Dealer for the Transaction is:
                [       ]
          The Office of Issuer for the Transaction is:
                [       ]
     6. Notices: For purposes of this Confirmation:
     (a) Address for notices or communications to Issuer:
 	 	 	 	 	
 	 	To:	 	NetApp, Inc.	
 	 	 	 	495 East Java Drive	
 	 	 	 	Sunnyvale, CA 94089	
 	 	Attn:	 	Treasurer	
 	 	Telephone:	 	(408) 822-6000	
 	 	Facsimile:	 	(408) 822-4501	
 	 	 	 	 	
 	 	With a copy to:	 	NetApp, Inc.	
 	 	 	 	495 East Java Drive	
 	 	 	 	Sunnyvale, CA 94089	
 	 	Attn:	 	General Counsel	
 	 	Telephone:	 	(408) 822-6000	
 	 	Facsimile:	 	(408) 822-4501	
     (b) Address for notices or communications to Dealer:
 	 	 	 	 	
 	 	To:	 	 	
 	 	Attn:	 	[       ]	
 	 	 	 	[       ]	
9

 
 	 	 	 	 	
 	 	Telephone:	 	[       ]	
 	 	Facsimile:	 	[       ]	
 	 	 	 	 	
 	 	With a copy to:	 	 	
 	 	 	 	 	
 	 	Attn:	 	[       ]	
 	 	 	 	[       ]	
 	 	Telephone:	 	[       ]	
 	 	Facsimile:	 	[       ]	
     7. Representations, Warranties and Agreements:
     (a) In addition to the representations and warranties in the Agreement and those contained elsewhere herein, Issuer represents and warrants to and for the benefit of, and agrees with, Dealer as follows:
     (i) On the Trade Date, (A) none of Issuer and its executive officers and directors is aware of any material nonpublic information regarding Issuer or the Shares and (B) all reports and other documents filed by Issuer 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, Issuer acknowledges that neither Dealer nor any of its affiliates is making any representations or warranties or taking a position or expressing any view with respect to the treatment of the Transaction under any accounting standards, including FASB Statements 128, 133 (as amended), 149 or 150, EITF Issue No. 00-19, 01-6, 03-6 or 07-5 (or any successor issue statements) or under the FASB’s Liabilities & Equity Project..
     (iii) Prior to the Trade Date, Issuer shall deliver to Dealer a resolution of Issuer’s board of directors authorizing the Transaction and such other certificate or certificates as Dealer shall reasonably request.
     (iv) Issuer 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 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) Issuer 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 Issuer at their fair valuation exceed the liabilities of Issuer, including contingent liabilities, (B) the capital of Issuer is adequate to conduct the business of Issuer and (C) Issuer 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) Issuer shall not take any action to decrease the number of Available Shares below the Capped Number (each as defined below).
     (viii) Issuer understands no obligations of Dealer to it hereunder will be entitled to the benefit of deposit insurance and that such obligations will not be guaranteed by any affiliate of Dealer or any governmental agency.
     (ix) (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,”
10

 
as such term is defined in Regulation M under the Exchange Act (“Regulation M”) and (B) Issuer shall not engage in any “distribution,” as such term is defined in Regulation M, other than a distribution meeting the requirements of the exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business Day immediately following the Settlement Period.
     (x) During the Settlement Period, neither Issuer 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, except for purchases from its employees that are not “Rule 10b-18 purchases” as defined in Rule 10b-18(a)(13).
     (xi) Issuer 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) Issuer’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 Issuer to Dealer that such information is true and correct. In addition, Issuer 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) Any Shares issued or delivered in connection with the Transaction shall be duly authorized and validly issued, fully paid and non-assessable, and the issuance or delivery thereof shall not be subject to any preemptive or similar rights.
     (b) Each of Dealer and Issuer agrees and represents that it is an “eligible contract participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended.
     (c) Each of Dealer and Issuer 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(2) thereof. Accordingly, Dealer represents and warrants to Issuer 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 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 Issuer agrees and acknowledges that Dealer is a “financial institution,” “swap participant” and “financial participant” within the meaning of Sections 101(22),
11

 
101(53C) 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 (i) a “securities contract,” as such term is defined in Section 741(7) of Title 11 of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code.
     (e) Issuer shall deliver to Dealer (i) an incumbency certificate, dated as of the Trade Date, of Issuer 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 due incorporation, existence and good standing of the Issuer in Delaware, its qualifications as a foreign corporation and good standing in California, the due authorization, execution and delivery of the Confirmation, and the absence of conflict of the execution and delivery of the Confirmation with any material agreement required to be filed as any exhibit to the Issuer’s Annual Report on Form 10-K and the Issuer’s charter documents
     (f) Issuer 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” .
     Each party acknowledges and agrees to be bound by the Conduct Rules of the National Association of Securities Dealers, Inc. applicable to transactions in options, and further agrees not to violate the position and exercise limits set forth therein.
     8. Other Provisions:
     (a) Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Issuer shall owe Dealer any amount pursuant to Section 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of a Tender Offer, Merger Event, Insolvency or Nationalization, in each case, in which the consideration or proceeds to be paid to holders of Shares consists solely of cash) or pursuant to Section 6(d)(ii) of the Agreement (except in the event of an Event of Default in which Issuer is the Defaulting Party or a Termination Event in which Issuer is the Affected Party that resulted from an event or events within Issuer’s control) (a “ Payment Obligation ”), Issuer 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, between the hours of 9:00 A.M. and 4:00 P.M., New York City time, on the Merger Date, Tender Offer Date, Announcement Date or Early Termination Date, as applicable (“ Notice of Share Termination ”). 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 or Early Termination Date, as applicable:
 	 	 	
Share Termination Alternative:	 	Applicable and means that Issuer shall deliver to Dealer the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to Section 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable (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 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, as determined by the Calculation Agent in its discretion by	
12

 
 	 	 	
 	 	commercially reasonable means and notified by the Calculation Agent to Issuer at the time of notification of the Payment Obligation.	
 	 	 	
Share Termination Delivery Unit:	 	In the case of a Termination Event, Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, a 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, Merger Event or Tender Offer. If such Insolvency, Nationalization, Merger Event or Tender Offer involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.	
 	 	 	
Failure to Deliver:	 	Applicable	
 	 	 	
Other Applicable provisions:	 	If Share Termination Alternative is applicable, the provisions of Sections 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 Issuer is the issuer of any Share Termination Delivery Units (or any security forming a part thereof). If, in the reasonable judgment of Issuer or Dealer, based on advice of counsel, for any reason, any securities comprising the Share Termination Delivery Units deliverable pursuant to this Section 8(a) 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(b) below apply.	
     (b) 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 (a) of this Section 8. If so applicable, then, at the election of Issuer 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 Issuer to Dealer shall be covered by an effective registration statement of Issuer 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) Issuer 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 an appropriate 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, Issuer 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 (b) only, the term “Issuer” shall mean the issuer of the relevant securities, as the context shall require.)
     (ii) If Issuer makes the election described in clause (b)(i)(A) above:
13

 
     (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 Issuer that is customary in scope for underwritten follow-on offerings of equity securities of companies of comparable size, maturity and lines of business and that yields results that are commercially reasonably 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 Issuer 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 follow-on offerings of equity securities of companies of comparable size, maturity and lines of business, in form and substance commercially reasonably satisfactory to Dealer or such affiliate and Issuer, 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 Issuer, shall provide for the payment by Issuer of all registration 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 as are customarily requested in comfort letters covering follow-on offerings of equity securities of companies of comparable size, maturity and lines of business.
     (iii) If Issuer makes the election described in clause (b)(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 Issuer customary in scope for private placements of equity securities of companies of comparable size, maturity and lines of business (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 Issuer;
     (B) Dealer (or an affiliate of Dealer designated by Dealer) and Issuer 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 Issuer 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 of companies of comparable size, maturity and lines of business, in form and substance commercially reasonably satisfactory to Dealer and Issuer, 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 Issuer, shall provide for the payment by Issuer of all expenses in connection with such resale, including all fees and expenses of counsel for Dealer, shall contain representations, warranties and agreements of Issuer 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 commercially reasonable 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 as are customarily requested in comfort letters covering private placements of equity securities of companies of comparable size, maturity and lines of business;
     (C) Issuer agrees that any Shares or Share Termination Delivery Units so delivered to Dealer, (i) may be transferred by and among Dealer and its affiliates, and Issuer 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
14

 
Shares or any securities issued by Issuer comprising such Share Termination Delivery Units, Issuer 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 upon delivery by Dealer (or such affiliate of Dealer) to Issuer or such transfer agent of seller’s and broker’s representation letters customarily delivered by Dealer in connection with resales of restricted securities pursuant to Rule 144 under the Securities Act, without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer); and
     (D) Issuer shall not take, or cause to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Issuer 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(1) or Section 4(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).
     (c) Make-whole Shares. If Issuer makes the election described in clause (i)(B) of paragraph (b) 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 all such Shares or Share Termination Delivery Units, as the case may be, or 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 Issuer. If the Freely Tradeable Value exceeds the realized net proceeds from such resale, Issuer shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the last day of the Resale Period the amount of such excess (the “ Additional Amount ”) in cash or in a number of additional Shares (“ Make-whole Shares ”) in an amount that, based on the Relevant Price on the last 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(c). This provision shall be applied successively until the Additional Amount is equal to zero, subject to Section 8(e).
     (d) 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, (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 ”) would be equal to or greater than 8.5% or more of the outstanding Shares 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 Section 203 of the Delaware General Corporation Law (the “ DGCL Takeover Statute ”) or other federal, state or local regulations or regulatory orders applicable to ownership of Shares (“ Applicable Laws ”), 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 Laws (including, without limitation, “interested stockholder” or “acquiring person” status under the DGCL Takeover Statute) and with respect to which such requirements have not been met or the relevant approval has not been received minus  (y) 1.0% of the number of Shares outstanding on the date of determination (either such condition described in clause (i) or (ii), an “ Excess Ownership Position ”). If any delivery owed to Dealer hereunder is not made,
15

 
in whole or in part, as a result of this provision, Issuer’s obligation to make such delivery shall not be extinguished and Issuer shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Dealer gives notice to Issuer that such delivery would not result in the existence of an Excess Ownership Position.
     (e) Limitations on Settlement by Issuer. Notwithstanding anything herein or in the Agreement to the contrary, in no event shall Issuer be required to deliver Shares in connection with the Transaction in excess of the product of two, the aggregate Number of Warrants for all Components at the time of delivery and the Warrant Entitlement at the time of delivery (such product, the “ Capped Number ”);  provided  that, solely for purposes of determining the Capped Number, the Number of Warrants for a Component and the Warrant Entitlement at the time of delivery shall take into account only adjustments made in accordance with the provisions of this Confirmation as a result of any Potential Adjustment Event or Extraordinary Event or other event, in each case, that was initiated by, and effectuated under the control of, Issuer (it being understood, for the avoidance of doubt, that an event initiated by Issuer shall not be deemed to be effectuated outside of the control of Issuer merely because effectuating such event requires approvals that are outside of Issuer’s control). Issuer 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 Issuer 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 Issuer shall not have delivered the full number of Shares otherwise deliverable as a result of this Section 8(e) (the resulting deficit, the “ Deficit Shares ”), Issuer 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 Issuer 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 reserved for issuance in respect of other transactions prior to such date which prior to the relevant date become no longer so reserved and (C) Issuer 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 ”). Issuer 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. Issuer shall not, until Issuer’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 reserve any such Shares for future issuance for any purpose other than to satisfy Issuer’s obligations to Dealer under the Transaction.
     (f) 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 Issuer’s bankruptcy. For the avoidance of doubt, the parties agree that the preceding sentence shall not apply at any time other than during Issuer’s bankruptcy to any claim arising as a result of a breach by Issuer of any of its obligations under this Confirmation or the Agreement. For the avoidance of doubt, the parties acknowledge that the obligations of Issuer under this Confirmation are not secured by any collateral that would otherwise secure the obligations of Issuer herein under or pursuant to any other agreement.
     (g) Amendments to Equity Definitions. The following amendments shall be made to the Equity Definitions:
     (i) For the purposes of any adjustment under Section 11.2(c) of the Equity Definitions in respect of a Potential Adjustment Event described in Section 11.2(e)(ii), (v) and (vi) thereof only, the first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has a material effect on the theoretical value of the relevant Shares or options on the Shares and, if so, will (i) make
16

 
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)”; and
     (ii) Section 11.2(e)(vii) of the Equity Definitions is hereby amended by inserting at the end of the Section the phrase “or a material effect on the theoretical value of the Warrants.”
     (h) 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 Issuer, subject to the restrictions set forth in the legend appearing at the top of this Confirmation. Dealer shall as soon as reasonably practicable notify Issuer of such transfer or assignment.
     (i) Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Issuer 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 Issuer relating to such tax treatment and tax structure.
     (j) 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 Issuer 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 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 (as defined above) 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 terms 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 no longer exists;
     (iii) any Person (as defined below) other than Issuer files a Schedule TO or any other schedule, form or report under the Exchange Act disclosing, or Issuer otherwise becomes aware, that such Person has acquired beneficial ownership (determined in accordance with Rule 13d-3 under the Exchange Act), directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of shares of Issuer’s capital stock entitling the Person to exercise 50% or more of the total voting power of all shares of Issuer’s capital stock entitled to vote generally in elections of directors;
17

 
     (iv) Issuer merges or consolidates with or into any other Person, other than a subsidiary, another Person merges with or into Issuer, or Issuer conveys, sells, transfers or leases all or substantially all of its assets to another Person, other than any merger or consolidation:
 	(A)	 	that does not result in a reclassification, conversion, exchange or cancellation of the outstanding Shares and pursuant to which the consideration received by holders of Shares immediately prior to the transaction entitles such holders to exercise, directly or indirectly, 50% or more of the voting power of all shares of capital stock entitled to vote generally in the election of directors of the continuing or surviving corporation immediately after such transaction in substantially the same proportions as their respective ownership of our voting securities immediately prior to the transaction; or	
 	 	 	 	
 	(B)	 	which is effected solely to change Issuer’s jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding Shares solely into shares of common stock of the surviving entity; or	
     (v) Issuer is liquidated or dissolved or holders of Shares approve any plan or proposal for Issuer’s liquidation or dissolution.
Notwithstanding the foregoing, a transaction set forth in clause (iii) or (iv) above will not constitute an Additional Termination Event, in each case, if at least 90% of the consideration received for the Shares (excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights and cash dividends) in connection with such event consists of shares of capital stock traded or quoted on any of the New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or any of their respective successors) (or will be so traded or quoted immediately following the completion of the merger or consolidation or such other transaction).
     “Person” includes any syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act.
     (k) Effectiveness. If, on or prior to the Effective Date, Dealer reasonably determines that it is advisable to cancel the Transaction because of concerns that Dealer’s related hedging activities could be viewed as not complying with applicable securities laws, rules or regulations, the Transaction shall be cancelled and shall not become effective, and neither party shall have any obligation to the other party in respect of the Transaction.
     (l) Extension of Settlement. Dealer may divide any Component into additional Components and designate the Expiration Date and the Number of Warrants for each such Component if Dealer determines, in its reasonable discretion, that such further division is necessary or advisable to preserve Dealer’s hedging activity hereunder in light of existing liquidity conditions in the cash market or stock loan market or to enable Dealer to effect purchases of Shares in connection with its hedging activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be compliance with applicable legal and regulatory requirements.
     (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 Issuer 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 EITF 00-19 as in effect on the relevant Trade Date (including, without limitation, where the Issuer so elects to deliver cash or fails timely to elect to deliver Shares or Share Termination Delivery Property in respect of such settlement).
     (o) Payments by Dealer upon Early Termination. The parties hereby agree that, notwithstanding anything to the contrary herein, in the Definitions or in the Agreement, following the
18

 
payment of the Premium, in the event that an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to the Transaction or the Transaction is terminated or cancelled pursuant to Article 12 of the Equity Definitions and, as a result, Dealer would owe to Issuer an amount calculated under Section 6(e) of the Agreement or Article 12 of the Equity Definitions, such amount shall be deemed to be zero.
     (p) 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 THE NEW YORK GENERAL OBLIGATIONS LAW).
     (q) Amendment. This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Issuer and Dealer. If Goldman, Sachs & Co. exercises the Initial Purchasers’ (as defined in the Purchase Agreement) right under the Purchase Agreement to purchase additional convertible notes as set forth therein, then Dealer and Issuer will either enter into a new confirmation evidencing a corresponding number of additional warrants to be issued by Issuer to Dealer or amend this Confirmation (in each case on pricing terms acceptable Dealer and Issuer) (such additional confirmation or amendment to this Confirmation to provide for the payment by Dealer to Issuer of the additional premium related thereto in an amount to be agreed between the parties).
     (r) 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.
     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 Issuer 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) Issuer agrees that any and all controversies that may arise between Issuer 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 The New York Stock Exchange, Inc. (“NYSE”) or NASD Dispute Resolution (“NASD-DR”), or, if the NYSE and NASD-DR decline 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.
19

 
     (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) Issuer is excluded from the class by the court.
     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.
20

 
     Issuer 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 Issuer 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 [       ], Facsimile No. [      ].
 	 	 	 	 	
 	Yours faithfully,

[INSERT DEALER NAME]
 	 	
 	By:  	 	 	
 	 	Name:  	 	 	
 	 	Title:  	 	 	
 	
Agreed and Accepted By:
NETAPP, INC.
By:                                                                                  
Name:
Title:

 
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	 	 	 	September 3, 2013	
2	 	 	 	September 4, 2013	
3	 	 	 	September 5, 2013	
4	 	 	 	September 6, 2013	
5	 	 	 	September 9, 2013	
6	 	 	 	September 10, 2013	
7	 	 	 	September 11, 2013	
8	 	 	 	September 12, 2013	
9	 	 	 	September 13, 2013	
10	 	 	 	September 16, 2013	
11	 	 	 	September 17, 2013	
12	 	 	 	September 18, 2013	
13	 	 	 	September 19, 2013	
14	 	 	 	September 20, 2013	
15	 	 	 	September 23, 2013	
16	 	 	 	September 24, 2013	
17	 	 	 	September 25, 2013	
18	 	 	 	September 26, 2013	
19	 	 	 	September 27, 2013	
20	 	 	 	September 30, 2013	
21	 	 	 	October 1, 2013	
22	 	 	 	October 2, 2013	
23	 	 	 	October 3, 2013	
24	 	 	 	October 4, 2013	
25	 	 	 	October 7, 2013	
26	 	 	 	October 8, 2013	
27	 	 	 	October 9, 2013	
28	 	 	 	October 10, 2013	
29	 	 	 	October 11, 2013	
30	 	 	 	October 14, 2013	
31	 	 	 	October 15, 2013	
32	 	 	 	October 16, 2013	
33	 	 	 	October 17, 2013	
34	 	 	 	October 18, 2013	
35	 	 	 	October 21, 2013	
36	 	 	 	October 22, 2013	
37	 	 	 	October 23, 2013	
38	 	 	 	October 24, 2013	
39	 	 	 	October 25, 2013	
40	 	 	 	October 28, 2013	

Exhibit 10.3
AMENDMENT TO CONFIRMATION
     THIS AMENDMENT (this “Amendment”) is made as of June 6, 2008, between [Insert Dealer Name] (“ Dealer ”) and NetApp, Inc. (“ Issuer ”).
     WHEREAS, Dealer and Issuer are parties to a Confirmation dated as of June 4, 2008 (the “Confirmation”) evidencing an Issuer Warrant Transaction [Insert Reference Number];
     WHEREAS, the parties wish to amend the Confirmation on the terms and conditions set forth in this Amendment;
     NOW, THEREFORE, in consideration of their mutual covenants herein contained, the parties hereto agree as follows:
     Section 1. Terms Used but Not Defined Herein. Terms used but not defined herein shall have the respective meanings given to them in the Confirmation.
     Section 2. Amendment to the Confirmation.
 	(a)	 	The “Premium” under the Confirmation shall be USD[                    ]. For the avoidance of doubt, the Premium per Warrant set forth in the Confirmation shall remain unchanged.	
 	 	 	 	
 	(b)	 	The “Number of Warrants” under Annex A shall be [                    ] for Components 1 through 8, and [                      ] for Components 9 through 40.	
     Section 3. Representations and Warranties. Issuer represents and warrants to Dealer as follows:
 	(a)	 	On the date of this Amendment, (i) none of Issuer and its officers and directors is aware of any material nonpublic information regarding Issuer or the Shares and (ii) all reports and other documents filed by Issuer 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 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.	
 	 	 	 	
 	(b)	 	Issuer is not entering into this Amendment to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or to otherwise violate the Exchange Act.	
 	 	 	 	
 	(c)	 	The representations and warranties of Issuer set forth in Section 3 of the Agreement and Section 7 of the Confirmation are true and correct and are hereby deemed to be repeated to Dealer as if set forth herein.	
     Section 4. Effectiveness. This Amendment shall become effective upon execution by the parties hereto.
     Section 5. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all of the signatures thereto and hereto were upon the same instrument.
     Section 6. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York.
     Section 7. Effectiveness of Confirmation. Except as amended hereby, all the terms of the Confirmation shall remain and continue in full force and effect and are hereby confirmed in all respects.

 
     IN WITNESS WHEREOF, the parties have signed this Amendment as of the date and year first above written.
 	 	 	 	 	 	 	
 	 	[INSERT DEALER NAME]	
 	 	 	 	 	 	 	
 	 	By:	 	 	 	 	
 	 	 	 	  Name:	 	 	
 	 	 	 	Title:	 	 	

Agreed and Accepted By:	 	 	
 	 	 	 	 	
NETAPP, INC.	 	 	
 	 	 	 	 	
By:	 	 	 	 	
 	 	  Name:	 	 	
 	 	Title:	 	 	

Exhibit 99.1

NetApp Prices $1.1 Billion of Its 1.75% Convertible Senior Notes Due 2013
Sunnyvale, Calif. — June 5, 2008 — NetApp (NASDAQ: NTAP) announced today that it has priced $1.1 billion aggregate principal amount of 1.75% convertible senior notes due in 2013. The notes will be sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. NetApp also granted the initial purchasers of the notes an option to purchase up to an additional $165 million aggregate principal amount of notes solely to cover over-allotments. The sale is expected to close on June 10, 2008, subject to customary closing conditions.
The notes will be convertible, subject to certain conditions, into cash up to the principal amount of notes and, with respect to any excess conversion value, into shares of NetApp’s common stock. The notes will have an initial conversion rate of 31.4006 shares of common stock per $1,000 principal amount of notes (which is subject to adjustment in certain circumstances). This represents an initial effective conversion price of approximately $31.85 per share. The initial conversion price represents a premium of 35% to the closing price of NetApp’s common stock on June 4, 2008, which was $23.59 per share.
The notes will be unsecured, unsubordinated obligations of NetApp, and interest will be payable semi-annually in cash at a rate of 1.75% per annum, and will be convertible upon satisfaction of certain conditions. NetApp estimates that the net proceeds from the offering will be approximately $1,077 million, after deducting initial purchasers’ discounts and estimated offering expenses. The notes will mature on June 1, 2013.
In connection with the offering, NetApp has entered into convertible note hedge transactions with counterparties (the “hedge counterparties”), some of which are affiliates of the initial purchasers of the notes, and intends to use a portion of the net proceeds from this offering to pay for the convertible note hedge transactions. NetApp has also entered into separate warrant transactions with the hedge counterparties and will use the proceeds of those warrant transactions to partially offset the cost of the convertible note hedge transactions. The warrants have an exercise price of $41.28, which is approximately 75 percent above the closing price of NetApp’s common stock on June 4, 2008. In connection with the convertible note hedge and warrant transactions, the hedge counterparties have advised NetApp that they or their affiliates expect to enter into various derivative transactions with respect to the common stock of NetApp and/or purchase common stock of NetApp or other securities linked to or referencing NetApp’s common stock concurrently with or shortly after the pricing of the notes. These activities could have the effect of increasing or preventing a decline in the price of the common stock of NetApp concurrently with or after the pricing of the notes. In addition, the hedge counterparties or their affiliates may from time to time enter into or unwind various derivative transactions with respect to the common stock of NetApp and/or purchase or sell common stock of NetApp or other securities linked to or referencing NetApp’s common stock in secondary market transactions (and are likely to do so during any observation period relating to the conversion of the notes). These activities could have the effect of

 
decreasing the price of the common stock of NetApp and could adversely affect the price of the notes during any observation period related to the conversion of notes.
NetApp expects to use (i) approximately $273.6 million of the net proceeds of the offering to repurchase shares of its common stock in negotiated transactions with institutional investors, through one or more of the initial purchasers as its agent, concurrently with the offering, (ii) a portion of the net proceeds for the cost of the convertible note hedge transactions described above, after such cost is offset by the proceeds received from the warrant transactions described above, and (iii) any remaining net proceeds for general corporate purposes, including capital expenditures, possible future stock repurchases, working capital and potential acquisitions and strategic transactions. The repurchase of such shares in connection with the offering could have the effect of raising or maintaining the market price of the common stock above levels that would otherwise have prevailed, or preventing, slowing or delaying a decline in such price. If the initial purchasers exercise the over-allotment option, NetApp intends to use any proceeds therefrom to enter into additional convertible note hedge transactions and for general corporate purposes, and in such event also intends to enter into additional warrant transactions, which would result in the receipt of additional proceeds.
This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities (including the shares of NetApp common stock into which the notes are convertible) and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
The notes and the shares of common stock issuable upon conversion of the notes have not been registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
Cautionary Statement:
The statements in this release relating to the offering and the expected use of proceeds from the offering are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, whether or not NetApp will consummate the offering, prevailing market conditions, the anticipated use of the proceeds of the offering which could change as a result of market conditions or for other reasons, the fact that future share repurchases will depend upon market conditions, interest rates and corporate considerations and the impact of general economic, industry or political conditions in the United States or internationally.
Stockholders of NetApp are cautioned not to place undue reliance on its forward-looking statements, which speak only as of the date such statements are made. NetApp does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this June 4, 2008 press release, or to reflect the occurrence of unanticipated events.
-2-

 
Press Contact:
NetApp PR Hotline
Ph: (408) 822-3287 xdl-uspr@netapp.com

-3-