Exhibit 10.1
 
November 20, 2012

Fixed Dollar Accelerated Share Repurchase Transaction

Calgon Carbon Corporation
400 Calgon Carbon Drive
Pittsburgh, PA 15230-0717

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Dear Sir/Madam:

The purpose of this letter agreement (this “Confirmation”) is to confirm the
terms and conditions of the Transaction entered into between Morgan Stanley &
Co. LLC (“MSCO”) and Calgon Carbon Corporation (“Issuer”) on the Trade Date
specified below (the “Transaction”).  This confirmation constitutes a
“Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”)) (the “Equity Definitions”) are incorporated into
this Confirmation.  The Transaction is a Share Forward Transaction for purposes
of the Equity Definitions.  Any reference to a currency shall have the meaning
contained in Section 1.7 of the 2006 ISDA Definitions, as published by ISDA.

1.  This Confirmation evidences a complete and binding agreement between MSCO
and Issuer as to the terms of the Transaction to which this Confirmation relates
and shall supersede all prior or contemporaneous written or oral communications
with respect thereto.  This Confirmation shall be subject to an agreement (the
“Agreement”) in the form of the 2002 ISDA Master Agreement as if MSCO and Issuer
had executed an agreement in such form without any Schedule but with the
elections set forth in this Confirmation (and the election of USD as the
Termination Currency).

The Transaction shall be the only transaction under the Agreement.  If there
exists any ISDA Master Agreement between MSCO and Issuer or any confirmation or
other agreement between MSCO and Issuer pursuant to which an ISDA Master
Agreement is deemed to exist between MSCO and Issuer, then, notwithstanding
anything to the contrary in such ISDA Master Agreement, such confirmation or
agreement or any other agreement to which MSCO and Issuer are parties, the
Transaction shall not be considered a transaction under, or otherwise governed
by, such existing or deemed to be existing ISDA Master Agreement.

If there is any inconsistency between the Agreement, this Confirmation and the
Equity Definitions, the following will prevail for purposes of the Transaction
in the order of precedence indicated: (i) this Confirmation; (ii) the Equity
Definitions; and (iii) the Agreement.

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

GENERAL TERMS:

Trade Date:
As specified in Schedule I

Buyer:
Issuer

 
 
 

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Seller:
MSCO

Shares:
Common Stock, par value USD 0.01 per share, of Issuer (Ticker: CCC)

Tranches:
The Transaction will be divided into multiple Tranches, each with the terms set
forth in this Confirmation, and in particular with the Prepayment Amount,
Observation Dates, the Scheduled Valuation Date and the Lock-Out Date set forth
in Schedule I.  The payments and deliveries to be made upon settlement of the
Transaction will be determined separately for each Tranche as if each Tranche
were a separate Transaction under the Agreement.

Forward Price:
A price per Share (as determined by the Calculation Agent) equal to (i) the
arithmetic mean (not a weighted average) of the 10b-18 VWAP on each Observation
Date that is a Trading Day during the Calculation Period minus (ii) the
Discount.
   
Discount:
As specified in Schedule I
   
10b-18 VWAP:
For each Observation Date that is a Trading Day, a price per Share equal to the
volume-weighted average price of the Rule 10b-18 eligible trades in the Shares
for the entirety of such Trading Day as determined by the Calculation Agent by
reference to the screen entitled “CCC UN <Equity> AQR SEC” or any successor page
as reported by Bloomberg L.P. or any successor (without regard to pre-open or
after-hours trading outside of any regular trading session for such Trading Day
or block trades (as defined in Rule 10b-18(b)(5) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) on such Trading Day) or, if the price
(i) is not reported on such Bloomberg page or successor page or (ii) is
determined by the Calculation Agent to have been reported incorrectly, the price
determined by the Calculation in a commercially reasonable manner to substitute
for the unreported or erroneous price on such day.
   
Observation Dates:
As specified in Schedule I

Calculation Period:
The period from, and including, the first Observation Date that is a Trading Day
that occurs on or after the Prepayment Date to, but excluding, the relevant
Valuation Date; provided, however, that if the Valuation Date is the Scheduled
Valuation Date, then the Valuation Date shall be included in the Calculation
Period.

Trading Day:
Any Exchange Business Day that is not a Disrupted Day in whole

Initial Shares:
As specified in Schedule I
   
Initial Share Delivery Date:
One Exchange Business Day following the Trade Date.  On the Initial Share
Delivery Date, Seller shall deliver to Buyer a number of Shares equal to the
Initial Shares in accordance with Section 9.4 of the Equity Definitions, with
the Initial Share Delivery Date being deemed to be a “Settlement Date” for
purposes of such Section 9.4.

 
 
 

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Prepayment:
Applicable

Prepayment Amount:
As specified in Schedule I
   
Commission Amount:
As specified in Schedule I
   
Adjustment Amount:
As specified in Schedule I
   
Structuring Fee:
As specified in Schedule I

Prepayment Date:
One Exchange Business Day following the Trade Date.  On the Prepayment Date,
Buyer shall pay to Seller the Prepayment Amount, the Commission Amount, the
Adjustment Amount and the Structuring Fee.

Exchange:
New York Stock Exchange

Related Exchange:
All Exchanges

Market Disruption Event:
The definition of “Market Disruption Event” in Section 6.3(a) of the Equity
Definitions is hereby amended by deleting the words “at any time during the
one-hour period that ends at the relevant Valuation Time, Latest Exercise Time,
Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,”
starting in the third line thereof.
     
Section 6.3(d) of the Equity Definitions is hereby amended by deleting the
remainder of the provision following the term “Scheduled Closing Time” in the
fourth line thereof.
     
Notwithstanding anything to the contrary in the Equity Definitions, if any
Observation Date in the Calculation Period is a Disrupted Day, the Calculation
Agent shall have the option in its sole discretion either (i) to determine the
weighting of each Rule 10b-18 eligible transaction in the Shares on the relevant
Disrupted Day using its commercially reasonable judgment for purposes of
calculating the Forward Price, as applicable, (ii) to elect to extend the
Calculation Period by a number of Observation Dates equal to the number of
Disrupted Days during the Calculation Period or (iii) to suspend the Calculation
Period until the circumstances giving rise to such suspension have ceased.  For
the avoidance of doubt, if Calculation Agent elects the option described in
clause (i) above, then such Disrupted Day shall be deemed to be a Trading Day
for purposes of calculating the Forward Price.
     
If a Disrupted Day occurs during the  Calculation Period and each of the nine
immediately following Scheduled Trading Days is a Disrupted Day, then the
Calculation Agent may, in its good faith and commercially reasonable discretion,
deem such ninth Scheduled Trading Day to be an Exchange Business Day that is not
a Disrupted Day and determine the VWAP Price for such ninth Scheduled Trading
Day using its good faith and commercially reasonable estimate of the value of
the Shares on such ninth Scheduled Trading Day based on the volume, historical
trading patterns and price of the Shares and such other factors as it deems
appropriate.

 
 
 

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VALUATION:      
Valuation Date:
The earlier of (i) the Scheduled Valuation Date and (ii) any earlier accelerated
Valuation Date as a result of MSCO’s election in accordance with the immediately
succeeding paragraph.
     
MSCO shall have the right, in its absolute discretion but subject to the
limitation set forth in the immediately succeeding paragraph, to accelerate the
Valuation Date, in whole or in part, to any Exchange Business Day that is on or
after the Lock-Out Date and prior to the Scheduled Valuation Date by notice
(each such notice, an “Acceleration Notice”) to Issuer by 9:00 p.m., New York
City time, on the Exchange Business Day immediately following the accelerated
Valuation Date.
     
MSCO shall specify in each Acceleration Notice the portion of the Prepayment
Amount that is subject to acceleration (which may be less than the full
Prepayment Amount, but only so long as such portion is not less than USD
$5,000,000).  If the portion of the Prepayment Amount that is subject to
acceleration is less than the full Prepayment Amount, then the Calculation Agent
shall adjust the terms of the Transaction as appropriate in order to take into
account the occurrence of such accelerated Valuation Date (including cumulative
adjustments to take into account all prior accelerated Valuation Dates).
     
On each Valuation Date, the Calculation Agent shall calculate the Settlement
Amount.
   
Scheduled Valuation Date:
As specified in Schedule I, subject to postponement in accordance with “Market
Disruption Event” above
   
Lock-Out Date:
As specified in Schedule I

 
SETTLEMENT TERMS:
     
Physical Settlement:
Applicable.
     
On the Settlement Date, Seller shall deliver to Buyer a number of Shares equal
to (a) (i) the Prepayment Amount  divided by (ii) the Forward Price, minus (b)
the Initial Shares (such number of Shares, the “Settlement Amount”), rounded to
the nearest whole number of Shares; provided, however, that if the Settlement
Amount is less than zero, the terms of the Buyer Settlement Provisions in Annex
A shall apply.

 
 
 

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Settlement Currency:
USD
   
Settlement Date:
The date that falls one Settlement Cycle after the relevant Valuation Date
   
Other Applicable Provisions:
The last sentence of Section 9.2, Sections 9.8, 9.9, 9.10 and 9.11 (except 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 arising as a result of the fact that Buyer is the issuer of the
Shares) and Section 9.12 of the Equity Definitions will be applicable to the
Transaction.

 
SHARE ADJUSTMENTS:
     
Potential Adjustment Event:
Notwithstanding anything to the contrary in Section 11.2(e) of the Equity
Definitions, an Extraordinary Dividend shall not constitute a Potential
Adjustment Event.
     
It shall constitute a Potential Adjustment Event if a Disrupted Day occurs or,
pursuant to Section 10 below, is deemed to occur (in whole or in part) on any
Trading Day on or prior to the Valuation Date.
   
Extraordinary Dividend:
Any dividend or distribution on the Shares with an ex-dividend date occurring
during the period from, and including, the Trade Date to, and including, the
last day of the Calculation Period (other than any dividend or distribution of
the type described in Section 11.2(e)(i), Section 11.2(e)(ii)(A) or Section
11.2(e)(ii)(B) of the Equity Definitions).

Method of Adjustment:
Calculation Agent Adjustment

EXTRAORDINARY EVENTS:

Consequences of Merger Events:

Share-for-Share:
Modified Calculation Agent Adjustment

Share-for-Other:
Cancellation and Payment on that portion of the Other Consideration that
consists of cash; Modified Calculation Agent Adjustment on the remainder of the
Other Consideration

Share-for-Combined:
Component Adjustment
   
Tender Offer:
Applicable

 
 
 

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Consequences of Tender Offers:

Share-for-Share:
Modified Calculation Agent Adjustment

Share-for-Other:
Modified Calculation Agent Adjustment

Share-for-Combined:
Modified Calculation Agent Adjustment
   
New Shares:
In the definition of New Shares in Section 12.1(i) of the Equity Definitions,
the text in clause (i) thereof shall be deleted in its entirety (including the
word “and” following such clause (i)) and replaced with “publicly quoted, traded
or listed on any of the New York Stock Exchange, The NASDAQ Global Select Market
or The NASDAQ Global Market (or their respective successors)”.

For purposes of the Transaction,

(i)           the definition of Merger Date in Section 12.1(c) of the Equity
Definitions shall be amended to read, “Merger Date shall mean the Announcement
Date.”;

(ii)          the definition of Tender Offer Date in Section 12.1(e) of the
Equity Definitions shall be amended to read, “Tender Offer Date shall mean the
Announcement Date.”;

(iii)         the definition of “Announcement Date” in Section 12.1(l) of the
Equity Definitions is hereby amended by (a) replacing the words “a firm” with
the word “any” in the second and fourth lines thereof, (b) replacing the word
“leads to the” with the words “, if completed, would lead to a” in the third and
the fifth lines thereof, (c) replacing the words “voting shares” with the word
“Shares” in the fifth line thereof, (d) inserting the words “by any entity”
after the word “announcement” in the second and the fourth lines thereof, (e)
inserting the words “or to explore the possibility of engaging in” after the
words “engage in” in the second line thereof and (f) inserting the words “or to
explore the possibility of purchasing or otherwise obtaining” after the word
“obtain” in the fourth line thereof;

(iv)         Section 12.2 of the Equity Definitions is hereby amended by
inserting the words “Announcement Date in respect of any Merger Event or any
potential” before the words “Merger Event” in the final line thereof;
 
Composition of Combined Consideration:
Not Applicable
   
Nationalization, Insolvency or Delisting:
Cancellation and Payment; provided that in addition to the provisions of Section
12.6(a)(iii) of the Equity Definitions, it shall 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 Market or The NASDAQ Global Select Market (or their respective
successors); if the Shares are immediately re-listed, re-traded or re-quoted on
any such exchange or quotation system, such exchange or quotation system shall
thereafter be deemed to be the Exchange.

 
Additional Disruption Events:

Change in Law:
Applicable; provided that (i) any determination as to whether (A) the adoption
of or any change in any applicable law or regulation (including, for the
avoidance of doubt and without limitation, (x) any tax law or (y) adoption or
promulgation of new regulations authorized or mandated by existing statute) or
(B) the promulgation of or any change in the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any applicable
law or regulation (including any action taken by a taxing authority), in each
case, constitutes a “Change in Law” shall be made without regard to Section 739
of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any
similar legal certainty provision in any legislation enacted, or rule or
regulation promulgated, on or after the Trade Date, and (ii) Section 12.9(a)(ii)
of the Equity Definitions is hereby amended by replacing the parenthetical
beginning after the word “regulation” in the second line thereof the words
“(including, for the avoidance of doubt and without limitation, (x) any tax law
or (y) adoption or promulgation of new regulations authorized or mandated by
existing statute)”.

 
 
 
 

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Failure to Deliver:
Applicable

Insolvency Filing:
Applicable

Hedging Disruption:
Applicable; provided that Section 12.9(a)(v) of the Equity Definitions is
amended by adding the following: “provided that However, any such inability that
occurs solely due to the deterioration of the creditworthiness of the Hedging
Party shall not be a Hedging Disruption.”

Increased Cost of Hedging:
Applicable; provided that Section 12.9(a)(vi) of the Equity Definitions is
amended by adding the following: “provided that any such materially increased
amount that is incurred solely as a result of the deterioration of the
creditworthiness of the Hedging Party shall not be an Increased Cost of
Hedging.”
   
Loss of Stock Borrow:
Applicable
   
Maximum Stock Loan Rate:
200 bps

Increased Cost of Stock Borrow:
Applicable
   
Initial Stock Loan Rate:
50 bps

Determining Party:
For all applicable events, MSCO; provided that following any determination
hereunder and upon written request by Issuer, the Determining Party shall
provide Issuer with a reasonably detailed explanation in writing of its
determination including, where applicable, a description of the methodology and
the basis for such determination.

Hedging Party:
For all applicable events, MSCO

Non-Reliance:
Applicable

 
 
 

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Agreements and Acknowledgements Regarding Hedging Activities:
Applicable

Additional Acknowledgments:
Applicable

3.  Calculation Agent:
MSCO

4.  Account Details and Notices:

(a)           Account for delivery of Shares to Issuer:

Transfer Agent:  Registrar and Transfer Company
Method:  Deposit/Withdrawal At Custodian
Account:  DTC #2783

(b)           Account for payments to Issuer:

Bank First National Bank
Pittsburgh, PA 15212
ABA#: 043-318092
Deposit to: Calgon Carbon Corporation
Account # 95030837

(c)           Account for payments to MSCO:

Citibank, NY
ABA # 021000089
Morgan Stanley & Co.
Account # 38890774
Calgon Carbon Corporation
Account # 023- 05159

(d)           For purposes of this Confirmation:

(i)           Address for notices or communications to Issuer:

Calgon Carbon Corporation
400 Calgon Carbon Drive
P.O. Box 717
Pittsburgh, PA  15230-0717
Attn:  General Counsel
With a copy to:  Treasurer

Telephone:  (412) 787-6700
Facsimile: (412) 787-6676

(ii)           Address for notices or communications to MSCO:

Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036-8293
Attention: Brian Lehman
Telephone: (212) 761-8101
Facsimile: 212 507-2714
Email: Brian.Lehman@morganstanley.com
 
 
 

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With a copy to:

Morgan Stanley & Co. LLC
1585 Broadway
5th Floor
New York, NY 10036
Attention: Anthony Cicia
Telephone: 212-762-4828
Facsimile: 212-507-4338
Email: Anthony.Cicia@morganstanley.com

5.  Amendments to the Equity Definitions.

(a)           Section 9.2(a)(iii) of the Equity Definitions is hereby amended by
deleting the words “the Excess Dividend Amount, if any, and”.

(b)           Section 11.2(a) of the Equity Definitions is hereby amended by
deleting the words “a diluting or concentrative effect on the theoretical value
of the relevant Shares” and replacing them with the words “, in the commercially
reasonable judgment of the Calculation Agent, a material economic effect on the
relevant Transaction”.

(c)           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 or Share Forward Transaction,
then, following the announcement or occurrence of any Potential Adjustment
Event, the Calculation Agent will determine whether such Potential Adjustment
Event has an economic effect on the Transaction and, if so, will (i) make
appropriate adjustment(s), if any, to any one or more of:’ and the portion of
such sentence immediately preceding clause (ii) thereof is hereby amended by
deleting the words “diluting or concentrative” and the words “(provided that no
adjustments will be made to account solely for changes in volatility, expected
dividends, stock loan rate or liquidity relative to the relevant Share)” and
replacing such latter phrase with the words “(including adjustments to account
for changes in volatility, stock loan rate or liquidity relevant to the Shares
or to the Transaction)”.

(d)           Section 11.2(e)(vii) of the Equity Definitions is hereby amended
by deleting the words “diluting or concentrative effect on the theoretical value
of the relevant Shares” and replacing them with the words “, in the commercially
reasonable judgment of the Calculation Agent, a material economic effect on the
relevant Transaction”.

(e)           Section 12.6(c)(ii) of the Equity Definitions is hereby amended by
replacing the words “the Transaction will be cancelled,” in the first line with
the words “MSCO will have the right to cancel the Transaction,”.

(f)           Section 12.9(b)(iv) of the Equity Definitions is hereby amended by
(A) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)”
following subsection (A) and (3) the phrase “in each case” in subsection (B);
and (B) deleting the phrase “neither the Non-Hedging Party nor the Lending Party
lends Shares in the amount of the Hedging Shares or” in the penultimate
sentence.

(g)           Section 12.9(b)(v) of the Equity Definitions is hereby amended by
(A) adding the word “or” immediately before subsection “(B)” and deleting the
comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its
entirety, (2) deleting the word “or” immediately preceding subsection (C) and
(3) replacing in the penultimate sentence the words “either party” with “the
Hedging Party” and (4) deleting clause (X) in the final sentence.

 
 

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6.  Certain Payments and Deliveries by MSCO.
 
Notwithstanding anything to the contrary herein, or in the Equity Definitions,
if at any time (i) an Early Termination Date occurs and MSCO would be required
to make a payment pursuant to Section 6 of the Agreement or (ii) an
Extraordinary Event occurs and MSCO would be required to make a payment pursuant
to Article 12 of the Equity Definitions (the amount of any such payment
obligation described in Section 6(i) or (ii) above, an “MSCO Payment Amount”),
then Issuer shall have the option to require MSCO to settle such payment
obligation in Shares in lieu of cash.  If Issuer elects for MSCO to settle an
MSCO Payment Amount in Shares, then on such date such MSCO Payment Amount is
due, MSCO will deliver a number of Shares with a market value, as determined by
the Calculation Agent, equal to all or a portion (which portion may be zero) of
the MSCO Payment Amount.  If the market value of such Shares equals a portion,
but not all, of the MSCO Payment Amount, then, on the date such MSCO Payment
Amount is due, a notional balance (the “Settlement Balance”) shall be
established equal to the remaining portion of the MSCO Payment Amount, and MSCO
shall commence purchasing Shares for delivery to Issuer.  At the end of each
Trading Day on which MSCO purchases Shares pursuant to this Section 6, MSCO
shall reduce the Settlement Balance by the amount paid by MSCO to purchase the
Shares purchased on such Trading Day; provided, however, that if the amount paid
by MSCO to purchase Shares exceeds the 10b-18 VWAP for that Trading Day, MSCO
shall reduce the Settlement Balance by the amount equal to the product of (i)
the number of Shares purchased on that Trading Day, and (ii) the 10b-18
VWAP.  MSCO shall deliver any Shares purchased on a Trading Day pursuant to this
Section 6 to Issuer on the third Exchange Business Day following such Trading
Day.  MSCO shall continue so purchasing and delivering Shares until the
Settlement Balance has been reduced to zero.  In making any purchases of Shares
contemplated by this Section 6, MSCO shall use commercially reasonable efforts
to purchase such Shares in a manner that would qualify for the safe harbor
provided by Rule 10b-18 if such purchases were made by or on behalf of
Issuer.  The period until the Settlement Balance is reduced to zero shall be
considered to be part of the Calculation Period for purposes of the
representations, warranties and covenants and other provisions herein as the
context requires.

7.  Certain Payments and Deliveries by Issuer.

Notwithstanding anything to the contrary herein, or in the Equity Definitions,
if at any time (i) an Early Termination Date occurs and Issuer would be required
to make a payment pursuant to Section 6 of the Agreement or (ii) an
Extraordinary Event occurs and Issuer would be required to make a payment
pursuant to Article 12 of the Equity Definitions (any such payment described in
Section 7(i) or (ii) above, an “Early Settlement Payment”), then Issuer shall
have the option in lieu of making such cash payment, to settle such payment
obligation in Shares (such Shares, “Early Settlement Shares”).  In order to
elect to deliver Early Settlement Shares, (i) Issuer must notify MSCO of its
election by no later than 4:00 p.m., New York City time, on the date that is
three Exchange Business Days before the date that the Early Settlement Payment
is due, (ii) Issuer must specify whether such Early Settlement Shares are to be
sold by means of a registered offering or by means of a private placement and
(iii) Issuer must comply with Annex A below.

8.   Special Provisions for Merger Transactions.

Notwithstanding anything to the contrary herein or in the Equity Definitions,
Issuer agrees that:

(i)           It will not during the term of the Transaction make, or, to the
extent within its control, permit to be made, any public announcement (as
defined in Rule 165(f) under the Securities Act) of any Merger Transaction or
potential Merger Transaction unless such public announcement is made prior to
the open or after the close of the regular trading session on the Exchange for
the Shares.

(ii)           To the extent that an announcement of a potential Merger
Transaction occurs during the term of the Transaction and such announcement does
not cause the Transaction to be cancelled or terminated in whole pursuant to
“Extraordinary Events” in Section 2 above, then as soon as practicable following
such announcement (but in any event prior to the next opening of the regular
trading session on the Exchange), Issuer shall provide MSCO with written notice
of such announcement; promptly (but in any event prior to the next opening of
the regular trading session on the Exchange), Issuer shall provide MSCO with
written notice specifying (x) 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 MSCO or its
affiliates and (y) the number of Shares purchased pursuant to the block purchase
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 MSCO that such information is true and
correct.  Issuer understands that MSCO will use this information in calculating
the trading volume for purposes of Rule 10b-18.  In addition, Issuer shall
promptly notify MSCO of the earlier to occur of the completion of such
transaction and the completion of the vote by target shareholders.  Issuer
acknowledges that any such public announcement may trigger the provision set
forth in Section 10 below.  Accordingly, Issuer acknowledges that its actions in
relation to any such announcement or transaction must comply with the standards
set forth in Section 12(b) below.
 
 
 

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

9.  Special Provisions for Acquisition Transaction Announcements.

(a)           If an Acquisition Transaction Announcement occurs on or prior to
the final Valuation Date, then the Forward Price shall be determined as if the
words “minus (ii) the Discount” were deleted from the definition thereof. If an
Acquisition Transaction Announcement occurs after the Trade Date but prior to
the Lock-Out Date, the Lock-Out Date shall be deemed to be the date of such
Acquisition Transaction Announcement.

(b)           “Acquisition Transaction Announcement” means (i) the announcement
of an Acquisition Transaction other than a Hostile Tender Offer, (ii) an
announcement that Issuer or any of its subsidiaries has entered into an
agreement, a letter of intent or an understanding designed to result in an
Acquisition Transaction, (iii) the announcement of the intention to solicit or
enter into, or to explore strategic alternatives or other similar undertaking
that may include, an Acquisition Transaction, (iv) any other announcement that
in the reasonable judgment of the Calculation Agent may result in an Acquisition
Transaction or (v) any announcement subsequent to an Acquisition Transaction
Announcement relating to an amendment, extension, withdrawal or other change to
the subject matter of the previous Acquisition Transaction Announcement.

(c)           “Acquisition Transaction” means (i) any Merger Event (for purposes
of this definition, the definition of Merger Event shall be read with the
references therein to “100%” being replaced by “20%” and to “50%” by “75%” and
without reference to the clause beginning immediately following the definition
of Reverse Merger therein to the end of such definition), Tender Offer or Merger
Transaction or any other transaction involving the merger of Issuer with or into
any third party, (ii) the sale or transfer of all or substantially all of the
assets or liabilities of Issuer, (iii) a recapitalization, reclassification,
binding share exchange or other similar transaction, (iv) any acquisition,
lease, exchange, transfer, disposition (including by way of spin-off or
distribution) of assets or liabilities (including any capital stock or other
ownership interests in subsidiaries) or other similar event by Issuer or any of
its subsidiaries where the consideration transferable or receivable by or to
Issuer or its subsidiaries in respect of each transaction exceeds 50% of the
market capitalization of Issuer and (v) any transaction with respect to which
Issuer or its board of directors has a legal obligation to make a recommendation
to its shareholders in respect of such transaction (whether pursuant to Rule
14e-2 under the Exchange Act or otherwise); provided, however, that
notwithstanding anything to the contrary herein, a Hostile Tender Offer shall be
excluded from the foregoing definition and shall not constitute an Acquisition
Transaction.

 
 

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(d)           “Hostile Tender Offer” means the announcement by any person or
entity of any intention to purchase or otherwise obtain the requisite number of
Shares (whether or not subsequently amended) that, if completed, would lead to a
Tender Offer, where such transaction has not been initiated, approved by, agreed
to, recommended by or otherwise consented to by Company or its board of
directors, or negotiated by Company or any authorized representative of Company.
Company agrees to immediately notify Dealer on any date (each, a “Reference
Date”) after the occurrence of a Hostile Tender Offer on which Company or its
board of directors approves, agrees to, recommends or otherwise consents to such
transaction, or Company or an authorized representative of Company negotiates
such transaction, or Company or its board of directors has a legal obligation to
make a recommendation to Company’s shareholders in respect of such transaction
and does not recommend the rejection thereof. Immediately following the
occurrence of a Reference Date in respect of any Hostile Tender Offer, such
transaction shall cease to constitute, and shall no longer be treated as, a
Hostile Tender Offer for purposes of  this section.

10.  MSCO Adjustments.

In the event that MSCO reasonably determines, in its commercially reasonable
discretion upon the advice of counsel,  that it is appropriate with regard to
any legal, regulatory or self-regulatory requirements or related policies and
procedures (whether or not such requirements, policies or procedures are imposed
by law or have been voluntarily adopted by MSCO, and including, without
limitation, Rule 10b-18, Rule 10b-5, Regulations 13D-G and Regulations 14 D-E
under the Exchange Act, but provided that such requirements, policies or
procedures are generally applicable in similar situations and applied to the
relevant Transaction in a non-discriminatory manner), for MSCO to refrain from
purchasing Shares or engaging in other market activity or to purchase fewer than
the number of Shares or to engage in fewer or smaller other market transactions
MSCO would otherwise purchase or engage in on any Trading Day on or prior to the
last day of the Calculation Period, then MSCO may, in its discretion, elect that
a Market Disruption shall be deemed to have occurred on such Trading Day. MSCO
shall notify Issuer upon the exercise of MSCO’s rights pursuant to this Section
10 and shall subsequently notify Issuer on the day MSCO believes that the
circumstances giving rise to such exercise have changed.

11.  Covenants.

Issuer covenants and agrees that:

(a)           Until the end of the Potential Purchase Period (as defined below),
neither it nor any of its affiliated purchasers (as defined in Rule 10b-18 under
the Exchange Act) shall directly or indirectly (which shall be deemed to include
the writing or purchase of any cash-settled or other derivative or structured
Share repurchase transaction with a hedging period, calculation period or
settlement valuation period or similar period that overlaps with the
Transaction) purchase, offer to purchase, place any bid or limit order relating
to a purchase of or commence any tender offer relating to Shares (or any
security convertible into or exchangeable for Shares) without the prior written
approval of MSCO or take any other action that would cause the purchase by MSCO
of any Shares in connection with this Agreement not to qualify for the safe
harbor provided in Rule 10b-18 under the Exchange Act (assuming for the purposes
of this paragraph that such safe harbor were otherwise available for such
purchases).  “Potential Purchase Period” means the period from, and including,
the Trade Date to, and including, the latest of (i) the last day of the
Calculation Period, (ii) the earlier of (A) the date ten Exchange Business Days
immediately following the last day of the Calculation Period and (B) the
Scheduled Valuation Date and (iii) if an Early Termination Date occurs or the
Transaction is cancelled pursuant to Article 12 of the Equity Definitions, a
date determined by MSCO in its commercially reasonable discretion and
communicated to Issuer no later than the Exchange Business Day immediately
following such date.

(b)           It will comply with all laws, rules and regulations applicable to
it (including, without limitation, the Securities Act and the Exchange Act) in
connection with the transactions contemplated by this Confirmation.

 
 

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(c)           Without limiting the generality of Section 13.1 of the Equity
Definitions, it is not relying, and has not relied, upon MSCO or any of its
representatives or advisors with respect to the legal, accounting, tax or other
implications of this Agreement and that it has conducted its own analyses of the
legal, accounting, tax and other implications of this Agreement, and that MSCO
and its affiliates may from time to time effect transactions for their own
account or the account of customers and hold positions in securities or options
on securities of Issuer and that MSCO and its affiliates may continue to conduct
such transactions during the term of this Agreement.  Without limiting the
generality of the foregoing, Issuer acknowledges that MSCO is not making any
representations or warranties or taking any position or expressing any view with
respect to the treatment of the Transaction under any accounting standards
including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and
Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC
815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity (or any
successor issue statements) or under FASB’s Liabilities & Equity Project.

(d)           Neither it nor any affiliates shall take any action that would
cause a restricted period (as defined in Regulation M under the Exchange Act
(“Regulation M”)) to be applicable to any purchases of Shares, or of any
security for which Shares is a reference security (as defined in Regulation M),
by Issuer or any affiliated purchasers (as defined in Regulation M) of Issuer
during the Potential Purchase Period.

(e)           It will not make any election or take any other action in
connection with the Transaction while aware of any material nonpublic
information regarding Issuer or the Shares.

(f)           It shall not declare or pay any Extraordinary Dividend until the
earlier of (i) the Scheduled Valuation Date or (ii) the date ten Exchange
Business Days immediately following the Valuation Date.

12.  Representations, Warranties and Acknowledgments.

(a)           Issuer hereby represents and warrants to MSCO on the date hereof
and on and as of the Initial Share Delivery Date that:

(i)           (A) None of Issuer and its officers and directors is aware of any
material nonpublic information regarding Issuer or the Shares, and is entering
into the Transaction in good faith and not as part of a plan or scheme to evade
the prohibitions of federal securities laws, including, without limitation, Rule
10b-5 under the Exchange Act and (B) Issuer agrees not to alter or deviate from
the terms of the Agreement or enter into or alter a corresponding or hedging
transaction or position with respect to the Shares (including, without
limitation, with respect to any securities convertible or exchangeable into the
Shares) during the term of the Agreement.  Without limiting the generality of
the foregoing, all reports and other documents filed by Issuer with the
Securities and Exchange Commission pursuant to 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)           The transactions contemplated by this Confirmation have been
authorized under Issuer’s publicly announced program to repurchase Shares and,
prior to the Trade Date, MSCO shall deliver to Issuer a resolution of Issuer’s
board of directors authorizing the Transaction and such other certificate or
certificates as MSCO shall reasonably request.

(iii)           Issuer is not entering into this Agreement to facilitate a
distribution of the Shares (or any security convertible into or exchangeable for
Shares) or in connection with a future issuance of securities.

(iv)           Issuer is not entering into this Agreement to create actual or
apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress the price of the Shares (or any
security convertible into or exchangeable for Shares) in violation of the
federal securities laws.

 
 

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(v)           There have been no purchases of Shares in Rule 10b-18 purchases of
blocks pursuant to the once-a-week block exception contained in Rule
10b-18(b)(4) by or for Issuer or any of its affiliated purchasers during each of
the four calendar weeks preceding the Trade Date and during the calendar week in
which the Trade Date occurs (“Rule 10b-18 purchase”, “blocks” and “affiliated
purchaser” each being used as defined in Rule 10b-18).

(vi)           Issuer is as of the date hereof, and after giving effect to the
transactions contemplated hereby will be, Solvent.  As used in this paragraph,
the term “Solvent” means, with respect to a particular date, that on such date
(A) the present fair market value (or present fair saleable value) of the assets
of Issuer is not less than the total amount required to pay the liabilities of
Issuer on its total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured, (B) Issuer is able to realize
upon its assets and pay its debts and other liabilities, contingent obligations
and commitments as they mature and become due in the normal course of business,
(C) assuming consummation of the transactions as contemplated by this Agreement,
Issuer is not incurring debts or liabilities beyond its ability to pay as such
debts and liabilities mature, (D) Issuer is not engaged in any business or
transaction, and does not propose to engage in any business or transaction, for
which its property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which Issuer is
engaged, (E) Issuer is not a defendant in any civil action that could reasonably
be expected to result in a judgment that Issuer is or would become unable to
satisfy, (F) Issuer 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 (G) Issuer would be able to purchase Shares with an
aggregate purchase price equal to the Prepayment Amount in compliance with the
corporate laws of the jurisdiction of its incorporation.

(vii)           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.

(viii)           No state or local (including non-U.S. jurisdictions) law, rule,
regulation or regulatory order applicable to the Shares would give rise to any
reporting, consent, registration or other requirement (including without
limitation a requirement to obtain prior approval from any person or entity) as
a result of MSCO or its affiliates owning or holding (however defined) Shares.

(b)           Issuer acknowledges and agrees that the Initial Shares may be sold
short to Issuer. Issuer further acknowledges and agrees that MSCO may purchase
Shares in connection with the Transaction, which Shares may be used to cover all
or a portion of such short sale or may be delivered to Issuer.  Such purchases
and any other market activity by MSCO will be conducted independently of Issuer
by MSCO as principal for its own account.  All of the actions to be taken by
MSCO in connection with the Transaction shall be taken by MSCO independently and
without any advance or subsequent consultation with Issuer.  It is the intent of
the parties that the Transaction comply with the requirements of Rule
10b5-1(c)(1)(i)(B) of the Exchange Act, and the parties agree that this
Confirmation shall be interpreted to comply with the requirements of such Rule,
and Issuer shall not take any action that results in the Transaction not so
complying with such requirements.  Without limiting the generality of the
preceding sentence, Issuer acknowledges and agrees that (A) Issuer does not
have, and shall not attempt to exercise, any influence over how, when or whether
MSCO effects any market transactions in connection with the Transaction and (B)
neither Issuer nor its officers or employees shall, directly or indirectly,
communicate any information regarding Issuer or the Shares to any employee of
MSCO or its Affiliates, other than employees identified by MSCO to Issuer in
writing as employees not responsible for executing market transactions in
connection with the Transaction.  Issuer also acknowledges and agrees that any
amendment, modification, waiver or termination of this Confirmation must be
effected in accordance with the requirements for the amendment or termination of
a “plan” as defined in Rule 10b5-1(c) under the Exchange Act.  Without limiting
the generality of the foregoing, any such amendment, modification, waiver or
termination shall be made in good faith and not as part of a plan or scheme to
evade the prohibitions of Rule 10b-5 under the Exchange Act, and no such
amendment, modification or waiver shall be made at any time at which Issuer or
any officer or director of Issuer is aware of any material nonpublic information
regarding Issuer or the Shares.

 
 

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(c)           Each of Issuer and MSCO represents and warrants to the other that
it is an “eligible contract participant” as defined in Section 1a(12) of the
U.S. Commodity Exchange Act, as amended.

(d)           Each of Issuer and MSCO 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, it represents
and warrants to the other party 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, (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 and (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.

13.  Acknowledgements of Issuer Regarding Hedging and Market Activity.

Issuer agrees, understands and acknowledges that:

(a)            during the period from (and including) the Trade Date to (and
including) the Settlement Date, MSCO and its Affiliates may buy or sell Shares
or other securities or buy or sell options or futures contracts or enter into
swaps or other derivative transactions in order to adjust its Hedge Position
with respect to the Transaction;

(b)            MSCO and its Affiliates also may be active in the market for the
Shares or options, futures contracts, swaps or other derivative transactions
relating to the Shares other than in connection with hedging activities in
relation to the Transaction;

(c)            MSCO shall make its own determination as to whether, when and in
what manner any hedging or market activities in Issuer’s securities or other
securities or transactions shall be conducted and shall do so in a manner that
it deems appropriate to hedge its price and market risk with respect to the
Transaction; and

(d)            any such market activities of MSCO and its Affiliates may affect
the market price and volatility of the Shares, including the 10b-18 VWAP and the
Forward Price, each in a manner that may be adverse to Issuer.

14.  Other Provisions.

(a)            Issuer agrees and acknowledges that MSCO is a “financial
institution” and “financial participant” within the meaning of Sections 101(22)
and 101(22A) of the Bankruptcy Code.  The parties hereto further agree and
acknowledge that it is the intent of the parties that (A) this Confirmation is a
“securities contract,” as such term is defined in Section 741(7) of the
Bankruptcy Code, with respect to which each payment and delivery hereunder or in
connection herewith is a “termination value,” “payment amount” or “other
transfer obligation” within the meaning of Section 362 of the Bankruptcy Code
and a “settlement payment,” within the meaning of Section 546 of the Bankruptcy
Code, and (B) MSCO is entitled to the protections afforded by, among other
sections, Sections 362(b)(6), 362(b)(17), 362(o), 546(e), 555 and 561 of the
Bankruptcy Code.

(b)            MSCO and Issuer hereby agree and acknowledge that MSCO has
authorized Issuer to disclose the Transaction to any and all persons, and there
are no express or implied agreements, arrangements or understandings to the
contrary, and authorizes Issuer to use any information that Issuer receives or
has received with respect to the Transaction in any manner.

 
 

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(c)            In the event Issuer becomes the subject of proceedings
(“Bankruptcy Proceedings”) under the Bankruptcy Code or any other applicable
bankruptcy or insolvency statute, any rights or claims of MSCO hereunder in
respect of the Transaction shall rank for all purposes no higher than, but on a
parity with, the rights or claims of holders of Shares, and MSCO hereby agrees
that its rights and claims hereunder shall be subordinated to those of all
parties with claims or rights against Issuer (other than common stockholders) to
the extent necessary to assure such ranking. Without limiting the generality of
the foregoing, after the commencement of Bankruptcy Proceedings, the claims of
MSCO hereunder shall for all purposes have rights equivalent to the rights of a
holder of a percentage of the Shares equal to the aggregate amount of such
claims (the “Claim Amount”) taken as a percentage of the sum of (i) the Claim
Amount and (ii) the aggregate fair market value of all outstanding Shares on the
record date for distributions made to the holders of such Shares in the related
Bankruptcy Proceedings.  Notwithstanding any right it might otherwise have to
assert a higher priority claim in any such Bankruptcy Proceedings, MSCO shall be
entitled to receive a distribution solely to the extent and only in the form
that a holder of such percentage of the Shares would be entitled to receive in
such Bankruptcy Proceedings, and, from and after the commencement of such
Bankruptcy Proceedings, MSCO expressly waives (i) any other rights or
distributions to which it might otherwise be entitled in such Bankruptcy
Proceedings in respect of its rights and claims hereunder and (ii) any rights of
setoff it might otherwise be entitled to assert in respect of such rights and
claims.

(d)            Notwithstanding any provision of this Confirmation or any other
agreement between the parties to the contrary, neither the obligations of Issuer
nor the obligations of MSCO hereunder are secured by any collateral, security
interest, pledge or lien.

(e)            Each party waives any and all rights it may have to set off
obligations arising under the Agreement and the Transaction against other
obligations between the parties, whether arising under any other agreement,
applicable law or otherwise.

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

(g)            It shall constitute an Additional Termination Event with respect
to which the Transaction is the sole Affected Transaction and Issuer is the sole
Affected Party and MSCO shall be the party entitled to designate an Early
Termination Date pursuant to Section 6(b) of the Agreement if, at any time on or
prior to the Valuation Date, the price per Share on the Exchange, as determined
by the Calculation Agent, is at or below the Threshold Price (as specified in
Schedule I).

15.  Share Cap.

Notwithstanding any other provision of this Confirmation or the Agreement to the
contrary, in no event shall Issuer be required to deliver to MSCO in the
aggregate a number of Shares that exceeds the Share Cap as of the date of
delivery (as specified in Schedule I).

16.  Transfer and Assignment.

MSCO may transfer or assign its rights and obligations hereunder and under the
Agreement, in whole or in part, to any of its Affiliates of equivalent credit
quality (or whose obligations are guaranteed by an entity of equivalent credit
quality) without the consent of Issuer.
 
 
 

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Page 17

 
17.  Governing Law; Jurisdiction; Waiver.

THIS CONFIRMATION AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED
TO THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.  THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE
ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM
WITH RESPECT TO, THESE COURTS.

EACH PARTY HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS
OF ISSUER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT
HEREOF.

Remainder of Page Intentionally Blank
 
 
 
 
 
 

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Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to us by facsimile to
the number provided on the attached facsimile cover page.

Confirmed as of the date first written above:

CALGON CARBON CORPORATION
MORGAN STANLEY & CO. LLC
                   
By:
/s/ Richard D. Rose  
By:
/s/ Serkan Savasoglu    
Name:  Richard D. Rose
   
Name: Serkan Savasoglu
   
Title: Senior Vice President, General
   
Title:  Managing Director
    Counsel and Secretary        

 
 

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ANNEX A
 
BUYER SETTLEMENT PROVISIONS
 
1.           The following Buyer Settlement Provisions shall apply to the extent
indicated under the Confirmation:
 

 
Settlement Currency:
USD
       
Settlement Method Election:
Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby
amended by deleting the word “Physical” in the sixth line thereof and replacing
it with the words “Net Share” and (ii) the Electing Party may make a settlement
method election only if the Electing Party represents and warrants to Seller in
writing on the date it notifies Seller of its election that, as of such date,
the Electing Party is not aware of any material non-public information
concerning Buyer or the Shares and is electing the settlement method in good
faith and not as part of a plan or scheme to evade compliance with the federal
securities laws.
       
Electing Party:
Buyer
       
Settlement Method Election Date:
The earlier of (i) the Scheduled Valuation Date and (ii) the second Scheduled
Trading Day immediately following the Valuation Date (if different than the
Scheduled Valuation Date), in which case the election under Section 7.1 of the
Equity Definitions shall be made no later than 10 minutes prior to the open of
trading on the Exchange on such second Scheduled Trading Day), as the case may
be.
       
Default Settlement Method:
Cash Settlement
       
Forward Cash Settlement Amount:
The Settlement Amount multiplied by the Settlement Price.
       
Settlement Price:
The arithmetic mean of the 10b-18 VWAP for the Scheduled Trading Days in the
Settlement Valuation Period, subject to Valuation Disruption as specified in the
Confirmation.
       
Settlement Valuation Period:
A number of Scheduled Trading Days selected by the Calculation Seller in its
commercially reasonable discretion, beginning on the Scheduled Trading Day
immediately following the Settlement Method Election Date.
       
Cash Settlement:
If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute
value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.
       
Cash Settlement Payment Date:
The date one Settlement Cycle following the last day of the Settlement Valuation
Period.
       
Net Share Settlement Procedures:
If Net Share Settlement is applicable, Net Share Settlement shall be made in
accordance with paragraphs 2 through 7 below.

 
 
 

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2.           Net Share Settlement shall be made by delivery on the Cash
Settlement Payment Date of a number of Shares satisfying the conditions set
forth in paragraph 3 below (the “Registered Settlement Shares”), or a number of
Shares not satisfying such conditions (the “Unregistered Settlement Shares”), in
either case with a value equal to the absolute value of the Forward Cash
Settlement Amount, with such Shares’ value based on the value thereof to Seller
(which value shall, in the case of Unregistered Settlement Shares, take into
account a commercially reasonable illiquidity discount not to exceed [  %]), in
each case as determined by the Calculation Seller in its commercially reasonable
judgment acting in good faith.
 
3.           Buyer may only deliver Registered Settlement Shares pursuant to
paragraph 2 above if:
 
(a)           a registration statement covering public resale of the Registered
Settlement Shares by Seller (the “Registration Statement”) shall have been filed
with the Securities and Exchange Commission under the Securities Act and been
declared or otherwise become effective on or prior to the date of delivery, and
no stop order shall be in effect with respect to the Registration Statement; a
printed prospectus relating to the Registered Settlement Shares (including any
prospectus supplement thereto, the “Prospectus”) shall have been delivered to
Seller, in such quantities as Seller shall reasonably have requested, on or
prior to the date of delivery;
 
(b)           the form and content of the Registration Statement and the
Prospectus (including, without limitation, any sections describing the plan of
distribution) shall be satisfactory to Seller;
 
(c)           as of or prior to the date of delivery, Seller and its Sellers
shall have been afforded a reasonable opportunity to conduct a due diligence
investigation with respect to Buyer customary in scope for underwritten
offerings of equity securities and the results of such investigation are
satisfactory to Seller, in its discretion; and
 
(d)           as of the date of delivery, an agreement (the “Underwriting
Agreement”) shall have been entered into with Seller in connection with the
public resale of the Registered Settlement Shares by Seller substantially
similar to underwriting agreements customary for underwritten offerings of
equity securities, in form and substance commercially reasonably satisfactory to
Seller and Buyer, which Underwriting Agreement shall include, without
limitation, provisions substantially similar to those contained in such
underwriting agreements of a publicly traded company relating, without
limitation, to the customary indemnification of, and contribution in connection
with the liability of, Seller and its affiliates and the provision of customary
opinions, accountants’ comfort letters and lawyers’ negative assurance letters.
 
4.           If Buyer delivers Unregistered Settlement Shares pursuant to
paragraph 2 above:
 
(a)           all Unregistered Settlement Shares shall be delivered to Seller
(or any affiliate of Seller designated by Seller) pursuant to the exemption from
the registration requirements of the Securities Act provided by Section 4(2)
thereof;
 
(b)           as of or prior to the date of delivery, Seller and any potential
purchaser of any such Shares from Seller (or any affiliate of Seller designated
by Seller) identified by Seller shall be afforded a commercially reasonable
opportunity to conduct a due diligence investigation with respect to Buyer
customary in scope for private placements of equity securities (including,
without limitation, the right to have made available to them for inspection all
financial and other records, pertinent corporate documents and other information
reasonably requested by them);
 
(c)           as of the date of delivery, Buyer shall enter into an agreement (a
“Private Placement Agreement”) with Seller (or any affiliate of Seller
designated by Seller) in connection with the private placement of such shares by
Buyer to Seller (or any such affiliate) and the private resale of such shares by
Seller (or any such affiliate), substantially similar to private placement
purchase agreements customary for private placements of equity securities, in
form and substance commercially reasonably satisfactory to Seller and Buyer,
which Private Placement Agreement shall include, without limitation, provisions
substantially similar to those contained in such private placement purchase
agreements relating  to the customary indemnification of, and contribution in
connection with the liability of, Seller and its affiliates and the provision of
customary opinions, accountants’ comfort letters and lawyers’ negative assurance
letters, and shall provide for the payment by Buyer of all fees and expenses in
connection with such resale, including all fees and expenses of counsel for
Seller, and shall contain representations, warranties, covenants and agreements
of Buyer 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
 
 
 

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(d)           in connection with the private placement of such shares by Buyer
to Seller (or any such affiliate) and the private resale of such shares by
Seller (or any such affiliate), Buyer shall, if so requested by Seller, prepare,
in cooperation with Seller, a private placement memorandum in form and substance
reasonably satisfactory to Seller and Buyer.
 
5.           Seller, itself or through an affiliate (the “Selling Seller”) or
any underwriter(s), will sell all, or such lesser portion as may be required
hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares
and any Make-whole Shares (as defined below) (together, the “Settlement Shares”)
delivered by Buyer to Seller pursuant to paragraph 6 below commencing on the
Cash Settlement Payment Date and continuing until the date on which the
aggregate Net Proceeds (as such term is defined below) of such sales, as
determined by Seller, is equal to the absolute value of the Forward Cash
Settlement Amount (such date, the “Final Resale Date”).  If the proceeds of any
sale(s) made by Seller, the Selling Seller or any underwriter(s), net of any
fees and commissions (including, without limitation, underwriting or placement
fees) customary for similar transactions under the circumstances at the time of
the offering, together with carrying charges and expenses incurred in connection
with the offer and sale of the Shares (including, but without limitation to, the
covering of any over-allotment or short position (syndicate or otherwise)) (the
“Net Proceeds”) exceed the absolute value of the Forward Cash Settlement Amount,
Seller will refund, in USD, such excess to Buyer on the date that is three (3)
Currency Business Days following the Final Resale Date, and, if any portion of
the Settlement Shares remains unsold, Seller shall return to Buyer on that date
such unsold Shares.
 
6.           If the Calculation Seller determines that the Net Proceeds received
from the sale of the Registered Settlement Shares or Unregistered Settlement
Shares or any Make-whole Shares, if any, pursuant to this paragraph 6 are less
than the absolute value of the Forward Cash Settlement Amount (the amount in USD
by which the Net Proceeds are less than the absolute value of the Forward Cash
Settlement Amount being the “Shortfall”), Buyer shall, on the Exchange Business
Day next succeeding the day on which such Shortfall is established (the
“Make-whole Notice Date”), deliver to Seller a notice of Buyer’s election that
Buyer shall either (i) pay an amount in cash equal to the Shortfall on the day
that is one (1) Currency Business Day after the Make-whole Notice Date, or
(ii) deliver additional Shares.  If Buyer elects to deliver to Seller additional
Shares, then Buyer shall deliver additional Shares in compliance with the terms
and conditions of paragraph 3 or paragraph 4 above, as the case may be (the
“Make-whole Shares”), on the first Clearance System Business Day which is also
an Exchange Business Day following the Make-whole Notice Date in such number as
the Calculation Seller reasonably believes would have a market value on that
Exchange Business Day equal to the Shortfall.  Such Make-whole Shares shall be
sold by Seller in accordance with the provisions above; provided that if the sum
of the Net Proceeds from the sale of the originally delivered Shares and the Net
Proceeds from the sale of any Make-whole Shares is less than the absolute value
of the Forward Cash Settlement Amount then Buyer shall, at its election, either
make such cash payment or deliver to Seller further Make-whole Shares until such
Shortfall has been reduced to zero.
 
7.           Notwithstanding the foregoing, in no event shall the aggregate
number of Settlement Shares and Make-whole Shares be greater than the Reserved
Shares minus the amount of any Shares actually delivered by Buyer under any
other Transaction(s) under this Confirmation (the result of such calculation,
the “Capped Number”).  Buyer represents and warrants (which shall be deemed to
be repeated on each day that a Transaction is outstanding) that the Capped
Number is equal to or less than the number of Shares determined according to the
following formula:
 
 
 

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Page 22
 
 
A – B
 
 
Where
A = the number of authorized but unissued shares of the Buyer that are not
reserved for future issuance on the date of the determination of the Capped
Number; and

 
 
B = the maximum number of Shares required to be delivered to third parties if
Buyer elected Net Share Settlement of all transactions in the Shares (other than
Transactions in the Shares under this Confirmation) with all third parties that
are then currently outstanding and unexercised.

 
“Reserved Shares” means [          ] Shares.