Exhibit 10.1
Opening Transaction

     
 
  AMERIGROUP Corporation
To:
  4425 Corporation Lane
 
  Virginia Beach, VA 23462
 
   
A/C:
  [Insert Account Number]
 
   
From:
  Wells Fargo Bank, National Association
 
   
Re:
  Convertible Bond Hedge Transaction
 
   
Ref. No:
  [Insert Reference Number]
 
   
Date:
  March 22, 2007

     
 
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 Wells Fargo Bank,
National Association (“Dealer”) and AMERIGROUP Corporation (“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 March 28, 2007
between Counterparty and The Bank of New York, N.A., as trustee (the
“Indenture”) relating to the USD240,000,000 principal amount of the 2.00%
convertible senior notes due 2012 (the “Convertible Debentures”). 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,
(i) the Transaction shall be the only transaction under the Agreement and
(ii) 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. Furthermore, for the avoidance of
doubt, even if all Convertible Debentures cease to be outstanding prior to the
Expiration Date (as set forth below), for purposes of the references herein to
sections of the Indenture, the Convertible Debentures shall be deemed to remain
outstanding. 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 Debentures 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.

 

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     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 as if Dealer and Counterparty had
executed an agreement in such form on the date hereof (but without any Schedule
except for (i) the election of Loss and Second Method and US Dollars (“USD”) as
the Termination Currency, (ii) the replacement of the word “third” in the last
line of Section 5(a)(i) with the word “first” and (iii) the election that the
“Cross Default” provisions of Section 5(a)(vi) shall apply to Counterparty, with
a “Threshold Amount” of USD10 million).
     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.
     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:   March 22, 2007
 
       
 
  Effective Date:   March 28, 2007 or such other date as agreed by the parties.
 
       
 
  Option Style:   American
 
       
 
  Option Type:   Call
 
       
 
  Seller:   Dealer
 
       
 
  Buyer:   Counterparty
 
       
 
  Shares:   The Common Stock of Counterparty, par value USD0.01 per share
(Ticker Symbol: “AGP”).
 
       
 
  Number of Options:   The number of Convertible Debentures in denominations of
USD1,000 principal amount issued by Counterparty on the closing date for the
initial issuance of the Convertible Debentures; provided that the Number of
Options shall be automatically increased as of the date of exercise by Goldman,
Sachs & Co. (“GS & Co.”), as representative of the several Purchasers (as
defined in the Purchase Agreement), of its option pursuant to Section 2 of the
Purchase Agreement dated as of March 22, 2007 between Counterparty and GS & Co.
as representative of the several Purchasers party thereto (the “Purchase
Agreement”) by the number of Convertible Debentures in denominations of USD1,000
principal amount issued pursuant to such exercise (such Convertible Debentures,
the “Additional Convertible Debentures”). For the avoidance of doubt, the Number
of Options outstanding shall be reduced by each exercise of Options hereunder.
 
       
 
  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 Section 12.01(e) or 12.05(f) of
the Indenture) as of such date.

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  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.
 
       
 
  Premium:   USD48,648,000.00 (Premium per Option USD202.70); 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 Debentures.
 
       
 
  Exchange:   New York Stock Exchange
 
       
 
  Related Exchange:   All Exchanges
 
        Procedures for Exercise:    
 
       
 
  Independent Threshold Date:   The earlier to occur of (x) any Conversion Date
(as defined below) that is not also an Exercise Date and (y) the first Exercise
Date on which Counterparty exercises a number of Options not equal to the number
of Relevant Convertible Debentures (as defined below) on such date, if any.
 
       
 
  Conversion Date:   Each “Conversion Date”, as defined in the Indenture,
occurring during the Exercise Period for Convertible Debentures other than
Convertible Debentures with respect to which Counterparty makes the direction
described in Section 12.02(a)(3) of the Indenture and the financial institution
designated by Counterparty accepts such Convertible Debentures in accordance
with Section 12.02(a)(3) of the Indenture (such Convertible Debentures, other
than those excluded above (each in denominations of USD1,000 principal amount),
the “Relevant Convertible Debentures” for such Conversion Date). For the
avoidance of doubt, Convertible Debentures are “accepted” for purposes of the
foregoing upon the earlier of the declaration of the designated financial
institution’s agreement to exchange such Convertible Debentures or delivery of
such Convertible Debentures to such financial institution for purposes of such
exchange.
 
       
 
  Exercise Period:   The period from and excluding the Trade Date to and
including the Expiration Date.
 
       
 
  Expiration Date:   The third Scheduled Trading Day immediately preceding the
“Maturity Date”, as defined in the Indenture.
 
       
 
  Multiple Exercise:   Applicable

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  Minimum Number of Options:   Zero
 
       
 
  Maximum Number of Options:   Number of Options
 
       
 
  Integral Multiple:   One
 
       
 
  Automatic Exercise:   Applicable; subject to the provisions of “Notice of
Exercise” below.
 
       
 
  Notice of Exercise:   Notwithstanding anything to the contrary in the Equity
Definitions, (x) in order for Counterparty to exercise any Options on any
Exercise Date that precedes the Independent Threshold Date, Counterparty or the
“Trustee”, as defined in the Indenture, must have notified Dealer and the
Calculation Agent in writing prior to 5:00 PM, New York City time, on the
Scheduled Trading Day prior to the first Scheduled Trading Day of the
“Observation Period”, as defined in the Indenture, relating to the Convertible
Debentures converted on the Conversion Date on which such Exercise Date occurs
(the “Notice Deadline”) of (i) the relevant Exercise Date, (ii) the number of
Options being exercised on such Exercise Date and, for each holder of
Convertible Debentures being converted on such Exercise Date, the aggregate
principal amount of the Relevant Convertible Debentures held by such holder that
will be so converted, (iii) the scheduled settlement date under the Indenture
for the Convertible Debentures converted on the Conversion Date on which such
Exercise Date occurs, (iv) the first day of the relevant Observation Period and
(v) the applicable Cash Percentage as defined in the Indenture; provided that,
notwithstanding the foregoing, such notice shall be effective so long as it
relates to an Exercise Date that precedes the Independent Threshold Date and the
notice is given after the Notice Deadline but prior to 5:00 PM (New York City
time) on the fifth Exchange Business Day of such Observation Period and prior to
the Independent Threshold Date (it being understood that such delayed notice
does not itself cause the Independent Threshold Date to occur), in which event
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 expenses incurred by Dealer or Hedging
Party or any of their respective affiliates in connection with their hedging
activities (including the unwinding of any hedge position) as a result of their
not having received such notice prior to the Notice Deadline; and (y) in order
to exercise any Options on any Exercise Date that is or is following the
Independent Threshold Date, Counterparty must notify Dealer and the Calculation
Agent in writing prior to 5:00 PM, New York City time, on the Exchange Business
Day prior to the first Scheduled Trading Day of the

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              “Observation Period”, as defined in the Indenture, determined as
if the Exercise Date were a Conversion Date, of (i) the relevant Exercise Date,
(ii) the number of Options being exercised on such Exercise Date, (iii) the
first day of the Observation Period (determined in accordance with Section 1.01
of the Indenture for the Convertible Debentures converted on the corresponding
Conversion Date, if any, or, if such Exercise Date did not occur on a Conversion
Date, determined in accordance with Section 1.01 of the Indenture as if such
Exercise Date were a Conversion Date) and (v) the applicable Cash Percentage
and, with respect to this clause (y) except in relation to any Exercise Date
occurring during the period from and including the 25th Scheduled Trading Day
prior to the “Maturity Date” to and including the Expiration Date (the “Final
Conversion Period”), Counterparty shall also make in such notice written
representations, warranties and agreements set forth in Section 7(a)(i) hereof.
Notwithstanding the foregoing, in respect of Options with an Exercise Date
occurring during the Final Conversion Period, (a) the Notice Deadline shall be
12:00 p.m. (New York City time) on the Scheduled Trading Day immediately
following the relevant Exercise Date and the content of such notice shall be as
set forth in clauses (x)(i) and (x)(ii) or (y)(i) and (y)(ii) above, as
applicable, and (b) Counterparty shall notify Dealer and the Calculation Agent
of the applicable Cash Percentage on the date it notifies the Trustee (as
defined in the Indenture) thereof, but in no event later than the Scheduled
Trading Day immediately preceding the first day of the Final Conversion Period.
For the avoidance of doubt, if an exercise of Options is in connection with a
conversion of Convertible Debentures, Counterparty shall designate the Exercise
Date in its Notice of Exercise as the corresponding Conversion Date.
 
       
Dealer’s Telephone Number and Telex and/or Facsimile Number and Contact Details
for purpose of Giving Notice:
  To:   Wells Fargo Bank, N.A.
 
      550 California Street
 
      14th Floor
 
      San Francisco, CA 94104
 
       
 
  Attn:   Financial Products Documentation Group
Equities Trading Manager
 
       
 
  Telephone:   (415) 396-3962
 
  Facsimile:   (415) 646-9208
 
       
 
  With a copy to:    
 
       
 
  Attn:   Michele Beasley

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      Facsimile:   (415) 646-9208
 
           
 
  Calculation Agent’s Telephone Number and Telex and/or Facsimile Number and
Contact Details for purpose of             Giving Notice:   All communications
relating to the Transaction or the Agreement shall be transmitted exclusively:
 
           
 
      Through:   Goldman, Sachs & Co.
 
          One New York Plaza
 
          New York, NY 10004
 
           
 
      Attn:   Equity Operations:
 
          Options and Derivatives
 
      Telephone:   (212) 902-1981
 
      Facsimile:   (212) 428-1980/1983
 
           
 
      With a copy to:    
 
           
 
      Attn:   Tracey McCabe
 
          Equity Capital Markets
 
      Telephone:   (212) 357-0428
 
      Facsimile:   (212) 902-3000
 
            Settlement Terms:        
 
                Settlement Date:   In respect of an Exercise Date occurring on a
Conversion Date, the settlement date for the Shares to be delivered in respect
of the Convertible Debentures being converted on such Conversion Date under the
terms of the Indenture. In respect of any other Exercise Date, the date one
Settlement Cycle immediately following the last day of the relevant Observation
Period, determined as if such Exercise Date were a Conversion Date.
 
                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, a number of Shares and/or an
amount of cash, determined by the Calculation Agent, to be equal to (i) a number
of Shares equal to the aggregate number of Shares that Counterparty is (or would
have been) obligated to deliver to the holder(s) of the Relevant Convertible
Debentures for such Conversion Date pursuant to Section 12.02 of the Indenture
(rounded down to the nearest whole number); (ii) an amount of cash, if any, in
USD in lieu of any fractional Share resulting from rounding of such aggregate
number of Shares valued at the “Daily VWAP” (as defined in the Indenture) on the
last day of the relevant Observation Period; and/or (iii) the aggregate amount
of cash that Counterparty is (or would have been) obligated to deliver in lieu
of “Deliverable Shares”, as defined in the Indenture

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      (other than any cash owed in lieu of fractional Shares under clause
(ii) above) to the holder(s) of the Relevant Convertible Debentures for such
Conversion Date pursuant to the election described in Section 12.02(a)(2) of the
Indenture (and, if such Exercise Date does not occur on a Conversion Date or, if
the number of Options being exercised on such Exercise Date differs from the
number of the Relevant Convertible Debentures for the Conversion Date that
coincides with such Exercise Date, in each case as determined by the Calculation
Agent pursuant to Section 12.02 of the Indenture as if such Exercise Date were a
Conversion Date for a number of Convertible Debentures equal to the number of
Options being exercised on such Exercise Date) (such Shares and cash
collectively, the “Convertible Obligation”); provided that such obligation shall
be determined excluding any Shares and cash that Counterparty is (or would have
been) obligated to deliver to holder(s) of the Convertible Debentures as a
direct or indirect result of any adjustments to the Conversion Rate pursuant to
Sections 12.01(e) or 12.05(f) of the Indenture and any interest payment that
Counterparty is (or would have been) obligated to deliver to holder(s) of the
Convertible Debenture converted on such Conversion Date. For the avoidance of
doubt, if the “Daily Conversion Value”, as defined in the Indenture, for each of
the “VWAP Trading Days”, as defined in the Indenture, occurring in the relevant
Observation Period, is (or would have been) less than or equal to USD50, Dealer
will have no delivery obligation hereunder in respect of such Exercise Date.
 
       
 
  Notice of Delivery Obligation:   No later than the later of (1) the relevant
Exercise Date and (2) the Exchange Business Day immediately following the last
day of the Observation Period, Counterparty shall give Dealer and the
Calculation Agent notice of the final number of Shares and/or the amount of cash
comprising the relevant Convertible Obligation; provided that, with respect to
any Exercise Date occurring during the Final Conversion Period, Counterparty may
provide Dealer and the Calculation Agent each with a single notice of the
aggregate number of Shares and the amount of cash, if any, 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 or Dealer’s obligations with respect to
Delivery Obligation, each 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, 9.11 and 9.12 of
the Equity Definitions will be

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      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 Buyer 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
Definitions, upon the occurrence of any event or condition set forth in
Sections 12.05(a), (b), (c), (d) or (e) of the Indenture, 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. Immediately 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 Debentures in respect of such Adjustment Event
have been determined, Counterparty shall immediately notify the Calculation
Agent in writing of the details of such adjustments.
 
        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 12.12 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 12.01(e) or
12.05(f) of the Indenture.

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              Notice of Merger Consideration:   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 the weighted average
of the types and amounts of consideration received by the holders of Shares
entitled to receive cash, securities or other property or assets with respect to
or in exchange for such Shares in any Merger Event who affirmatively make such
an election.
 
            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 American 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 shall be amended by inserting (i) at the end of the fifth
line thereof the following phrase: “(or GS)”, (ii) at the end of clause (X) the
following phrase: “(or, in the case of GS, a Hedging Party Related
Transaction)”; and (iii) in clause (Y), immediately following the words “such
Transaction”, the following phrase: “(or, in the case of GS, a Hedging Party
Related Transaction).”
 
           
GS:
          Goldman Sachs International or any of its affiliates to which Goldman
Sachs International assigns its rights and obligations under a Hedging Party
Related Transaction.
 
            Hedging Party Related    
 
      Transaction:   A transaction between GS and Dealer or its affiliate
evidenced by a confirmation that refers to the Transaction.
 
           
 
  (b)   Insolvency Filing:   Applicable
 
           
 
  (c)   Increased Cost of Hedging:   Applicable; provided that Section
12.9(a)(vi) of the Equity Definitions shall be amended by inserting at the end
of clause (A) thereof the following phrase: “(or a Hedging Party Related
Transaction).”
 
            Hedging Party:   GS
 
            Determining Party:   GS

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          Non-Reliance:   Applicable
 
        Agreements and Acknowledgments     Regarding Hedging Activities:  
Applicable
 
        Additional Acknowledgments:   Applicable
 
       
3.
  Calculation Agent:   GS.
 
       
4.
  Account Details:    
 
       
 
  Dealer Payment Instructions:   To be provided by Dealer
 
       
 
  Counterparty Payment Instructions:   To be provided by Counterparty.
 
       
5.
  Offices:    
 
            The Office of Dealer for the Transaction is:
 
                      550 California Street, 14th Floor, San Francisco, CA 94104
 
            The Office of Counterparty for the Transaction is:
 
                      4425 Corporation Lane, Virginia Beach, Virginia 23462
 
        6.   Notices: For purposes of this Confirmation:

          (a)   Address for notices or communications to Counterparty:
 
       
 
  To:   AMERIGROUP Corporation
 
      4425 Corporation Lane
 
      Virginia Beach, VA 23462
 
  Attn:   Office of General Counsel
 
  Telephone:   757-490-6900
 
        (b)   Address for notices or communications to Dealer:
 
       
 
  To:   Wells Fargo Bank, N.A.
 
      550 California Street
 
      14th Floor
 
      San Francisco, CA 94104
 
       
 
  Attn:   Financial Products Documentation Group
 
      Equities Trading Manager
 
  Telephone:   (415) 396-3962
 
  Facsimile:   (415) 646-9208
 
       
 
  With a copy to:    
 
       
 
  Attn:   Michele Beasley
 
  Facsimile:   (415) 646-9208
 
        (c)   Address for notices or communications to Calculation Agent:
 
            All communications relating to the Transaction or the Agreement
shall be transmitted exclusively:
 
       
 
  Through:   Goldman, Sachs & Co.
 
      One New York Plaza
 
      New York, NY 10004
 
  Attn:   Equity Operations: Options and Derivatives
 
  Telephone:   (212) 902-1981
 
  Facsimile:   (212) 428-1980/1983

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  With a copy to:    
 
       
 
  Attn:   Tracey McCabe
 
      Equity Capital Markets
 
  Telephone:   (212) 357-0428
 
  Facsimile:   (212) 902-3000

     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 and GS as follows:
     (i) On the Trade Date, each date on which Counterparty delivers a Notice of
Exercise relating to an Exercise Date that is or is following the Independent
Threshold Date (other than any such Exercise Date occurring during the Final
Conversion Period) and each date on which Counterparty delivers a notice of cash
percentage pursuant to Section 12.02(a)(2) of the Indenture (A) none of
Counterparty and its officers and directors is aware of any material nonpublic
information regarding Counterparty or the Shares and (B) all reports and other
documents filed by Counterparty with the Securities and Exchange Commission
(“SEC”) 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) pursuant to the Exchange Act of 1934, as amended (the
“Exchange Act”) 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) On the Trade Date and on each day during the Observation Period for
any Exercise Date that is or is following the Independent Threshold Date,
neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as
defined in Rule 10b-18 of the Exchange Act (“Rule 10b-18”)) shall directly or
indirectly (including, without limitation, by means of any cash-settled or other
derivative instrument, other than the Transaction) 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.
     (iii) Without limiting the generality of Section 13.1 of the Equity
Definitions, Counterparty acknowledges that neither Dealer nor GS is making any
representations or warranties with respect to the treatment of the Transaction
under FASB Statements 149 or 150, EITF Issue No. 00-19 (or any successor issue
statements) or under 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 raise or depress or 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 the Trade Date, the Premium Payment Date and the Additional
Premium Payment Date, if any, (A) the assets of Counterparty at their fair
valuation exceed the liabilities of

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Counterparty, including contingent liabilities, (B) the capital of Counterparty
is adequate to conduct the business of Counterparty and (C) Counterparty has the
ability to pay its debts and obligations as such debts mature and does not
intend to, or does not believe that it will, incur debt beyond its ability to
pay as such debts mature.
     (ix) The representations and warranties of Counterparty set forth in
Section 3 of the Agreement and Section 1 of the Purchase Agreement are true and
correct as of the Trade Date, the Effective Date and the Additional Premium
Payment Date and are hereby deemed to be repeated to Dealer as if set forth
herein.
     (x) Counterparty understands that 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.
     (xi) On the Trade Date and each day during the Observation Period for any
Exercise Date that is or is following the Independent Threshold 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.
     (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.
     (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 (A) that this
Confirmation is (i) a “securities contract,” as such term is defined in
Section 741(7) of Title 11 of the United States Code (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, Section 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the
Bankruptcy Code.
     (e) Counterparty shall deliver to Dealer and GS an opinion of counsel,
dated as of the Trade Date and reasonably acceptable to each of Dealer and GS in
form and substance, with respect to the matters set forth in Section 3(a) of the
Agreement.
     8. Other Provisions:
     (a) Right to Extend. The Calculation Agent may postpone any Settlement Date
or any other date of delivery by Dealer, with respect to some or all of the
relevant Options, if the Calculation Agent determines, in its reasonable
discretion, that such extension is reasonably necessary or appropriate to
preserve Hedging Party’s hedging or hedge unwind activity under the Transaction
or a Hedging Party Related Transaction in light of existing liquidity conditions
or to enable Hedging Party to effect purchases

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of Shares in connection with its hedging, hedge unwind or settlement activity
under the Transaction or a Hedging Party Related Transaction in a manner that
would, if Hedging Party 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 Hedging Party.
     (b) Additional Termination Events. The occurrence of (i) an event of
default with respect to Counterparty under the terms of the Convertible
Debentures as set forth in Section 5.01 of the Indenture that results in an
acceleration of the Convertible Debentures pursuant to the terms 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 the Calculation Agent shall be the
party entitled to designate an Early Termination Date pursuant to Section 6(b)
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
Debentures governing the principal amount, coupon, maturity, repurchase
obligation of Counterparty, redemption right of Counterparty, any term relating
to conversion of the Convertible Debentures (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 Debentures to amend, in each case without the prior
consent of the Calculation Agent, such consent not to be unreasonably withheld.
     (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 and “Consequences of Merger
Events” above, or Sections 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions
(except in the event of a Merger Event, Insolvency or Nationalization, 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 and the
Calculation Agent, confirmed in writing within one Scheduled Trading Day, by
4:00 P.M. New York City time on the Merger 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, 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 Section 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 on the
date such Share Termination Delivery Units are to be delivered as Share
Termination Delivery Property, 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.

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Share Termination Delivery Unit:
  In the case of a Termination Event, Event of Default or Delisting, one Share
or, in the case of an Insolvency, Nationalization or Merger Event, one Share or
a unit consisting of the number or amount of each type of property received by a
holder of one Share (without consideration of any requirement to pay cash or
other consideration in lieu of fractional amounts of any securities) in such
Insolvency, Nationalization or Merger Event. 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, 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 Buyer 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 either Hedging Party or Dealer, the Shares
(the “Hedge Shares”) acquired by Hedging Party for the purpose of hedging its
obligations pursuant to the Transaction or a Hedging Party Related Transaction
cannot be sold in the U.S. public market by Hedging Party without registration
under the Securities Act, Counterparty shall, at its election: (i) in order to
allow Hedging Party to sell the Hedge Shares in a registered offering, make
available to Dealer and Hedging Party 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 and Hedging Party,
substantially in the form of an underwriting agreement for a registered
offering, (B) provide accountant’s “comfort” letters in customary form for
registered offerings of equity securities, (C) provide disclosure opinions of
nationally recognized outside counsel to Counterparty reasonably acceptable to
Dealer and Hedging Party, (D) provide other customary opinions, certificates and
closing documents customary in form for registered offerings of equity
securities and (E) afford Dealer and Hedging Party a reasonable opportunity to
conduct a “due diligence” investigation with respect to Counterparty customary
in scope for underwritten offerings of equity securities; provided, however,
that if either Dealer or Hedging Party, in its sole 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; (ii) in order to allow Hedging
Party to sell the Hedge Shares in a private placement, use its best efforts to
enter into a private placement agreement substantially similar to private
placement purchase agreements customary for private placements of equity
securities, in form and substance satisfactory to Dealer and Hedging Party,
including customary representations, covenants, blue sky and other governmental
filings and/or registrations, indemnities to Dealer and Hedging Party, due
diligence rights (for Dealer, Hedging Party or any designated buyer of the Hedge
Shares from Hedging Party), opinions and certificates and such other
documentation as is customary for private placements agreements, all reasonably
acceptable to Dealer and Hedging Party (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 Hedging Party 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 Hedging Party at the
VWAP Price on such Exchange Business Days, and in the amounts, requested by
Hedging Party. “VWAP Price” means, on any Exchange Business Day, the per Share
volume-weighted average price as displayed under the heading “Bloomberg VWAP” on
Bloomberg page AGP.N <equity> VAP (or any successor thereto) in respect of the
period from 9:30 a.m. to 4:00 p.m. (New York City time) on such Exchange
Business Day (or if such volume-weighted average price is unavailable, the

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market value of one Share on such Exchange Business Day, as determined by the
Calculation Agent using a volume-weighted method). For the avoidance of doubt,
Counterparty is not obligated to purchase Shares under any circumstances under
this Section 8(d) unless it elects to do so pursuant to Section 8(d)(iii).
     (e) Repurchase Notices. Counterparty shall, on any day on which
Counterparty effects any repurchase of Shares, promptly give Dealer and the
Calculation Agent a written notice of such repurchase (a “Repurchase Notice”) on
such day if, following such repurchase, the Notice Percentage as determined on
such day is (i) greater than 9.0% and (ii) greater by 0.5% than the Notice
Percentage included in the immediately preceding Repurchase Notice (or, in the
case of the first such Repurchase Notice, greater than the Notice Percentage as
of the date hereof). The “Notice Percentage” as of any day is the fraction,
expressed as a percentage, the numerator of which is the Number of Shares and
the denominator of which is the number of Shares outstanding on such day. In the
event that Counterparty fails to provide Dealer or the Calculation Agent with a
Repurchase Notice on the day and in the manner specified in this Section 8(e)
then Counterparty agrees to indemnify and hold harmless Dealer and Hedging
Party, their respective affiliates and their respective directors, officers,
employees, agents and controlling persons (collectively, 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 may
become subject under applicable securities laws, including without limitation,
Section 16 of the Exchange Act, or under any state law, regulation or regulatory
order, relating to or arising out of such failure. If for any reason the
foregoing indemnification is unavailable to any Indemnified Party or
insufficient to hold harmless any Indemnified Party, then Counterparty shall
contribute, to the maximum extent permitted by law, to the amount paid or
payable by the Indemnified Party as a result of such loss, claim, damage or
liability. In addition, Counterparty will reimburse any Indemnified Party for
all 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 and Hedging Party.
     (f) Transfer and Assignment. Neither party may transfer any of its rights
or obligations under the Transaction without the prior written consent of the
non-transferring party; provided that at any time at which (i) the Equity
Percentage exceeds 9.0%, (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 any State laws, regulations
or regulatory orders applicable to ownership of Shares (“Applicable State
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 of a Dealer Person
under Applicable State Laws 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 (i) or (ii), an “Excess Ownership Position” and, such
condition described in clause (ii), an “Excess State Law Ownership Position”) or
(iii) a Hedging Disruption has occurred and is continuing, if Dealer, in the
judgment of Dealer or the Calculation Agent, is unable to effect a transfer or
assignment to a third party after using its commercially reasonable efforts
(and, in the event of a Hedging Disruption, after attempting to effect such
transfer or assignment for five consecutive Scheduled Trading Days) on pricing
terms reasonably acceptable to Dealer and the Calculation Agent such that an
Excess Ownership Position or a Hedging Disruption, as the case may be, no longer
exists, Dealer or the Calculation Agent may designate any Scheduled Trading Day
as an Early Termination Date with respect to a portion (the “Terminated
Portion”) of the Transaction, such that such Excess Ownership Position or
Hedging Disruption, as the case may be, no longer exists. In the event that
Dealer or the Calculation Agent so designates an Early Termination Date with
respect to a portion of the Transaction, a payment or delivery shall be made
pursuant to Section 6 of the Agreement 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 shall be the sole Affected Party with respect to such partial
termination and (iii) such portion of the Transaction shall be the only
Terminated Transaction. In the event that a

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Hedging Disruption has occurred, the Calculation Agent will also adjust one or
more terms of the Transaction to account for the difference in the economic
position in respect of an option transaction with terms matching that of the
Transaction (an “Equivalent Transaction") of a hypothetical dealer who is fully
hedged in respect of such Equivalent Transaction and a hypothetical dealer
hedging such Equivalent Transaction with respect to whom a Hedging Disruption
has occurred to the same extent and for the same duration as such Hedging
Disruption with respect to Dealer and the Transaction. 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 (x) 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 (collectively, “Dealer Group”) and all persons
who may form a “group” (within the meaning of Rule 13d-5(b)(1) under the
Exchange Act) with Dealer and (y) Hedging Party and any of its affiliates
subject to aggregation with Hedging Party for purposes of the “beneficial
ownership” test under Section 13 of the Exchange Act (collectively, “Hedging
Party Group”) and all persons who may form a “group” (within the meaning of
Rule 13d-5(b)(1) under the Exchange Act) with Hedging Party “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. “Hedging Disruption” has the meaning set forth in Section 12.9(a)(v)
of the Equity Definitions; provided that Section 12.9(a)(v) of the Equity
Definitions shall be amended by inserting at the end of clause (A) thereof the
following phrase: “(or a Hedging Party Related Transaction).” Dealer agrees that
Dealer Group shall use commercially reasonable efforts, in consultation with
counsel as to legal and regulatory issues, to hedge its exposure to the
Transaction and to manage its other positions through the use of cash-settled
swaps or other derivative instruments to the extent necessary to avoid the
occurrence of an Excess Ownership Position. Counterparty may transfer or assign
its rights and obligations hereunder and under the Agreement, in whole or in
part, to any party with the consent of Dealer and GS, such consent not to be
unreasonably withheld. Notwithstanding any other provision of this Confirmation
to the contrary requiring or allowing Dealer to receive or deliver any Shares,
Dealer may designate any of its affiliates to receive or deliver such Shares and
otherwise perform Dealer’s obligations in respect of the Transaction and any
such designee may assume such obligation. Dealer shall be discharged of its
obligation hereunder only to the extent of any such performance.
     (g) Staggered Settlement. If, as of any Exchange Business Day during the
relevant Observation Period, as defined in the Indenture, (X) the Staggered
Settlement Equity Percentage is greater than 9.0% or (Y) an Excess State Law
Ownership Position or a Hedging Party Excess State Law Ownership Position
exists, 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 such Nominal
Settlement Date, but not prior to the beginning of such 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
     (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.
     The “Staggered Settlement Equity Percentage” as of any day is the fraction,
expressed as a percentage, (A) the numerator of which is the sum of (i) the
number of Shares that 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 and Hedging Party, any of
its affiliates subject to aggregation with Hedging Party 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 Hedging Party “beneficially own” (within the meaning of
Section 13 of the Exchange Act) without duplication on such day, other than any
Shares so owned as a hedge of the Transaction or the Hedging Party Related
Transaction, and (ii) the Number of Shares hereunder and (B) the denominator of
which is the number of Shares outstanding on such day.

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     The “Hedging Party Excess State Law Ownership Position” occurs when, as of
any day, Hedging Party, Hedging Party Group or any person whose ownership
position would be aggregated with that of Hedging Party or Hedging Party Group
(Hedging Party, Hedging Party Group or any such person, a “Hedging Party
Person”) under any Applicable State Laws, owns, beneficially owns,
constructively owns, controls, holds the power to vote or otherwise meets a
relevant definition of ownership with respect to 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 of a Hedging Party Person under
Applicable State Laws 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 such date of determination.
     (h) Agreement in Respect of Termination Amounts. In determining any amounts
payable in respect of the termination or cancellation of the Transaction
pursuant to Section 6 of the Agreement or Article 12 of the Equity Definitions,
the Calculation Agent shall make such determination without regard to
(i) changes to costs of funding, stock loan rates or expected dividends, or
(ii) losses or costs incurred in connection with terminating, liquidating or
re-establishing any hedge related to the Transaction (or any gain resulting from
any of them).
     (i) 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.
     (j) No 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.
     (k) 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.
     (l) Early Unwind. In the event the sale by Counterparty of the Convertible
Debentures is not consummated with the several Purchasers party to the Purchase
Agreement pursuant to the Purchase Agreement for any reason by the close of
business in New York on March 28, 2007 (or such later date as agreed upon by the
parties, which in no event shall be later than April 2, 2007) (March 28, 2007 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 thereunder shall be cancelled and terminated. Following such
termination and cancellation, 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 all obligations with respect to the Transaction
shall be deemed fully and finally discharged.
     (m) Adjustment Upon Amendment or Exchange of Convertible Debentures. If the
Convertible Debentures are amended or an irrevocable election is made thereunder
to change the settlement method thereunder (including, without limitation, to
change from net share settlement to physical settlement) or the Convertible
Debentures are exchanged for new convertible debentures with a different
settlement method but otherwise substantially identical to the Convertible
Debentures, the parties shall work together in good faith to adjust the terms of
the Transaction (including, without limitation, the settlement method under the
Transaction) to preserve the fair value of the Transaction and the economic
intent of the parties in light of such amendment or exchange. Without limiting
the generality of the foregoing, if the Convertible Debentures are so amended,
changed or exchanged and the settlement method for the resulting Convertible
Debentures or convertible debentures (the “New Convertible Debentures”) is
“gross physical settlement” (i.e. the entire conversion value of the New
Convertible Debentures is settled in Shares (or Shares and cash

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in lieu of fractional Shares)), then such adjustments to the terms of the
Transaction shall provide that (i) in respect of any Exercise Date that
(A) occurs prior to the Final Conversion Period, (B) is not also a Conversion
Date for a number of Relevant Convertible Debentures equal to the number of
Options hereunder exercised on such Exercise Date or (C) occurs during the Final
Conversion Period if (in the case of this clause (C) only) the average of the
Daily VWAP on each of the 10 consecutive VWAP Trading Days ending on the first
day of the Final Conversion Period is greater than 90% of the Strike Price as of
the last of such 10 VWAP Trading Days and less than 110% of such Strike Price,
the valuation and settlement terms of the Transaction shall be as currently
provided in this Confirmation as if there had been no such amendment, change or
exchange of the Convertible Debentures (which means, for the avoidance of doubt,
that the Delivery Obligation will be determined assuming that there had been no
such amendment, change or exchange) except that, in the case of an Exercise Date
that occurs during the Final Conversion Period, the Delivery Obligation will be
capped so that the value of the Delivery Obligation does not exceed the value of
the Convertible Obligation minus the product of $1,000 and the number of Options
being exercised on such Exercise Date, with both values determined using the
Relevant Price as of the date two Exchange Business Days prior to the Settlement
Date, determined as if such date were a Valuation Date; and (ii) in respect of
any other Exercise Date, the valuation and settlement terms of the Transaction
shall be adjusted to conform to those in the New Convertible Debenture (which
means, for the avoidance of doubt, that the determination of the Delivery
Obligation will take into account such amendment, change or exchange, and will
continue to exclude amounts comprising the Convertible Obligation as a result of
provisions in the relevant indenture relating to “make-whole” adjustments and
discretionary adjustments as currently contemplated in this Confirmation).
     (n) Early Termination or Cancellation. Notwithstanding anything to the
contrary in the Equity Definitions or the Agreement, to the extent that Dealer
would otherwise have the right under the Equity Definitions or the Agreement to
elect to cancel the Transaction, to designate an Early Termination Date in
respect of the Transaction or to determine any amount due upon the cancellation
or early termination of the Transaction, the Calculation Agent shall make such
election, designation or determination, as the case may be, in place of Dealer.
     (o) Third Party Beneficiary. GS shall be the third party beneficiary of
Counterparty’s representations, warranties, agreements, indemnities and other
obligations hereunder and will have a right to directly enforce those
obligations against Counterparty.
     (p) Governing Law. THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE).
          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.

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     (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.

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     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 Wells Fargo Bank, National Association, Facsimile No.
(415) 646-9208, with a copy to Goldman Sachs International, Equity Derivatives
Documentation Department, Facsimile No. (212) 428-1980/83.

            Yours faithfully,

WELLS FARGO BANK, NATIONAL ASSOCIATION
      By:   /s/  Gordy Holtermen       Name:  Gordy Holtermen        
Title:  Executive Vice President    

          Agreed and accepted by:    
 
        AMERIGROUP CORPORATION    
 
       
By:
  /s/ James W. Treuss    
 
 
 
Name: James W. Truess
Title: Executive Vice President and Chief Financial Officer