Exhibit 10.3

 

    Deutsche Bank LOGO [g352281g17d87.jpg]     Deutsche Bank AG, London Branch  
  Winchester house     1 Great Winchester St,     London EC2N 2DB     Telephone:
44 20 7545 8000     c/o Deutsche Bank Securities Inc.     60 Wall Street     New
York, NY 10005     Telephone: 212-250-2500

 

DATE:    May 10, 2012    TO:   

Medicis Pharmaceutical Corporation

7720 North Dobson Road

Scottsdale, Arizona 85256

   ATTENTION:    Richard D. Peterson    FACSIMILE:    (480) 291-8847    FROM:   
Deutsche Bank AG, London Branch    SUBJECT:    Base Warrant Transaction   
REFERENCE NUMBER(S):    486863   

The purpose of this agreement (this “Confirmation”) is to confirm the terms and
conditions of the transaction entered into between Deutsche Bank AG, London
Branch (“Dealer”) and Medicis Pharmaceutical Corporation (“Counterparty”) on the
Trade Date specified below (the “Transaction”). This Confirmation constitutes a
“Confirmation” as referred to in the ISDA Master Agreement specified below. This
Confirmation constitutes the entire agreement and understanding of the parties
with respect to the subject matter and terms of the Transaction and supersedes
all prior or contemporaneous written and oral communications with respect
thereto.

DEUTSCHE BANK AG IS NOT REGISTERED AS A BROKER OR DEALER UNDER THE U.S.
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. DEUTSCHE BANK SECURITIES INC.
(“AGENT”) HAS ACTED SOLELY AS AGENT IN CONNECTION WITH THE TRANSACTION AND HAS
NO OBLIGATION, BY WAY OF ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH
RESPECT TO THE PERFORMANCE OF EITHER PARTY UNDER THE TRANSACTION. AS SUCH, ALL
DELIVERY OF FUNDS, ASSETS, NOTICES, DEMANDS AND COMMUNICATIONS OF ANY KIND
RELATING TO THE TRANSACTION BETWEEN DEUTSCHE BANK AG AND COUNTERPARTY SHALL BE
TRANSMITTED EXCLUSIVELY THROUGH AGENT. DEUTSCHE BANK AG, LONDON BRANCH IS NOT A
MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC).

The definitions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives
Association, Inc., are incorporated into this Confirmation. In the event of any
inconsistency between the Equity Definitions and the terms of this Confirmation,
the terms of this Confirmation shall govern, and in the event of any
inconsistency between either the Equity Definitions or this Confirmation and the
Agreement (as defined below), the Equity Definitions or this Confirmation, as
the case may be, shall govern. For the

 

Chairman of the Supervisory Board: Clemens Börsig

Board of Managing Directors: Hermann-Josef Lamberti, Josef Ackermann, Dr. Hugo
Banziger, Anthony Dilorio

   Deutsche Bank AG is regulated by the FSA for the conduct of designated
investment business in the UK, is a member of the London Stock Exchange and is a
limited liability company incorporated in the Federal Republic of Germany HRB
No. 30 000 District Court of Frankfurt am Main; Branch Registration No. in
England and Wales BR000005, Registered address: Winchester House, 1 Great
Winchester Street, London EC2N 2DB.

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avoidance of doubt, except to the extent of an express conflict, the application
of any provision of this Confirmation, the Agreement or the Equity Definitions
shall not be construed to exclude or limit the application of any other
provision of this Confirmation, the Agreement or the Equity Definitions. For the
purposes of the Equity Definitions, each reference herein to a Warrant shall be
deemed to be a reference to a Call or an Option, as context requires.

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 supplement, form a part of, and be subject to
an agreement (the “Agreement”) in the form of the ISDA 2002 Master Agreement as
if Dealer and Counterparty had executed an agreement in such form (without any
Schedule but with the election that the “Cross-Default” provisions of
Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(i) the phrase “or becoming capable at such time of being declared” shall be
deleted from clause (1) of such Section 5(a)(vi); (ii) the following language
shall be added to the end thereof: “Notwithstanding the foregoing, a default
under subsection (2) hereof shall not constitute an Event of Default if (i) the
default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the
payment when due; and (iii) the payment is made within two Local Business Days
of such party’s receipt of written notice of its failure to pay.”;
(iii) “Specified Indebtedness” will have the meaning specified in Section 14 of
the Agreement, except that such term shall not include obligations in respect of
deposits received in the ordinary course of a party’s banking business; and
(iv) “Threshold Amount” means in relation to Dealer, three percent (3%) of
shareholders’ equity of Deutsche Bank AG as of the Trade Date and in relation to
Counterparty, USD 25 million, and with such other elections set forth in this
Confirmation). The Transaction shall be the only transaction under the
Agreement.

The Transaction is a Warrant Transaction, which shall be considered a Share
Option Transaction for purposes of the Equity Definitions, and shall have the
following terms:

 

General:      Trade Date:    May 10, 2012. Effective Date:    May 16, 2012.
Components:    The Transaction will be divided into individual Components, each
with the terms set forth in this Confirmation, and, in particular, with the
Number of Warrants and Expiration Date set forth in this Confirmation. The
payments and deliveries to be made upon settlement of the Transaction will be
determined separately for each Component as if each Component were a separate
Transaction under the Agreement. Warrant Style:    European. Warrant Type:   
Call. Seller:    Counterparty. Buyer:    Dealer. Shares:    The Class A common
stock, par value USD 0.014 per share, of Counterparty. Number of Warrants:   
For each Component, as provided in Annex C to this Confirmation. Warrant
Entitlement:    One Share per Warrant.

 

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Strike Price:    As provided in Annex B to this Confirmation. Premium:    As
provided in Annex B to this Confirmation. Premium Payment Date:    The Effective
Date. Exchange:    The New York Stock Exchange. Related Exchanges:    All
Exchanges. Calculation Agent:    Dealer, whose judgments, determinations and
calculations shall be made in good faith and in a commercially reasonable
manner. Following any determination or calculation by the Calculation Agent
hereunder, upon a written request by Counterparty, the Calculation Agent will
provide to Counterparty by e-mail to the e-mail address provided by Counterparty
in such written request a report (in a commonly used file format for the storage
and manipulation of financial data) displaying in reasonable detail the basis
for such calculation, it being understood that the Calculation Agent shall not
be obligated to disclose any proprietary models used by it for such calculation.
Procedure for Exercise:   

In respect of any Component:

   Expiration Date:    As provided in Annex C to this Confirmation (or, if such
date is not a Scheduled Trading Day, the next following Scheduled Trading Day
that is not already an Expiration Date for another Component); provided that if
that date is a Disrupted Day, the Expiration Date for such Component shall be
the first succeeding Scheduled Trading Day that is not a Disrupted Day and is
not or is not deemed to be an Expiration Date in respect of any other Component
of the Transaction hereunder; and provided further that if the Expiration Date
has not occurred pursuant to the preceding proviso as of the Final Disruption
Date, then the Final Disruption Date shall be deemed to be the Expiration Date
(irrespective of whether such date is an Expiration Date in respect of any other
Component for the Transaction) and, notwithstanding anything to the contrary in
this Confirmation or the Equity Definitions, the Relevant Price for the
Expiration Date shall be the prevailing market value per Share determined by the
Calculation Agent in a commercially reasonable manner. Notwithstanding the
foregoing and anything to the contrary in the Equity Definitions, if a Market
Disruption Event occurs on any Expiration Date, the Calculation Agent may
determine that such Expiration Date is a Disrupted Day only in part, in which
case (i) the Calculation Agent shall make adjustments to the number of Warrants
for the relevant Component for which such day shall be the Expiration Date and
shall designate the Scheduled Trading Day determined in the manner described in
the immediately preceding sentence as the Expiration Date for the remaining
Warrants for such Component and (ii) the Relevant Price for such Disrupted Day
shall be determined by the Calculation Agent based on transactions in the Shares
on such Disrupted Day taking into account the nature and duration of such Market
Disruption Event on such day with the intent to capture the economic effect of
such transactions. Section 6.6 of the Equity Definitions shall not apply to any
Valuation Date occurring on an Expiration Date. “Final Disruption Date” has the
meaning provided in Annex B to this Confirmation.

 

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Automatic Exercise:    Applicable, and means that the Number of Warrants for
each Component will be deemed to be automatically exercised at the Expiration
Time on the Expiration Date for such Component, subject to the provisions set
forth under “Limit on Beneficial Ownership” below. Market Disruption Event:   
Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words
“during the one hour period that ends at the relevant Valuation Time, Latest
Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case
may be,” in clause (ii) thereof, and by replacing the words “or (iii) an Early
Closure.” with “(iii) an Early Closure or (iv) a Regulatory Disruption, in each
case that the Calculation Agent determines is material.”    Section 6.3(d) of
the Equity Definitions is hereby amended by deleting the remainder of the
provision following the term “Scheduled Closing Time” in the fourth line
thereof. Regulatory Disruption:    Any event that Dealer, in its reasonable
judgment based on the advice of counsel, determines makes it advisable 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 Dealer or its
affiliate), for Dealer or its affiliate to refrain from or decrease any market
activity in connection with the Transaction. Dealer shall notify Counterparty as
soon as reasonably practicable that a Regulatory Disruption has occurred and the
Expiration Dates affected by it. Settlement Terms:   

In respect of any Component:

   Settlement Method Election:    Applicable; provided that (i) references to
“Physical Settlement” in Section 7.1 of the Equity Definitions shall be replaced
by references to “Net Share Settlement”; (ii) Counterparty may elect Cash
Settlement only if Counterparty represents and warrants to Dealer in writing on
the date of such election that (A) Counterparty is not in possession of any
material non-public information regarding Counterparty or the Shares, (B)
Counterparty is electing Cash Settlement in good faith and not as part of a plan
or scheme to evade compliance with the federal securities laws, and (C) the
assets of Counterparty at their fair valuation exceed the liabilities of
Counterparty (including contingent liabilities), and Counterparty has the
ability to pay its debts and obligations as such debts mature; and (iii) the
same election of settlement method shall apply to all Expiration Dates
hereunder.

 

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Electing Party:    Counterparty Settlement Method Election Date:    The third
Scheduled Trading Day immediately preceding the scheduled Expiration Date for
the Component with the earliest scheduled Expiration Date. Default Settlement
Method:    Net Share Settlement Net Share Settlement:    If applicable, in lieu
of the obligations set forth in Sections 8.1 and 9.1 of the Equity Definitions,
for each Component, Counterparty shall deliver to Dealer on the relevant
Settlement Date a number of Shares equal to the Net Share Amount for such
Component to the account specified by Dealer, and cash in lieu of any fractional
Share valued at the Relevant Price for the Valuation Date corresponding to such
Settlement Date, subject to the provisions set forth under “Registration/Private
Placement Procedures” below. Net Share Amount:    For any Exercise Date, a
number of Shares, as calculated by the Calculation Agent, equal to (x) the
product of (i) the number of Warrants being exercised or deemed exercised on
such Exercise Date, (ii) the Warrant Entitlement and (iii) the excess, if any,
of the Relevant Price for the Valuation Date occurring on such Exercise Date
over the Strike Price (such product, the “Net Share Settlement Amount”), divided
by (y) such Relevant Price. Cash Settlement:    If applicable, on the relevant
Settlement Date, Counterparty shall pay to Dealer an amount of cash in the
Settlement Currency equal to the Net Share Settlement Amount for such Settlement
Date. Relevant Price:    On any Valuation Date, the volume weighted average
price per Share for the regular trading session of the Exchange as displayed
under the heading “Bloomberg VWAP” on Bloomberg Page MRX.N <equity> AQR on such
Valuation Date in respect of the period from 9:30 am to 4:00 p.m. (New York City
time) on such Valuation Date (or if such volume weighted average price is not
available or is, in the Calculation Agent’s reasonable discretion, erroneous,
the Calculation Agent’s reasonable, good faith estimate of such price on such
Valuation Date). Settlement Currency:    USD.

 

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Other Applicable Provisions:    The provisions of Sections 9.1(c), 9.8, 9.9,
9.11 (except that, with respect to any Private Placement Settlement, the
Representation and Agreement contained in Section 9.11 of the Equity Definitions
shall be modified by excluding any representations therein relating to
restrictions, obligations, limitations or requirements under applicable
securities laws as a result of the fact that Counterparty is the Issuer of the
Shares) and 9.12 of the Equity Definitions will be applicable, except that all
references in such provisions to “Physical Settlement” and “Physically-settled”
shall be read as references to “Net Share Settlement” and “Net Share Settled”.
“Net Share Settled” in relation to any Warrant means that Net Share Settlement
is applicable to such Warrant. Dividends:   

In respect of any Component:

   Dividend Adjustments:    Counterparty agrees to notify Dealer promptly of the
announcement of an ex-dividend date for any cash dividend by Counterparty. If an
ex-dividend date for any cash dividend or distribution on the Shares (a
“Triggering Dividend”) that differs from the Regular Dividend occurs at any time
from, but excluding, the Trade Date to, and including, the Expiration Date or if
no ex-dividend date for a cash dividend or distribution by Counterparty occurs
during any regular dividend period of Counterparty (as determined by the
Calculation Agent) that falls, in whole or in part, after the Trade Date and on
or prior to the Expiration Date, then in lieu of any adjustments as provided
under “Method of Adjustment” below, the Calculation Agent may make such
adjustments to the Strike Price, the Number of Warrants and/or any other
variable relevant to the exercise, settlement or payment or other terms of the
Transaction as it deems appropriate in its good faith and commercially
reasonable discretion to preserve the intended economic benefits of the
Transaction. Regular Dividend:    For the first Triggering Dividend for which
the ex-dividend date occurs within any regular dividend period of Counterparty
(as determined by the Calculation Agent), USD 0.10 per Share (subject to
adjustment (x) by the Calculation Agent to account for any change in the regular
dividend period length and (y) for any Potential Adjustment Event or
Extraordinary Event as otherwise provided herein), and, for any subsequent
Triggering Dividend for which the ex-dividend date occurs within the same
regular dividend period, zero.

Adjustments:

  

In respect of any Component:

   Method of Adjustment:    Calculation Agent Adjustment; provided, however,
that the Equity Definitions shall be amended by replacing the words “diluting or
concentrative” in Sections 11.2(a), 11.2(c) (in two instances) and 11.2(e)(vii)
with the word “material” and by adding the words “or the Transaction” after the
words “theoretical value of the relevant Shares” in Sections 11.2(a), 11.2(c)
and 11.2(e)(vii); provided further that adjustments may be made to account for
changes in actual or expected volatility, dividends, correlation, stock loan
rate and liquidity relative to the relevant Share.

 

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Extraordinary Events:

   New Shares:    In the definition of New Shares in Section 12.1(i) of the
Equity Definitions (a) the text in clause (i) thereof shall be deleted in its
entirety and replaced with “publicly quoted, traded or listed on any of the New
York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market
(or their respective successors)” and (b) the following clause shall be inserted
at the end thereof: “and (iii) of an entity or person that is a corporation
organized under the laws of the United States, any State thereof or the District
of Columbia that either (x) also becomes Counterparty under the relevant
Transaction following such Merger Event or Tender Offer or (y) wholly owns the
Counterparty under the relevant Transaction following such Merger Event or
Tender Offer (which Counterparty is a corporation that is organized under the
laws of the United States, any State thereof or the District of Columbia) and
fully and unconditionally guarantees the obligations of Counterparty under the
Transaction”. Modified Calculation Agent Adjustment:    For greater certainty,
the definition of “Modified Calculation Agent Adjustment” in Sections 12.2 and
12.3 of the Equity Definitions shall be amended by adding the following
italicized language to the stipulated parenthetical provision: “(including
adjustments to account for changes in expected volatility, expected dividends,
expected correlation, expected stock loan rate or expected liquidity relevant to
the Shares or to the Transaction)”. Announcement Event:    With respect to any
Component, if an Announcement Event occurs, the Calculation Agent will determine
the economic effect of the Announcement Event on the theoretical value of such
Component (i) on or after the relevant Announcement Date and (ii) on the
Valuation Date or any earlier date of termination or cancellation for such
Component (in each case, including without limitation any actual or expected
change in volatility, dividends, correlation, stock loan rate or liquidity
relevant to the Shares or to such Component), and if, in the case of clause (i)
or (ii), the Calculation Agent determines in its good faith and commercially
reasonable discretion that such economic effect is material and Dealer so elects
in its commercially reasonable discretion, the Calculation Agent will (x) adjust
the terms of such Component to reflect such economic effect (without duplication
in respect of any other adjustment or cancellation valuation made pursuant to
the Equity Definitions) and (y) determine the effective date of such adjustment;
provided that, notwithstanding the foregoing, if the related Merger Date or
Tender Offer Date, as the case may be, or any subsequent related Announcement
Event, occurs on or prior to the effective date of such adjustment, any further
adjustment to the terms of such Component with respect to such Merger Date,
Tender Offer Date or Announcement Event pursuant to this Confirmation and/or the
Equity Definitions shall take such earlier adjustment into account (and,

 

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   for the avoidance of doubt, where Cancellation and Payment is applicable, the
Determining Party shall take into account such adjustment in determining the
Cancellation Amount). “Announcement Event” shall mean the occurrence of an
Announcement Date in respect of a Merger Event or Tender Offer, notwithstanding
the fact that such Merger Date or Tender Offer Date may not, or may not be
anticipated to, occur on or prior to the Valuation Date for the related
Component. The definition of “Announcement Date” in Section 12.1(l) of the
Equity Definitions shall be amended by (a) replacing the words “a firm” with the
word “any bona fide” in the second and fourth lines thereof, (b) inserting the
words “by the Issuer, any potential counterparty to such Merger Event or any of
their agents or affiliates” after the word “announcement” in the second line
thereof, (c) replacing the word “leads to the” with the words “, if completed,
would lead to a” in the third and the fifth lines thereof, (d) inserting the
words “by the Issuer, any potential offeror in respect of such Tender Offer or
any of their agents or affiliates” after the word “announcement” in the second
and the fourth lines thereof, and (e) replacing the words “voting shares” with
the word “Shares” in the fifth line thereof. Consequences of Merger Events:
Merger Event:    (a) Share-for-Share:    Modified Calculation Agent Adjustment.
(b) Share-for-Other:    Cancellation and Payment (Calculation Agent
Determination). (c) Share-for-Combined:    Component Adjustment. Tender Offer:
   Applicable; provided that Section 12.1(d) of the Equity Definitions is hereby
amended by adding “, or of the outstanding Shares,” before “of the Issuer” in
the fourth line thereof; provided, further that, Section 12.1(d) of the Equity
Definitions is hereby amended by replacing “10%” with “25%”. Consequences of
Tender Offers: (a) Share-for-Share:    Modified Calculation Agent Adjustment.
(b) Share-for-Other:    Modified Calculation Agent Adjustment. (c)
Share-for-Combined:    Modified Calculation Agent Adjustment.
Composition of Combined Consideration:    Notwithstanding anything to the
contrary in the Equity Definitions, if the composition of Combined Consideration
in respect of any Share-for-Combined Merger Event or Tender Offer could be
determined by a holder of Shares, Dealer shall determine the composition of such
Combined Consideration in its commercially reasonable discretion.

 

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Nationalization, Insolvency and Delisting:    Cancellation and Payment
(Calculation Agent Determination); provided that in addition to the provisions
of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a
Delisting if the Exchange is located in the United States and the Shares are not
immediately re-listed, re-traded or re-quoted on any of the New York Stock
Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their
respective successors); if the Shares are immediately re-listed, re-traded or
re-quoted on any such exchange or quotation system, such exchange or quotation
system shall be deemed to be the Exchange. Additional Disruption Events: Change
in Law:    Applicable; provided that Section 12.9(a)(ii) of the Equity
Definitions is hereby amended (i) by inserting the parenthetical “(including,
for the avoidance of doubt and without limitation, adoption or promulgation of
new regulations authorized or mandated by existing statute)” at the end of
clause (A) thereof, (ii) by the replacement of the word “Shares” with “Hedge
Positions” in clause (X) thereof; (iii) by adding the phrase “or announcement”
immediately after the phrase “due to the promulgation” in the third line thereof
and adding the phrase “formal or informal” before the word “interpretation” in
the same line; (iv) immediately following the word “Transaction” in clause (X)
thereof, adding the phrase “in the manner contemplated by the Hedging Party on
the Trade Date” and (v) adding the following proviso to the end of clause (Y)
thereof: “provided that such party has used commercially reasonable efforts to
avoid such increased cost on terms acceptable to the Hedging Party”. Failure to
Deliver:    Inapplicable Insolvency Filing:    Applicable Loss of Stock Borrow:
   Applicable Maximum Stock Loan Rate:    200 basis points per annum Increased
Cost of Stock Borrow:    Applicable Initial Stock Loan Rate:    25 basis points
per annum Increased Cost of Hedging:    Not Applicable. Hedging Disruption:   

Applicable; provided that:

 

(i)     Section 12.9(a)(v) of the Equity Definitions is hereby amended by (a)
inserting the following words at the end of clause (A) thereof: “in the manner
contemplated by the Hedging Party on the Trade Date” and (b) inserting the
following two phrases at the end of such Section:

 

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“For the avoidance of doubt, the term “equity price risk” shall be deemed to
include, but shall not be limited to, stock price and volatility risk. And, for
the further avoidance of doubt, any such transactions or assets referred to in
phrases (A) or (B) above must be available on commercially reasonable pricing
terms.”; and

 

(ii)    Section 12.9(b)(iii) of the Equity Definitions is hereby amended by
inserting in the third line thereof, after the words “to terminate the
Transaction”, the words “or a portion of the Transaction affected by such
Hedging Disruption”.

Hedging Party:    Dealer for all applicable Additional Disruption Events
Determining Party:    Dealer for all applicable Extraordinary Events
Acknowledgements:    Non-Reliance:    Applicable Agreements and Acknowledgements
   Regarding Hedging Activities:    Applicable Additional Acknowledgements:   
Applicable

Mutual Representations: Each of Dealer and Counterparty represents and warrants
to, and agrees with, the other party that:

 

  (i) Tax Disclosure. Notwithstanding anything to the contrary herein, in the
Equity Definitions or in the Agreement, and notwithstanding any express or
implied claims of exclusivity or proprietary rights, the parties (and each of
their employees, representatives or other agents) are authorized to disclose to
any and all persons, beginning immediately upon commencement of their
discussions and 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 by either party to the other relating
to such tax treatment and tax structure.

 

  (ii) Commodity Exchange Act. It is an “eligible contract participant” within
the meaning of the U.S. Commodity Exchange Act, as amended (the “CEA”). The
Transaction has been subject to individual negotiation by the parties. The
Transaction has not been executed or traded on a “trading facility” as defined
in the CEA.

 

  (iii) Securities Act. It is a “qualified institutional buyer” as defined in
Rule 144A under the Securities Act.

 

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Counterparty Representations: Counterparty hereby represents, warrants,
acknowledges and covenants that:

 

  (i) Counterparty shall immediately provide written notice to Dealer upon
obtaining knowledge of the occurrence of any event that would constitute an
Event of Default, a Potential Event of Default, a Potential Adjustment Event, a
Merger Event or any other Extraordinary Event; provided, however, that should
Counterparty be in possession of material non-public information regarding
Counterparty, Counterparty shall not communicate such information to Dealer in
connection with this Transaction until such information no longer constitutes
material non-public information.

 

  (ii) (A) Counterparty is acting for its own account, and it has made its own
independent decisions to enter into the Transaction and as to whether the
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisers as it has deemed necessary, (B) Counterparty is not
relying on any communication (written or oral) of Dealer or any of its
affiliates as investment advice or as a recommendation to enter into the
Transaction (it being understood that information and explanations related to
the terms and conditions of the Transaction shall not be considered investment
advice or a recommendation to enter into the Transaction) and (C) no
communication (written or oral) received from Dealer or any of its affiliates
shall be deemed to be an assurance or guarantee as to the expected results of
the Transaction.

 

  (iii) Counterparty is not entering into the Transaction and will not make any
election hereunder for the purpose of (i) creating actual or apparent trading
activity in the Shares (or any security convertible into or exchangeable for the
Shares) or (ii) raising or depressing or otherwise manipulating the price of the
Shares (or any security convertible into or exchangeable for the Shares), in
either case in violation of the U.S. Securities Exchange Act of 1934, as amended
(the “Exchange Act”).

 

  (iv) Counterparty’s filings under the Exchange Act and other applicable
securities laws that are required to be filed have been filed and 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), as of the date of this representation, do not contain any untrue
statement of material fact or any omission of a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading.

 

  (v) The representations and warranties of Counterparty set forth in Section 3
of the Agreement and Section 1 of the Underwriting Agreement (the “Underwriting
Agreement”) dated as of the Trade Date between Counterparty and Deutsche Bank
Securities Inc. and J.P. Morgan Securities LLC as representatives of the
underwriters party thereto are true and correct and are hereby deemed to be
repeated to Dealer as if set forth herein.

 

  (vi) The Shares issuable upon exercise of all Warrants (the “Warrant Shares”)
(a) have been duly authorized and, when delivered pursuant to the terms of such
Transaction, shall be validly issued, fully-paid and non-assessable, and such
issuance of the Warrant Shares shall not be subject to any preemptive or similar
rights and (b) shall, upon such issuance, be accepted for listing or quotation
upon the Exchange. In addition, Counterparty shall ensure that at all times
until its delivery obligations hereunder have been met in full that the total
number of Shares reserved for issuance hereunder and, prior to receipt of the
Required NYSE Stockholder Approval (as defined below), for issuance under any
Other Warrant Transaction (as defined below), in the aggregate, is at least
equal to the Maximum Delivery Amount.

 

  (vii) Counterparty is not as of the Trade Date and as of the date on which
Counterparty delivers any Termination Delivery Units, and shall not be after
giving effect to the transactions contemplated hereby, “insolvent” (as such term
is defined in Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the
United States Code) (the “Bankruptcy Code”)) and Counterparty would be able to
purchase 13,276,700 Shares in compliance with the laws of the jurisdiction of
Counterparty’s incorporation or organization.

 

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  (viii) Counterparty is not, and after giving effect to the transactions
contemplated hereby will not be, an “investment company” as such term is defined
in the Investment Company Act.

 

  (ix) Without limiting the generality of Section 13.1 of the Equity
Definitions, Counterparty acknowledges that Dealer is not making any
representations or warranties with respect to the treatment of the Transaction
under ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging,
ASC Topic 480, Distinguishing Liabilities from Equity and ASC Topic 815-40,
Derivatives and Hedging – Contracts in Entity’s Own Equity (or any successor
issue statements), or under any other accounting guidance.

 

  (x) Counterparty understands, agrees and acknowledges that no obligations of
Dealer to it hereunder, if any, shall be entitled to the benefit of deposit
insurance and that such obligations shall not be guaranteed by any affiliate of
Dealer or any governmental agency.

 

  (xi) Counterparty shall deliver to Dealer on the Effective Date an opinion of
counsel, dated as of such date and reasonably acceptable to Dealer in form and
substance, with respect to the matters set forth in Section 3(a) of the
Agreement and clause (a) of the first sentence of clause (vi) above (solely with
respect to the Shares initially issuable upon exercise of the Warrants) and such
other matters as Dealer may reasonably request.

 

  (xii) On each anniversary of the Trade Date, upon request by Dealer,
Counterparty shall deliver to Dealer an officer’s certificate, signed by an
authorized officer, stating the number of Available Shares (as defined in the
provision titled “Limitation On Delivery of Shares” below).

 

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

 

  (xiv) During the period starting on the first Expiration Date and ending on
the last Expiration Date (the “Settlement Period”), the Shares or securities
that are convertible into, or exchangeable or exercisable for, Shares will not
be subject to a “restricted period,” as such term is defined in Regulation M
under the Exchange Act (“Regulation M”) unless Counterparty has provided written
notice to Dealer of such “restricted period” not later than the Scheduled
Trading Day immediately preceding the first day of such “restricted period”.
Counterparty acknowledges that any such notice may give rise to a Regulatory
Disruption or a postponement pursuant to “Right to Extend” below and
acknowledges that the proviso to clause (i) under this “Counterparty
Representations” section shall apply to any such notice.

 

  (xv) On each day during the Settlement Period, neither Counterparty nor any
“affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18 under the
Exchange Act (“Rule 10b-18”)) shall directly or indirectly (including, without
limitation, by means of any cash-settled or other derivative instrument)
purchase, offer to purchase, place any bid or limit order that would effect a
purchase of, or commence any tender offer relating to, any Shares (or an
equivalent interest, including a unit of beneficial interest in a trust or
limited partnership or a depository share) or any security convertible into or
exchangeable or exercisable for Shares, except through Dealer; provided that
this clause (xv) shall not apply to the following: (a) privately negotiated
purchases of Shares (or any security convertible into or exchangeable for
Shares); (b) purchases of Shares pursuant to exercises of stock options granted
to former or current employees, officers, directors,

 

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  independent contractors or other affiliates of Counterparty, including the
withholding and/or purchase of Shares from holders of such options to satisfy
payment of the option exercise price and/or satisfy tax withholding requirements
in connection with the exercise of such options; (c) purchases of Shares from
holders of performance shares or units or restricted shares or units to satisfy
tax withholding requirements in connection with vesting; (d) the conversion or
exchange by holders of any convertible or exchangeable securities of the
Counterparty previously issued; or (e) purchases of Shares effected by or for a
plan by an agent independent of the Counterparty that satisfy the requirements
of Rule 10b-18(a)(13)(ii).

Miscellaneous:

Netting and Set-Off. 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.

Qualified Financial Contracts. It is the intention of the parties that, in
respect of Counterparty, (a) the Transaction shall constitute a “qualified
financial contract” within the meaning of 12 U.S.C. Section 1821(e)(8)(D)(i) and
(b) a Non-defaulting Party’s rights under Sections 5 and 6 of the Agreement
constitute rights of the kind referred to in 12 U.S.C. Section 1821(e)(8)(A).

Method of Delivery. Whenever delivery of funds or other assets is required
hereunder by or to Counterparty, such delivery shall be effected through Agent.
In addition, all notices, demands and communications of any kind relating to the
Transaction between Dealer and Counterparty shall be transmitted exclusively
through Agent.

Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this
Confirmation is not intended to convey to Dealer rights with respect to the
Transaction that are senior to the claims of common stockholders in any U.S.
bankruptcy proceedings of Counterparty; provided that nothing herein shall limit
or shall be deemed to limit Dealer’s right to pursue remedies in the event of a
breach by Counterparty of its obligations and agreements with respect to the
Transaction outside of Counterparty’s bankruptcy; provided, further, that
nothing herein shall limit or shall be deemed to limit Dealer’s rights in
respect of any transactions other than the Transaction.

No Collateral. Notwithstanding any provision of this Confirmation, the
Agreement, Equity Definitions, or any other agreement between the parties to the
contrary, the obligations of Counterparty under the Transaction are not secured
by any collateral.

Securities Contract; Swap Agreement. The parties hereto agree and acknowledge
that Dealer is a “financial institution,” “swap participant” and “financial
participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of
the Bankruptcy Code. The parties hereto further agree and acknowledge (A) that
this Confirmation is (i) a “securities contract,” as such term is defined in
Section 741(7) of the Bankruptcy Code, with respect to which each payment and
delivery hereunder or in connection herewith is a “termination value,” “payment
amount” or “other transfer obligation” within the meaning of Section 362 of the
Bankruptcy Code and a “settlement payment” or a “transfer” within the meaning of
Section 546 of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is
defined in Section 101(53B) of the Bankruptcy Code, with respect to which each
payment and delivery hereunder or in connection herewith is a “termination
value,” a “payment amount” or “other transfer obligation” within the meaning of
Section 362 of the Bankruptcy Code and a “transfer” within the meaning of
Section 546 of the Bankruptcy Code, and (B) that Dealer is entitled to the
protections afforded by, among other sections, Section 362(b)(6), 362(b)(17),
362(b)(27), 362(o), 546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the
Bankruptcy Code.

Alternative Calculations and Counterparty Payment on Early Termination and on
Certain Extraordinary Events. If Counterparty owes Dealer any amount in
connection with the Transaction pursuant to Sections 12.2, 12.3, 12.6, 12.7 or
12.9 of the Equity Definitions (except in the case of an Extraordinary Event
(x) that is within Counterparty’s control or (y) as a result of which the Shares
have changed into cash) or pursuant to Section 6(d)(ii) of the Agreement (except
in the case of an Event of Default in which Counterparty is the Defaulting Party
or a Termination Event in which Counterparty is the Affected Party, other than
an Event of Default or a

 

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Termination Event that resulted from an event or events outside Counterparty’s
control) (a “Counterparty Payment Obligation”), Counterparty shall have the
right, in its sole discretion, to satisfy any such Counterparty Payment
Obligation by delivery of Termination Delivery Units (as defined below) by
(A) giving irrevocable telephonic notice to Dealer, confirmed in writing within
one Scheduled Trading Day, between the hours of 9:00 a.m. and 4:00 p.m. New York
time on the Early Termination Date or other date the transaction is terminated,
as applicable (“Notice of Counterparty Termination Delivery”) and (B) remaking
the representation set forth under “No Material Non-Public Information” below on
the date of such notice; provided that if Counterparty does not validly elect
(or is not permitted to elect) to satisfy its Counterparty Payment Obligation by
delivery of Termination Delivery Units, Dealer shall have the right, in its sole
discretion, to elect to require Counterparty to satisfy its Counterparty Payment
Obligation by delivery of Termination Delivery Units. On a date determined by
the Calculation Agent that is within a commercially reasonable period of time
following receipt of a Notice of Counterparty Termination Delivery or a notice
from Dealer requiring Counterparty to satisfy its Counterparty Payment
Obligation by delivery of Termination Delivery Units, as the case may be,
Counterparty shall deliver to Dealer a number of Termination Delivery Units
having a cash value equal to the amount of such Counterparty Payment Obligation
(as determined by the Calculation Agent in a commercially reasonable manner),
subject to the provisions set forth opposite the caption “Registration/Private
Placement Procedures” below. If the provisions set forth in this paragraph are
applicable, the provisions of Sections 9.8, 9.9, 9.11 (modified as described
above) and 9.12 of the Equity Definitions shall be applicable, except that all
references to “Shares” shall be read as references to “Termination Delivery
Units”.

“Termination Delivery Unit” means one Share or, if the Shares have changed into
cash or any other property or the right to receive cash or any other property as
the result of an Insolvency, Nationalization, Merger Event or Tender Offer, a
unit consisting of the number or amount of each type of property received by a
holder of one Share (without consideration of any requirement to pay cash or
other consideration in lieu of fractional amounts of any securities) in such
Insolvency, Nationalization, Merger Event or Tender Offer. If such Insolvency,
Nationalization, Merger Event or Tender Offer involves a choice of consideration
to be received by holders, the Calculation Agent shall determine the composition
of such consideration in its commercially reasonable discretion.

Registration/Private Placement Procedures. If, in the reasonable opinion of
Dealer based on advice of counsel, any Shares or Termination Delivery Units
deliverable to Dealer hereunder, for any reason, would be in the hands of Dealer
subject to any applicable restrictions on transfer (including, without
limitation, any registration or qualification requirement or prospectus delivery
requirement for such Shares or Termination Delivery Units) pursuant to any
applicable federal or state securities law or otherwise (including, without
limitation, any such requirement arising under Section 5 of the Securities Act
as a result of such Shares or Termination Delivery Units being “restricted
securities”, as such term is defined in Rule 144) (such Shares or Termination
Delivery Units, “Restricted Shares”), then delivery of such Restricted Shares
shall be effected pursuant to either clause (i) or (ii) of Annex A hereto at the
election of Counterparty, unless the requirements of such clauses (i) and
(ii) are waived by Dealer with respect to such delivery. Notwithstanding the
foregoing, solely in respect of any Warrants exercised or deemed exercised on
any Exercise Date, Counterparty shall elect, prior to the first Settlement Date
for the first Exercise Date (or, if later, prior to the third Scheduled Trading
Day following the date of notification by Dealer of the need for such settlement
procedures), a Private Placement Settlement of similar size (as defined in Annex
A hereto) or Registration Settlement (as defined in Annex A hereto) for all
deliveries of Restricted Shares for all such Exercise Dates which election shall
be applicable to all Settlement Dates for such Warrants and the procedures in
clause (i) or clause (ii) of Annex A hereto shall apply for all such delivered
Restricted Shares on an aggregate basis commencing after the final Settlement
Date for such Warrants. The Calculation Agent shall make reasonable adjustments
to settlement terms and provisions under this Confirmation to reflect a single
Private Placement Settlement or Registration Settlement for such aggregate
Restricted Shares delivered hereunder. If the Private Placement Settlement or
the Registration Settlement shall not be effected as set forth in clauses (i) or
(ii) of Annex A, as applicable, then failure to effect such Private Placement
Settlement or such Registration Settlement shall constitute an Event of Default
with respect to which Counterparty shall be the Defaulting Party.

 

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Share Deliveries. Counterparty acknowledges and agrees that, to the extent that
Dealer (or its affiliate) is not then an affiliate, as such term is used in Rule
144, of Counterparty and has not been such an affiliate of Counterparty for 90
days (it being understood that Dealer or its affiliate shall not be considered
such an affiliate of Counterparty solely by reason of its right to receive
Shares pursuant to a Transaction hereunder), any Shares or Termination Delivery
Units delivered hereunder either prior to or after the first anniversary of the
Premium Payment Date shall be eligible for resale under Rule 144 or any
successor provision at all times following such first anniversary, and
Counterparty agrees that any Shares or Termination Delivery Units delivered
after such first anniversary shall not bear any legends restricting, or
referring to restrictions on, the resale of such securities, and, with respect
to any Shares or Termination Delivery Units delivered prior to such first
anniversary, on such first anniversary Counterparty shall remove, or cause the
transfer agent for such Shares or Termination Delivery Units to remove, any
legends referring to any restrictions on resale under the Securities Act from
the certificates representing such Shares or Termination Delivery Units, without
any requirement for the delivery of any certificate, consent, agreement, opinion
of counsel, notice or any other document, any transfer tax stamps or payment of
any other amount or any other action by Dealer or such affiliate. Counterparty
further agrees that with respect to any Shares or Termination Delivery Units
delivered hereunder at any time after 6 months from the Premium Payment Date but
prior to 1 year from the Premium Payment Date, to the extent that Counterparty
then satisfies the current information requirement of Rule 144, Counterparty
shall promptly remove, or cause the transfer agent for such Shares or
Termination Delivery Units to remove, any legends referring to any such
restrictions or requirements from the certificates representing such Share or
Termination Delivery Units upon delivery by Dealer or its affiliate to
Counterparty or such transfer agent of any customary seller’s and broker’s
representation letters in connection with resales of such Shares or Termination
Delivery Units pursuant to Rule 144, without any further requirement for the
delivery of any certificate, consent, agreement, opinion of counsel, notice or
any other document, any transfer tax stamps or payment of any other amount or
any other action by Dealer or such affiliate. Counterparty further agrees and
acknowledges that Dealer (or its affiliate) shall run a holding period under
Rule 144 from the Premium Payment Date with respect to the Warrants and/or any
Shares or Termination Delivery Units delivered hereunder notwithstanding the
existence of any other transaction or transactions between Counterparty and
Dealer relating to the Shares. Counterparty further agrees that Shares or
Termination Delivery Units delivered hereunder prior to the date that is 6
months from the Premium Payment Date may be freely transferred among Dealer and
its affiliates, and Counterparty shall effect such transfer without any further
action by Dealer or its affiliates. Notwithstanding anything to the contrary
herein, Counterparty agrees that any delivery of Shares or Termination Delivery
Units shall be effected by book-entry transfer through the facilities of the
Clearance System if, at the time of such delivery, the certificates representing
such Shares or Termination Delivery Units would not contain any restrictive
legend as described above. Notwithstanding anything to the contrary herein, to
the extent the provisions of Rule 144 or any successor rule are amended, or the
applicable interpretation thereof by the Securities and Exchange Commission or
any court changes after the Trade Date, the agreements of Counterparty herein
shall be deemed modified to the extent necessary, in the opinion of outside
counsel of Counterparty, to comply with Rule 144, including Rule 144(b) or any
successor provision, as in effect at the time of delivery of the relevant Shares
or Termination Delivery Units.

No Material Non-Public Information. Counterparty represents and warrants to
Dealer that it is not aware of any material nonpublic information concerning
itself, the Shares or option contracts related to the Shares.

Limit on Beneficial Ownership. Notwithstanding any other provisions hereof,
Dealer may not exercise any Warrant hereunder, Automatic Exercise shall not
apply with respect thereto, and no delivery hereunder (including pursuant to
provisions opposite the headings “Alternative Calculations and Counterparty
Payments on Early Termination and on Certain Extraordinary Events,”
“Registration/Private Placement Procedures,” “Limitation on Delivery of Shares”
or Annex A) shall be made, to the extent (but only to the extent) that the
receipt of any Shares upon such exercise or delivery would result in the
existence of an Excess Ownership Position as set forth in clause (1) or (3) of
the definition thereof. Any purported delivery hereunder shall be void and have
no effect to the extent (but only to the extent) that such delivery would result
in the existence of such an Excess Ownership Position. If any delivery owed to
Dealer or exercise hereunder is not made, in whole or in part, as a result of
this provision, Counterparty’s obligation to make such delivery and Dealer’s
right to exercise a Warrant shall not be extinguished and Counterparty shall
make such delivery as promptly as practicable after, but in no event later than
one Clearance System Business Day after, Dealer gives notice to Counterparty
that such exercise or delivery would not result in the existence of such an
Excess Ownership Position.

 

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Repurchase Notices. Counterparty shall, on any day on which Counterparty effects
any repurchase of Shares, provide Dealer with a written notice of such
repurchase (a “Repurchase Notice”) on such day if, following such repurchase,
the Warrant Equity Percentage (as defined below) is greater by 0.5% or more than
the Warrant Equity Percentage set forth in the immediately preceding Repurchase
Notice (or, in the case of the first such Repurchase Notice, greater by 0.5% or
more than the Warrant Equity Percentage as of the date hereof). The “Warrant
Equity Percentage” as of any day is the fraction, expressed as a percentage, of
(1) the numerator of which is the sum of (A) the product of the Number of
Warrants and the Warrant Entitlement and (B) the number of Shares underlying any
other warrant transaction between Counterparty as seller and Dealer as buyer and
(2) the denominator of which is the number of Shares outstanding on such day.
Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and
their respective officers, directors, employees, affiliates, advisors, agents
and controlling person (each, an “Indemnified Person”) from and against any and
all losses (including losses relating to Dealer’s hedging activities as a
consequence of becoming an “insider” as defined under Section 16 of the Exchange
Act, including without limitation, any forbearance from hedging activities or
cessation of hedging activities and any losses in connection therewith with
respect to this Transaction), claims, damages, judgments, liabilities and
reasonable expense (including reasonable attorney’s fees), joint or several,
which an Indemnified Person actually may become subject to, as a result of
Counterparty’s failure to provide Dealer with a Repurchase Notice on the day and
in the manner specified herein, and to reimburse, upon written request, each of
such Indemnified Persons for any reasonable legal or other expenses incurred in
connection with investigating, preparing for, providing testimony or other
evidence in connection with or defending any of the foregoing. If any suit,
action, proceeding (including any governmental or regulatory investigation),
claim or demand shall be brought or asserted against the Indemnified Person,
such Indemnified Person shall promptly notify Counterparty in writing, and
Counterparty, upon request of the Indemnified Person, shall retain counsel
reasonably satisfactory to the Indemnified Person to represent the Indemnified
Person and any others Counterparty may designate in such proceeding and shall
pay the reasonable fees and expenses of such counsel related to such proceeding.
Counterparty shall be relieved from liability to the extent that the Indemnified
Person fails promptly to notify Counterparty of any action commenced against it
in respect of which indemnity may be sought hereunder; provided that failure to
notify Counterparty (x) shall not relieve Counterparty from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
(y) shall not, in any event, relieve Counterparty from any liability that it may
have otherwise than on account of this indemnity agreement. Counterparty shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and
against any loss or liability by reason of such settlement or judgment.
Counterparty shall not, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding on terms
reasonably satisfactory to such Indemnified Person. If the indemnification
provided for in this paragraph is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then Counterparty, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities. The remedies
provided for in this paragraph are not exclusive and shall not limit any rights
or remedies that may otherwise be available to any Indemnified Person at law or
in equity. The indemnity and contribution agreements contained in this paragraph
shall remain operative and in full force and effect regardless of the
termination of the Transaction.

Limitation On Delivery of Shares. Notwithstanding anything herein or in the
Agreement to the contrary, in no event shall Counterparty be required at any
time to deliver any Shares hereunder to the extent that the number of Shares
otherwise deliverable would exceed (i) prior to receipt of the Required NYSE
Stockholder Approval, 6,861,831 Shares less the total number of Shares
previously delivered hereunder or under any warrant transaction that (x) is
entered into by Dealer and Counterparty within 30 days of the date hereof and
(y) except with respect to the number of warrants and the premium, is
substantially similar hereto (any such transaction, an “Other Warrant
Transaction”) or (ii) following receipt of the Required NYSE Stockholder
Approval, two times the Number of Shares (the “Maximum Delivery Amount”).
Notwithstanding anything to the contrary in the Agreement, this Confirmation or
the Equity Definitions, in no event shall the Maximum Delivery Amount be

 

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subject to adjustment, other than any adjustment that (a) prior to receipt of
the Required NYSE Stockholder Approval, is made pursuant to Article 11 or 12 of
the Equity Definitions (without any amendment thereto pursuant to the terms of
this Confirmation), and (b) to the extent that such adjustment would cause the
Maximum Delivery Amount to exceed the number of Available Shares, results from
actions of Counterparty or events within Counterparty’s control. Counterparty
represents and warrants (which shall be deemed to be repeated on each day that
the Transaction is outstanding) that the Maximum Delivery Amount is equal to or
less than the number of authorized but unissued Shares of Counterparty that are
not reserved for future issuance in connection with transactions in the Shares
other than the Transaction and, prior to receipt of the Required NYSE
Stockholder Approval, any Other Warrant Transaction (such Shares, the “Available
Shares”). In the event that, notwithstanding the preceding sentence,
Counterparty shall not have delivered the full number of Shares otherwise
deliverable hereunder because Counterparty has insufficient authorized but
unissued Shares that are not reserved for future issuance under transactions
other than the Transaction and, prior to receipt of the Required NYSE
Stockholder Approval, any Other Warrant Transaction (the resulting deficit, the
“Deficit Shares”), Counterparty shall be continually obligated to deliver, from
time to time until the full number of Deficit Shares have been delivered
pursuant to this paragraph, Shares when, and to the extent, that (A) Shares are
repurchased, acquired or otherwise received by Counterparty or any of its
subsidiaries after the Trade Date (whether or not in exchange for cash, fair
value or any other consideration), (B) authorized and unissued Shares previously
reserved for issuance in respect of other transactions become no longer so
reserved and (C) Counterparty additionally authorizes any unissued Shares that
are not reserved for such other transactions. Counterparty shall reasonably
promptly notify Dealer of the occurrence of any of the foregoing events
(including the number of Shares subject to clause (A), (B) or (C) and the
corresponding number of Shares to be delivered) and promptly deliver such Shares
thereafter. Notwithstanding the provisions of Section 5 of the Agreement, in the
event of a failure by Counterparty to comply with the agreement set forth in
this provision, there shall be no grace period for remedy of such failure.

Additional Termination Event. The occurrence of any of the following shall
constitute an Additional Termination Event with respect to which
(1) Counterparty shall be the sole Affected Party and (2) the Transaction shall
be the sole Affected Transaction; provided that with respect to any Additional
Termination Event, Dealer may choose to treat part of the Transaction as the
sole Affected Transaction, and, upon termination of the Affected Transaction, a
Transaction with terms identical to those set forth herein except with a Number
of Warrants equal to the unaffected number of Warrants shall be treated for all
purposes as the Transaction, which shall remain in full force and effect:

(i) Dealer reasonably determines, based on advice of counsel, that it is
advisable to terminate a portion of the Transaction so that Dealer’s related
hedging activities will comply with applicable securities laws, rules or
regulations;

(ii) any “person” or “group” within the meaning of Section 13(d) of the Exchange
Act, other than Counterparty, its subsidiaries and its and their employee
benefit plans, files a Schedule TO or any schedule, form or report under the
Exchange Act disclosing that such person or group has become the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act) of Counterparty’s
common equity representing more than 50% of the voting power of its common
equity;

(iii) the consummation of (A) any recapitalization, reclassification or change
of the Shares (other than changes resulting from a subdivision or combination)
as a result of which the Shares would be converted into, or exchanged for,
stock, other securities, other property or assets; (B) any share exchange,
consolidation or merger of Counterparty pursuant to which the Shares will be
converted into cash, securities or other property, other than a merger of
Counterparty solely for the purpose of changing its jurisdiction of
incorporation that results in a reclassification, conversion or exchange of
outstanding Shares solely into shares of common stock of the surviving entity;
or (C) any sale, lease or other transfer in one transaction or a series of
transactions of all or substantially all of the consolidated assets of
Counterparty and its subsidiaries, taken as a whole, to any person other than
one of its subsidiaries; or

 

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(iv) (A) at any time the price per Share on the Exchange (as determined by the
Calculation Agent) is at or above USD 500.00 (subject to adjustment as provided
in this Confirmation and the Equity Definitions, except that, for the avoidance
of doubt, with respect to a Potential Adjustment Event, any such adjustment may
become effective as of the announcement of the relevant Potential Adjustment
Event), unless Counterparty has received approval from its stockholders in
accordance with the requirements of Rule 312.03(c) of the New York Stock
Exchange Listed Company Manual (or any successor thereto) for (x) the issuance
pursuant to the Transaction of a number of Shares up to two times the Number of
Shares and (y) the issuance pursuant to any Other Warrant Transaction of a
number of Shares up to two times the “Number of Shares,” as defined in the
confirmation therefor (such approval, the “Required NYSE Stockholder Approval”)
and (B) Dealer reasonably believes that, if Counterparty were to validly elect
to deliver Termination Delivery Units in respect of any Counterparty Payment
Obligation upon the occurrence at such time of any event described in
“Alternative Calculations and Counterparty Payment on Early Termination and on
Certain Extraordinary Events,” such Termination Delivery Units would constitute
Restricted Shares.

Notwithstanding the foregoing, transactions described in clause (ii) or
(iii) above shall not constitute Additional Termination Events under such clause
if (a) at least 90% of the consideration paid for the Shares (excluding cash
payments for fractional shares and cash payments made pursuant to dissenters’
appraisal rights and cash dividends) in a transaction otherwise constituting an
Additional Termination Event under clause (ii) or (iii) above consists of shares
of common stock traded or quoted on The New York Stock Exchange, The NASDAQ
Global Select Market or The NASDAQ Global Market (or any of their respective
successors), or will be so traded or quoted immediately following the completion
of such transaction and (b) as a result of the completion of such transaction,
the “Shares” are composed of such consideration.

Notwithstanding anything to the contrary herein or in the Equity Definitions or
the Agreement, any Counterparty Payment Obligation shall, for all purposes, be
calculated without regard to the provisions set forth under “Limitation on
Delivery of Shares” above; provided that the number of Shares deliverable
pursuant to the provisions set forth under “Alternative Calculations and
Counterparty Payment on Early Termination and on Certain Extraordinary Events”
above (if applicable) shall not exceed the applicable Maximum Delivery Amount.
For the avoidance of doubt, the provisions set forth above under “Alternative
Calculations and Counterparty Payment on Early Termination and on Certain
Extraordinary Events”, including and subject to the conditions and limitations
set forth therein and above, shall apply to any Counterparty Payment Obligation
amount resulting from such Additional Termination Events.

Right to Extend. Dealer may postpone any Exercise Date or Settlement Date or any
other date of valuation or delivery with respect to some or all of the relevant
Warrants (in which event the Calculation Agent shall make appropriate
adjustments to the Net Share Amount with respect to one or more Components), if
Dealer determines, in its commercially reasonable discretion (in the case of the
immediately following clause (i)) or in its reasonable discretion based on
advice of counsel (in the case of the immediately following clause (ii)), that
such extension is reasonably necessary or appropriate to (i) preserve Dealer’s
(or its affiliate’s) hedging or hedge unwind activity hereunder in light of
existing liquidity conditions in the cash market, the stock loan market or any
other relevant market (but only if there is a material decrease in liquidity
relative to Dealer’s expectations on the Trade Date) or (ii) to enable Dealer
(or its affiliate) to effect purchases of Shares in connection with its hedging,
hedge unwind or settlement activity hereunder in a manner that would, if Dealer
(or such affiliate) were Counterparty or an affiliate of Counterparty, be in
compliance with applicable legal, regulatory or self-regulatory requirements, or
with related policies and procedures applicable to Dealer (or such affiliate).

Transfer or Assignment. Counterparty may not transfer any of its obligations
hereunder without the prior written consent of Dealer. Notwithstanding any
provision of the Agreement to the contrary, Dealer may, subject to applicable
law, freely transfer and assign all of its rights and obligations under the
Transaction without the consent of Counterparty.

If (a) at any time (1) the Section 16 Equity Percentage exceeds 8%, (2) the
Warrant Equity Percentage exceeds 14.5% or (3) Dealer, Dealer Group (as defined
below) or any person whose ownership position would be aggregated with that of
Dealer or Dealer Group (Dealer, Dealer Group or any such person, a “Dealer
Person”) under any federal, state or local (including non-U.S.) laws, rules,
regulations or regulatory orders or

 

18

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organizational documents or contracts of Counterparty that are, in each case,
applicable to ownership of Shares (“Applicable Restrictions”), owns,
beneficially owns, constructively owns, controls, holds the power to vote or
otherwise meets a relevant definition of ownership, or could be reasonably
viewed as meeting any of the foregoing, in excess of a number of Shares equal to
(x) the number of Shares that would give rise to reporting, registration, filing
or notification obligations or other requirements (including obtaining prior
approval by a state, federal or non-U.S. regulator) of a Dealer Person (except
for filings of Schedule 13D or Schedule 13G under the Exchange Act or any other
filing obligations applicable as of the date hereof), or could result in an
adverse effect on a Dealer Person, under Applicable Restrictions, as determined
by Dealer in its reasonable discretion, and with respect to which such
requirements have not been met or the relevant approval has not been received
minus (y) 1% of the number of Shares outstanding on the date of determination
(either such condition described in clause (1), (2) or (3), an “Excess Ownership
Position”), and (b) Dealer is unable, after commercially reasonable efforts, to
effect a transfer or assignment on pricing and terms and within a time period
reasonably acceptable to it of all or a portion of this Transaction pursuant to
the preceding paragraph such that an Excess Ownership Position no longer exists,
Dealer may designate any Scheduled Trading Day as an Early Termination Date with
respect to a portion (the “Terminated Portion”) of this Transaction, such that
an Excess Ownership Position no longer exists following such partial
termination. In the event that Dealer so designates an Early Termination Date
with respect to a portion of this Transaction, a payment shall be made pursuant
to Section 6 of the Agreement as if (i) an Early Termination Date had been
designated in respect of a Transaction having terms identical to this
Transaction and a Number of Warrants equal to the Terminated Portion (allocated
among the Components thereof in the discretion of Dealer), (ii) Counterparty
shall be the sole Affected Party with respect to such partial termination and
(iii) such Transaction shall be the only Terminated Transaction (and, for the
avoidance of doubt, the provisions set forth under the caption “Alternative
Calculations and Counterparty Payment on Early Termination and on Certain
Extraordinary Events” shall apply to any amount that is payable by Counterparty
to Dealer pursuant to this sentence). The “Section 16 Equity Percentage” as of
any day is the fraction, expressed as a percentage, (A) the numerator of which
is the number of Shares that Dealer and any of its affiliates subject to
aggregation with Dealer for purposes of the “beneficial ownership” test under
Section 13 of the Exchange Act and all persons who may form a “group” (within
the meaning of Rule 13d-5(b)(1) under the Exchange Act) with Dealer
(collectively, “Dealer Group”) “beneficially own” (within the meaning of
Section 13 of the Exchange Act) without duplication on such day (or, to the
extent that the equivalent calculation under Section 16 of the Exchange Act and
the rules and regulations thereunder results in a higher number, such number)
and (B) the denominator of which is the number of Shares outstanding on such
day.

Designation by Dealer. Notwithstanding any other provision in this Confirmation
to the contrary requiring or allowing Dealer to purchase, sell, receive or
deliver any Shares or other securities to or from Counterparty, Dealer may
designate any of its affiliates to purchase, sell, receive or deliver such
Shares or other securities and otherwise to perform Dealer’s obligations in
respect of the Transaction and any such designee may assume such obligations.
Dealer shall be discharged of its obligations to Counterparty to the extent of
any such performance.

Amendments to Equity Definitions. (a) Section 12.9(b)(iv) of the Equity
Definitions is hereby amended by: (i) 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); (ii) replacing “will lend” with “lends” in
subsection (B); and (iii) replacing the phrase “neither the Non-Hedging Party
nor the Lending Party lends Shares” with the phrase “such Lending Party does not
lend Shares” in the penultimate sentence; and (b) Section 12.9(b)(v) of the
Equity Definitions is hereby amended by: (i) adding the word “or” immediately
before subsection “(B)” and deleting the comma at the end of subsection (A);
(ii) (1) deleting subsection (C) in its entirety, (2) deleting the word “or”
immediately preceding subsection (C) and (3) deleting the penultimate sentence
in its entirety and replacing it with the sentence “The Hedging Party will
determine the Cancellation Amount payable by one party to the other”; and
(iii) deleting subsection (X) in its entirety and the words “or (Y)” immediately
following subsection (X).

Matters Related to Agent. Each party agrees and acknowledges that (i) Agent acts
solely as agent on a disclosed basis with respect to the Transaction, and
(ii) Agent has no obligation, by guaranty, endorsement or otherwise with respect
to the obligations of either Counterparty or Dealer hereunder, either with
respect to the delivery of cash or Shares, either at the beginning or the end of
the Transaction. In this regard, each of Counterparty and Dealer acknowledges
and agrees to look solely to the other for performance hereunder, and not to
Agent.

 

19

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Severability; Illegality. Notwithstanding anything to the contrary in the
Agreement, if compliance by either party with any provision of the Transaction
would be unenforceable or illegal, (a) the parties shall negotiate in good faith
to resolve such unenforceability or illegality in a manner that preserves the
economic benefits of the transactions contemplated hereby and (b) the other
provisions of the Transaction shall not be invalidated, but shall remain in full
force and effect.

Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING RELATING TO THE TRANSACTION. EACH PARTY (I) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH A
SUIT, ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(II) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO
THE TRANSACTION, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS PROVIDED HEREIN.

Wall Street Transparency and Accountability Act. In connection with Section 739
of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the
parties hereby agree that neither the enactment of WSTAA or any regulation under
the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall
limit or otherwise impair either party’s otherwise applicable rights to
terminate, renegotiate, modify, amend or supplement this Confirmation or the
Agreement, as applicable, arising from a termination event, force majeure,
illegality, increased costs, regulatory change or similar event under this
Confirmation, the Equity Definitions incorporated herein, or the Agreement
(including, but not limited to, rights arising from Change in Law, Hedging
Disruption, Increased Cost of Hedging, an Excess Ownership Position, or
Illegality (as defined in the Agreement)).

Agreements and Acknowledgements Regarding Hedging. Counterparty understands,
acknowledges and agrees that: (A) at any time on and prior to the Expiration
Date, Dealer and its affiliates may buy or sell Shares or other securities or
buy or sell options or futures contracts or enter into swaps or other derivative
securities in order to adjust its hedge position with respect to the
Transaction; (B) Dealer and its affiliates also may be active in the market for
Shares other than in connection with hedging activities in relation to the
Transaction; (C) Dealer shall make its own determination as to whether, when or
in what manner any hedging or market activities in securities of Counterparty
shall be conducted and shall do so in a manner that it deems appropriate to
hedge its price and market risk with respect to the Relevant Prices; and (D) any
market activities of Dealer and its affiliates with respect to Shares may affect
the market price and volatility of Shares, as well as the Relevant Prices, each
in a manner that may be adverse to Counterparty.

Early Unwind. In the event the sale of the “Firm Securities” (as defined in the
Underwriting Agreement) is not consummated with the underwriters thereof for any
reason, other than in cases involving breach of the Underwriting Agreement by
Dealer or its affiliate, by the close of business in New York on May 23, 2012
(or such later date as agreed upon by the parties) (May 23, 2012 or such later
date as agreed upon being the “Early Unwind Date”), the Transaction shall
automatically terminate (the “Early Unwind”) on the Early Unwind Date and
(a) the Transaction and all of the respective rights and obligations of Dealer
and Counterparty under the Transaction shall be cancelled and terminated and
(b) 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 the other 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.

Payment by Counterparty. In the event that, following the payment of the
Premium, (i) an Early Termination Date occurs or is designated with respect to
the Transaction as a result of a Termination Event or an Event of Default and,
as a result, Dealer owes to Counterparty an amount calculated under Section 6(e)
of the Agreement, or (ii) Dealer owes to Counterparty, pursuant to Section 12.7
or Section 12.9 of the Equity Definitions, an amount calculated under
Section 12.8 of the Equity Definitions, such amount shall be deemed to be zero.

 

20

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Deduction or Withholding for Tax. So long as Counterparty is organized under the
laws of the United States or any State thereof, the provisions of
Section 2(d)(i)(4) of the Agreement shall not apply to the Transaction.

Part 2(b) of the ISDA Schedule – Payee Representation:

For the purpose of Section 3(f) of this Agreement, Counterparty makes the
following representation to Dealer:

Counterparty is a corporation established under the laws of the State of
Delaware and is a “United States person” (as that term is defined in
Section 7701(a)(30) of the Code).

For the purpose of Section 3(f) of this Agreement, Dealer makes the following
representation to Counterparty:

 

  (A) Each payment received or to be received by it in connection with this
Agreement is effectively connected with its conduct of a trade or business
within the United States; and

 

  (B) It is a “foreign person” (as that term is used in Section 1.6041-4(a)(4)
of the United States Treasury Regulations) for United States federal income tax
purposes.

Part 3(a) of the ISDA Schedule – Tax Forms:

 

Party Required to Deliver Document   Form/Document/Certificate   Date by which
to be Delivered Counterparty   A complete and duly executed United States
Internal Revenue Service Form W-9 (or successor thereto.)   (i) Upon execution
and delivery of this Agreement; (ii) promptly upon reasonable demand by Dealer;
and (iii) promptly upon learning that any such Form previously provided by
Counterparty has become obsolete or incorrect. Dealer   A complete and duly
executed United States Internal Revenue Service Form W-8ECI (or successor
thereto).   (i) Upon execution and delivery of this Agreement; (ii) promptly
upon reasonable demand by Counterparty; and (iii) promptly upon learning that
any such Form previously provided by Dealer has become obsolete or incorrect.

Governing Law; Jurisdiction: 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.

 

21

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Contact information. For purposes of the Agreement (unless otherwise specified
in the Agreement), the addresses for notice to the parties shall be:

(a) Counterparty

Medicis Pharmaceutical Corporation

7720 North Dobson Road

Scottsdale, Arizona 85256

Attention: Richard D. Peterson

Fax: (480) 291-8847

(b) Dealer

Deutsche Bank AG, London Branch

c/o Deutsche Bank Securities Inc.

60 Wall Street

New York, NY 10005

Attention: Andrew Yaeger

Telephone: (212) 250-2717

Email: Andrew.Yaeger@db.com

with a copy to:

Deutsche Bank AG, London Branch

c/o Deutsche Bank Securities Inc.

60 Wall Street

New York, New York 10005

Attention: Faiz Khan

Telephone: (212) 250-0668

Email: Faiz.Khan@db.com

 

22

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This Confirmation may be executed in several counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.

Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to Dealer a facsimile of the fully-executed
Confirmation to Dealer at 44 113 336 2009. Originals shall be provided for your
execution upon your request.

We are very pleased to have executed the Transaction with you and we look
forward to completing other transactions with you in the near future.

Very truly yours,

 

DEUTSCHE BANK AG, LONDON BRANCH By:   /s/ Michael Sanderson   Name: Michael
Sanderson   Title: Managing Director By:   /s/ Dushyant Chadha   Name: Dushyant
Chadha   Title: Managing Director

 

DEUTSCHE BANK SECURITIES INC.,

acting solely as Agent in connection with this Transaction

By:   /s/ Michael Sanderson   Name: Michael Sanderson   Title: Managing Director
By:   /s/ Dushyant Chadha   Name: Dushyant Chadha   Title: Managing Director

Counterparty hereby agrees to, accepts and confirms the terms of the foregoing
as of the Trade Date.

MEDICIS PHARMACEUTICAL CORPORATION

By:   /s/ Richard D. Peterson  

Name: Richard D. Peterson

Title: Executive Vice President,

          Chief Financial Officer & Treasurer

[Base Warrant Transaction Signature Page]

 

 

 

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ANNEX A

Registration Settlement and Private Placement Settlement

 

(i) If Counterparty elects to settle the Transaction pursuant to this clause
(i) (a “Private Placement Settlement”), then delivery of Restricted Shares by
Counterparty shall be effected in customary private placement procedures for
private placements of equity securities of similar size with respect to such
Restricted Shares reasonably acceptable to Dealer; provided that Counterparty
may not elect a Private Placement Settlement if, on the date of its election, it
has taken, or caused to be taken, any action that would make unavailable either
the exemption pursuant to Section 4(2) of the Securities Act for the sale by
Counterparty to Dealer (or any affiliate designated by Dealer) of the Restricted
Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the
Securities Act for resales of the Restricted Shares by Dealer (or any such
affiliate of Dealer). Dealer or its affiliate and Counterparty shall enter into
a private placement agreement that is customary in form and substance for
private placements of equity securities of similar size in connection with any
Private Placement Settlement (including the resale of the Restricted Shares and
any Make-Whole Shares by Dealer or its affiliate), which agreement shall
include, without limitation, customary representations, covenants, blue sky and
other governmental filings and/or registrations, indemnities to Dealer and its
affiliates, due diligence rights (for Dealer or its affiliate or any potential
buyer of the Restricted Shares or Make-Whole Shares, as the case may be,
designated by Dealer or its affiliate), opinions and certificates, and such
other documentation as is customary for private placement agreements for private
placements of equity securities of similar size, all reasonably acceptable to
Dealer or its affiliate.

 

(ii) If Counterparty elects to settle the Transaction pursuant to this clause
(ii) (a “Registration Settlement”), then Counterparty shall promptly (but in any
event no later than the beginning of the Resale Period) file and use its
reasonable best efforts to make effective under the Securities Act a
registration statement or supplement or amend an outstanding registration
statement in form and substance reasonably satisfactory to Dealer, to cover the
resale of such Restricted Shares (and any Make-whole Shares) in accordance with
customary resale registration procedures for offerings of equity securities of
similar size, including entry by Dealer or its affiliate and Counterparty into
an underwriting agreement that is customary in form and substance for registered
secondary equity offerings of similar size, including, without limitation,
covenants, conditions, representations, underwriting discounts (if applicable),
commissions (if applicable), indemnities, due diligence rights (for Dealer, its
affiliate or any potential buyer of the Restricted Shares or Make-whole Shares,
as the case may be, designated by Dealer or its affiliate), opinions and
certificates, and such other documentation as is customary for equity resale
underwriting agreements for offerings of similar size, all reasonably acceptable
to Dealer or its affiliate. If Dealer or its affiliate, in its sole discretion,
is not satisfied with such procedures and documentation, Private Placement
Settlement shall apply. If Dealer or its affiliate is satisfied with such
procedures and documentation, it shall sell the Restricted Shares (or any
Make-whole Shares) pursuant to such registration statement during a period (the
“Resale Period”) commencing on the Exchange Business Day following delivery of
such Restricted Shares (or any Make-whole Shares) and ending on the earliest of
(i) the Exchange Business Day on which Dealer or its affiliate completes the
sale of all Restricted Shares or, in the case of settlement of Termination
Delivery Units, a sufficient number of Restricted Shares so that the realized
net proceeds of such sales exceed the Counterparty Payment Obligation and
(ii) the date upon which all Restricted Shares (and any Make-whole Shares) may
be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar
provision then in force) without any further restriction whatsoever.

 

(iii)

If (ii) above is applicable and the Net Share Settlement Amount or the
Counterparty Payment Obligation, as applicable, exceeds the realized net
proceeds from such resale, or if (i) above is applicable and the Freely
Tradeable Value (as defined below) of the Shares owed pursuant to the Net Share
Settlement Amount, or the Counterparty Payment Obligation (in each case as
adjusted pursuant to (i) above), as applicable, exceeds the realized net
proceeds from such resale, Counterparty shall transfer to Dealer or its
affiliate by the open of the regular trading session on the Exchange on the
third Exchange Business Day immediately following the last day of the Resale
Period the amount of such excess (the “Additional Amount”), at its option,
either in cash or in a number of Restricted Shares

 

A-1

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  (“Make-whole Shares”, provided that the aggregate number of Restricted Shares
and Make-whole Shares delivered shall not exceed the Maximum Delivery Amount)
that, based on the Relevant Price on the last day of the Resale Period (as if
such day was the “Valuation Date” for purposes of computing such Relevant
Price), has a value equal to the Additional Amount. If Counterparty elects to
pay the Additional Amount in Make-whole Shares, Counterparty shall elect whether
the requirements and provisions for either Private Placement Settlement or
Registration Settlement shall apply to such payment. This provision shall be
applied successively until the Additional Amount is equal to zero, subject to
“Limitation on Delivery of Shares”. “Freely Tradeable Value” means the value of
the number of Shares delivered to Dealer or its affiliate which such Shares
would have if they were freely tradeable (without prospectus delivery) upon
receipt by Dealer or its affiliate, as determined by the Calculation Agent by
reference to the Relevant Price for freely tradeable Shares as of the Valuation
Date, or other date of valuation used in a commercially reasonable manner to
determine the delivery obligation with respect to such Shares, or by other
commercially reasonable means.

 

A-2

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ANNEX B

The Strike Price, Premium and Final Disruption Date for the Transaction are set
forth below.

 

Strike Price:    USD 60.256 Premium:    USD 18,981,000 Final Disruption Date:   
December 6, 2017.

 

B-1

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ANNEX C

For each Component of the Transaction, the Number of Warrants and Expiration
Date is set forth below.

 

Component Number

 

Number of Warrants

 

Expiration Date

1.   95,592   August 31, 2017 2.   95,592   September 1, 2017 3.   95,592  
September 5, 2017 4.   95,592   September 6, 2017 5.   95,592   September 7,
2017 6.   95,592   September 8, 2017 7.   95,592   September 11, 2017 8.  
95,592   September 12, 2017 9.   95,592   September 13, 2017 10.   95,592  
September 14, 2017 11.   95,592   September 15, 2017 12.   95,592   September
18, 2017 13.   95,592   September 19, 2017 14.   95,592   September 20, 2017 15.
  95,592   September 21, 2017 16.   95,592   September 22, 2017 17.   95,592  
September 25, 2017 18.   95,592   September 26, 2017 19.   95,592   September
27, 2017 20.   95,592   September 28, 2017 21.   95,592   September 29, 2017 22.
  95,592   October 2, 2017 23.   95,592   October 3, 2017 24.   95,592   October
4, 2017 25.   95,592   October 5, 2017 26.   95,592   October 6, 2017 27.  
95,592   October 9, 2017 28.   95,592   October 10, 2017 29.   95,592   October
11, 2017 30.   95,592   October 12, 2017 31.   95,592   October 13, 2017 32.  
95,592   October 16, 2017 33.   95,592   October 17, 2017 34.   95,592   October
18, 2017 35.   95,592   October 19, 2017 36.   95,592   October 20, 2017 37.  
95,592   October 23, 2017 38.   95,592   October 24, 2017 39.   95,592   October
25, 2017 40.   95,592   October 26, 2017

 

C-1

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41.   95,592   October 27, 2017 42.   95,592   October 30, 2017 43.   95,592  
October 31, 2017 44.   95,592   November 1, 2017 45.   95,592   November 2, 2017
46.   95,592   November 3, 2017 47.   95,592   November 6, 2017 48.   95,592  
November 7, 2017 49.   95,592   November 8, 2017 50.   95,592   November 9, 2017
51.   95,592   November 10, 2017 52.   95,593   November 13, 2017 53.   95,593  
November 14, 2017 54.   95,593   November 15, 2017 55.   95,593   November 16,
2017 56.   95,593   November 17, 2017 57.   95,593   November 20, 2017 58.  
95,593   November 21, 2017 59.   95,593   November 22, 2017 60.   95,593  
November 24, 2017

 

C-2