Exhibit 10.9
 
Goldman, Sachs & Co.
200 West Street
New York, NY 10282
Telephone No: 212-902-1000
 
Confirmation of Additional OTC Warrant Transaction
 
Date:
May 18, 2011
                To:
Iconix Brand Group, Inc.
       
Attention: Chief Executive Officer
       
Telephone No.: 212-730-0030
       
Facsimile No.: 212-391-0127
                From: Goldman, Sachs & Co.                
Reference:
SDB4164996097      

 
Dear Sir / Madam:
 
The purpose of this letter agreement (this “Confirmation”) is to set forth the
terms and conditions of the Transaction entered into between Goldman, Sachs &
Co. (“GS&Co.”) and Iconix Brand Group, Inc. (“Counterparty”) on the Trade Date
specified below (the “Transaction”).  This Confirmation constitutes a
“Confirmation” as referred to in the Master Agreement specified below.
 
The definitions and provisions contained in the 2006 ISDA Definitions (the “Swap
Definitions”) and the 2002 ISDA Equity Derivatives Definitions (the “Equity
Definitions” and, together with the Swap Definitions, the “Definitions”), in
each case as published by the International Swaps and Derivatives Association,
Inc., are incorporated into this Confirmation. In the event of any inconsistency
between the Swap Definitions and the Equity Definitions, the Equity Definitions
will govern, and in the event of any inconsistency between the Definitions and
this Confirmation, this Confirmation will govern. References herein to the
“Transaction” shall be deemed to be references to a “Share Option Transaction”
for the purposes of the Equity Definitions and to a “Swap Transaction” for the
purposes of the Swap Definitions. For purposes of the Transaction, “Warrant
Style”, “Warrant Type”, “Number of Warrants” and “Warrant Entitlement” (each as
defined below) shall be used herein as if such terms were referred to as “Option
Style”, “Option Type”, “Number of Options” and “Option Entitlement”,
respectively, in the Definitions.
 
This Confirmation, together with the Agreement (as defined below), evidences a
complete and binding agreement between you and us as to the terms of the
Transaction to which this Confirmation relates. This Confirmation, shall be
subject to, and form part of, an agreement in the 1992 form of the ISDA Master
Agreement (Multicurrency Cross Border) (the “Master Agreement” or “Agreement”)
as if we had executed an agreement in such form (but without any Schedule and
with elections specified in the “ISDA Master Agreement” Section of this
Confirmation) on the Trade Date. In the event of any inconsistency between the
provisions of that Agreement and this Confirmation, this Confirmation will
prevail for the purpose of the Transaction. The parties hereby agree that the
Transaction evidenced by this Confirmation shall be the only Transaction subject
to and governed by the Agreement.
 
 
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The terms of the particular Transaction to which this Confirmation relates are
as follows:
 
General Terms:
   
Trade Date:
 
May 18, 2011
     
Effective Date:
 
May 23, 2011, subject to cancellation of the OTC Warrant Transaction prior to
5:00 p.m. (New York City time) on such date by the Counterparty. In the event of
such cancellation, any payments previously made hereunder, including the
Premium, shall be returned to the person making such payment. In addition,
Counterparty shall reimburse GS&Co. for any costs or expenses (including market
losses) relating to the unwinding of its hedging activities in connection with
the Transaction (including any loss or cost incurred as a result of its
terminating, liquidating, obtaining or reestablishing any hedge or related
trading position).
     
Warrant Style:
 
European
     
Warrant Type:
 
Call
     
Seller:
 
Counterparty
     
Buyer:
 
GS&Co.
     
Shares:
 
Shares of common stock, $0.001 par value, of Counterparty (Security Symbol:
“ICON”).
     
Components:
 
The Transaction will be divided into individual Components, each with the terms
set forth in this Confirmation, and, in particular, with the Daily Number of
Warrants and Expiration Date set forth in this Confirmation. The valuation and
exercise of the Transaction and 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.
     
Number of Warrants:
 
365,815, in the aggregate for the Transaction
     
Daily Number of Warrants:
 
For any Expiration Date, the unexercised Number of Warrants on such day divided
by the remaining number of Expiration Dates (including such day) and rounded
down to the nearest whole number, with the balance of the Number of Warrants
exercised on the final Expiration Date.

 
 
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Warrant Entitlement:
 
One (1) Share per Warrant
     
Strike Price:
 
$40.6175
     
Premium:
 
$1,080,000
     
Premium Payment Date:
 
The Effective Date; provided no cancellation of the Transaction has occurred
prior to 5:00 p.m. (New York City time) on such date by the Counterparty.
     
Exchange:
 
NASDAQ Global Market
     
Related Exchange(s):
 
All Exchanges
     
Full Exchange Business Day:
 
A Scheduled Trading Day that has a scheduled closing time for its regular
trading session at 4:00 p.m. (New York City time) or the then standard closing
time for regular trading on the Exchange and is not a Disrupted Day.

Procedures for Exercise:
   
In respect of any Component
   
Expiration Time:
 
11:59 p.m. (New York City time).
     
Expiration Dates:
 
 
The 75 consecutive Full Exchange Business Days beginning on and including
September 6, 2016, each shall be the Expiration Date for a number of Warrants
equal to the Daily Number of Warrants on such date and shall relate to a
separate Component; provided that if not all such 75 consecutive Full Exchange
Business Days have occurred as of the Final Disruption Date, the Calculation
Agent shall have the right to elect, in its reasonable discretion, that the
Final Disruption Date shall be the final Expiration Date (irrespective of
whether such date is a Disrupted Day or an Expiration Date in respect of any of
the Warrants) and the Settlement Price for the Final Disruption Date shall be
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 Scheduled Trading
Day otherwise, (i) the Calculation Agent may determine that such day is a
Disrupted Day only in part, in which case the Calculation Agent may make
adjustments to the Daily Number of Warrants for the relevant Component for which
such day shall be the Expiration Date and the Daily Number of Warrants for
Expiration Dates that follow such day and (ii) the Settlement Price for such
Disrupted Day may be adjusted by the Calculation Agent as appropriate on the
basis of the nature and duration of the relevant Market Disruption Event.  Any
day on which the Exchange is scheduled as of the Trade Date to close prior to
its normal closing time shall be considered a Disrupted Day in whole.  Section
6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on
an Expiration Date.

 
 
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Final Disruption Date:
 
The date that immediately follows the scheduled Expiration Date for the final
Component by nine Scheduled Trading Days.
     
Exercise Dates:
 
Each Expiration Date shall be an Exercise Date for a number of Warrants equal to
the Daily Number of Warrants on such date.
     
Automatic Exercise:
 
 
 
Applicable; provided that Section 3.4(a) of the Equity Definitions shall apply
to Cash Settlement and Net Physical Settlement; and provided further that,
unless all Warrants have been previously exercised hereunder, a number of
Warrants for each Expiration Date equal to the Daily Number of Warrants for such
Expiration Date shall be deemed to be automatically exercised.
     
Market Disruption Event:
 
 
Section 6.3(a) of the Equity Definitions shall be amended by deleting the words
“at any time during the one hour period that ends at the relevant Valuation
Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time,
as the case may be” and replacing them with the words “at any time during the
regular trading session on the Exchange, without regard to after hours or any
other trading outside of the regular trading session hours”, by amending and
replacing clause (a)(ii) thereof in its entirety with “(ii) an Exchange
Disruption that the Calculation Agent determines is material”, by amending and
restating clause (a)(iii) thereof in its entirety to read as follows: “(iii) an
Early Closure that the Calculation Agent determines is material” and by adding
the words “, or (iv) a Regulatory Disruption” after clause (a)(iii) as restated
above.
 
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:
 
 
A “Regulatory Disruption” shall occur if GS&Co.  determines in its reasonable
good faith discretion and based on the advice of counsel that it is appropriate
in light of legal, regulatory or self-regulatory requirements or related
policies or procedures for GS&Co. to refrain from all or any part of the market
activity in which it would otherwise engage in connection with the
Transaction.  GS&Co. will notify Counterparty promptly of any determination that
a Regulatory Disruption has occurred.
     
Disrupted Day:
 
The definition of “Disrupted Day” in Section 6.4 of the Equity Definitions shall
be amended by adding the following sentence after the first sentence: “A
Scheduled Trading Day on which a Related Exchange fails to open during its
regular trading session will not be a Disrupted Day if the Calculation Agent
determines that such failure will not have a material impact on GS&Co.’s ability
to unwind any hedging transactions related to the Transaction.”

 
Counterparty’s Telephone Number and Facsimile Number and Contact Details for
purpose of Giving Notice:
 
Address:       1450 Broadway
                New York, NY  10018
 
Attention:             Chief Executive Officer
Facsimile:              +1-212-391-0127
Telephone:            +1-212-730-0030

 
 
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Valuation:
   
In respect of any Component
   
Valuation Dates:
 
Each Exercise Date

Settlement Terms:
   
In respect of any Component
   
Cash Settlement:
 
Applicable; provided that it shall be a condition of Counterparty’s right to
elect Cash Settlement that Counterparty delivers to Buyer on the date of the
Cash Settlement election a representation signed by Counterparty that
Counterparty is not aware of, and is not in possession of, any material
non-public information regarding itself or the Shares. “Material” information
for these purposes is any information to which an investor would reasonably
attach importance in reaching a decision to buy, sell or hold the Shares.
     
Settlement Currency:
 
USD
     
Settlement Price:
 
For each Valuation Date, the volume-weighted average price per Share (“VWAP”)
calculated from 9:30 a.m. to 3:50 p.m., as observed under the heading Bloomberg
“VWAP” on Bloomberg page “ICON <equity> AQR SEC” (or any successor thereto) (or
if such volume-weighted average price is unavailable, the market value of one
Share on such Valuation Date, as determined by the Calculation Agent); provided
that if the scheduled weekday closing time of the Exchange for any Valuation
Date is later than 4:00 p.m. (without regard to after hours or any other trading
outside of the regular trading session hours) the VWAP shall be calculated for
such Valuation Date from 9:45 a.m. until 15 minutes prior to such later closing
time of the Exchange.

 
 
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Cash Settlement Payment Date:
 
With respect to each Valuation Date, three (3) Currency Business Days after the
final Valuation Date.
     
Settlement Method Election:
 
Applicable with respect to Cash Settlement or Net Physical Settlement only;
provided that any election made pursuant to this Settlement Method Election
provision shall be irrevocable and shall apply to every Component.
     
Electing Party:
 
Counterparty
     
Settlement Method Election Date:
 
Ten (10) Business Days prior to the Expiration Date for the Component with the
earliest scheduled Expiration Date.
     
Default Settlement Method:
 
Net Physical Settlement.
     
Net Physical Settlement:
 
In the event that the Counterparty elects, or is deemed to elect, to settle the
Transaction by Net Physical Settlement, subject to “Conditions to Net Physical
Settlement” below, Counterparty shall deliver to GS&Co. on the Settlement Date a
number of Shares (the “Delivered Shares”) equal to the Share Delivery Quantity,
provided that in the event that the number of Shares calculated comprises any
fractional Share, only whole Shares shall be delivered and an amount in cash
equal to the value of such fractional share shall be payable by the Counterparty
to GS&Co. in lieu of such fractional Share.

 
Share Delivery Quantity:
 
For each Exercise Date, a number of Shares, as calculated by the Calculation
Agent, equal to the Net Physical Settlement Amount for such Exercise Date
divided by the Settlement Price on the Valuation Date in respect of such
Settlement Date plus an amount in cash in lieu of any fractional Shares (based
on the applicable Settlement Price).
     
Net Physical Settlement Amount:
 
For any Exercise Date, an amount equal to the product of (i) the Number of
Warrants being exercised on the relevant Exercise Date, (ii) the Strike Price
Differential for such Exercise Date and (iii) the Warrant Entitlement.

 
 
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Strike Price Differential:
 
For any Valuation Date, (i) if the Settlement Price is greater than the Strike
Price, an amount equal to the excess of such Settlement Price over the Strike
Price for such Valuation Date or (ii) if such Settlement Price is less than or
equal to the Strike Price, zero.
     
Settlement Date:
 
Settlement with respect to each Exercise Date shall occur on the third (3rd)
Full Exchange Business Day following the final Valuation Date, provided that
GS&Co. shall have the right to request by prior written notice to Counterparty a
Settlement Date with respect to any Exercise Date and the related Share Delivery
Quantity that is three (3) Full Exchange Business Days following such Exercise
Date. Such request shall not unreasonably be denied.
     
Other Provisions Applicable to Net Physical Settlement:
 
The provisions of Sections 9.1(c), 9.4 (except that “Settlement Date” shall be
as defined above, unless a Settlement Disruption Event prevents delivery of such
Shares on that date), 9.8, 9.9, 9.11(as modified herein), 9.12 and 10.5 of the
Equity Definitions will be applicable, as if “Physical Settlement” applied to
the Transaction. Notwithstanding Section 9.11 of the Equity Definitions, but
subject to “Conditions to Net Physical Settlement” below, the parties
acknowledge that any Shares delivered to GS&Co. may be, upon delivery, subject
to restrictions and limitations arising from Counterparty’s status as issuer of
the Shares under applicable securities laws as a result of the fact that
Counterparty is the issuer of the Shares, and the parties agree that the
Representation and Agreement contained in Section 9.11 of the Equity Definitions
shall be modified by excluding any representations therein relating to
restrictions, obligations, limitations or requirements under applicable
securities laws that exist as a result of the fact that Counterparty is the
issuer of the Shares.
     
Conditions to Net Physical Settlement:
 
If, in connection with, or within six months following, delivery of Shares
hereunder, GS&Co. notifies the Counterparty that GS&Co. has reasonably
determined after advice from counsel that there is a considered risk that such
Shares are subject to restrictions on transfer in the hands of GS&Co. pursuant
to the rules and regulations promulgated under the Securities Act of 1933, as
amended (the “Securities Act”), then Counterparty shall either (i) deliver
Shares that are covered by an effective registration statement of Counterparty
for immediate resale by GS&Co. or (ii) agree to deliver additional Shares so
that the value of such Shares as determined by the Calculation Agent to reflect
an appropriate liquidity discount, equals the value of the number of Shares that
would otherwise be deliverable if such Shares were freely tradable upon receipt
by GS&Co.

 
 
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(A) If Counterparty elects to deliver Shares as described in above clause (i),
then promptly following such notification from GS&Co.
         
(a) Counterparty shall afford GS&Co. a reasonable opportunity to conduct a due
diligence investigation with respect to Counterparty that is customary in scope
for underwritten offerings of equity securities that yields a result
satisfactory to GS&Co.;
         
(b) Counterparty shall as soon as practicable make available to GS&Co. an
effective registration statement for immediate resale (the “Registration
Statement”) in form and content reasonably satisfactory to GS&Co. and
Counterparty and filed pursuant to Rule 415 under the Securities Act, and such
prospectuses as GS&Co. may reasonably request to comply with the applicable
prospectus delivery requirements (the “Prospectus”) for the resale by GS&Co. of
such number of Shares as GS&Co. shall reasonably specify in accordance with this
paragraph, such Registration Statement to be effective and Prospectus to be
current until the earliest of the date on which (1) all Delivered Shares have
been sold by GS&Co., (2) GS&Co. has advised Counterparty that it no longer
requires that such Registration Statement be effective, (3) all remaining
Delivered Shares could be sold by GS&Co. without registration pursuant to Rule
144 promulgated under the Securities Act (the “Registration Period”) or (4)
Counterparty has provided a legal opinion in form and substance reasonably
satisfactory to GS&Co. (with customary assumptions and exceptions) that the
Shares issuable upon exercise of these Warrants will be freely tradable under
the Securities Act upon delivery to GS&Co. and not subject to any legend
restricting transferability. It is understood that the Registration Statement
and Prospectus will cover a number of Shares equal to the aggregate number of
Shares (if any) reasonably estimated by GS&Co. to be potentially deliverable by
Counterparty in connection with Net Physical Settlement hereunder (not to exceed
the Maximum Deliverable Share Amount) and shall be subject to the same
suspension of sales during “blackout dates” as provided in the following
paragraph; and

 
 
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(c) Counterparty will enter into a registration rights agreement with GS&Co. in
form and substance reasonably acceptable to GS&Co. and Counterparty, which
agreement will contain among other things, customary representations and
warranties and indemnification, restrictions on sales during “blackout dates” as
provided for in the registration rights agreement (the “Registration Rights
Agreement”) entered into by Counterparty on or about the date hereof, provide
for delivery of comfort letters and opinions of counsel and other rights
relating to the registration of a number of Shares equal to the number of
Delivered Shares and other Shares deliverable hereunder up to the Maximum
Deliverable Share Amount.
         
(B) If Counterparty elects to deliver Shares as described in above clause (ii),
then promptly following such notification from GS&Co.
         
(a) Counterparty shall afford GS&Co. and any potential institutional purchaser
of any Shares identified by GS&Co. a reasonable opportunity to conduct a due
diligence investigation with respect to Counterparty that is customary in scope
for private placements of equity securities subject to execution of any
customary confidentiality agreements;

 

   
(b) Counterparty shall enter into an agreement (a “Private
Placement  Agreement”) with GS&Co. on commercially reasonable mutually
acceptable terms in connection with the private placement of such Shares by
Counterparty to GS&Co. or an affiliate and the private resale of such shares by
GS&Co. or such affiliate, substantially similar to private placement purchase
agreements customary for private placements of equity securities, in form and
substance commercially reasonably satisfactory to GS&Co. and Counterparty, which
Private Placement Agreement shall include provisions relating to the
indemnification of, and contribution in connection with the liability of, GS&Co.
and its affiliates, shall provide for the payment by Counterparty of all
expenses in connection with such resale, including all reasonable and documented
fees and expenses of counsel for GS&Co., shall contain representations,
warranties and agreements of Counterparty reasonably necessary or advisable to
establish and maintain the availability of an exemption from the registration
requirements of the Securities Act for such resales, and shall use reasonable
best efforts to provide for the delivery of accountants’ “comfort letters” to
GS&Co. or such affiliate with respect to the financial statements and certain
financial information contained in or incorporated by reference into the
offering memorandum prepared for the resale of such Shares;

 
 
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(c) GS&Co. shall sell the Delivered Shares in a commercially reasonable manner
until the amount received by GS&Co. for the sale of the Shares (the “Proceeds
Amount”) is equal to the Net Physical Settlement Amount. Any remaining Delivered
Shares shall be returned to Counterparty. If the Proceeds Amount is less than
the Net Physical Settlement Amount, Counterparty shall promptly deliver upon
notice from GS&Co. additional Shares to GS&Co. until the U.S. dollar amount from
the sale of such Shares by GS&Co. equals the difference between the Net Physical
Settlement Amount and the Proceeds Amount. In no event shall Counterparty be
required to deliver to GS&Co. a number of Shares greater than the Maximum
Deliverable Share Amount.
         
(C) Notwithstanding the foregoing: (I) if Counterparty has elected to deliver
Shares as described in clause (i) above and either (a) Counterparty does not
provide for the sale of the Shares under the Registration Statement as provided
in the Registration Rights Agreement or (b) some Shares cannot be registered
under the Registration Statement due to Rule 415(a)(4) under the Securities Act,
then the provisions of sub-paragraph (B) shall apply to the extent Counterparty
has not satisfied its obligations hereunder by the delivery of Shares pursuant
to sub-paragraph (A). (II) If sub-paragraph (B) is applicable and Counterparty
fails to satisfy its obligations under such sub-paragraph (B), then Counterparty
may deliver unregistered Shares of equivalent value to the Net Physical
Settlement Amount (or, if applicable, the unsatisfied portion thereof). The
value of any unregistered Shares so delivered shall be discounted to reflect an
appropriate liquidity discount (determined by GS&Co. in a commercially
reasonable manner, taking into account GS&Co.’s policies and determinations with
respect to any transfer restrictions that GS&Co. deems it advisable to observe
in connection with sales of such Shares). (III) If some or all of the Delivered
Shares cannot be used to close out stock loans in the shares of Counterparty
entered into to establish or maintain short positions by GS&Co. in connection
with the Transaction without a prospectus being required by applicable law to be
delivered to such lender, then the value of any such Delivered Shares shall
reflect the cost (determined by the Calculation Agent in good faith and in a
commercially reasonable manner and taking into account the policies and
determinations of GS&Co. with respect to compliance with applicable legal and
regulatory requirements) to GS&Co. of trading Shares in order to close out its
hedge position if any, in all cases for purposes of calculating the Delivered
Shares. In no event shall Counterparty be required to top up the delivery in
cash.

 
 
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Limitations on Net Physical Settlement by Counterparty:
 
Notwithstanding anything herein or in the Agreement to the contrary, the number
of Shares that may be delivered at settlement of all Components by Counterparty
shall not exceed 548,723 Shares at any time (the “Maximum Deliverable Share
Amount”), as adjusted by Calculation Agent to account for any subdivision,
stock-split, stock combination, reclassification or similar dilutive or
anti-dilutive event with respect to the Shares.
         
Counterparty represents and warrants that the number of Available Shares as of
the Trade Date is greater than the Maximum Deliverable Share Amount.
Counterparty covenants and agrees that (i) Counterparty shall not take any
action of corporate governance or otherwise to reduce the number of Available
Shares below the Maximum Deliverable Share and (ii) Counterparty shall use its
reasonable efforts to cause the number of Available Shares at all times to be
greater than the Maximum Deliverable Share Amount.
         
For this purpose, “Available Shares” means the number of Shares Counterparty
currently has authorized (but not issued and outstanding) less the maximum
number of Shares that may be required to be issued by Counterparty in connection
with stock options, convertibles, and other commitments of Counterparty that may
require the issuance or delivery of Shares in connection therewith.

 
 
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Representations for Cash Settlement and Net Physical Settlement:
 
If Counterparty elects to settle the Transaction by Cash Settlement or Net
Physical Settlement, Counterparty represents and agrees that:
         
(i) Counterparty is not, on the date of the Cash Settlement or Net Physical
Settlement election, and will not be, on any day during the period from and
including the first Expiration Date to and including the final Expiration Date,
engaged in a distribution, as such term is used in Regulation M under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a
distribution meeting the requirements of the exceptions set forth in sections
101(b)(10) and 102(b)(7) of Regulation M; and
         
(ii) during the period from and including the first Expiration Date to and
including the final Expiration Date, without the prior written consent of
GS&Co., the Counterparty shall not, and shall cause its affiliates and
affiliated purchasers (each as defined in Rule 10b-18 under the Exchange Act
(“Rule 10b-18”)) not to, directly or indirectly (including, without limitation,
by means of a 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 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 for the Shares; provided, that such
restrictions will not apply to the following: (A) purchases of Shares directly
effected by the Issuer in privately negotiated off-market transactions that are
not “Rule 10b-18 Purchases” as defined in Rule 10b-18, (B) purchases of Shares
from holders of performance shares or units or restricted shares or units to
satisfy tax withholding requirements in connection with vesting; (C) the
conversion or exchange by holders of any convertible or exchangeable securities
of the Issuer issued prior to the Trade Date pursuant to the terms of such
securities; or (D) purchases of Shares effected by or for an Issuer plan by an
agent independent of the Issuer that satisfy the requirements of Rule
10b-18(a)(13)(ii) under the Exchange Act.

 
 
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Dividends:
   
Extraordinary Dividends
 
Any and all dividends declared by the Issuer on the Shares for which the
ex-dividend date occurs during the period from, and including, the Trade Date
to, and including, the date on which the obligations of Counterparty under the
Transaction have been satisfied in full.
     
Adjustments:
   
Method of Adjustment:
 
Calculation Agent Adjustment; provided 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 Section 11.2(a), 11.2(c) and 11.2(e)(vii); provided, further
that adjustments may be made to account solely for changes in volatility,
expected dividends, stock loan rate or liquidity relative to the relevant
Shares.
     
Extraordinary Events:
   
New Shares:
 
 
Section 12.1(i) of the Equity Definitions is hereby amended by deleting the text
in clause (i) in its entirety and replacing it with the phrase “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)”.
     
Share-for-Share:
 
The definition of “Share-for-Share” set forth in Section 12.1(f) of the Equity
Definitions is hereby amended by the deletion of the parenthetical in clause (i)
thereof.
     
Consequences of Merger Events:
   
Merger Event:
 
Applicable; provided that if an event occurs that constitutes both a Merger
Event under Section 12.1(b) of the Equity Definitions and Additional Termination
Event as defined below in this Confirmation, GS&Co. may elect, in its
commercially reasonable judgment, whether the provisions of Section 12.2 of the
Equity Definitions or the provisions regarding Additional Termination Events
below will apply.
 
(a)           Share-for-Share: Modified Calculation Agent Adjustment
 
(b)           Share-for-Other: Cancellation and Payment (Calculation Agent
Determination)
 
(c)           Share-for-Combined: Cancellation and Payment (Calculation Agent
Determination); provided that GS&Co. may elect Component Adjustment.

 
 
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Consequences of Tender Offers:
   
Tender Offer:
 
Applicable; provided that if an event occurs that constitutes both a Tender
Offer under Section 12.1(d) of the Equity Definitions and Additional Termination
Event as described below in this Confirmation, then (i) if such event does not
result in Cancellation and Payment under Section 12.3 of the Equity Definitions,
then GS&Co. may elect, in its commercially reasonable judgment, whether the
provisions of Section 12.3 of the Equity Definitions or the provisions regarding
Additional Termination Events below will apply, and (ii) otherwise, the
provisions regarding Additional Termination Events below will apply.
 
(a) Share-for-Share: Modified Calculation Agent Adjustment
 
(b) Share-for-Other: Modified Calculation Agent Adjustment; provided that
Cancellation and Payment (Calculation Agent Determination) shall apply with
respect to such portion of the Other Consideration that consists of Cash
 
(c) Share-for-Combined: Modified Calculation Agent Adjustment; provided that
Cancellation and Payment (Calculation Agent Determination) shall apply with
respect to such portion of the Other Consideration that consists of Cash
     
Modified Calculation Agent Adjustment:
 
 
For greater certainty, the definition of “Modified Calculation Agent Adjustment”
of the Equity Definitions shall be amended (i) in Section 12.2(e) of the Equity
Definitions by adding the following italicized language after the stipulated
parenthetical provision: “(including adjustments to account for changes in
volatility, expected dividends, stock loan rate or liquidity relevant to the
Shares or to the Transaction) from the Announcement Date or the Determination
Date, as applicable,  to the Merger Date.”, (ii) in Section 12.3(d) of the
Equity Definitions by adding the following italicized language after the
stipulated parenthetical provision: “(including adjustments to account for
changes in volatility, expected dividends, stock loan rate or liquidity relevant
to the Shares or to the Transaction) from the Announcement Date or the
Determination Date, as applicable,  to the Tender Offer Date.”, and (iii) in
both Section 12.2(e) and Section 12.3(d) of the Equity Definitions by deleting
the phrase “expected dividends,” from such stipulated parenthetical provisions.

 
 
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Announcement Date:
 
 
The definition of “Announcement Date” in Section 12.1 of the Equity Definitions
shall be amended by (i) replacing the word “leads to the” in the third and the
fifth lines thereof with the words “, if completed, would lead to a”, and (ii)
replacing the words “voting shares” in the fifth line thereof with the word
“Shares”.
     
Announcement Event:
 
If an Announcement Event has occurred, the Calculation Agent shall have the
right to determine the economic effect of the Announcement Event on the
theoretical value of the Transaction (including without limitation any change in
volatility, stock loan rate or liquidity relevant to the Shares or to the
Transaction) (i) at a time that it deems appropriate, from the Announcement Date
to the date of such determination (the “Determination Date”), and (ii) on the
Valuation Date or on a date on which a payment amount is determined pursuant to
Sections 12.7 or 12.8 of the Equity Definitions, from the Announcement Date or
the Determination Date, as applicable, to the Valuation Date or the date on
which a payment amount is determined pursuant to Sections 12.7 or 12.8 of the
Equity Definitions. If any such economic effect is material, the Calculation
Agent will either (i) adjust the terms of the Transaction to reflect such
economic effect or (ii) terminate the Transaction, in which case the Determining
Party will determine the Cancellation Amount payable by one party to the other;
provided that the reference in Section 12.8(a) of the Equity Definitions to
“Extraordinary Event” shall be replaced for this purpose with a reference to
“Announcement Event.”  “Announcement Event” shall mean the occurrence of an
Announcement Date.
     
Settlement of Cancellation and Payment:
 
With respect to any Extraordinary Events hereunder, upon the occurrence of
Cancellation and Payment in whole or in part, the parties agree that the amount
to be paid, in accordance with the Equity Definitions, shall constitute a
Transaction Early Termination Amount, subject to satisfaction by the payment or
delivery of Shares or cash as set forth in the Early Termination section below.

 
 
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Nationalization, Insolvency or Delisting:
 
Cancellation and Payment (Calculation Agent Determination); provided that, in
addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it
will also constitute a Delisting if the Exchange is located in the United States
and the Shares are not immediately re-listed, re-traded or re-quoted on any of
the New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global
Select Market (or their respective successors); if the Shares are immediately
re-listed, re-traded or re-quoted on any such exchange or quotation system, such
exchange or quotation system shall thereafter be deemed to be the Exchange.
     
Determining Party:
 
GS&Co., acting in good faith and in a commercially reasonable manner
     
Additional Disruption Events:
   
Change in Law:
 
Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is
hereby amended (i) by replacing the phrase “the interpretation” in the third
line thereof with the phrase “, or public announcement of, the formal or
informal interpretation” and (ii) by replacing the word “Shares” where it
appears in clause (X) thereof with the words “Hedge Position”.
 
The parties agree that, for the avoidance of doubt, for purposes of Section
12.9(a)(ii) of the Equity Definitions, “any applicable law or regulation” shall
include the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010,
any rules and regulations promulgated thereunder and any similar law or
regulation, and the consequences specified in Section 12.9(b)(i) of the Equity
Definitions shall apply to any Change in Law arising from such act, rule or
regulation.
     
Failure to Deliver:
 
Not Applicable
     
Insolvency Filing:
 
Applicable
     
Hedging Disruption:
 
Applicable; provided that:
 
(i) Section 12.9(a)(v) of the Equity Definitions is hereby modified by inserting
the following two phrases at the end of such Section:
 
“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.”
 
(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”.
     
Increased Cost of Hedging:
 
Not Applicable

 
 
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Loss of Stock Borrow:
 
Applicable. Section 12.9(b)(iv) of the Equity Definitions is hereby amended by
deleting the text from and including “(A)” to and including “(B)” and by
deleting the words “in each case”.
     
Maximum Stock Loan Rate:
 
2.00%
     
Increased Cost of Stock Borrow:
 
Applicable; provided that it shall be a condition to Counterparty’s right to
make the election described in clause (C) of Section 12.9(b)(v) of the Equity
Definitions that on the date of such election, none of Counterparty, its
directors, executive officers, or any person controlling, or exercising
influence over, its decision to make such election is in possession of any
material non-public information with respect to Counterparty or the Shares; and
provided further that, if Counterparty timely makes the election described in
clause (A) or (B) of Section 12.9(b)(v) of the Equity Definitions, Counterparty
shall thereafter remain entitled, subject to the foregoing condition, to
terminate the Transaction pursuant to Section 12.9(b)(v)(C) of the Equity
Definitions upon ten Scheduled Trading Days’ notice to GS&Co. Section 12.9(b)(v)
of the Equity Definitions is hereby amended by deleting the text from and
including “(X)” to and including “(Y)”.
     
Initial Stock Loan Rate:
 
0.25%
     
Hedging Party:
 
GS&Co. or an affiliate of GS&Co. that is involved in the hedging of the
Transaction for all applicable Additional Disruption Events
     
Determining Party:
 
GS&Co. for all applicable Extraordinary Events
     
Non-Reliance:
 
Applicable
     
Agreements and Acknowledgments Regarding Hedging Activities:
 
Applicable
     
Additional Acknowledgments:
 
Applicable

 
 
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Other Provisions:
   
Additional Agreements:
 
If Counterparty would be obligated to pay cash to GS&Co. pursuant to the terms
of this Agreement for any reason without having had the right (other than
pursuant to this paragraph) to elect to deliver Shares in satisfaction of such
payment obligation, then Counterparty may elect to deliver to GS&Co. a number of
Shares (whether registered or unregistered) having a cash value equal to the
amount of such payment obligation. Such number of Shares to be delivered shall
be the number of Shares, determined by the Calculation Agent, sufficient for
GS&Co. to realize the cash equivalent of such payment obligation from proceeds
of the sale of such number of Shares over a reasonable period of time taking
into account any applicable discount (determined in a commercially reasonable
manner) to reflect any restrictions on transfer as well as the market value of
the Shares). Settlement relating to any delivery of Shares pursuant to this
paragraph shall occur within a reasonable period of time. The number of Shares
delivered pursuant to this paragraph shall not exceed the Maximum Deliverable
Share Amount and shall be subject to the provisions under “Early Termination”
hereof regarding Proceeds Amount and the provisions set forth in subsection (c)
under “Additional Agreements, Representations and Covenants of Counterparty,
Etc.” below.
     
Early Termination:
 
Notwithstanding any provision to the contrary, upon the designation of an Early
Termination Date or the occurrence of Cancellation and Payment in whole or in
part hereunder, Counterparty’s payment obligation in respect of the Transaction
(which shall, in the case of an Early Termination Date be determined in
accordance with Second Method and Loss (which shall be determined using
commercially reasonable procedures in order to produce a commercially reasonable
result)) (the “Transaction Early Termination Amount”) may, at the option of
Counterparty, be satisfied by the delivery of a number of Shares equal to the
Transaction Early Termination Amount divided by the Termination Price (“Early
Termination Stock Settlement”); provided, however, that Counterparty must notify
GS&Co. of its election of Early Termination Stock Settlement by the close of
business on the day that is two Exchange Business Days following the day that
the notice designating the Early Termination Date, or notice that an
Extraordinary Event has resulted in the cancellation or termination of the
Transaction in whole or in part, is effective. “Termination Price” means the
market value per Share on the Early Termination Date, as determined by the
Calculation Agent in a commercially reasonable manner taking into account any
applicable discount to reflect any restrictions on transfer.

 
 
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A number of Shares calculated as being due in respect of any Early Termination
Stock Settlement will be deliverable on the third Clearance System Business Day
following the date that notice specifying the number of Shares deliverable is
effective; provided that, if Counterparty is delivering Shares as a result of a
Merger Event, the Settlement Date for such delivery will be immediately prior to
the effective time of the Merger Event and the Shares will be deemed delivered
at such time such that GS&Co. will be a holder of the Shares prior to such
effective time. Section 6(d)(i) of the Agreement is hereby amended by adding the
following words after the word “paid” in the fifth line thereof: “or any
delivery is to be made, as applicable.”
         
On or prior to the Early Termination Date or date on which notice that an
Extraordinary Event has resulted in the cancellation or termination of the
Transaction in whole or in part is effective, as applicable, if Early
Termination Stock Settlement is elected and if so requested by GS&Co. upon
advice of counsel, Counterparty shall (subject to its right to make the election
described in the immediately succeeding paragraph) enter into a registration
rights agreement with GS&Co. in form and substance reasonably acceptable to
GS&Co. and Counterparty which agreement will contain among other things,
customary representations and warranties and indemnification, restrictions on
sales during “blackout dates” as provided for in the Registration Rights
Agreement and shall satisfy the conditions contained therein and Counterparty
shall file and diligently pursue to effectiveness a Registration Statement
pursuant to Rule 415 under the Securities Act. If and when such Registration
Statement shall have been declared effective by the Securities and Exchange
Commission, Counterparty shall have made available to GS&Co. such Prospectuses
as GS&Co. may reasonably request to comply with the applicable prospectus
delivery requirements for the resale by GS&Co. of such number of Shares as
GS&Co. shall specify (or, if greater, the number of Shares that Counterparty
shall specify). Such Registration Statement shall be effective and Prospectus
shall be current until the earliest of the date on which (i) all Shares
delivered by Counterparty in connection with an Early Termination Date have been
sold, (ii) GS&Co. has advised Counterparty that it no longer requires that such
Registration Statement be effective or (iii) all remaining Shares could be sold
by GS&Co. without registration pursuant to Rule 144 promulgated under the
Securities Act (the “Termination Registration Period”). It is understood that
the Registration Statement and Prospectus will cover a number of Shares equal to
the number of Shares plus the aggregate number of Shares (if any) reasonably
estimated by GS&Co. to be potentially deliverable by Counterparty in connection
with Early Termination Stock Settlement hereunder, but in no event exceeding the
Maximum Deliverable Share Amount. On each day during the Termination
Registration Period, Counterparty shall represent that each of its filings under
the Securities Act, the Exchange Act or other applicable securities laws that
are required to be filed have been filed and that, as of the respective dates
thereof and as of the date of this representation, they do not contain any
untrue statement of a material fact or omission of a material fact required to
be stated therein or necessary to make the statements made, in the light of the
circumstances under which they were made, not misleading.
         
If Counterparty elects not to deliver Shares subject to an effective
Registration Statement (or if some or all of the Shares delivered cannot be used
to close out stock loans in the shares of Counterparty entered into to establish
or maintain short positions by GS&Co. in connection with the Transaction without
a prospectus being required by applicable law to be delivered to such lender),
the provisions of sub-paragraphs (B) and (C) set forth above under “Conditions
to Net Physical Settlement” shall apply, mutatis mutandis, as if the Net
Physical Settlement Amount were the Transaction Early Termination Amount. In no
event shall Counterparty be required to deliver to GS&Co. a number of Shares
greater than the Maximum Deliverable Share Amount.

 
 
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Compliance With Securities Laws:
 
Counterparty represents and agrees that it has complied, and will comply, in
connection with the Transaction and all related or contemporaneous sales and
purchases of Shares, with the applicable provisions of the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder, including,
without limitation, Rule 10b-5 and 13e and Regulation M under the Exchange Act.
         
Each party acknowledges that the offer and sale of the Transaction to it is
intended to be exempt from registration under the Securities Act by virtue of
Section 4(2) thereof. Accordingly, each party represents and warrants to the
other party that (i) it has the financial ability to bear the economic risk of
its investment in the Transaction and is able to bear a total loss of its
investment, (ii) it is an “accredited investor” as that term is defined in
Regulation D as promulgated under the Securities Act and (iii) the disposition
of the Transaction is restricted under this Confirmation, the Securities Act and
state securities laws.
         
Counterparty further represents and warrants that:
         
(a) Counterparty is not entering into the Transaction to create actual or
apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress or otherwise manipulate the
price of the Shares (or any security convertible into or exchangeable for
Shares);
         
(b) Counterparty represents and acknowledges that as of the date hereof and
without limiting the generality of Section 13.1 of the Equity Definitions,
GS&Co. is not making any representations or warranties with respect to the
treatment of the Transaction under any accounting standards including ASC Topic
260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, ASC Topic 480,
Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging –
Contracts in Entity’s Own Equity (or any successor issue statements) or under
FASB’s Liabilities & Equity Project;
         
(c) Counterparty is not, and after giving effect to the Transaction contemplated
hereby, will not be, an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended;
         
(d) As of the Trade Date and each date on which a payment or delivery is made by
Counterparty hereunder, (i) the assets of Counterparty at their fair valuation
exceed the liabilities of Counterparty, including contingent liabilities; (ii)
the capital of Counterparty is adequate to conduct its business; and (iii)
Counterparty has the ability to pay its debts and other obligations as such
obligations mature and does not intend to, or believe that it will, incur debt
or other obligations beyond its ability to pay as such obligations mature.

 
 
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Account Details:
 
Account for payments to Counterparty:
   
To be advised.
         
Account for payments to GS&Co.:
   
Chase Manhattan Bank N.A., New York
   
ABA No. 021-000021
   
A/C Goldman, Sachs & Co. New York
   
A/C No. 930-1-011483
   
REF: Iconix Brand Group, Inc.
   
A/C at GS: 040703779
         
Account for delivery of Shares to GS&Co.:
   
To be advised.
     
Agreement Regarding Shares:
 
Counterparty agrees that, in respect of any Shares delivered to GS&Co., such
Shares shall be, upon such delivery, duly and validly authorized, issued and
outstanding, fully paid and non-assessable and subject to no adverse claims of
any other party. The issuance of such Shares does not and will not require the
consent, approval, authorization, registration or qualification of any
government authority, except such as shall have been obtained on or before the
delivery date of any Shares or as may be required in connection with any
Registration Statement filed with respect to any Shares.
     
Bankruptcy Rights:
 
In the event of Counterparty’s bankruptcy, GS&Co.’s rights in connection with
the Transaction shall not exceed those rights held by common shareholders. For
the avoidance of doubt, the parties acknowledge and agree that GS&Co.’s rights
with respect to any other claim arising from the Transaction prior to
Counterparty’s bankruptcy shall remain in full force and effect and shall not be
otherwise abridged or modified in connection herewith.
     
Netting and Set-Off:
 
 
Obligations under the Transaction shall not be netted, recouped or set off
(including pursuant to Section 6 of the Agreement) against any other obligations
of the parties, whether arising under the Agreement, the Transaction any other
agreement, applicable law or otherwise, and no other obligations of the parties
shall be netted, recouped or set off (including pursuant to Section 6 of the
Agreement) against obligations under the Transaction, whether arising under the
Agreement, the Transaction any other agreement, applicable law or otherwise, and
each party hereby waives any such right of setoff, netting or recoupment
provided that both parties agree that subparagraph (ii) of Section 2(c) of the
Agreement shall apply to the Transaction.
     
Right to Extend:
 
GS&Co. may postpone any potential Expiration Date or postpone or extend 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 Option Cash Settlement Amount or Net Physical Settlement
Amount (as applicable) for such Expiration Date), if GS&Co. determines, in its
reasonable discretion, that such postponement or extension is reasonably
necessary or appropriate (i) to preserve GS&Co.’s or its affiliate’s hedging or
hedge unwind activity hereunder in light of existing liquidity conditions in the
cash market or stock loan market; provided that any extension or postponement
resulting from such circumstances or conditions contemplated by this clause (i)
shall not result in the final Exercise Date for the Transaction occurring more
than seventy-five (75) Scheduled Trading Days following the final Exercise Date
contemplated hereunder, or (ii) to enable GS&Co. or its affiliate to effect
purchases or sale of Shares in connection with its hedging, hedge unwind or
settlement activity hereunder in a manner that would, if GS&Co. or its affiliate
were Issuer or an affiliated purchaser of Issuer, be in compliance with
applicable legal, regulatory or self-regulatory requirements, or with related
policies and procedures applicable to GS&Co. and/or such affiliate.

 
 
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Transfer:
 
Neither party may transfer its rights or delegate its obligations under the
Transaction without the prior written consent of the other party, except that
GS&Co., after payment in full of the Premium, may assign its rights and delegate
its obligations hereunder, in whole or in part, to any other person (an
“Assignee”) without the prior consent of the Counterparty, effective (the
“Transfer Effective Date”) upon delivery to Counterparty of an executed
acceptance and assumption by the Assignee (an “Assumption”) of the transferred
obligations of GS&Co. under the Transaction (the “Transferred  Obligations”).
     
Beneficial Ownership:
 
Notwithstanding anything to the contrary in the Agreement or this Confirmation,
in no event shall GS&Co. be entitled to receive, or shall be deemed to receive,
any Shares in connection with this Transaction if, immediately upon giving
effect to such receipt of such Shares, (i) Goldman’s Beneficial Ownership would
be equal to or greater than 9.0% of the outstanding Shares or (ii) GS&Co.,
Goldman Group (as defined below) or any person whose ownership position would be
aggregated with that of GS&Co. or Goldman Group (GS&Co., Goldman Group or any
such person, a “Goldman Person”) under Section 203 of the Delaware General
Corporation Law (the “DGCL Takeover Statute”) or any federal, state or local
laws, regulations or regulatory orders applicable to ownership of Shares
(“Applicable Laws”), owns, beneficially owns, constructively owns, controls,
holds the power to vote or otherwise meets a relevant definition of ownership in
excess of a number of Shares equal to (x) the number of Shares that would give
rise to reporting or registration obligations or other requirements (including
obtaining prior approval by a state or federal regulator) of a Goldman Person
under Applicable Laws (including, without limitation, “interested stockholder”
or “acquiring person” status under the DGCL Takeover Statute) and with respect
to which such requirements have not been met or the relevant approval has not
been received, in each case minus (y) 1% of the number of Shares outstanding on
the date of determination (each of clause (i) and (ii) above, an “Ownership
Limitation”). If any delivery owed to GS&Co. hereunder is not made, in whole or
in part, as a result of an Ownership Limitation, GS&Co.’s right to receive such
delivery shall not be extinguished and Issuer shall make such delivery as
promptly as practicable after, but in no event later than one Exchange Business
Day after, GS&Co. gives notice to Issuer that such delivery would not result in
any of such Ownership Limitations being breached.
 
“Goldman’s Beneficial Ownership” means the “beneficial ownership” (within the
meaning of Section 13 of the Exchange Act and the rules promulgated thereunder
(collectively, “Section 13”)) of Shares, without duplication, by GS&Co.,
together with any of its affiliates or other person subject to aggregation with
GS&Co.  under Section 13 for purposes of “beneficial ownership”, or by any
“group” (within the meaning of Section 13) of which GS&Co. is or may be deemed
to be a part (GS&Co. and any such affiliates, persons and groups, collectively,
“Goldman Group”) (or, to the extent that, as a result of a change in law,
regulation or interpretation after the date hereof, the equivalent calculation
under Section 16 of the Exchange Act and the rules and regulations thereunder
results in a higher number, such number).
 
Notwithstanding anything in the Agreement or this Confirmation to the contrary,
GS&Co. shall not become the record or beneficial owner, or otherwise have any
rights as a holder, of any Shares that GS&Co. (or such affiliate) is not
entitled to receive at any time pursuant to this paragraph, until such time as
such Shares are delivered pursuant to this paragraph.
 
Notwithstanding any other provision in this Confirmation to the contrary
requiring or allowing GS&Co. to purchase, sell, receive or deliver any Shares or
other securities to or from Counterparty, GS&Co. may designate any of its
affiliates to purchase, sell, receive or deliver such Shares or other securities
and otherwise to perform GS&Co.’s obligations in respect of the Transaction and
any such designee may assume such obligations.  GS&Co. shall be discharged of
its obligations to Counterparty solely to the extent of any such performance,
and not otherwise.

 
 
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Repurchase Notices:
 
Counterparty shall, on any day on which Counterparty effects any repurchase of
Shares, promptly give GS&Co. a written notice of such repurchase (a “Repurchase
Notice”) on such day if following such repurchase, the Warrant Equity Percentage
as determined on such day is (i) equal to or greater than 9% or (ii) greater by
0.5% than the Warrant Equity Percentage included in the immediately preceding
Repurchase Notice (or, in the case of the first such Repurchase Notice, greater
than the Warrant Equity Percentage as of the Trade Date).  The “Warrant Equity
Percentage” as of any day is the fraction (A) the numerator of which is the
product of (x) the sum of the Number of Warrants in the aggregate and the number
of Warrants in the aggregate underlying the OTC warrant transaction referencing
the Shares entered into by GS&Co. and Counterparty on May 17, 2011 and (y) the
Option Entitlement in respect of the Transaction and (B) the denominator of
which is the number of Shares outstanding on such day.  Counterparty agrees to
indemnify and hold harmless GS&Co. and its affiliates and their respective
officers, directors, employees, affiliates, advisors, agents and controlling
persons (each, an “Indemnified Person”) from and against any and all losses
(including losses relating to GS&Co.’s hedging activities as a consequence of
becoming, or of the risk of becoming, a Section 16 “insider”, including without
limitation, any forbearance from hedging activities or cessation of hedging
activities and any losses in connection therewith with respect to the
Transaction), claims, damages, judgments, liabilities and expenses (including
reasonable attorney’s fees), joint or several, which an Indemnified Person may
become subject to, as a result of Counterparty’s failure to provide GS&Co. with
a Repurchase Notice on the day and in the manner specified in this paragraph,
and to reimburse, within 30 days, 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 in respect of
the foregoing, 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 fees and expenses of such counsel related to such
proceeding.  Counterparty shall not be liable for any settlement of any
proceeding contemplated by this paragraph that is 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
contemplated by this paragraph that is 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 hereunder, 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 which 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. Notwithstanding anything in this paragraph,
Counterparty will not be liable to an Indemnified Person under this provision,
whether by indemnity or contribution, to the extent that any loss, claim,
damage, liability or expense is found in a final judgment by a court to have
resulted from that Indemnified Person’s gross negligence or willful misconduct.
     
Regulation:
 
GS&Co. is a member of the Securities Investor Protection Corporation (“SIPC”).

 
 
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Additional Agreements, Representations and Covenants of Counterparty, Etc.:
 
(a)  
Counterparty hereby represents and warrants to GS&Co., as of and on the Trade
Date, that:

 
       (1)  
it will not, and will not permit any person or entity subject to its control to,
bid for or purchase Shares except pursuant to transactions or arrangements which
have been approved by GS&Co. or an affiliate of GS&Co.;

 
       (2)  
each of Counterparty’s filings under the Securities Act, the Exchange Act, or
other applicable securities laws that are required to be filed have been filed
and that, as of the respective dates thereof and as of the date of this
representation, such filings when considered as a whole (with the more recent
such filings deemed to amend inconsistent statements contained in any earlier
such filings) do not contain any misstatement of a 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; and

 
      (3)  
Counterparty is not entering into the Transaction 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) or otherwise in violation of the Exchange
Act.

 
(b)  
No collateral shall be required by either party for any reason in connection
with the Transaction.

 
(c)  
The representations and warranties of Counterparty set forth in Section 1 of the
Purchase Agreement, dated as of May 17, 2011 (the “Purchase Agreement”), between
Counterparty, Barclays Capital Inc. and Goldman, Sachs & Co. (Barclays Capital
Inc. and Goldman, Sachs & Co., the “Initial Purchasers”) relating to the
issuance of USD 275,000,000 principal amount of 2.50% convertible senior
subordinated notes due 2016 and the additional USD 25,000,000 principal amount
of 2.50% convertible senior subordinated notes due 2016 issued pursuant to the
over-allotment option exercised by the Initial Purchasers on the date hereof
pursuant to Section 2(b) of the Purchase Agreement (together, the “Convertible
Notes”), are true and correct and are hereby deemed to be repeated to GS&Co. as
if set forth herein.

 
(d)  
Counterparty understands no obligations of GS&Co. to it hereunder will be
entitled to the benefit of deposit insurance and that such obligations will not
be guaranteed by any governmental agency.

(e)  
Counterparty represents and warrants that it has received, read and understands
the OTC Options Risk Disclosure Statement and a copy of the most recent
disclosure pamphlet prepared by The Options Clearing Corporation entitled
“Characteristics and Risks of Standardized Options”.

(f)  
Each party acknowledges and agrees to be bound by the Conduct Rules of the
Financial Industry Regulatory Authority, Inc. applicable to transactions in
options, and further agrees not to violate the position and exercise limits set
forth therein.

ISDA Master Agreement:
 
With respect to the Agreement, GS&Co. and Counterparty each agree as follows:
 
“Specified Entity” means in relation to GS&Co. and in relation to Counterparty
for purposes of the Transaction: Not applicable.
 
The definition of “Specified Transaction” in Section 14 of the Agreement is
hereby amended by adding the text “commodity transaction, credit derivative
transaction or futures transaction” after the words “foreign exchange
transaction” in the sixth line thereof.  “Specified Transaction” shall exclude
any default under a Specified Transaction if caused solely by the general
unavailability of the currency in which payments under such Specified
Transaction are denominated due to exchange controls or other governmental
action.
 
 
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The “Cross Default” provisions of Section 5(a)(vi) of the Agreement will not
apply to GS&Co. and will not apply to Counterparty.
 
The “Credit Event Upon Merger” provisions of Section 5(b)(iv) of the Agreement
will not apply to GS&Co. and will not apply to Counterparty.
 
Additional Termination Event.
 
Without limiting the generality of the definition of any Extraordinary Event
hereunder, the occurrence of any of the following shall constitute an Additional
Termination Event with respect to which the Transaction shall be the sole
Affected Transaction and Issuer shall be the sole Affected Party; provided that
with respect to any Additional Termination Event, GS&Co. may choose to treat
part of the Transaction as the sole Affected Transaction, and, upon the
termination of the Affected Transaction, a Transaction with terms identical to
those set forth herein except with a Number of Warrants equal to the unaffected
number of Warrants shall be treated for all purposes as the Transaction, which
shall remain in full force and effect:
 
(i) within the period commencing on the Trade Date and ending on the first
anniversary of the Premium Payment Date, Buyer reasonably determines that it is
advisable to terminate a portion of the Transaction so that Buyer’s related
hedging activities will comply with applicable securities laws, rules or
regulations;
 
(ii) the sale, lease, transfer, conveyance or other disposition (other than by
way of merger or consolidation), in one or a series of related transactions, of
all or substantially all of the properties and assets of the Issuer and its
subsidiaries taken as a whole to another person other than to one or more of the
Issuer’s wholly-owned subsidiaries;
 
(iii) the adoption of a plan relating to the liquidation or dissolution of the
Issuer;
 
(iv) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any person becomes the
beneficial owner, directly or indirectly, of more than 50% of the voting stock
of the Issuer (measured by voting power rather than the number of Shares),
except that a person shall be deemed to have “beneficial ownership” of all
securities that such person has the right to acquire, whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition;
 
(v) the first day on which a majority of the members of the board of directors
of the Issuer are not continuing directors; or
 
(vi) the Issuer consolidates with, or merges with or into, any person, or any
person consolidates with, or merges with or into, the Issuer, in any such event
pursuant to a transaction in which any of the voting stock of the Issuer is
converted into or exchanged for cash, securities or other property; provided,
however that a transaction as a result of which the holders of the voting stock
of the Issuer immediately prior to such transaction will own, directly or
indirectly, more than 50% of all voting stock of the continuing or surviving
corporation or limited liability company or transferee or a direct or indirect
parent thereof immediately after such transaction shall not constitute an
Additional Termination Event.
 
 
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Notwithstanding anything to the contrary set forth herein, an event described in
clauses (ii) through (v) above will not constitute an Additional Termination
Event if 90% of the consideration for the Shares (excluding cash payments for
fractional shares and cash payments made in respect of dissenters’ appraisal
rights) in the transaction or transactions otherwise constituting an Additional
Termination Event consists of shares of common stock or American Depositary
Shares representing shares of common stock, traded on a U.S. national securities
exchange, or which will be so traded or quoted when issued or exchanged in
connection with such event; provided that, with respect to an entity organized
under the laws of a jurisdiction outside the United States, such entity has a
worldwide total market capitalization of its equity securities of at least three
times the market capitalization of the Issuer before giving effect to the
consolidation or merger.
 
For purposes of the foregoing, “beneficial ownership” shall be determined in
accordance with Rule 13d-3 promulgated by the Securities and Exchange Commission
under the Exchange Act. The term “person” includes any syndicate or group which
would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act. The
term “continuing director” means, as of any date of determination, any member of
the board of directors of the Issuer who (i) was a member of such board of
directors on the date hereof or (ii) was nominated for election or elected to
such board of directors with the approval of a majority of the continuing
directors who were members of such board of directors at the time of such
nomination or election. The term “voting stock” of a person means all shares of
capital stock of such person entitled to vote in elections of the board of
directors, managers or trustees of such person.
 
The “Automatic Early Termination” provision of Section 6(a) of the Agreement
will not apply to GS&Co. or to Counterparty.
 
Payments on Early Termination. For the purpose of Section 6(e) of the Agreement:
(i) Loss (which shall be determined using commercially reasonable procedures in
order to produce a commercially reasonable result) shall apply; and (ii) the
Second Method shall apply.
 
“Termination Currency” means USD.
 
Tax Representations.
 
(I) 
Payer Representations. For the purpose of Section 3(e) of the Agreement, each
party represents to the other party that it is not required by any applicable
law, as modified by the practice of any relevant governmental revenue authority,
of any Relevant Jurisdiction to make any deduction or withholding for or on
account of any Tax from any payment (other than interest under Section 2(e),
6(d)(ii), or 6(e) of the Agreement) to be made by it to the other party under
the Agreement. In making this representation, each party may rely on (i) the
accuracy of any representations made by the other party pursuant to Section 3(f)
of the Agreement, (ii) the satisfaction of the agreement contained in Sections
4(a)(i) and 4(a)(iii) of the Agreement, and the accuracy and effectiveness of
any document provided by the other party pursuant to Sections 4(a)(i) and
4(a)(iii) of the Agreement, and (iii) the satisfaction of the agreement of the
other party contained in Section 4(d) of the Agreement; provided that it will
not be a breach of this representation where reliance is placed on clause (ii)
above and the other party does not deliver a form or document under Section
4(a)(iii) of the Agreement by reason of material prejudice to its legal or
commercial position.  For purposes of this representation, “any Tax from any
payment” shall not include any tax imposed by sections 1471 through 1474 of the
United States Internal Revenue Code (the “Code”).

 
 
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(II)  
Payee Representations. For the purpose of Section 3(f) of the Agreement, each
party makes the following representations to the other party:

 
(i)  
GS&Co. represents that it is a New York limited partnership that is treated as a
corporation for U.S. federal income tax purposes.

 
(ii)  
Counterparty represents that it is a corporation incorporated in Delaware.

 
Delivery Requirements. For the purpose of Sections 4(a)(i) and (ii) of the
Agreement, each party agrees to deliver the following documents:
 
(a)  
Tax forms, documents or certificates to be delivered are:

 
GS&Co. agrees to complete (accurately and in a manner reasonably satisfactory to
Counterparty), execute, and deliver to Counterparty, United States Internal
Revenue Service Form W-9, or any successor of such form(s): (i) before the first
payment date under this agreement; (ii) promptly upon reasonable demand by
Counterparty; and (iii) promptly upon learning that any such form(s) previously
provided by GS&Co. has become obsolete or incorrect.
 
Counterparty agrees to complete (accurately and in a manner reasonably
satisfactory to GS&Co.), execute, and deliver to GS&Co., United States Internal
Revenue Service Form W-9, or any successor of such form(s): (i) before the first
payment date under this agreement; (ii) promptly upon reasonable demand by
GS&Co.; and (iii) promptly upon learning that any such form(s) previously
provided by Counterparty has become obsolete or incorrect.
 
(b)  
Other documents to be delivered:

 
Party Required to Deliver Document
 
Document Required to be Delivered
 
When Required
 
Covered by
Section 3(d)
Representation
Counterparty
 
Evidence of the authority and true signatures of each official or representative
signing this Confirmation
 
Upon or before execution and delivery of this Confirmation
 
Yes
             
Counterparty
 
Certified copy of the resolution of the Board of Directors or equivalent
document authorizing the execution and delivery of this Confirmation and such
other certificate or certificates as GS&Co. shall reasonably request
 
Upon or before execution and delivery of this Confirmation
 
Yes

 
 
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Addresses for Notices:
 
Address for notices or communications to GS&Co. for all purposes:
 
Goldman, Sachs & Co.
Attn: Michael Voris
Equity Capital Markets
200 West Street,
New York, NY 10282
Telephone No.: 212-902-4895
Facsimile No.:  212-291-5027
Email: vorism@am.ibd.gs.com

Address for notices or communications to Counterparty for all purposes:
 

  Address:   1450 Broadway      
New York, NY 10018
            Attention:  
Chief Executive Officer
    Facsimile No.:
212-391-0127
    Telephone No.:
212-730-0030
 

 
In addition, in the case of notices or communications relating to Section 5, 6,
11 or 13 of the Agreement, a second copy of any such notice or communication
shall be addressed to the attention of Counterparty’ General Counsel as follows:
 
 

  Address: 1450 Broadway       New York, NY 10018             Attention: General
Counsel     Facsimile No.: 212-391-0127     Telephone No.: 212-819-2089  

                              
 
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Process Agent: For the purpose of Section 13(c) of the Agreement: GS&Co. does
not appoint a Process Agent.
 
Counterparty does not appoint a Process Agent.
 
Multibranch Party. For the purpose of Section 10(c) of the Agreement: Neither
GS&Co. nor Counterparty is a Multibranch Party.
 
Calculation Agent. “Calculation Agent” means GS&Co.; provided that all
calculations and determinations to be made hereunder or in connection herewith
by the Calculation Agent shall be made in good faith and in a commercially
reasonable manner.
 
Credit Support Document.
 
With respect to GS&Co.: The General Guarantee Agreement dated January 30, 2006
made by The Goldman Sachs Group, Inc. (“GS Group”) in favor of each person to
whom GS&Co. may owe any Obligations (as defined in the General Guarantee
Agreement) and filed as Exhibit 10.45 to GS Group’s Form 10-K for the fiscal
year ended November 25, 2005 and any successor guarantee by GS Group in favor of
each person to whom GS&Co. may owe any Obligations (as defined in the General
Guarantee Agreement).
 
With respect to Counterparty: Not Applicable
 
Credit Support Provider.
 
With respect to GS&Co.: The Goldman Sachs Group, Inc.
 
With respect to Counterparty: Not Applicable.
 
Governing Law. This Confirmation will be governed by, and construed in
accordance with, the laws of the State of New York.
 
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.
 
Netting of Payments. The provisions of Section 2(c) of the Agreement shall not
be applicable to the Transaction.
 
 
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Basic Representations. Section 3(a) of the Agreement is hereby amended by the
deletion of “and” at the end of Section 3(a)(iv); the substitution of a
semicolon for the period at the end of Section 3(a)(v) and the addition of
Section 3(a)(vi), as follows:
 
“Eligible Contract Participant; Line of Business. Each party agrees and
represents that it is an “eligible contract participant” as defined in Section
1a(12) of the U.S. Commodity Exchange Act, as amended (the “CEA”), this
Agreement and the Transaction thereunder are subject to individual negotiation
by the parties and have not been executed or traded on a “trading facility” as
defined in Section 1a(34) of the CEA, and it has entered into this Confirmation
and the Transaction in connection with its business or a line of business
(including financial intermediation), or the financing of its business.”
 
Acknowledgements:
 
(a)  
The parties acknowledge and agree that there are no other representations,
agreements or other undertakings of the parties in relation to the Transaction,
except as set forth in this Confirmation.

 
(b)  
Each of Counterparty and GS&Co. agrees and acknowledges that GS&Co. is a
“financial institution,” “swap participant” and “financial participant” within
the meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11 of the United
States Code (the “Bankruptcy Code”).  The parties hereto agree and acknowledge
that they intend for (A) this Confirmation to be (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” 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,” “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 GS&Co. is entitled
to the protections afforded by, among other sections, Sections 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.

 
(c)  
The parties acknowledge and agree that in the event of an Early Termination Date
as a result of an Event of Default that is within Counterparty’s control, the
amount payable under the Agreement will be a cash amount calculated as described
therein and that any delivery specified in the Transaction will no longer be
required.

 
 
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Amendment of Section 6(d)(ii). Section 6(d)(ii) of the Agreement is modified by
deleting the words “on the day” in the second line thereof and substituting
therefor “on the day that is three Local Business Days after the day”. Section
6(d)(ii) is further modified by deleting the words “two Local Business Days” in
the fourth line thereof and substituting therefor “three Local Business Days.”
 
Amendment of Definition of Reference Market-Makers. The definition of “Reference
Market-Makers” in Section 14 of the Agreement is hereby amended by adding in
clause (a) after the word “credit” and before the word “and” the words “or to
enter into transactions similar in nature to the Transactions.”
 
Consent to Recording. Each party consents to the recording of the telephone
conversations of trading and marketing personnel of the parties and their
Affiliates in connection with this Confirmation. To the extent that one party
records telephone conversations (the “Recording Party”) and the other party does
not (the “Non-Recording Party”), the Recording Party shall in the event of any
dispute, make a complete and unedited copy of such party’s tape of the entire
day’s conversations with the Non-Recording Party’s personnel available to the
Non-Recording Party. The Recording Party’s tapes may be used by either party in
any forum in which a dispute is sought to be resolved and the Recording Party
will retain tapes for a consistent period of time in accordance with the
Recording Party’s policy unless one party notifies the other that a particular
transaction is under review and warrants further retention.
 
Disclosure. Each party hereby acknowledges and agrees that GS&Co. has authorized
Counterparty to disclose the Transaction and any related hedging transaction
between the parties if and to the extent that Counterparty reasonably determines
(after consultation with GS&Co., to the extent permissible and practicable) that
such disclosure is required by law or by the rules of the New York Stock
Exchange or any securities exchange. Notwithstanding the foregoing, effective
from the date of commencement of discussions concerning the Transaction,
Counterparty and each of its employees, representatives, or other agents may
disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the Transaction and all materials of any kind
(including opinions or other tax analyses) that are provided to Counterparty
relating to such tax treatment and tax structure.
 
Severability. If any term, provision, covenant or condition of this
Confirmation, or the application thereof to any party or circumstance, shall be
held to be invalid or unenforceable in whole or in part for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Confirmation had been executed with the invalid
or unenforceable provision eliminated, so long as this Confirmation as so
modified continues to express, without material change, the original intentions
of the parties as to the subject matter of this Confirmation and the deletion of
such portion of this Confirmation will not substantially impair the respective
benefits or expectations of parties to this Agreement; provided, however, that
this severability provision shall not be applicable if any provision of Section
2, 5, 6 or 13 of the Agreement (or any definition or provision in Section 14 to
the extent that it relates to, or is used in or in connection with any such
Section) shall be so held to be invalid or unenforceable.
 
Illegality. The parties agree that for the avoidance of doubt, for purposes of
Section 5(b)(i) of the Agreement, “any applicable law” shall include the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, any rules and
regulations promulgated thereunder and any similar law or regulation, without
regard to Section 739 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 or any similar legal certainty provision in any
legislation enacted, or rule or regulation promulgated, on or after the Trade
Date, and the consequences specified in the Agreement, including without
limitation, the consequences specified in Section 6 of the Agreement, shall
apply to any Illegality arising from any such act, rule or regulation.
 
 
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Affected Parties. For purposes of Section 6(e) of the Agreement, each party
shall be deemed to be an Affected Party in connection with Illegality and any
Tax Event.
 
Indemnifiable Tax.  For purposes of this Agreement, “Indemnifiable Tax” shall
not include any Tax imposed pursuant to sections 1471 through 1474 of the Code.
 
Counterparts.  This Confirmation may be executed in one or more counterparts,
each of which shall be deemed an original and all of which taken together shall
constitute a single agreement.
 
[Signatures follow on separate page]

 
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Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
 

 
Very truly yours,
         
GOLDMAN, SACHS & CO.
         
 
By:  
/s/ Jonathan Lipnick       
Name: Jonathan Lipnick
     
Title: Vice President
         

 
Confirmed as of the date first above written:
 

ICONIX BRAND GROUP, INC.                     By: 
/s/ Warren Clamen  
   
 
   
Name: Warren Clamen
   
 
   
Title: Executive Vice President and Chief Financial Officer
   
 
 

 
 
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