Exhibit 10.2

February 6, 2007

To:                                                                             
Conceptus, Inc.
331 East Evelyn Avenue
Mountain View, California  94041
Attn:  Chief Financial Officer
Telephone:  (650) 962-4000
Facsimile:  (650) 962-5200

From:                                                                  Societe
Generale

Tour Societe Generale

17 Cours Valmy

92987 Paris La-Defense cedex

France

Attn: Candice Berguin

          Documentation Department

Telephone:  + 33 1 58 98 05 16

Facsimile:   +33 1 46 92 46 70

Re:                                                                            
Convertible Bond Hedge Transaction
(Societe Generale Reference Number: 186829494)

Ladies and Gentlemen:

The purpose of this communication (this “Confirmation”) is to set forth the
terms and conditions of the above-referenced transaction entered into on the
Trade Date specified below (the “Transaction”) between Societe General
(“Dealer”) represented by SG Americas Securities, LLC (“Agent”) as its agent,
and Conceptus, Inc. (“Counterparty”).  This communication constitutes a
“Confirmation” as referred to in the ISDA Master Agreement specified below.

1.             THIS CONFIRMATION IS SUBJECT TO, AND INCORPORATES, THE
DEFINITIONS AND PROVISIONS OF THE 2000 ISDA DEFINITIONS (INCLUDING THE ANNEX
THERETO) (THE “2000 DEFINITIONS”) AND THE DEFINITIONS AND PROVISIONS OF THE 2002
ISDA EQUITY DERIVATIVES DEFINITIONS (THE “EQUITY DEFINITIONS”, AND TOGETHER WITH
THE 2000 DEFINITIONS, THE “DEFINITIONS”), IN EACH CASE AS PUBLISHED BY THE
INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC. (“ISDA”).  IN THE EVENT OF
ANY INCONSISTENCY BETWEEN THE 2000 DEFINITIONS AND THE EQUITY DEFINITIONS, THE
EQUITY DEFINITIONS WILL GOVERN.  CERTAIN DEFINED TERMS USED HEREIN HAVE THE
MEANINGS ASSIGNED TO THEM IN THE INDENTURE TO BE DATED AS OF FEBRUARY 12, 2007
(THE “BASE INDENTURE”) BETWEEN COUNTERPARTY AND WELLS FARGO BANK, N.A., AS
TRUSTEE (THE “TRUSTEE”), AS SUPPLEMENTED BY A FIRST SUPPLEMENTAL INDENTURE
THERETO TO BE DATED AS OF FEBRUARY 12, 2007 (THE “SUPPLEMENTAL INDENTURE” AND,
TOGETHER WITH THE BASE INDENTURE, THE “INDENTURE”), RELATING TO THE
COUNTERPARTY’S USD 75,000,000 PRINCIPAL AMOUNT OF 2.25% CONVERTIBLE SENIOR NOTES
DUE 2027 (THE “CONVERTIBLE NOTES”).  IN THE EVENT OF ANY INCONSISTENCY BETWEEN
THE TERMS DEFINED IN THE INDENTURE AND THIS CONFIRMATION, THIS CONFIRMATION
SHALL GOVERN.  IF ANY RELEVANT SECTIONS OF THE INDENTURE REFERRED TO HEREIN ARE
CHANGED, ADDED OR RENUMBERED FOLLOWING EXECUTION OF THIS CONFIRMATION, THE
PARTIES WILL AMEND THIS CONFIRMATION IN GOOD FAITH TO PRESERVE THE ECONOMIC
INTENT OF THE PARTIES.

Each party is hereby advised, and each such party acknowledges, that the other
party has engaged in, or refrained from engaging in, substantial financial
transactions and has taken other material actions in reliance upon the parties’
entry into the Transaction to which this Confirmation relates on the terms and
conditions set forth below.

This Confirmation evidences a complete and binding agreement between Dealer and
Counterparty as to the terms of the Transaction to which this Confirmation
relates.  This Confirmation shall be subject to an agreement (the “Agreement”)
in the form of the 2002 ISDA Master Agreement (the “ISDA Form”) as if Dealer and
Counterparty had executed an agreement in such form (without any Schedule but
with the elections set forth in this Confirmation).  For the avoidance of doubt,
the Transaction shall be the only transaction under the Agreement.

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All provisions contained in, or incorporated by reference to, the Agreement will
govern this Confirmation except as expressly modified herein.  In the event of
any inconsistency between this Confirmation and either the Definitions or the
Agreement, this Confirmation shall govern.

2.             THE TRANSACTION CONSTITUTES A SHARE OPTION TRANSACTION FOR
PURPOSES OF THE EQUITY DEFINITIONS.  THE TERMS OF THE PARTICULAR TRANSACTION TO
WHICH THIS CONFIRMATION RELATES ARE AS FOLLOWS:

General Terms:

Trade Date:

 

February 6, 2007

 

 

 

Effective Date:

 

February 12, 2007, subject to Section 8(m)

 

 

 

Option Style:

 

Modified American, as described under “Procedures for Exercise” below.

 

 

 

Option Type:

 

Call

 

 

 

Seller:

 

Dealer

 

 

 

Buyer:

 

Counterparty

 

 

 

Shares:

 

The Common Stock of Counterparty, par value USD 0.003 per share (Ticker Symbol:
“CPTS”).

 

 

 

Number of Options:

 

The number of Convertible Notes in denominations of USD1,000 principal amount
issued by Counterparty on the closing date for the initial issuance of the
Convertible Notes. For the avoidance of doubt, the Number of Options outstanding
shall be reduced by each exercise of Options hereunder.

 

 

 

Option Entitlement:

 

As of any date, a number of Shares per Option equal to the Conversion Rate (as
defined in the Indenture, but without regard to any election by Counterparty to
adjust the Conversion Rate and the conversion obligation pursuant to Section
10.05(f) or Section 10.08 of the Supplemental Indenture).

 

 

 

Strike Price:

 

As of any date, an amount in USD, rounded to the nearest cent (with 0.5 cents
being rounded upwards), equal to USD1,000 divided by the Option Entitlement.

 

 

 

Applicable Percentage:

 

13.3333%

 

 

 

Number of Shares:

 

The product of the Number of Options and the Option Entitlement and the
Applicable Percentage.

 

 

 

Premium:

 

USD2,246,000 (Premium per Option USD224.60)

 

 

 

Premium Payment Date:

 

The Effective Date

 

 

 

Exchange:

 

NASDAQ Global Market

 

 

 

Related Exchange:

 

All Exchanges

 

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Procedures for Exercise:

 

 

 

 

 

Potential Exercise Dates:

 

Each Conversion Date.

 

 

 

Conversion Date:

 

Each “Conversion Date”, as defined in the Supplemental Indenture, of Convertible
Notes (such Convertible Notes surrendered for conversion, the “Relevant
Convertible Notes” for such Conversion Date) occurring on or prior to the
Expiration Date.

 

 

 

 

 

If the principal amount of Relevant Convertible Notes for any Conversion Date is
less than the aggregate principal amount of Convertible Notes then outstanding,
then the terms of the Transaction shall continue to apply, subject to the
provisions of this Confirmation, with respect to the remaining outstanding
principal amount of the Convertible Notes.

 

 

 

Required Exercise on

 

 

Conversion Dates:

 

On each Conversion Date for Relevant Convertible Notes, a number of Options
equal to the number of Relevant Convertible Notes in denominations of USD1,000
principal amount submitted for conversion on such Conversion Date in accordance
with the terms of the Indenture shall be automatically exercised, subject to
“Notice of Exercise” below.

 

 

 

Exercise Period:

 

The period from and excluding the Trade Date to and including the Expiration
Date.

 

 

 

Expiration Date:

 

The earlier of (x) last day on which any Convertible Notes remain outstanding
and (y) February 15, 2012.

 

 

 

Multiple Exercise:

 

Applicable, as provided above under “Required Exercise on Conversion Dates”.

 

 

 

Minimum Number of Options:

 

1

 

 

 

Maximum Number of Options:

 

Number of Options

 

 

 

Integral Multiple:

 

Not Applicable

 

 

 

Automatic Exercise:

 

As provided above under “Required Exercise on Conversion Dates”.

 

 

 

Notice of Exercise:

 

Notwithstanding anything to the contrary in the Equity Definitions, in order to
exercise any Options, Counterparty or the Trustee must notify Dealer in writing
prior to 5:00 PM, New York City time, on the Exchange Business Day prior to the
first Trading Day (as such term is defined in the Indenture) of the “Cash
Settlement Averaging Period”, as defined in the Indenture, relating to the
Relevant Convertible Notes converted on the Conversion Date relating to the
relevant Exercise Date (the “Notice Deadline”) of (i) the number of Options
being exercised on such Exercise Date, (ii) the scheduled settlement date under
the Indenture for the Relevant

 

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Convertible Notes converted on the Conversion Date corresponding to such
Exercise Date, (iii) the number, if any, of such Options that correspond to a
conversion of Convertible Notes in connection with a Make-Whole Fundamental
Change (as such term is defined in the Indenture) pursuant to Section
10.01(A)(v)(a) of the Indenture and (iv) the number of additional Shares to be
delivered as Make-Whole Consideration (as such term is defined in Section 10.14
of the Indenture), if any, per Convertible Note deliverable with respect to any
such Convertible Notes pursuant to Section 10.14 of the Indenture; provided
that, notwithstanding the foregoing, such notice (and the related exercise of
Options) shall be effective if given after the Notice Deadline, but prior to
5:00 PM New York City time, on the fifth Exchange Business Day of such “Cash
Settlement Averaging Period”, in which event the Calculation Agent shall have
the right to adjust the Delivery Obligation as appropriate to reflect the
additional costs (including, but not limited to, hedging mismatches and market
losses) and expenses incurred by Dealer in connection with its hedging
activities (including the unwinding of any hedge position) as a result of Dealer
not having received such notice prior to the Notice Deadline.

 

 

 

Dealer’s Telephone Number

 

 

and Telex and/or Facsimile Number

 

 

and Contact Details for purpose of

 

 

Giving Notice:

 

To:  Societe Generale

 

 

Tour Societe Generale

 

 

17 Cours Valmy

 

 

92987 Paris La-Defense cedex

 

 

France

 

 

Attn:

Candice Berguin

 

 

 

Documentation Department

 

 

Telephone:  + 33 1 58 98 05 16

 

 

Facsimile:   + 33 1 46 92 46 70

 

 

 

Settlement Terms:

 

 

 

 

 

Settlement Date:

 

In respect of an Exercise Date occurring on a Conversion Date, the settlement
date for the Shares to be delivered in respect of the Relevant Convertible Notes
under the terms of the Indenture; provided that the Settlement Date will not be
prior to the later of (i) the date one Settlement Cycle following the final day
of the “Cash Settlement Averaging Period”, as defined in the Indenture, or (ii)
the Exchange Business Day immediately following the date on which Counterparty
gives notice to Dealer of such Settlement Date prior to 5:00 PM, New York City
time.

 

 

 

Delivery Obligation:

 

In lieu of the obligations set forth in Sections 8.1 and 9.1 of the Equity
Definitions, and subject to “Notice of Exercise” above, in respect of an
Exercise Date occurring on a Conversion Date, Dealer will deliver to
Counterparty, on the related Settlement Date, the product (x) of the Applicable
Percentage and (y) a number of Shares equal to the aggregate number of Shares
and cash in lieu of fractional Shares that Counterparty is obligated to deliver
to the holder(s) of the

 

4

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Relevant Convertible Notes converted on such Conversion Date pursuant to Section
10.02(A)(ii) of the Supplemental Indenture (the “Convertible Obligation”);
provided that, if the Relevant Convertible Notes are being converted in
connection with any Make-Whole Fundamental Change (as defined in the Indenture),
(a) the Calculation Agent shall determine an amount that would be payable by
Dealer to Counterparty pursuant to Section 6(e)(ii)(1) of the Agreement (for
purposes of such determination, the Calculation Agent shall not be taking into
account the amount deliverable to the holder(s) of the Relevant Convertible
Notes pursuant to Section 10.14 of the Indenture) if (x) the Number of Options
were equal to the product of the Applicable Percentage and the number of the
Relevant Convertible Notes and (y) the Make-Whole Fundamental Change were an
Additional Termination Event occurring on the effective date for the Make-Whole
Fundamental Change with Counterparty as the sole Affected Party (the “Fair Value
Amount”), and (b) to the extent that a number of additional Shares that
Counterparty is obligated to deliver to holder(s) of the Relevant Convertible
Notes as Make-Whole Consideration as a result of any adjustments to the
Conversion Rate pursuant to Section 10.14 of the Indenture in respect of such
Make-Whole Fundamental Change exceeds the number of Shares equal to the Fair
Value Amount (such number of Shares to be determined by the Calculation Agent
based on the daily VWAP of the Shares on the effective date of the Make-Whole
Fundamental Change), then the “Delivery Obligation” shall be determined
excluding any such excess Shares. To the extent that Shares are exchanged for,
converted into, acquired for or constitute solely the right to receive cash as a
result of such Make-Whole Fundamental Change, the Delivery Obligation may be
settled with cash in lieu of Shares, as reasonably determined by the Calculation
Agent.

 

 

 

Notice of Delivery Obligation:

 

No later than the Exchange Business Day immediately following the last day of
the “Cash Settlement Averaging Period”, as defined in the Indenture,
Counterparty shall give Dealer notice of the final number of Shares comprising
the Convertible Obligation (it being understood, for the avoidance of doubt,
that the requirement of Counterparty to deliver such notice shall not limit
Counterparty’s obligations with respect to Notice of Exercise, as set forth
above, in any way).

 

 

 

Other Applicable Provisions:

 

To the extent Dealer is obligated to deliver Shares hereunder, the provisions of
Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be
applicable, except that all references in such provisions to
“Physically-Settled” shall be read as references to “Net Share Settled”; and
provided that the Representation and Agreement contained in Section 9.11 of the
Equity Definitions shall be modified by excluding any representations therein
relating to restrictions, obligations, limitations or requirements under
applicable securities laws as a result of the fact that “Buyer” is the issuer of
the Shares.

 

5

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Restricted Certificated
Shares:                                                                               
Notwithstanding anything to the contrary in the Equity Definitions, Dealer may,
in whole or in part, deliver Shares in certificated form representing the Number
of Shares to be Delivered to Counterparty in lieu of delivery through the
Clearance System.

Adjustments:

Method of
Adjustment:                                                                                                                 
Notwithstanding Section 11.2 of the Equity Definitions, upon the occurrence of
any event or condition set forth in Section 10.05(a), Section 10.05(b), Section
10.05(c) or Section 10.05(d) of the Supplemental Indenture, the Calculation
Agent shall make the corresponding adjustment in respect of any one or more of
the Number of Options, the Option Entitlement and any other variable relevant to
the exercise, settlement or payment of the Transaction, to the extent an
analogous adjustment is made under the Indenture.

Extraordinary Events:

Merger
Events:                                                                                                                                                             
Notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event”
means the occurrence of any event or condition set forth in clause (i), clause
(ii) or clause (iii) of the first paragraph Section 10.11 of the Supplemental
Indenture.

Tender
Offer:                                                                                                                                                                        
Applicable. Notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender
Offer” means the occurrence of any event or condition set forth in Section
10.05(e) of the Supplemental Indenture.

Consequences of Merger Events and

Tender
Offers:                                                                                                                                                                  
Notwithstanding Sections 12.2 and 12.3 of the Equity Definitions, upon the
occurrence of a Merger Event or Tender Offer, the Calculation Agent shall make
the corresponding adjustment in respect of any adjustment under the Indenture to
any one or more of the nature of the Shares, the Number of Options, the Option
Entitlement and any other variable relevant to the exercise, settlement or
payment for the Transaction, to the extent an analogous adjustment is made under
the Indenture.

Nationalization, Insolvency

or
Delisting:                                                                                                                                                                              
Cancellation and Payment (Calculation Agent Determination); provided that in
addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it
will also constitute a Delisting if the Exchange is located in the United States
and the Shares are not immediately re-listed, re-traded or re-quoted on any of
the New York Stock Exchange, the American Stock Exchange or the NASDAQ Global
Market (or their respective successors); if the Shares are immediately
re-listed, re-traded or re-quoted on any such exchange or quotation system, such
exchange or quotation system shall thereafter be deemed to be the Exchange.

6

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Additional Disruption Events:

 

 

 

 

 

(a)   Change in Law:

 

Applicable

 

 

 

(b)   Failure to Deliver:

 

Applicable

 

 

 

(c)   Insolvency Filing:

 

Applicable

 

 

 

(d)   Hedging Disruption:

 

Applicable

 

 

 

(e)   Increased Cost of Hedging:

 

Not Applicable

 

 

 

Hedging Party:

 

For all applicable Additional Disruption Events, Dealer

 

 

 

Determining Party:

 

For all applicable Additional Disruption Events, Dealer

 

 

 

Non-Reliance:

 

Applicable

 

 

 

Agreements and Acknowledgments

 

 

Regarding Hedging Activities:

 

Applicable

 

 

 

Additional Acknowledgments:

 

Applicable

 

 

 

3.             Calculation Agent:

 

Dealer

 

 

 

4.             Account Details:

 

 

 

 

 

Dealer Payment Instructions:

 

 

 

 

 

Societe Generale, New York

SOGEUS33

CHIPS 022251

Favour: SG, Paris

SOGEFRPPHCM

A/C # 0018701

 

Counterparty Payment Instructions:

 

To be provided by Counterparty.

 

5.             Offices:

 

The Office of Dealer for the Transaction is:

 

Societe Generale
Tour Societe Generale
17 Cours Valmy
92987 Paris La -Defense cedex
France
Telephone:  +33 1 58 98 05 16
Facsimile:   +33 1 46 92 46 70

 

The Office of Counterparty for the Transaction is:  N/A

 

For the purpose of Section 10(c) of the Agreement, neither party is a
Multibranch Party.

 

7

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6.             Notices:  For purposes of this Confirmation:

(A)           ADDRESS FOR NOTICES OR COMMUNICATIONS TO COUNTERPARTY:

To:

 

Conceptus, Inc.

 

 

331 East Evelyn Avenue

 

 

Mountain View, California 94041

Attn:

 

Chief Financial Officer

Telephone:

 

(650) 962-4000

Facsimile:

 

(650) 962-5200

 

(B)           ADDRESS FOR NOTICES OR COMMUNICATIONS TO DEALER:

To:

 

Societe Generale

 

 

Tour Societe Generale

 

 

17 Cours Valmy

 

 

92987 Paris La-Defense cedex

 

 

France

Attn:

 

Candice Berguin

 

 

Documentation Department

Telephone:

 

+ 33 1 58 98 05 16

Facsimile:

 

+ 33 1 46 92 46 70

 

With a copy to:

To:

 

SG Americas Securities, LLC

 

 

1221 Avenue of the Americas, 6th Floor

 

 

New York, NY 10020

Attn:

 

Mike Collins , Managing Director

Telephone:

 

(212) 278-5105

Facsimile:

 

(212) 278-5891

e-mail:

 

mike.collins@sgcib.com

 

and:

To:

 

Societe Generale

 

 

Corporate and Investment Banking

 

 

1221 Avenue of the Americas, 8th Floor

 

 

New York, NY 10020

Attn:

 

Victor Lee, Vice President and Counsel

Telephone:

 

(212) 278-6207

Facsimile:

 

(212) 278-5891

e-mail:

 

victor.lee@sgcib.com

 

7.             REPRESENTATIONS, WARRANTIES AND AGREEMENTS:

(A)           IN ADDITION TO THE REPRESENTATIONS AND WARRANTIES IN THE AGREEMENT
AND THOSE CONTAINED ELSEWHERE HEREIN, COUNTERPARTY REPRESENTS AND WARRANTS TO
AND FOR THE BENEFIT OF, AND AGREES WITH, DEALER AS FOLLOWS:

(I)            ON THE TRADE DATE, (A) COUNTERPARTY IS NOT AWARE OF ANY MATERIAL
NONPUBLIC INFORMATION REGARDING COUNTERPARTY OR THE SHARES AND (B) ALL REPORTS
AND OTHER DOCUMENTS FILED BY COUNTERPARTY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) AND SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE “EXCHANGE ACT”) WHEN
CONSIDERED AS A WHOLE (WITH THE MORE RECENT SUCH REPORTS AND DOCUMENTS DEEMED TO
AMEND INCONSISTENT STATEMENTS CONTAINED IN ANY EARLIER SUCH REPORTS AND
DOCUMENTS), DO NOT CONTAIN ANY UNTRUE STATEMENT OF A

8

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MATERIAL FACT OR ANY OMISSION OF A MATERIAL FACT REQUIRED TO BE STATED THEREIN
OR NECESSARY TO MAKE THE STATEMENTS THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES
IN WHICH THEY WERE MADE, NOT MISLEADING.

(II)           ON THE TRADE DATE, NEITHER COUNTERPARTY NOR ANY “AFFILIATE” OR
“AFFILIATED PURCHASER” (EACH AS DEFINED IN RULE 10B-18 OF THE EXCHANGE ACT
(“RULE 10B-18”)) SHALL DIRECTLY OR INDIRECTLY (INCLUDING, WITHOUT LIMITATION, BY
MEANS OF ANY CASH-SETTLED OR OTHER DERIVATIVE INSTRUMENT) 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.

(III)          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 FASB STATEMENTS 149 OR 150, EITF ISSUE NO. 00-19 (OR ANY SUCCESSOR ISSUE
STATEMENTS) OR UNDER FASB’S LIABILITIES & EQUITY PROJECT.

(IV)          WITHOUT LIMITING THE GENERALITY OF SECTION 3(A)(III) OF THE
AGREEMENT, THE TRANSACTION WILL NOT VIOLATE RULE 13E-1 OR RULE 13E-4 UNDER THE
EXCHANGE ACT.

(V)           PRIOR TO THE TRADE DATE, COUNTERPARTY SHALL DELIVER TO DEALER A
RESOLUTION OF COUNTERPARTY’S BOARD OF DIRECTORS AUTHORIZING THE TRANSACTION AND
SUCH OTHER CERTIFICATE OR CERTIFICATES AS DEALER SHALL REASONABLY REQUEST.

(VI)          COUNTERPARTY IS NOT ENTERING INTO THIS CONFIRMATION TO CREATE
ACTUAL OR APPARENT TRADING ACTIVITY IN THE SHARES (OR ANY SECURITY CONVERTIBLE
INTO OR EXCHANGEABLE FOR SHARES) OR TO RAISE OR DEPRESS OR OTHERWISE MANIPULATE
THE PRICE OF THE SHARES (OR ANY SECURITY CONVERTIBLE INTO OR EXCHANGEABLE FOR
SHARES) OR OTHERWISE IN VIOLATION OF THE EXCHANGE ACT.

(VII)         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 OF 1940, AS AMENDED.

(VIII)        ON THE TRADE DATE (A) THE ASSETS OF COUNTERPARTY AT THEIR FAIR
VALUATION EXCEED THE LIABILITIES OF COUNTERPARTY, INCLUDING CONTINGENT
LIABILITIES, (B) THE CAPITAL OF COUNTERPARTY IS ADEQUATE TO CONDUCT THE BUSINESS
OF COUNTERPARTY AND (C) COUNTERPARTY HAS THE ABILITY TO PAY ITS DEBTS AND
OBLIGATIONS AS SUCH DEBTS MATURE AND DOES NOT INTEND TO, OR DOES NOT BELIEVE
THAT IT WILL, INCUR DEBT BEYOND ITS ABILITY TO PAY AS SUCH DEBTS MATURE.

(IX)           THE REPRESENTATIONS AND WARRANTIES OF COUNTERPARTY SET FORTH IN
SECTION 3 OF THE AGREEMENT AND SECTION 3 OF THE UNDERWRITING AGREEMENT ARE TRUE
AND CORRECT AND ARE HEREBY DEEMED TO BE REPEATED TO DEALER AS IF SET FORTH
HEREIN.

(X)            COUNTERPARTY UNDERSTANDS THAT NO OBLIGATIONS OF DEALER TO IT
HEREUNDER WILL BE ENTITLED TO THE BENEFIT OF DEPOSIT INSURANCE AND THAT SUCH
OBLIGATIONS WILL NOT BE GUARANTEED BY ANY AFFILIATE OF DEALER OR ANY
GOVERNMENTAL AGENCY.

(B)           EACH OF DEALER AND COUNTERPARTY AGREES AND REPRESENTS THAT IT IS
AN “ELIGIBLE CONTRACT PARTICIPANT” AS DEFINED IN SECTION 1A(12) OF THE U.S.
COMMODITY EXCHANGE ACT, AS AMENDED.

(C)           EACH OF DEALER AND COUNTERPARTY ACKNOWLEDGES THAT THE OFFER AND
SALE OF THE TRANSACTION TO IT IS INTENDED TO BE EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT BY VIRTUE OF SECTION 4(2) THEREOF.  ACCORDINGLY, COUNTERPARTY
REPRESENTS AND WARRANTS TO DEALER THAT (I) IT HAS THE FINANCIAL ABILITY TO BEAR
THE ECONOMIC RISK OF ITS INVESTMENT IN THE TRANSACTION AND IS ABLE TO BEAR A
TOTAL LOSS OF ITS INVESTMENT AND ITS INVESTMENTS IN AND LIABILITIES IN RESPECT
OF THE TRANSACTION, WHICH IT UNDERSTANDS ARE NOT READILY MARKETABLE, ARE NOT
DISPROPORTIONATE TO ITS NET WORTH, AND IT IS ABLE TO BEAR ANY LOSS IN CONNECTION
WITH THE TRANSACTION, INCLUDING THE LOSS OF ITS ENTIRE

9

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INVESTMENT IN THE TRANSACTION, (II) IT IS AN “ACCREDITED INVESTOR” AS THAT TERM
IS DEFINED IN REGULATION D AS PROMULGATED UNDER THE SECURITIES ACT, (III) IT IS
ENTERING INTO THE TRANSACTION FOR ITS OWN ACCOUNT AND WITHOUT A VIEW TO THE
DISTRIBUTION OR RESALE THEREOF, (IV) THE ASSIGNMENT, TRANSFER OR OTHER
DISPOSITION OF THE TRANSACTION HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT AND IS RESTRICTED UNDER THIS CONFIRMATION, THE SECURITIES ACT AND
STATE SECURITIES LAWS, AND (V) ITS FINANCIAL CONDITION IS SUCH THAT IT HAS NO
NEED FOR LIQUIDITY WITH RESPECT TO ITS INVESTMENT IN THE TRANSACTION AND NO NEED
TO DISPOSE OF ANY PORTION THEREOF TO SATISFY ANY EXISTING OR CONTEMPLATED
UNDERTAKING OR INDEBTEDNESS AND IS CAPABLE OF ASSESSING THE MERITS OF AND
UNDERSTANDING (ON ITS OWN BEHALF OR THROUGH INDEPENDENT PROFESSIONAL ADVICE),
AND UNDERSTANDS AND ACCEPTS, THE TERMS, CONDITIONS AND RISKS OF THE TRANSACTION.

(D)           EACH OF DEALER AND COUNTERPARTY AGREES AND ACKNOWLEDGES (A) THAT
THIS CONFIRMATION IS (I) A “SECURITIES CONTRACT,” AS SUCH TERM IS DEFINED IN
SECTION 741(7) OF TITLE 11 OF THE UNITED STATES CODE (THE “BANKRUPTCY CODE”),
WITH RESPECT TO WHICH EACH PAYMENT AND DELIVERY HEREUNDER IS A “SETTLEMENT
PAYMENT,” AS SUCH TERM IS DEFINED IN SECTION 741(8) OF THE BANKRUPTCY CODE, AND
(II) A “SWAP AGREEMENT,” AS SUCH TERM IS DEFINED IN SECTION 101(53B) OF THE
BANKRUPTCY CODE, WITH RESPECT TO WHICH EACH PAYMENT AND DELIVERY HEREUNDER IS A
“TRANSFER,” AS SUCH TERM IS DEFINED IN SECTION 101(54) OF THE BANKRUPTCY CODE,
AND (B) THAT DEALER IS ENTITLED TO THE PROTECTIONS AFFORDED BY, AMONG OTHER
SECTIONS, SECTION 362(B)(6), 362(B)(17), 546(E), 546(G), 555 AND 560 OF THE
BANKRUPTCY CODE.

8.             OTHER PROVISIONS:

(A)           RIGHT TO EXTEND.  DEALER MAY POSTPONE ANY POTENTIAL EXERCISE DATE
OR ANY OTHER DATE OF VALUATION OR DELIVERY BY DEALER, WITH RESPECT TO SOME OR
ALL OF THE RELEVANT OPTIONS (IN WHICH EVENT THE CALCULATION AGENT SHALL MAKE
APPROPRIATE ADJUSTMENTS TO THE DELIVERY OBLIGATION), IF DEALER DETERMINES, IN
ITS REASONABLE DISCRETION, THAT SUCH EXTENSION IS REASONABLY NECESSARY TO ENABLE
DEALER TO EFFECT PURCHASES OF SHARES IN CONNECTION WITH ITS HEDGING OR
SETTLEMENT ACTIVITY HEREUNDER IN A MANNER THAT WOULD, IF DEALER WERE
COUNTERPARTY OR AN AFFILIATED PURCHASER OF COUNTERPARTY, BE IN COMPLIANCE WITH
APPLICABLE LEGAL, REGULATORY OR SELF-REGULATORY REQUIREMENTS, OR WITH RELATED
POLICIES AND PROCEDURES APPLICABLE TO DEALER.

(B)           ADDITIONAL TERMINATION EVENTS.  THE OCCURRENCE OF (I) AN EVENT OF
DEFAULT WITH RESPECT TO COUNTERPARTY UNDER THE TERMS OF THE CONVERTIBLE NOTES AS
SET FORTH IN SECTION 6.01 OF THE SUPPLEMENTAL INDENTURE, (II) AN AMENDMENT EVENT
OR (III) A REPAYMENT EVENT SHALL BE AN ADDITIONAL TERMINATION EVENT WITH RESPECT
TO WHICH THE TRANSACTION IS THE SOLE AFFECTED TRANSACTION AND COUNTERPARTY IS
THE SOLE AFFECTED PARTY, AND DEALER SHALL BE THE PARTY ENTITLED TO DESIGNATE AN
EARLY TERMINATION DATE PURSUANT TO SECTION 6(B) OF THE AGREEMENT; PROVIDED THAT
IN THE CASE OF A REPAYMENT EVENT THE TRANSACTION SHALL BE SUBJECT TO TERMINATION
ONLY IN RESPECT OF THE NUMBER OF CONVERTIBLE NOTES THAT CEASE TO BE OUTSTANDING
IN CONNECTION WITH OR AS A RESULT OF SUCH REPAYMENT EVENT.

“Amendment Event” means that Counterparty amends, modifies, supplements or
waives any term of the Indenture or the Convertible Notes governing the
principal amount, coupon, maturity, repurchase obligation of Counterparty,
redemption right of Counterparty, any term relating to conversion of the
Convertible Notes (including changes to the conversion price, conversion
settlement dates or conversion conditions), or any term that would require
consent of the holders of not less than 100% of the principal amount of the
Convertible Notes to amend, in each case without the prior consent of Dealer,
such consent not to be unreasonably withheld.

“Repayment Event” means that (A) any Convertible Notes are repurchased (whether
in connection with or as a result of a change of control, howsoever defined, or
for any other reason) by Counterparty or any of its subsidiaries, (B) any
Convertible Notes are delivered to Counterparty in exchange for delivery of any
property or assets of Counterparty or any of its subsidiaries (howsoever
described), (C) any principal of any of the Convertible Notes is repaid prior to
the final maturity date of the Convertible Notes (whether following acceleration
of the Convertible Notes or otherwise), or (D) any Convertible Notes are
exchanged by or for the benefit of the holders thereof for any other securities
of Counterparty or any of its affiliates (or any other property, or any
combination thereof) pursuant to any exchange offer or similar transaction;
provided that, in the case of clause (B) and clause (D), conversions of the
Convertible Notes pursuant to the terms of the Indenture as in effect on the
date hereof shall not be Repayment Events.

 

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(C)           ALTERNATIVE CALCULATIONS AND PAYMENT ON EARLY TERMINATION AND ON
CERTAIN EXTRAORDINARY EVENTS.  IF, SUBJECT TO SECTION 8(K) BELOW, DEALER SHALL
OWE COUNTERPARTY ANY AMOUNT PURSUANT TO SECTIONS 12.6, 12.7 OR 12.9 OF THE
EQUITY DEFINITIONS OR PURSUANT TO SECTION 6(D)(II) OF THE AGREEMENT (EXCEPT IN
THE EVENT OF AN EVENT OF DEFAULT IN WHICH COUNTERPARTY IS THE DEFAULTING PARTY
OR A TERMINATION EVENT IN WHICH COUNTERPARTY IS THE AFFECTED PARTY, THAT
RESULTED FROM AN EVENT OR EVENTS WITHIN COUNTERPARTY’S CONTROL) (A “PAYMENT
OBLIGATION”), COUNTERPARTY SHALL HAVE THE RIGHT, IN ITS SOLE DISCRETION, TO
REQUIRE DEALER TO SATISFY ANY SUCH PAYMENT OBLIGATION BY THE SHARE TERMINATION
ALTERNATIVE (AS DEFINED BELOW) BY GIVING IRREVOCABLE TELEPHONIC NOTICE TO
DEALER, CONFIRMED IN WRITING WITHIN ONE SCHEDULED TRADING DAY, BETWEEN THE HOURS
OF 9:00 A.M. AND 4:00 P.M. NEW YORK CITY TIME ON THE ANNOUNCEMENT DATE OR EARLY
TERMINATION DATE, AS APPLICABLE (“NOTICE OF SHARE TERMINATION”).  UPON SUCH
NOTICE OF SHARE TERMINATION, THE FOLLOWING PROVISIONS SHALL APPLY ON THE
SCHEDULED TRADING DAY IMMEDIATELY FOLLOWING THE ANNOUNCEMENT DATE OR EARLY
TERMINATION DATE, AS APPLICABLE:

Share Termination
Alternative:                                                     Applicable and
means that Dealer shall deliver to Counterparty the Share Termination Delivery
Property on the date on which the Payment Obligation would otherwise be due
pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii)
of the Agreement, as applicable (the “Share Termination Payment Date”), in
satisfaction of the Payment Obligation.

Share Termination Delivery Property:                   A number of Share
Termination Delivery Units, as calculated by the Calculation Agent, equal to the
Payment Obligation divided by the Share Termination Unit Price.  The Calculation
Agent shall adjust the Share Termination Delivery Property by replacing any
fractional portion of a security therein with an amount of cash equal to the
value of such fractional security based on the values used to calculate the
Share Termination Unit Price.

Share Termination Unit
Price:                                                             The value of
property contained in one Share Termination Delivery Unit on the date such Share
Termination Delivery Units are to be delivered as Share Termination Delivery
Property, as determined by the Calculation Agent in its discretion by
commercially reasonable means and notified by the Calculation Agent to Dealer at
the time of notification of the Payment Obligation.

Share Termination Delivery Unit:                                          In the
case of a Termination Event, Event of Default or Delisting, one Share or, in the
case of an Insolvency or Nationalization, one Share or a unit consisting of the
number or amount of each type of property received by a holder of one Share
(without consideration of any requirement to pay cash or other consideration in
lieu of fractional amounts of any securities) in such Insolvency or
Nationalization.  If such Insolvency or Nationalization involves a choice of
consideration to be received by holders, such holder shall be deemed to have
elected to receive the maximum possible amount of cash.

Failure to
Deliver:                                                                                                                         
Applicable

Other applicable
provisions:                                                                  If
Share Termination Alternative is applicable, the provisions of Sections 9.8,
9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable, except
that all references in such provisions to “Physical Settlement” shall be read as
references to “Share Termination Alternative” and all references to “Shares”
shall be read as references to “Share Termination Delivery Units”; and provided
that the Representation and Agreement contained in  Section 9.11 of the Equity
Definitions shall be modified by excluding any representations therein relating
to restrictions, obligations, limitations or requirements under applicable
securities laws as a result of the fact that

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Buyer is the issuer of any Share Termination Delivery Units (or any part
thereof).

(D)           DISPOSITION OF HEDGE SHARES.  COUNTERPARTY HEREBY AGREES THAT IF,
IN THE GOOD FAITH REASONABLE JUDGMENT OF DEALER, THE SHARES (THE “HEDGE SHARES”)
ACQUIRED BY DEALER FOR THE PURPOSE OF HEDGING ITS OBLIGATIONS PURSUANT TO THE
TRANSACTION CANNOT BE SOLD IN THE U.S. PUBLIC MARKET BY DEALER WITHOUT
REGISTRATION UNDER THE SECURITIES ACT, COUNTERPARTY SHALL, AT ITS ELECTION:  (I)
IN ORDER TO ALLOW DEALER TO SELL THE HEDGE SHARES IN A REGISTERED OFFERING, MAKE
AVAILABLE TO DEALER AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
TO COVER THE RESALE OF SUCH HEDGE SHARES AND (A) ENTER INTO AN AGREEMENT, IN
FORM AND SUBSTANCE SATISFACTORY TO DEALER, SUBSTANTIALLY IN THE FORM OF AN
UNDERWRITING AGREEMENT FOR A REGISTERED SECONDARY OFFERING, (B) PROVIDE
ACCOUNTANT’S “COMFORT” LETTERS IN CUSTOMARY FORM FOR REGISTERED OFFERINGS OF
EQUITY SECURITIES, (C) PROVIDE DISCLOSURE OPINIONS OF NATIONALLY RECOGNIZED
OUTSIDE COUNSEL TO COUNTERPARTY REASONABLY ACCEPTABLE TO DEALER, (D) PROVIDE
OTHER CUSTOMARY OPINIONS, CERTIFICATES AND CLOSING DOCUMENTS CUSTOMARY IN FORM
FOR REGISTERED OFFERINGS OF EQUITY SECURITIES AND (E) AFFORD DEALER A REASONABLE
OPPORTUNITY TO CONDUCT A “DUE DILIGENCE” INVESTIGATION WITH RESPECT TO
COUNTERPARTY CUSTOMARY IN SCOPE FOR UNDERWRITTEN OFFERINGS OF EQUITY SECURITIES;
PROVIDED, HOWEVER,THAT IF DEALER, IN ITS SOLE REASONABLE DISCRETION, IS NOT
SATISFIED WITH ACCESS TO DUE DILIGENCE MATERIALS, THE RESULTS OF ITS DUE
DILIGENCE INVESTIGATION, OR THE PROCEDURES AND DOCUMENTATION FOR THE REGISTERED
OFFERING REFERRED TO ABOVE, THEN CLAUSE (II) OR CLAUSE (III) OF THIS SECTION
8(C) SHALL APPLY AT THE ELECTION OF COUNTERPARTY; (II) IN ORDER TO ALLOW DEALER
TO SELL THE HEDGE SHARES IN A PRIVATE PLACEMENT, ENTER INTO A PRIVATE PLACEMENT
AGREEMENT SUBSTANTIALLY SIMILAR TO PRIVATE PLACEMENT PURCHASE AGREEMENTS
CUSTOMARY FOR PRIVATE PLACEMENTS OF EQUITY SECURITIES, IN FORM AND SUBSTANCE
SATISFACTORY TO DEALER, INCLUDING CUSTOMARY REPRESENTATIONS, COVENANTS, BLUE SKY
AND OTHER GOVERNMENTAL FILINGS AND/OR REGISTRATIONS, INDEMNITIES TO DEALER, DUE
DILIGENCE RIGHTS (FOR DEALER OR ANY DESIGNATED BUYER OF THE HEDGE SHARES FROM
DEALER), OPINIONS AND CERTIFICATES AND SUCH OTHER DOCUMENTATION AS IS CUSTOMARY
FOR PRIVATE PLACEMENTS AGREEMENTS, ALL REASONABLY ACCEPTABLE TO DEALER (IN WHICH
CASE, THE CALCULATION AGENT SHALL MAKE ANY ADJUSTMENTS TO THE TERMS OF THE
TRANSACTION THAT ARE NECESSARY, IN ITS REASONABLE JUDGMENT, TO COMPENSATE DEALER
FOR ANY DISCOUNT FROM THE PUBLIC MARKET PRICE OF THE SHARES INCURRED ON THE SALE
OF HEDGE SHARES IN A PRIVATE PLACEMENT); OR (III) PURCHASE THE HEDGE SHARES FROM
DEALER AT THE VWAP PRICE ON SUCH EXCHANGE BUSINESS DAYS, AND IN THE AMOUNTS,
REQUESTED BY DEALER.  “VWAP PRICE” MEANS, ON ANY EXCHANGE BUSINESS DAY, THE PER
SHARE VOLUME-WEIGHTED AVERAGE PRICE AS DISPLAYED UNDER THE HEADING “BLOOMBERG
VWAP” ON BLOOMBERG PAGE CPTS <EQUITY> VAP (OR ANY SUCCESSOR THERETO) IN RESPECT
OF THE PERIOD FROM 9:30 A.M. TO 4:00 P.M. (NEW YORK CITY TIME) ON SUCH EXCHANGE
BUSINESS DAY (OR IF SUCH VOLUME-WEIGHTED AVERAGE PRICE IS UNAVAILABLE, THE
MARKET VALUE OF ONE SHARE ON SUCH EXCHANGE BUSINESS DAY, AS DETERMINED BY THE
CALCULATION AGENT USING A VOLUME-WEIGHTED METHOD).

(E)           AMENDMENT TO EQUITY DEFINITIONS AND THE AGREEMENT.  THE FOLLOWING
AMENDMENT SHALL BE MADE TO THE EQUITY DEFINITIONS AND TO THE AGREEMENT:  SECTION
12.6(A)(II) OF THE EQUITY DEFINITIONS IS HEREBY AMENDED BY (1) DELETING FROM THE
FOURTH LINE THEREOF THE WORD “OR” AFTER THE WORD “OFFICIAL” AND INSERTING A
COMMA THEREFOR, AND (2) DELETING THE SEMI-COLON AT THE END OF SUBSECTION (B)
THEREOF AND INSERTING THE FOLLOWING WORDS THEREFOR “OR (C) AT DEALER’S OPTION,
THE OCCURRENCE OF ANY OF THE EVENTS SPECIFIED IN SECTION 5(A)(VII) (1) THROUGH
(9) OF THE ISDA MASTER AGREEMENT WITH RESPECT TO THAT ISSUER.”

(F)            REPURCHASE NOTICES.  COUNTERPARTY SHALL, ON ANY DAY ON WHICH
COUNTERPARTY EFFECTS ANY REPURCHASE OF SHARES, PROMPTLY GIVE DEALER A WRITTEN
NOTICE OF SUCH REPURCHASE (A “REPURCHASE NOTICE”) ON SUCH DAY IF, FOLLOWING SUCH
REPURCHASE, THE NOTICE PERCENTAGE AS DETERMINED ON SUCH DAY (I) IN THE CASE OF
THE FIRST SUCH REPURCHASE NOTICE, IS GREATER THAN 8.00% AND (II) IN THE CASE OF
ANY SUBSEQUENT REPURCHASE NOTICE, (A) IS GREATER THAN 8.00% AND (B) IS GREATER
BY AT LEAST 0.5% THAN THE NOTICE PERCENTAGE INCLUDED IN THE IMMEDIATELY
PRECEDING REPURCHASE NOTICE.  THE “NOTICE PERCENTAGE” AS OF ANY DAY IS THE
FRACTION, EXPRESSED AS A PERCENTAGE, THE NUMERATOR OF WHICH IS THE NUMBER OF
SHARES AND THE DENOMINATOR OF WHICH IS THE NUMBER OF SHARES OUTSTANDING ON SUCH
DAY.  IN THE EVENT THAT COUNTERPARTY FAILS TO PROVIDE DEALER WITH A REPURCHASE
NOTICE ON THE DAY AND IN THE MANNER SPECIFIED IN THIS SECTION 8(F) THEN
COUNTERPARTY AGREES TO INDEMNIFY AND HOLD HARMLESS DEALER, ITS AFFILIATES AND
THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND CONTROLLING PERSONS
(DEALER AND EACH SUCH PERSON BEING AN “INDEMNIFIED PARTY”) FROM AND AGAINST ANY
AND ALL LOSSES, CLAIMS, DAMAGES AND LIABILITIES (OR ACTIONS IN RESPECT THEREOF),
JOINT OR SEVERAL, TO WHICH SUCH INDEMNIFIED PARTY MAY BECOME SUBJECT UNDER
APPLICABLE SECURITIES LAWS, INCLUDING WITHOUT LIMITATION, SECTION 16 OF THE
EXCHANGE ACT, RELATING TO OR ARISING OUT OF SUCH FAILURE.  IF FOR ANY REASON THE
FOREGOING INDEMNIFICATION IS UNAVAILABLE TO ANY INDEMNIFIED PARTY OR
INSUFFICIENT TO HOLD HARMLESS ANY INDEMNIFIED PARTY, THEN COUNTERPARTY SHALL
CONTRIBUTE, TO THE MAXIMUM EXTENT PERMITTED BY LAW, TO THE AMOUNT PAID OR
PAYABLE BY THE INDEMNIFIED PARTY AS A RESULT OF SUCH LOSS, CLAIM, DAMAGE OR
LIABILITY.  IN ADDITION,

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COUNTERPARTY WILL REIMBURSE ANY INDEMNIFIED PARTY FOR ALL EXPENSES (INCLUDING
REASONABLE COUNSEL FEES AND EXPENSES) AS THEY ARE INCURRED (AFTER NOTICE TO
COUNTERPARTY) IN CONNECTION WITH THE INVESTIGATION OF, PREPARATION FOR OR
DEFENSE OR SETTLEMENT OF ANY PENDING OR THREATENED CLAIM OR ANY ACTION, SUIT OR
PROCEEDING ARISING THEREFROM, WHETHER OR NOT SUCH INDEMNIFIED PARTY IS A PARTY
THERETO AND WHETHER OR NOT SUCH CLAIM, ACTION, SUIT OR PROCEEDING IS INITIATED
OR BROUGHT BY OR ON BEHALF OF COUNTERPARTY.  THIS INDEMNITY SHALL SURVIVE THE
COMPLETION OF THE TRANSACTION CONTEMPLATED BY THIS CONFIRMATION AND ANY
ASSIGNMENT AND DELEGATION OF THE TRANSACTION MADE PURSUANT TO THIS CONFIRMATION
OR THE AGREEMENT SHALL INURE TO THE BENEFIT OF ANY PERMITTED ASSIGNEE OF DEALER.

(G)           TRANSFER AND ASSIGNMENT.  DEALER MAY TRANSFER OR ASSIGN ITS RIGHTS
AND OBLIGATIONS HEREUNDER AND UNDER THE AGREEMENT, IN WHOLE OR IN PART, TO ANY
OF ITS AFFILIATES WITH A SENIOR UNSECURED DEBT RATING  EQUAL TO OR GREATER THAN
A AS SPECIFIED BY STANDARD AND POOR’S RATING SERVICES OR A2 AS SPECIFIED BY
MOODY’S INVESTOR SERVICE, INC., AT THE TIME OF SUCH ASSIGNMENT OR TRANSFER,
WITHOUT THE CONSENT OF COUNTERPARTY.  IN ADDITION, DEALER MAY TRANSFER OR ASSIGN
ITS RIGHTS AND OBLIGATIONS HEREUNDER AND UNDER THE AGREEMENT, IN WHOLE OR IN
PART, TO ANY UNAFFILIATED THIRD-PARTY FINANCIAL INSTITUTION WITHOUT THE CONSENT
OF COUNTERPARTY, SO LONG AS THE SENIOR UNSECURED DEBT RATING OF SUCH THIRD PARTY
(OR ANY GUARANTOR OF ITS OBLIGATIONS UNDER THE TRANSACTION) IS EQUAL TO OR
GREATER THAN A AS SPECIFIED BY STANDARD AND POOR’S RATING SERVICES OR A2 AS
SPECIFIED BY MOODY’S INVESTOR SERVICE, INC., AT THE TIME OF SUCH ASSIGNMENT OR
TRANSFER.  IN CONNECTION WITH ANY TRANSFER OR ASSIGNMENT BY DEALER OF ITS RIGHTS
AND OBLIGATIONS HEREUNDER AND UNDER THE AGREEMENT, DEALER SHALL PROMPTLY PROVIDE
WRITTEN NOTICE TO COUNTERPARTY OF SUCH TRANSFER OR ASSIGNMENT, AS THE CASE MAY
BE, AND THE IDENTITY OF THE RELEVANT TRANSFEREE OR ASSIGNEE.  IN CONNECTION WITH
ANY ASSIGNMENT OR TRANSFER PURSUANT TO THE SECOND IMMEDIATELY PRECEDING
SENTENCE, THE GUARANTEE OF ANY GUARANTOR OF THE RELEVANT TRANSFEREE’S
OBLIGATIONS UNDER THE TRANSACTION SHALL CONSTITUTE A CREDIT SUPPORT DOCUMENT
UNDER THE AGREEMENT.  IF AT ANY TIME AT WHICH THE EQUITY PERCENTAGE EXCEEDS
7.5%, DEALER, IN ITS DISCRETION, IS UNABLE TO EFFECT A TRANSFER OR ASSIGNMENT TO
AN UNAFFILIATED THIRD PARTY AFTER ITS COMMERCIALLY REASONABLE EFFORTS ON PRICING
TERMS REASONABLY ACCEPTABLE TO DEALER SUCH THAT THE EQUITY PERCENTAGE IS REDUCED
TO 7.5% OR LESS, DEALER MAY DESIGNATE ANY SCHEDULED TRADING DAY AS AN EARLY
TERMINATION DATE WITH RESPECT TO A PORTION (THE “TERMINATED PORTION”) OF THE
TRANSACTION, SUCH THAT THE EQUITY PERCENTAGE FOLLOWING SUCH PARTIAL TERMINATION
WILL BE EQUAL TO OR LESS THAN 7.5%.  IN THE EVENT THAT DEALER SO DESIGNATES AN
EARLY TERMINATION DATE WITH RESPECT TO A PORTION OF THE TRANSACTION, A PAYMENT
OR DELIVERY SHALL BE MADE PURSUANT TO SECTION 6 OF THE AGREEMENT AS IF (I) AN
EARLY TERMINATION DATE HAD BEEN DESIGNATED IN RESPECT OF A TRANSACTION HAVING
TERMS IDENTICAL TO THE TERMINATED PORTION OF THE TRANSACTION, (II) COUNTERPARTY
SHALL BE THE SOLE AFFECTED PARTY WITH RESPECT TO SUCH PARTIAL TERMINATION AND
(III) SUCH PORTION OF THE TRANSACTION SHALL BE THE ONLY TERMINATED TRANSACTION. 
THE “EQUITY PERCENTAGE” AS OF ANY DAY IS THE FRACTION, EXPRESSED AS A
PERCENTAGE, (A) THE NUMERATOR OF WHICH IS THE NUMBER OF SHARES AND (B) THE
DENOMINATOR OF WHICH IS THE NUMBER OF SHARES OUTSTANDING ON SUCH DAY. 
COUNTERPARTY MAY TRANSFER OR ASSIGN ITS RIGHTS AND OBLIGATIONS HEREUNDER AND
UNDER THE AGREEMENT, IN WHOLE OR IN PART, TO ANY PARTY WITH THE CONSENT OF
DEALER, SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD.

(H)           STAGGERED SETTLEMENT.  IF THE STAGGERED SETTLEMENT EQUITY
PERCENTAGE AS OF ANY EXCHANGE BUSINESS DAY DURING THE RELEVANT “CASH SETTLEMENT
AVERAGING PERIOD”, AS DEFINED IN THE SUPPLEMENTAL INDENTURE, IS GREATER THAN
4.5%, DEALER MAY, BY NOTICE TO COUNTERPARTY PRIOR TO ANY SETTLEMENT DATE (A
“NOMINAL SETTLEMENT DATE”), ELECT TO DELIVER ANY SHARES DUE HEREUNDER ON TWO OR
MORE DATES (EACH, A “STAGGERED SETTLEMENT DATE”) OR AT TWO OR MORE TIMES ON THE
NOMINAL SETTLEMENT DATE AS FOLLOWS:

(I)            IN SUCH NOTICE, DEALER WILL SPECIFY TO COUNTERPARTY THE RELATED
STAGGERED SETTLEMENT DATES (EACH OF WHICH WILL BE ON OR PRIOR TO SUCH NOMINAL
SETTLEMENT DATE, BUT NOT PRIOR TO THE BEGINNING OF SUCH “CONVERSION REFERENCE
PERIOD”) OR DELIVERY TIMES AND HOW IT WILL ALLOCATE THE SHARES IT IS REQUIRED TO
DELIVER UNDER “DELIVERY OBLIGATION” (ABOVE) AMONG THE STAGGERED SETTLEMENT DATES
OR DELIVERY TIMES;

(II)           THE AGGREGATE NUMBER OF SHARES THAT DEALER WILL DELIVER TO
COUNTERPARTY HEREUNDER ON ALL SUCH STAGGERED SETTLEMENT DATES AND DELIVERY TIMES
WILL EQUAL THE NUMBER OF SHARES THAT DEALER WOULD OTHERWISE BE REQUIRED TO
DELIVER ON SUCH NOMINAL SETTLEMENT DATE; AND

(III)          IF COUNTERPARTY DECLARES A DIVIDEND OR OTHER DISTRIBUTION WITH
RESPECT TO SHARES WITH AN EX DIVIDEND DATE FALLING ON OR AFTER A NOMINAL
SETTLEMENT DATE AND PRIOR TO A STAGGERED SETTLEMENT DATE, THEN IN ADDITION TO
ANY SHARES IT DELIVERS ON SUCH A STAGGERED SETTLEMENT DATE, DEALER SHALL DELIVER
TO COUNTERPARTY THE AMOUNT OF SUCH DIVIDEND OR OTHER DISTRIBUTION IN RESPECT OF
SUCH SHARES ON THE BUSINESS DAY NEXT FOLLOWING ITS RECEIPT OF SUCH DIVIDEND OR
DISTRIBUTION.

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THE “STAGGERED SETTLEMENT EQUITY PERCENTAGE” AS OF ANY DAY IS THE FRACTION,
EXPRESSED AS A PERCENTAGE, (A) THE NUMERATOR OF WHICH IS THE SUM OF (X) THE
NUMBER OF SHARES THAT DEALER OR ANY OF ITS AFFILIATES BENEFICIALLY OWN (WITHIN
THE MEANING OF SECTION 13 OF THE EXCHANGE ACT) ON SUCH DAY, OTHER THAN ANY
SHARES SO OWNED AS A HEDGE OF THE TRANSACTION, AND (Y) THE NUMBER OF SHARES AND
(B) THE DENOMINATOR OF WHICH IS THE NUMBER OF SHARES OUTSTANDING ON SUCH DAY.

(I)            DISCLOSURE.  EFFECTIVE FROM THE DATE OF COMMENCEMENT OF
DISCUSSIONS CONCERNING THE TRANSACTION, COUNTERPARTY AND EACH OF ITS EMPLOYEES,
REPRESENTATIVES, OR OTHER AGENTS MAY DISCLOSE TO ANY AND ALL PERSONS, WITHOUT
LIMITATION OF ANY KIND, THE TAX TREATMENT AND TAX STRUCTURE OF THE TRANSACTION
AND ALL MATERIALS OF ANY KIND (INCLUDING OPINIONS OR OTHER TAX ANALYSES) THAT
ARE PROVIDED TO COUNTERPARTY RELATING TO SUCH TAX TREATMENT AND TAX STRUCTURE.

(J)            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 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.

(K)           NETTING AND SET-OFF.  EACH PARTY WAIVES ANY AND ALL RIGHTS IT MAY
HAVE TO SET OFF, WHETHER ARISING UNDER ANY AGREEMENT, APPLICABLE LAW OR
OTHERWISE.  THE PROVISIONS OF SECTION 2(C) OF THE AGREEMENT SHALL NOT BE
APPLICABLE TO THE TRANSACTION.

(L)            EQUITY RIGHTS.  DEALER ACKNOWLEDGES AND AGREES THAT THIS
CONFIRMATION IS NOT INTENDED TO CONVEY TO IT RIGHTS WITH RESPECT TO THE
TRANSACTION THAT ARE SENIOR TO THE CLAIMS OF COMMON STOCKHOLDERS IN THE EVENT OF
COUNTERPARTY’S BANKRUPTCY.  FOR THE AVOIDANCE OF DOUBT, THE PARTIES AGREE THAT
THE PRECEDING SENTENCE SHALL NOT APPLY AT ANY TIME OTHER THAN DURING
COUNTERPARTY’S BANKRUPTCY TO ANY CLAIM ARISING AS A RESULT OF A BREACH BY
COUNTERPARTY OF ANY OF ITS OBLIGATIONS UNDER THIS CONFIRMATION OR THE AGREEMENT.

(M)          EARLY UNWIND.  IN THE EVENT THE SALE BY COUNTERPARTY OF THE
CONVERTIBLE NOTES IS NOT CONSUMMATED WITH UBS SECURITIES LLC PURSUANT TO THE
UNDERWRITING AGREEMENT FOR ANY REASON BY THE CLOSE OF BUSINESS IN NEW YORK ON
FEBRUARY 12, 2007 (OR SUCH LATER DATE AS AGREED UPON BY THE PARTIES) (FEBRUARY
12, 2007 OR SUCH LATER DATE BEING THE “EARLY UNWIND DATE”), THE TRANSACTION
SHALL AUTOMATICALLY TERMINATE (THE “EARLY UNWIND”), ON THE EARLY UNWIND DATE AND
(I) THE TRANSACTION AND ALL OF THE RESPECTIVE RIGHTS AND OBLIGATIONS OF DEALER
AND COUNTERPARTY THEREUNDER SHALL BE CANCELLED AND TERMINATED AND (II)
COUNTERPARTY SHALL PAY TO DEALER, OTHER THAN IN CASES INVOLVING A BREACH OF THE
UNDERWRITING AGREEMENT BY UBS SECURITIES LLC, AN AMOUNT IN CASH EQUAL TO THE
AGGREGATE AMOUNT OF COSTS AND EXPENSES  RELATING TO THE UNWINDING OF DEALER’S
HEDGING ACTIVITIES IN RESPECT OF THE TRANSACTION (INCLUDING MARKET LOSSES
INCURRED IN RESELLING ANY SHARES PURCHASED BY DEALER OR ITS AFFILIATES IN
CONNECTION WITH SUCH HEDGING ACTIVITIES).  FOLLOWING SUCH TERMINATION,
CANCELLATION AND PAYMENT, EACH PARTY SHALL BE RELEASED AND DISCHARGED BY THE
OTHER PARTY FROM AND AGREES NOT TO MAKE ANY CLAIM AGAINST THE OTHER PARTY WITH
RESPECT TO ANY OBLIGATIONS OR LIABILITIES OF EITHER PARTY ARISING OUT OF AND TO
BE PERFORMED IN CONNECTION WITH THE TRANSACTION EITHER PRIOR TO OR AFTER THE
EARLY UNWIND DATE.  DEALER AND COUNTERPARTY REPRESENT AND ACKNOWLEDGE TO THE
OTHER THAT UPON AN EARLY UNWIND AND FOLLOWING THE PAYMENT REFERRED TO ABOVE, ALL
OBLIGATIONS WITH RESPECT TO THE TRANSACTION SHALL BE DEEMED FULLY AND FINALLY
DISCHARGED.

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

(O)           GOVERNING LAW.  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

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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.

(P)           ROLE OF AGENT. EACH PARTY AGREES AND ACKNOWLEDGES THAT AGENT IS
ACTING AS AGENT FOR BOTH PARTIES BUT DOES NOT GUARANTEE THE PERFORMANCE OF
EITHER PARTY AND NEITHER DEALER NOR COUNTERPARTY SHALL CONTACT THE OTHER WITH
RESPECT TO ANY MATTER RELATING TO THE TRANSACTION WITHOUT THE DIRECT INVOLVEMENT
OF AGENT; (II) AGENT IS NOT A MEMBER OF THE SECURITIES INVESTOR PROTECTION
CORPORATION; (III) AGENT, DEALER AND COUNTERPARTY EACH HEREBY ACKNOWLEDGES THAT
ANY TRANSACTIONS BY DEALER OR AGENT IN THE SHARES WILL BE UNDERTAKEN BY DEALER
OR AGENT, AS THE CASE MAY, AS PRINCIPAL FOR ITS OWN ACCOUNT; (IV) ALL OF THE
ACTIONS TO BE TAKEN BY DEALER AND AGENT IN CONNECTION WITH THE TRANSACTION,
INCLUDING, BUT NOT LIMITED TO, ANY EXERCISE OF ANY RIGHTS WITH RESPECT TO THE
OPTIONS, SHALL BE TAKEN BY DEALER OR AGENT INDEPENDENTLY AND WITHOUT ANY ADVANCE
OR SUBSEQUENT CONSULTATION WITH COUNTERPARTY; AND (V) AGENT IS HEREBY AUTHORIZED
TO ACT AS AGENT FOR COUNTERPARTY ONLY TO THE EXTENT REQUIRED TO SATISFY THE
REQUIREMENTS OF RULE 15A-6 UNDER THE EXCHANGE ACT IN RESPECT OF THE OPTIONS
DESCRIBED HEREUNDER.

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Counterparty hereby agrees (a) to check this Confirmation carefully and
immediately upon receipt so that errors or discrepancies can be promptly
identified and rectified and (b) to confirm that the foregoing (in the exact
form provided by Dealer) correctly sets forth the terms of the agreement between
Dealer and Counterparty with respect to the Transaction, by manually signing
this Confirmation or this page hereof as evidence of agreement to such terms and
providing the other information requested herein and immediately returning an
executed copy to Candice Berguin (Documentation Department), Facsimile No. + 33
1 46 92 46 70.

Yours faithfully,

 

 

SOCIETE GENERALE

 

 

 

 

 

By:

/s/ Anne Martel

 

 

 

Name: Anne Martel

 

 

Title: Societe Generale OTC Equity Derivatives

 

 

 

 

 

 

 

SG AMERICAS SECURITIES, LLC, as agent

 

 

 

 

 

By:

/s/ Sanjay Garg

 

 

 

Name: Sanjay Garg

 

 

Title: Director

Agreed and Accepted By:

CONCEPTUS, INC.

 

 

 

 

 

By:

/s/ Gregory E. Lichtwardt

 

 

Name: Gregory E. Lichtwardt

 

Title: Executive Vice President, CFO

 

 

16

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