Exhibit 10.61

EXECUTION COPY

GOLDMAN, SACHS & CO. | 85 BROAD STREET | NEW YORK, NEW YORK 10004 | TEL:
212-902-1000

Opening Transaction

 

To:     

Gilead Sciences, Inc.

333 Lakeside Drive

Foster City, CA 94404

A/C:

   028820868

From:

   Goldman, Sachs & Co.

Re:

   Collared Accelerated Stock Buyback

Ref. No:

   As provided in the Supplemental Confirmation

Date:

   February 29, 2008

This master confirmation (this “Master Confirmation”), dated as of February 29,
2008 is intended to set forth certain terms and provisions of certain
Transactions (each, a “Transaction”) entered into from time to time between
Goldman, Sachs & Co. (“GS&Co.”) and Gilead Sciences, Inc. (“Counterparty”). This
Master Confirmation, taken alone, is neither a commitment by either party to
enter into any Transaction nor evidence of a Transaction. The additional terms
of any particular Transaction shall be set forth in (i) a Supplemental
Confirmation in the form of Schedule A hereto (a “Supplemental Confirmation”),
which shall reference this Master Confirmation and supplement, form a part of,
and be subject to this Master Confirmation and (ii) a Trade Notification in the
form of Schedule B hereto (a “Trade Notification”), which shall reference the
relevant Supplemental Confirmation and supplement, form a part of, and be
subject to such Supplemental Confirmation. This Master Confirmation, each
Supplemental Confirmation and the related Trade Notification together shall
constitute a “Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (the “Equity Definitions”), as published by the International Swaps
and Derivatives Association, Inc., are incorporated into this Master
Confirmation. This Master Confirmation, each Supplemental Confirmation and the
related Trade Notification evidence a complete binding agreement between
Counterparty and GS&Co. as to the subject matter and terms of each Transaction
to which this Master Confirmation, such Supplemental Confirmation and Trade
Notification relate and shall supersede all prior or contemporaneous written or
oral communications with respect thereto.

This Master Confirmation, each Supplemental Confirmation and each Trade
Notification supplement, form a part of, and are subject to an agreement in the
form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border) (the
“Agreement”) as if GS&Co. and Counterparty had executed the Agreement on the
date of this Master Confirmation (but without any Schedule except for (i) the
election of Loss and Second Method, New York law (without reference to its
choice of laws doctrine other than Title 14 of Article 5 of the New York General
Obligations Law) as the governing law and US Dollars (“USD”) as the Termination
Currency, (ii) the election that subparagraph (ii) of Section 2(c) will not
apply to the Transactions, (iii) the replacement of the word “third” in the last
line of Section 5(a)(i) with the word “first” and (iv) the election that the
“Cross Default” provisions of Section 5(a)(vi) shall apply to GS&Co. and
Counterparty, in each case with a “Threshold Amount” of USD 100 million;
provided that the phrase “or becoming capable at such time of being declared”
shall be deleted from clause (1) of such Section 5(a)(vi)).

The Transactions shall be the sole Transactions under the Agreement. If there
exists any ISDA Master Agreement between GS&Co. and Counterparty or any
confirmation or other agreement between GS&Co. and Counterparty pursuant to
which an ISDA Master Agreement is deemed to exist between GS&Co. and
Counterparty, then notwithstanding anything to the contrary in such ISDA Master
Agreement, such confirmation or agreement or any other agreement to which GS&Co.
and Counterparty are parties, the Transactions shall not be considered
Transactions under, or otherwise governed by, such existing or deemed ISDA
Master Agreement.

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All provisions contained or incorporated by reference in the Agreement shall
govern this Master Confirmation, each Supplemental Confirmation and each Trade
Notification except as expressly modified herein or in the related Supplemental
Confirmation.

If, in relation to any Transaction to which this Master Confirmation, a
Supplemental Confirmation and a Trade Notification relate, there is any
inconsistency between the Agreement, this Master Confirmation, any Supplemental
Confirmation, any Trade Notification and the Equity Definitions, the following
will prevail for purposes of such Transaction in the order of precedence
indicated: (i) such Trade Notification, (ii) such Supplemental Confirmation;
(iii) this Master Confirmation; (iv) the Agreement; and (v) the Equity
Definitions.

1. Each Transaction constitutes a Share Forward Transaction for the purposes of
the Equity Definitions. Set forth below are the terms and conditions that,
together with the terms and conditions set forth in the Supplemental
Confirmation and Trade Notification relating to any Transaction, shall govern
such Transaction.

General Terms:

 

Trade Date:

   For each Transaction, as set forth in the related Supplemental Confirmation.

Buyer:

   Counterparty

Seller:

   GS&Co.

Shares:

   Common stock, par value $0.001 per share, of Counterparty (Ticker: GILD)

Exchange:

   NASDAQ

Related Exchange(s):

   All Exchanges. Prepayment\Variable Obligation:   

Applicable

Prepayment Amount:

   For each Transaction, as set forth in the related Supplemental Confirmation.

Prepayment Date:

   For each Transaction, as set forth in the related Supplemental Confirmation.

Valuation:

 

Hedge Period:    The period from and including the first Exchange Business Day
following the Trade Date to and including the Hedge Completion Date.
Hedge Completion Date:    For each Transaction, as set forth in the related
Trade Notification, to be the Exchange Business Day on which GS&Co. finishes
establishing its initial Hedge Positions in respect of such Transaction, as
determined by GS&Co. in its sole discretion, but in no event later than the
Hedge Period End Date. Hedge Period End Date:    For each Transaction, as set
forth in the related Supplemental Confirmation. Hedge Period Reference Price:   
For each Transaction, as set forth in the related Trade Notification, to be the
average of the VWAP Prices for the Exchange Business Days in the Hedge Period,
subject to “Valuation Disruption” below.

 

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VWAP Price:    For any Exchange Business Day, as determined by the Calculation
Agent based on the NASDAQ 10b-18 Volume Weighted Average Price per Share for the
regular trading session (including any extensions thereof) of the Exchange on
such Exchange Business Day (without regard to pre-open or after hours trading
outside of such regular trading session for such Exchange Business Day), as
published by Bloomberg at 4:15 p.m. New York time (or 15 minutes following the
end of any extension of the regular trading session) on such Exchange Business
Day, on Bloomberg page “GILD.Q <Equity> AQR_SEC” (or any successor thereto), or
if such price is not so reported on such Exchange Business Day for any reason or
is, in the Calculation Agent’s reasonable discretion, erroneous, such VWAP Price
shall be as reasonably determined by the Calculation Agent. For purposes of
calculating the VWAP Price, the Calculation Agent will include only those trades
that are reported during the period of time during which Counterparty could
purchase its own shares under Rule 10b-18(b)(2) and are effected pursuant to the
conditions of Rule 10b-18(b)(3), each under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”) (such trades, “Rule 10b-18 eligible
transactions”). Forward Price:    The average of the VWAP Prices for the
Exchange Business Days in the Calculation Period, subject to “Valuation
Disruption” below.

Forward Price

   Adjustment Amount:    For each Transaction, as set forth in the related
Supplemental Confirmation. Calculation Period:    The period from and including
the Calculation Period Start Date to and including the Termination Date.
Calculation Period Start Date:    For each Transaction, as set forth in the
related Trade Notification, to be the first Exchange Business Day immediately
following the Hedge Completion Date. Termination Date:    The Scheduled
Termination Date; provided that GS&Co. shall have the right to designate any
Exchange Business Day on or after the First Acceleration Date to be the
Termination Date by delivering telephonic notice to Counterparty, to be
confirmed by email, of any such designation no later than prior to the open of
trading on the Exchange on the Exchange Business Day immediately following the
Termination Date. Scheduled Termination Date:    For each Transaction, as set
forth in the related Supplemental Confirmation, subject to postponement as
provided in “Valuation Disruption” below. First Acceleration Date:    For each
Transaction, as set forth in the related Supplemental Confirmation. Valuation
Disruption:    The definition of “Market Disruption Event” in Section 6.3(a) of
the Equity Definitions is hereby amended by deleting the words “at any time
during the one-hour period that ends at the relevant Valuation Time, Latest
Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case
may be” and inserting the words “at any time on any Scheduled Trading Day during
the Hedge Period, Calculation Period or Settlement Valuation Period” after the
word “material,” in the third line thereof.    Section 6.3(d) of the Equity
Definitions is hereby amended by deleting the remainder of the provision
following the term “Scheduled Closing Time” in the fourth line thereof.   
Notwithstanding anything to the contrary in the Equity Definitions, to the
extent that a Disrupted Day occurs (i) in the Hedge Period or the Calculation
Period, the Calculation Agent may, in its good faith and commercially reasonable

 

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   discretion, postpone either or both of the Hedge Period End Date and/or the
Scheduled Termination Date, or (ii) in the Settlement Valuation Period, the
Calculation Agent may extend the Settlement Valuation Period. If any such
Disrupted Day is a Disrupted Day because of a Market Disruption Event (or a
deemed Market Disruption Event as provided herein), the Calculation Agent shall
determine whether (i) such Disrupted Day is a Disrupted Day in full, in which
case the VWAP Price for such Disrupted Day shall not be included for purposes of
determining the Hedge Period Reference Price, the Forward Price or the
Settlement Price, as the case may be, or (ii) such Disrupted Day is a Disrupted
Day only in part, in which case the VWAP Price for such Disrupted Day shall be
determined by the Calculation Agent based on Rule 10b-18 eligible transactions
in the Shares on such Disrupted Day effected before the relevant Market
Disruption Event occurred and/or after the relevant Market Disruption Event
ended, and the weighting of the VWAP Price for the relevant Exchange Business
Days during the Hedge Period, the Calculation Period or the Settlement Valuation
Period, as the case may be, shall be adjusted in a commercially reasonable
manner by the Calculation Agent for purposes of determining the Hedge Period
Reference Price, the Forward Price or the Settlement Price, as the case may be,
with such adjustments based on, among other factors, the duration of any Market
Disruption Event and the volume, historical trading patterns and price of the
Shares. Any Scheduled Trading Day on which the Exchange is scheduled to close
prior to its normal close of trading shall be deemed to be a Disrupted Day in
full.    If a Disrupted Day occurs during the Hedge Period, the Calculation
Period or the Settlement Valuation Period, as the case may be, and each of the
nine immediately following Scheduled Trading Days is a Disrupted Day, then the
Calculation Agent, in its good faith and commercially reasonable discretion, may
deem such ninth Scheduled Trading Day to be an Exchange Business Day that is not
a Disrupted Day and determine the VWAP Price for such ninth Scheduled Trading
Day using its good faith estimate of the value of the Shares on such ninth
Scheduled Trading Day based on the volume, historical trading patterns and price
of the Shares and such other factors as it deems appropriate. Settlement Terms:
  

Physical Settlement:

   Applicable to GS&Co.; provided that GS&Co. does not, and shall not, make the
agreement or the representations set forth in Section 9.11 of the Equity
Definitions related to the restrictions imposed by applicable securities laws
with respect to any Shares delivered by GS&Co. to Counterparty under any
Transaction. The Counterparty Settlement Provisions are set forth in Annex A
hereto.

Number of Shares

  

to be Delivered:

   A number of Shares equal to (a) the Prepayment Amount divided by (b)(i) the
Forward Price minus (ii) the Forward Price Adjustment Amount; provided that the
Number of Shares to be Delivered shall not be less than the Minimum Shares and
not greater than the Maximum Shares. The Number of Shares to be Delivered on the
Settlement Date shall be reduced, but not below zero, by any Shares delivered
pursuant to the Initial Share Delivery and the Minimum Share Delivery described
below.

Excess Dividend Amount:

   For the avoidance of doubt, all references to the Excess Dividend Amount
shall be deleted from Section 9.2(a)(iii) of the Equity Definitions.

Settlement Date:

   The date that is one Settlement Cycle immediately following the Termination
Date.

 

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Settlement Currency:

   USD

Initial Share Delivery:

   GS&Co. shall deliver a number of Shares equal to the Initial Shares to
Counterparty on the Initial Share Delivery Date in accordance with Section 9.4
of the Equity Definitions, with the Initial Share Delivery Date deemed to be a
“Settlement Date” for purposes of such Section 9.4.

Initial Share Delivery Date:

   For each Transaction, as set forth in the related Supplemental Confirmation.

Initial Shares:

   For each Transaction, as set forth in the related Supplemental Confirmation.

Minimum Share Delivery:

   GS&Co. shall deliver a number of Shares equal to the excess, if any, of the
Minimum Shares over the Initial Shares on the Minimum Share Delivery Date in
accordance with Section 9.4 of the Equity Definitions, with the Minimum Share
Delivery Date deemed to be a “Settlement Date” for purposes of such Section 9.4.

Minimum Share Delivery Date:

   The date one Settlement Cycle immediately following the Hedge Completion
Date.

Minimum Shares:

   For each Transaction, as set forth in the related Supplemental Confirmation.

Maximum Shares:

   For each Transaction, as set forth in the related Supplemental Confirmation.
Share Adjustments:   

Potential Adjustment Event:

   Notwithstanding anything to the contrary in Section 11.2(e) of the Equity
Definitions, an Extraordinary Dividend shall not constitute a Potential
Adjustment Event.    It shall constitute an additional Potential Adjustment
Event if the Scheduled Termination Date for any Transaction is postponed
pursuant to “Valuation Disruption” above, in which case the Calculation Agent
may, in its commercially reasonable discretion, adjust any relevant terms of any
such Transaction as necessary to preserve as nearly as practicable the fair
value of such Transaction to GS&Co. prior to such postponement.

Extraordinary Dividend:

   Any dividend or distribution on the Shares (other than any dividend or
distribution of the type described in Section 11.2(e)(i) or Section
11.2(e)(ii)(A) or (B) of the Equity Definitions) that has an ex-dividend date
occurring during the Relevant Dividend Period (as defined below). For the
avoidance of doubt, the Calculation Agent shall not make any adjustments to
account for changes in extraordinary dividends under any circumstances under
this Master Confirmation.

Method of Adjustment:

   Calculation Agent Adjustment Extraordinary Events:   

Consequences of Merger Events:

  

(a) Share-for-Share:

  

Modified Calculation Agent Adjustment

 

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(b) Share-for-Other:

  

Cancellation and Payment

(c) Share-for-Combined:

  

Component Adjustment

Tender Offer:    Applicable; provided that (i) Section 12.1(l) of the Equity
Definitions shall be amended (x) by deleting the parenthetical in the fifth line
thereof, (y) by replacing “that” in the fifth line thereof with “whether or not
such announcement” and (z) by adding immediately after the words “Tender Offer”
in the fifth line thereof “, and any publicly announced change or amendment to
such an announcement (including the announcement of an abandonment of such
intention)” and (ii) Sections 12.3(a) and 12.3(d) of the Equity Definitions
shall each be amended by replacing each occurrence of the words “Tender Offer
Date” by “Announcement Date.” Consequences of Tender Offers:   

(a) Share-for-Share:

  

Modified Calculation Agent Adjustment or Cancellation and Payment, at the
election of GS&Co.

(b) Share-for-Other:

  

Modified Calculation Agent Adjustment or Cancellation and Payment, at the
election of GS&Co.

(c) Share-for-Combined:

  

Modified Calculation Agent Adjustment or Cancellation and Payment, at the
election of GS&Co.

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

(a) Change in Law:

  

Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions shall be
amended by deleting clause (Y) in its entirety.

(b) Failure to Deliver:

  

Applicable

(c) Insolvency Filing:

  

Applicable

Determining Party:

  

GS&Co.

Additional Termination Event(s):    Notwithstanding anything to the contrary in
the Equity Definitions, if, as a result of an Extraordinary Event, any
Transaction would be cancelled or terminated (whether in whole or in part)
pursuant to Article 12 of the Equity Definitions, an Additional Termination
Event (with such terminated Transaction(s) (or portions thereof) being the
Affected Transaction(s) and Counterparty being the sole Affected Party (provided
that, solely in the case of a Failure to Deliver, GS&Co. shall be the sole
Affected Party)) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8
and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to
such Affected Transaction(s).

 

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   The declaration by the Issuer of any Extraordinary Dividend will constitute
an Additional Termination Event, with Counterparty as the sole Affected Party
and all Transactions hereunder as the Affected Transactions.

Relevant Dividend Period:

   The period from and including the first day of the Hedge Period to and
including the later of the last day of the Relevant Period (as defined in
Section 4(f) of this Master Confirmation) and the last day of the Settlement
Valuation Period, if any. Non-Reliance/Agreements and Acknowledgements Regarding
Hedging Activities/Additional Acknowledgements:    Applicable

Transfer:

   Notwithstanding anything to the contrary in the Agreement, GS&Co. may assign,
transfer and set over all rights, title and interest, powers, privileges and
remedies of GS&Co. under any Transaction, in whole or in part, to an affiliate
of GS&Co. (the “Assignee”) without the consent of Counterparty; provided that
(i) Counterparty will not, as a result of such transfer, be required to pay to
the Assignee an amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) of the Agreement, (ii) the Assignee will not, as a result of such
transfer, be required to withhold or deduct any amount on account of a Tax under
Section 2(d)(i) of the Agreement, unless the Assignee would be required to make
additional payments pursuant to Section 2(d)(i)(4) of the Agreement
corresponding to such excess, in which case, Counterparty shall have the right
to elect that GS&Co. deliver Shares in lieu of making any such additional
payments in cash as if the amount required to be so paid were a Payment Amount
in accordance with Section 14 of this Master Confirmation, (iii) no Event of
Default, Potential Event of Default or Termination Event with respect to the
Assignee shall exist after giving effect to such assignment, transfer or set
over, (iv) the obligations of the Assignee are fully and unconditionally
guaranteed by The Goldman Sachs Group, Inc., (v) at the time of the Transfer,
the transferred Transaction represents a legal, valid and binding obligation of
the Assignee and (vi) immediately after such transfer, the Counterparty shall
receive notice thereof.

GS&Co. Payment Instructions:

  

Chase Manhattan Bank New York

For A/C Goldman, Sachs & Co.

A/C #930-1-011483

ABA: 021-000021

Counterparty’s Contact Details for Purpose of Giving Notice:    To be provided
by Counterparty GS&Co.’s Contact Details for Purpose of Giving Notice:   

Telephone No.: (212) 902-8996

Facsimile No.: (212) 902-0112

Attention: Equity Operations: Options and Derivatives

  

With a copy to:

Tracey McCabe

Equity Capital Markets

One New York Plaza New York, NY 10004

Telephone No.: (212) 357-0428

Facsimile No.: (212) 902-3000

 

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2. Calculation Agent. GS&Co.

3. Additional Mutual Representations, Warranties and Covenants of Each Party. In
addition to the representations, warranties and covenants in the Agreement, each
party represents, warrants and covenants to the other party that:

(a) Eligible Contract Participant. It is an “eligible contract participant”, as
defined in the U.S. Commodity Exchange Act (as amended), and is entering into
each Transaction hereunder as principal (and not as agent or in any other
capacity, fiduciary or otherwise) and not for the benefit of any third party.

(b) Accredited Investor. Each party acknowledges that the offer and sale of each
Transaction to it is intended to be exempt from registration under the
Securities Act of 1933, as amended (the “Securities Act”), by virtue of
Section 4(2) thereof. Accordingly, each party represents and warrants to the
other that (i) it has the financial ability to bear the economic risk of its
investment in each Transaction and is able to bear a total loss of its
investment, (ii) it is an “accredited investor” as that term is defined under
Regulation D under the Securities Act and (iii) the disposition of each
Transaction is restricted under this Master Confirmation, the Securities Act and
state securities laws.

4. Additional Representations, Warranties and Covenants of Counterparty. In
addition to the representations, warranties and covenants in the Agreement,
Counterparty represents, warrants and covenants to GS&Co. that:

(a) It is not entering into any Transaction (i) on the basis of, and is, as of
the Trade Date for any Transaction, not aware of, any material non-public
information with respect to the Shares (ii) in anticipation of, in connection
with, or to facilitate, a distribution of its securities, a self tender offer or
a third-party tender offer or (iii) to create actual or apparent trading
activity in the Shares (or any security convertible into or exchangeable for the
Shares) or to raise or depress or otherwise manipulate the price of the Shares
(or any security convertible into or exchangeable for the Shares).

(b) Each Transaction is being entered into pursuant to a publicly disclosed
Share buy-back program and its Board of Directors has approved the use of
derivatives to effect the Share buy-back program.

(c) It intends that each Transaction qualifies as an equity instrument for
purposes of EITF Issue No. 00-19 as in effect on the Trade Date. Notwithstanding
the foregoing and without limiting the generality of Section 13.1 of the Equity
Definitions, it acknowledges that neither GS&Co. nor any of its affiliates is
making any representations or warranties or taking any position or expressing
any view with respect to the treatment of any Transaction under any accounting
standards including FASB Statements 128, 133 as amended, or 149, 150, EITF
00-19, 01-6 or EITF 03-6 (or any successor issue statements) or under the
Financial Accounting Standards Board’s Liabilities & Equity Project.

(d) As of (i) the date hereof and (ii) the Trade Date for each Transaction
hereunder, Counterparty is in compliance with its reporting obligations under
the Exchange Act and its most recent Annual Report on Form 10-K, together with
all reports subsequently filed by it pursuant to the Exchange Act, taken
together and as amended and supplemented to the date of this representation, do
not, as of their respective filing dates, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;

(e) Counterparty is aware of its reporting obligations as required under
Regulation S-K under the Exchange Act in respect of the Transactions hereunder.

(f) The Shares are not, and Counterparty will not cause the Shares to be,
subject to a “restricted period” (as defined in Regulation M promulgated under
the Exchange Act) at any time during any Regulation M Period (as defined below)
for any Transaction unless Counterparty has provided written notice to GS&Co. of
such restricted period not later than the Scheduled Trading Day immediately
preceding the first day of such “restricted period”. Counterparty acknowledges
that any such notice may cause a Disrupted Day to occur pursuant to Section 5
below. Accordingly, Counterparty acknowledges that its delivery of such notice
must comply with the standards set forth in Section 6(c) below. “Regulation M
Period” means, for any Transaction, (i) the Relevant Period (as defined

 

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below) and (ii) the Settlement Valuation Period, if any, for such Transaction.
“Relevant Period” means, for any Transaction, the period commencing on the first
day of the Hedge Period for such Transaction and ending on the earlier of
(i) the Scheduled Termination Date and (ii) the last Additional Relevant Day (as
specified in the related Supplemental Confirmation) for such Transaction, or
such earlier day as elected by GS&Co. and communicated to Counterparty on such
day (or, if later, the First Acceleration Date without regard to any
acceleration thereof pursuant to “Special Provisions for Friendly Transaction
Announcements” below).

(g) As of the Trade Date and the Prepayment Date for each Transaction,
Counterparty is not “insolvent” (as such term is defined under Section 101(32)
of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the
“Bankruptcy Code”)) and Counterparty would be able to purchase a number of
Shares with a value equal to the Prepayment Amount in compliance with the laws
of the jurisdiction of Counterparty’s incorporation.

(h) Counterparty is not and, after giving effect to any Transaction, will not
be, required to register as an “investment company” as such term is defined in
the Investment Company Act of 1940, as amended.

(i) Counterparty has not and will not enter into agreements similar to the
Transactions described herein where any initial hedge period, calculation
period, relevant period or settlement valuation period (each however defined) in
such other transaction will overlap at any time (including as a result of
extensions in such initial hedge period, calculation period, relevant period or
settlement valuation period as provided in the relevant agreements) with any
Relevant Period or, if applicable, any Settlement Valuation Period under this
Master Confirmation. In the event that the initial hedge period, relevant
period, calculation period or settlement valuation period in any other similar
transaction overlaps with any Relevant Period or, if applicable, Settlement
Valuation Period under this Master Confirmation as a result of any postponement
of the Termination Date or extension of the Settlement Valuation Period pursuant
to “Valuation Disruption” above, Counterparty shall promptly amend such
transaction to avoid any such overlap.

5. Regulatory Disruption. In the event that GS&Co. concludes, in good faith and
in its commercially reasonable discretion, that it is appropriate with respect
to any legal, regulatory or self-regulatory requirements or related policies and
procedures (whether or not such requirements, policies or procedures are imposed
by law or have been voluntarily adopted by GS&Co.), for it to refrain from
purchasing Shares on any Scheduled Trading Day or Days during the Hedge Period,
the Calculation Period or, if applicable, the Settlement Valuation Period,
GS&Co. may by written notice to Counterparty elect to deem that a Market
Disruption Event has occurred and will be continuing on such Scheduled Trading
Day or Days.

6. 10b5-1 Plan.

(a) Counterparty represents, warrants and covenants to GS&Co. that Counterparty
is entering into this Master Confirmation and each Transaction hereunder in good
faith and not as part of a plan or scheme to evade the prohibitions of Rule
10b5-1 under the Exchange Act (“Rule 10b5-1”) or any other antifraud or
anti-manipulation provisions of the federal or applicable state securities laws
and that it has not entered into or altered and will not enter into or alter any
corresponding or hedging transaction or position with respect to the Shares. It
is the intent of the parties that each Transaction entered into under this
Master Confirmation comply with the requirements of paragraphs (c)(1)(i)(A) and
(B) of Rule 10b5-1 and each Transaction entered into under this Master
Confirmation shall be interpreted to comply with the requirements of Rule
10b5-1(c).

(b) Counterparty will not seek to control or influence GS&Co.’s decision to make
any “purchases or sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3))
under any Transaction entered into under this Master Confirmation, including,
without limitation, GS&Co.’s decision to enter into any hedging transactions.
Counterparty represents and warrants that it has consulted with its own advisors
as to the legal aspects of its adoption and implementation of this Master
Confirmation, each Supplemental Confirmation and each Trade Notification under
Rule 10b5-1.

 

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(c) Counterparty acknowledges and agrees that any amendment, modification,
waiver or termination of this Master Confirmation, the relevant Supplemental
Confirmation or Trade Notification must be effected in accordance with the
requirements for the amendment or termination of a “plan” as defined in Rule
10b5-1(c). Without limiting the generality of the foregoing, any such amendment,
modification, waiver or termination shall be made in good faith and not as part
of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such
amendment, modification or waiver shall be made at any time at which
Counterparty or any officer, director, manager or similar person of Counterparty
is aware of any material non-public information regarding Counterparty or the
Shares.

7. Rule 10b-18. (a) Counterparty (or any “affiliated purchaser” as defined in
Rule 10b-18 under the Exchange Act (“Rule 10b-18”)) shall not, without the prior
written consent of GS&Co., directly or indirectly purchase any Shares (including
by means of a derivative instrument), listed contracts on the Shares or
securities that are convertible into, or exchangeable or exercisable for Shares
(including, without limitation, any Rule 10b-18 purchases of blocks (as defined
in Rule 10b-18)) during any Relevant Period or, if applicable, Settlement
Valuation Period, except through GS&Co; provided that purchases effected by or
for an issuer plan of Counterparty by an agent independent of the issuer within
the meaning of Rule 10b-18(a)(13)(ii) shall not be subject to this Section 7(a).

(b) With respect to (i) all purchases of Shares made by GS&Co. during any
relevant Hedge Period in respect of any Transaction and (ii) purchases during
the related Calculation Period (as defined above) of a number of Shares equal to
the Minimum Shares for such Transaction less the number of Shares so purchased
during the related Hedge Period in respect of such Transaction, GS&Co. will use
good faith efforts to effect such purchases in a manner so that, if such
purchases were made by Counterparty, they would meet the requirements of Rule
10b-18(b)(2), (3) and (4) under the Exchange Act, and effect calculations in
respect thereof, taking into account any applicable Securities and Exchange
Commission or staff no-action letters or interpretations as appropriate and
subject to any delays between the execution and reporting of a trade of the
Shares on the Exchange and other circumstances beyond GS&Co.’s control.

8. Special Provisions for Merger Transactions. Notwithstanding anything to the
contrary herein or in the Equity Definitions:

(a) Counterparty agrees that it:

(i) will not during the period commencing on the Trade Date through the end of
the Relevant Period or, if applicable, the Settlement Valuation Period for any
Transaction make, or permit to be made, any public announcement (as defined in
Rule 165(f) under the Securities Act) of any Merger Transaction or potential
Merger Transaction unless such public announcement is made prior to the opening
or after the close of the regular trading session on the Exchange for the
Shares;

(ii) shall promptly (but in any event prior to the next opening of the regular
trading session on the Exchange) notify GS&Co. following any such announcement
that such announcement has been made; and

(iii) shall promptly (but in any event prior to the next opening of the regular
trading session on the Exchange) provide GS&Co. with written notice specifying
(i) Counterparty’s average daily Rule 10b-18 Purchases (as defined in Rule
10b-18) during the three full calendar months immediately preceding the
announcement date that were not effected through GS&Co. or its affiliates and
(ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4)
under the Exchange Act for the three full calendar months preceding the
announcement date. Such written notice shall be deemed to be a certification by
Counterparty to GS&Co. that such information is true and correct. In addition,
Counterparty shall promptly notify GS&Co. of the earlier to occur of the
completion of such transaction and the completion of the vote by target
shareholders. Counterparty acknowledges that any such notice may cause the terms
of any Transaction to be adjusted or such Transaction to be terminated;
accordingly, Counterparty acknowledges that its delivery of such notice must
comply with the standards set forth in Section 6(c) above.

(b) In connection with a Merger Transaction, GS&Co. in good faith and its
reasonable discretion may (i) suspend the Hedge Period, the Calculation Period
and/or any Settlement Valuation Period and postpone the Scheduled Termination
Date of any Transaction and make related adjustments as if such event were a
Potential

 

10

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Adjustment Event or (ii) treat the occurrence of such public announcement as an
Additional Termination Event with Counterparty as the sole Affected Party and
the Transactions hereunder as the Affected Transactions and, for the avoidance
of doubt, with the amount under Section 6(e) of the Agreement determined in a
commercially reasonable manner taking into account the fact that the Calculation
Period or Settlement Valuation Period, as the case may be, had fewer Scheduled
Trading Days than originally anticipated.

“Merger Transaction” means any merger, acquisition or similar transaction
involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the
Exchange Act. For the avoidance of doubt, transactions in which the
consideration is solely cash and there is no valuation period shall not
constitute “Merger Transactions” hereunder.

9. Special Provisions for Friendly Transaction Announcements. (a) If a Friendly
Transaction Announcement occurs on or prior to the Settlement Date for any
Transaction, then the Number of Shares to be Delivered for such Transaction
shall be determined as if the words “less than the Minimum Shares and not” and
“, but not below zero,” were deleted from the definition thereof. If a Friendly
Transaction Announcement occurs after the Trade Date, but prior to the First
Acceleration Date of any Transaction, the First Acceleration Date shall be the
date of such Friendly Transaction Announcement. If a Friendly Transaction
Announcement occurs after the Settlement Date for any Transaction or any earlier
date of termination or cancellation of such Transaction pursuant to Section 6 of
the Agreement or Article 12 of the Equity Definitions, then a second settlement
of such Transaction (a “Second Settlement”) shall occur (notwithstanding such
earlier termination or cancellation) with a Number of Shares to be Delivered
equal to the lesser of (i) zero and (ii) (x) the Number of Shares to be
Delivered determined pursuant to the first sentence of this paragraph as if such
Friendly Transaction Announcement occurred prior to such Settlement Date minus
(y) the Number of Shares to be Delivered determined pursuant to Section 1 of
this Master Confirmation (provided that in the case of a Second Settlement
occurring after such an early termination or cancellation, a Number of Shares to
be Delivered shall not be determined and instead a Forward Cash Settlement
Amount will be determined as provided in Annex A). If the Number of Shares to be
Delivered for any settlement of any Transaction is a negative number, then the
terms of the Counterparty Settlement Provisions in Annex A shall apply.

(b) “Friendly Transaction Announcement” means (i) an Acquisition Transaction
Announcement by Counterparty or its board of directors prior to the last day of
the Relevant Period or any earlier date of termination or cancellation of the
relevant Transaction pursuant to Section 6 of the Agreement or Article 12 of the
Equity Definitions (such date, the “Actual Termination Date”), (ii) an
announcement by Counterparty or its board of directors prior to the date three
months following the Scheduled Termination Date that an Acquisition Transaction
that is the subject of an Acquisition Transaction Announcement occurring prior
to the Actual Termination Date has been approved, agreed to, recommended by or
otherwise consented to by Counterparty or its board of directors, or negotiated
by Counterparty or any authorized representative of Counterparty, or (iii) where
Counterparty or its board of directors has a legal obligation to make a
recommendation to its shareholders in respect of any such Acquisition
Transaction contemplated by clause (i) or (ii) of this Section 9(b) prior to the
date three months following the Scheduled Termination Date, the absence of a
recommendation that its shareholders reject such transaction.

(c) “Acquisition Transaction Announcement” means (i) the announcement of an
Acquisition Transaction, (ii) an announcement that Counterparty or any of its
subsidiaries has entered into an agreement, a letter of intent or an
understanding designed to result in an Acquisition Transaction, (iii) the
announcement of the intention to solicit or enter into, or to explore strategic
alternatives or other similar undertaking that may include, an Acquisition
Transaction, or (iv) any other announcement that in the reasonable judgment of
the Calculation Agent may result in an Acquisition Transaction. For the
avoidance of doubt, announcements as used in the definition of Acquisition
Transaction Announcement refer to any public announcement whether made by the
Issuer or a third party; provided that in the case of an Acquisition Transaction
of the type described in clause (iv) of the definition thereof, such
announcement shall not be an Acquisition Transaction Announcement with respect
to a Transaction if it occurs after the first 60 calendar days following the
Trade Date for such Transaction.

(d) “Acquisition Transaction” means (i) any Merger Event (for purposes of this
definition the definition of Merger Event shall be read with the references
therein to “100%” being replaced by “15%” and to “50%” by “75%” and without
reference to the clause beginning immediately following the definition of
Reverse Merger therein to the end of such definition), Tender Offer or Merger
Transaction or any other transaction involving the merger of Counterparty with
or into any third party, (ii) the sale or transfer of all or substantially all
of the assets

 

11

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of Counterparty, (iii) a recapitalization, reclassification, binding share
exchange or other similar transaction, (iv) any acquisition, lease, exchange,
transfer, disposition (including by way of spin-off or distribution) of assets
(including any capital stock or other ownership interests in subsidiaries) or
other similar event by Counterparty or any of its subsidiaries where the
aggregate consideration transferable or receivable by or to Counterparty or its
subsidiaries exceeds 20% of the market capitalization of Counterparty and
(v) any transaction in which Counterparty or its board of directors has a legal
obligation to make a recommendation to its shareholders in respect of such
transaction (whether pursuant to Rule 14e-2 under the Exchange Act or
otherwise).

10. Acknowledgments. (a) The parties hereto intend for:

(i) each Transaction to be a “securities contract” as defined in Section 741(7)
of the Bankruptcy Code, a “swap agreement” as defined in Section 101(53B) of the
Bankruptcy Code and a “forward contract” as defined in Section 101(25) of the
Bankruptcy Code, and the parties hereto to be 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), 555, 556, 560 and 561 of the Bankruptcy Code;

(ii) the Agreement to be a “master netting agreement” as defined in
Section 101(38A) of the Bankruptcy Code;

(iii) a party’s right to liquidate, terminate or accelerate any Transaction, net
out or offset termination values or payment amounts, and to exercise any other
remedies upon the occurrence of any Event of Default or Termination Event under
the Agreement with respect to the other party or any Extraordinary Event that
results in the termination or cancellation of any Transaction to constitute a
“contractual right” (as defined in the Bankruptcy Code); and

(iv) all payments for, under or in connection with each Transaction, all
payments for the Shares (including, for the avoidance of doubt, payment of the
Prepayment Amount) and the transfer of such Shares to constitute “settlement
payments” and “transfers” (as defined in the Bankruptcy Code).

(b) Counterparty acknowledges that:

(i) during the term of any Transaction, GS&Co. and its affiliates may buy or
sell Shares or other securities or buy or sell options or futures contracts or
enter into swaps or other derivative securities in order to establish or adjust
its Hedge Position with respect to such Transaction;

(ii) GS&Co. and its affiliates may also be active in the market for the Shares
other than in connection with hedging activities in relation to any Transaction;

(iii) GS&Co. shall make its own determination as to whether, when or in what
manner any hedging or market activities in Counterparty’s securities shall be
conducted and shall do so in a manner that it deems appropriate to hedge its
price and market risk with respect to the Forward Price and the VWAP Price;

(iv) any market activities of GS&Co. and its affiliates with respect to the
Shares may affect the market price and volatility of the Shares, as well as the
Forward Price and VWAP Price, each in a manner that may be adverse to
Counterparty; and

(v) each Transaction is a derivatives transaction in which it has granted GS&Co.
an option; GS&Co. may purchase shares for its own account at an average price
that may be greater than, or less than, the price paid by Counterparty under the
terms of the related Transaction.

(c) Counterparty and GS&Co. acknowledge that none of Counterparty, GS&Co., or
any of their respective affiliates, intends to treat the payment of the
Prepayment Amount by Counterparty to GS&Co. on the Prepayment Date with respect
to any Transaction as a loan for purposes of filing any U.S. federal, state
or local tax return.

 

12

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11. Credit Support Documents. The parties hereto acknowledge that no Transaction
hereunder is secured by any collateral that would otherwise secure the
obligations of Counterparty herein or pursuant to the Agreement.

12. Set-off. (a) The parties agree to amend Section 6 of the Agreement by adding
a new Section 6(f) thereto as follows:

“(f) Upon the occurrence of an Event of Default or Termination Event with
respect to a party who is the Defaulting Party or the Affected Party (“X”), the
other party (“Y”) will have the right (but not be obliged) without prior notice
to X or any other person to set-off or apply any obligation of X owed to Y (or
any Affiliate of Y) (whether or not matured or contingent and whether or not
arising under the Agreement, and regardless of the currency, place of payment or
booking office of the obligation) against any obligation of Y (or any Affiliate
of Y) owed to X (whether or not matured or contingent and whether or not arising
under the Agreement, and regardless of the currency, place of payment or booking
office of the obligation). Y will give notice to the other party of any set-off
effected under this Section 6(f).

Amounts (or the relevant portion of such amounts) subject to set-off may be
converted by Y into the Termination Currency at the rate of exchange at which
such party would be able, acting in a reasonable manner and in good faith, to
purchase the relevant amount of such currency. If any obligation is
unascertained, Y may in good faith estimate that obligation and set-off in
respect of the estimate, subject to the relevant party accounting to the other
when the obligation is ascertained. Nothing in this Section 6(f) shall be
effective to create a charge or other security interest. This Section 6(f) shall
be without prejudice and in addition to any right of set-off, combination of
accounts, lien or other right to which any party is at any time otherwise
entitled (whether by operation of law, contract or otherwise).”

(b) Notwithstanding anything to the contrary in the foregoing, GS&Co. agrees not
to set off or net amounts due from Counterparty with respect to any Transaction
against amounts due from GS&Co. to Counterparty with respect to contracts or
instruments that are not Equity Contracts. “Equity Contract” means any
transaction or instrument that does not convey to GS&Co. rights, or the ability
to assert claims, that are senior to the rights and claims of common
stockholders in the event of Counterparty’s bankruptcy.

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

14. Early Termination. In the event that an Early Termination Date (whether as a
result of an Event of Default or a Termination Event) occurs or is designated
with respect to any Transaction (except as a result of a Merger Event in which
the consideration or proceeds to be paid to holders of Shares consists solely of
cash), if either party would owe any amount to the other party pursuant to
Section 6(d)(ii) and 6(e) of the Agreement (any such amount, a “Payment
Amount”), then, in lieu of any payment of such Payment Amount, Counterparty may,
no later than the Early Termination Date or the date on which such Transaction
is terminated, elect to deliver or for GS&Co. to deliver, as the case may be, to
the other party a number of Shares (or, in the case of a Merger Event, a number
of units, each comprising the number or amount of the securities or property
that a hypothetical holder of one Share would receive in such Merger Event (each
such unit, an “Alternative Delivery Unit” and, the securities or property
comprising such unit, “Alternative Delivery Property”)) with a value equal to
the Payment Amount, as determined by the Calculation Agent (and the parties
agree that, in making such determination of value, the Calculation Agent may
take into account a number of factors, including the market price of the Shares
or Alternative Delivery Property on the date of early termination and, if such
delivery is made by GS&Co., the prices at which GS&Co. purchases

 

13

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Shares or Alternative Delivery Property to fulfill its delivery obligations
under this Section 14); provided that in determining the composition of any
Alternative Delivery Unit, if the relevant Merger Event involves a choice of
consideration to be received by holders, such holder shall be deemed to have
elected to receive the maximum possible amount of cash. If such delivery is made
by Counterparty, paragraphs 2 through 7 of Annex A shall apply as if such
delivery were a settlement of the Transaction to which Net Share Settlement
applied, the Cash Settlement Payment Date were the Early Termination Date and
the Forward Cash Settlement Amount were zero (0) minus the Payment Amount owed
by Counterparty. In no event, however, shall the number of Shares required to be
delivered by Counterparty pursuant to this Master Confirmation be greater than
the Reserved Shares (as defined in the Annex A).

15. Calculations and Payment Date upon Early Termination. The parties
acknowledge and agree that in calculating Loss pursuant to Section 6 of the
Agreement GS&Co. may (but need not) determine losses without reference to actual
losses incurred but based on expected losses assuming a commercially reasonable
(including without limitation with regard to reasonable legal and regulatory
guidelines) risk bid were used to determine loss to avoid awaiting the delay
associated with closing out any hedge or related trading position in a
commercially reasonable manner prior to or sooner following the designation of
an Early Termination Date. Notwithstanding anything to the contrary in
Section 6(d)(ii) of the Agreement, all amounts calculated as being due in
respect of an Early Termination Date under Section 6(e) of the Agreement will be
payable on the day that notice of the amount payable is effective; provided that
if Counterparty elects to receive Shares or Alternative Delivery Property in
accordance with Section 14, such Shares or Alternative Delivery Property shall
be delivered on a date selected by GS&Co. as promptly as practicable in a
commercially reasonable manner.

16. Special Provisions for Counterparty Payments. The parties hereby agree that,
notwithstanding anything to the contrary herein or in the Agreement, in the
event that an Early Termination Date (whether as a result of an Event of Default
or a Termination Event) occurs or is designated with respect to any Transaction
and, as a result, Counterparty owes to GS&Co. an amount calculated under
Section 6(e) of the Agreement, such amount shall be deemed to be zero; provided
that following a Friendly Transaction Announcement, this Section 16 shall cease
to apply.

17. Delivery of Cash. For the avoidance of doubt, nothing in this Master
Confirmation shall be interpreted as requiring Counterparty to deliver cash in
respect of the settlement of the Transactions contemplated by this Master
Confirmation following payment by Counterparty of the relevant Prepayment
Amount, except in circumstances where the required cash settlement thereof is
permitted for classification of the contract as equity by EITF 00-19 as in
effect on the relevant Trade Date (including, without limitation, where
Counterparty so elects to deliver cash or fails timely to elect to deliver
Shares or Alternative Delivery Property in respect of the settlement of such
Transactions).

18. Agreements in Respect of Termination Amounts. Notwithstanding any provision
of this Master Confirmation, any Supplemental Confirmation, the Agreement or the
Equity Definitions to the contrary, in determining any amounts payable in
respect of the termination or cancellation of any Transaction pursuant to
Section 6 of the Agreement, Article 12 of the Equity Definitions or Section 14
of this Master Confirmation, the Calculation Agent shall make such determination
without regard to changes in dividends (including, without limitation,
Extraordinary Dividends) stock loan rates, liquidity or hedging costs.

19. Agreement in Respect of Adjustments. Notwithstanding any provision of this
Master Confirmation, any Supplemental Confirmation, the Agreement or the Equity
Definitions to the contrary, the Calculation Agent shall not make any adjustment
in respect of any Transaction pursuant to Article 11 or Article 12 of the Equity
Definitions or pursuant to this Master Confirmation to account for changes in
dividends (including, without limitation, Extraordinary Dividends), stock loan
rate, liquidity or hedging costs.

20. Explanations Provided. As soon as reasonably practicable upon request after
any calculation, adjustment or determination with respect to any Transaction
hereunder the Calculation Agent (or GS&Co., as applicable, if making any
calculation, adjustment or determination expressly provided in this Master
Confirmation to be made by GS&Co.) shall provide to Counterparty a reasonably
detailed explanation of such calculation, adjustment or determination.

 

14

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21. Claim in Bankruptcy. GS&Co. 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.

22. General Obligations Law of New York. With respect to each Transaction,
(i) this Master Confirmation, together with the related Supplemental
Confirmation, as supplemented by the related Trade Notification, is a “qualified
financial contract”, as such term is defined in Section 5-701(b)(2) of the
General Obligations Law of New York (the “General Obligations Law”); (ii) such
Trade Notification constitutes a “confirmation in writing sufficient to indicate
that a contract has been made between the parties” hereto, as set forth in
Section 5-701(b)(3)(b) of the General Obligations Law; and (iii) this Master
Confirmation, together with the related Supplemental Confirmation, constitutes a
prior “written contract” as set forth in Section 5-701(b)(1)(b) of the General
Obligations Law, and each party hereto intends and agrees to be bound by this
Master Confirmation and the related Supplemental Confirmation, as supplemented
by the Trade Notification.

23. Governing Law. The Agreement, this Master Confirmation, each Supplemental
Confirmation, each Trade Notification and all matters arising in connection with
the Agreement, this Master Confirmation, each Supplemental Confirmation and each
Trade Notification shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York (without reference to its
choice of laws doctrine other than Title 14 of Article 5 of the New York General
Obligations Law).

24. Offices.

(a) The Office of GS&Co. for each Transaction is: One New York Plaza, New York,
New York 10004.

(b) The Office of Counterparty for each Transaction is: 333 Lakeside Drive,
Foster City, California 94404.

25. Arbitration. The Agreement, this Master Confirmation, each Supplemental
Confirmation and each Trade Notification are subject to the following
arbitration provisions:

(a) All parties to this Confirmation are giving up the right to sue each other
in court, including the right to a trial by jury, except as provided by the
rules of the arbitration forum in which a claim is filed.

(b) Arbitration awards are generally final and binding; a party’s ability to
have a court reverse or modify an arbitration award is very limited.

(c) The ability of the parties to obtain documents, witness statements and other
discovery is generally more limited in arbitration than in court proceedings.

(d) The arbitrators do not have to explain the reason(s) for their award.

(e) The panel of arbitrators will typically include a minority of arbitrators
who were or are affiliated with the securities industry, unless Counterparty is
a member of the organization sponsoring the arbitration facility, in which case
all arbitrators may be affiliated with the securities industry.

(f) The rules of some arbitration forums may impose time limits for bringing a
claim in arbitration. In some cases, a claim that is ineligible for arbitration
may be brought in court.

(g) The rules of the arbitration forum in which the claim is filed, and any
amendments thereto, shall be incorporated into this Master Confirmation.

Counterparty agrees that any and all controversies that may arise between
Counterparty and GS&Co., including, but not limited to, those arising out of or
relating to the Agreement or any Transaction hereunder, shall be determined by
arbitration conducted before The New York Stock Exchange, Inc.

 

15

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(“NYSE”) or NASD Dispute Resolution (“NASD-DR”), or, if the NYSE and NASD-DR
decline to hear the matter, before the American Arbitration Association, in
accordance with their arbitration rules then in force. The award of the
arbitrator shall be final, and judgment upon the award rendered may be entered
in any court, state or federal, having jurisdiction.

No person shall bring a putative or certified class action to arbitration, nor
seek to enforce any pre-dispute arbitration agreement against any person who has
initiated in court a putative class action or who is a member of a putative
class who has not opted out of the class with respect to any claims encompassed
by the putative class action until: (i) the class certification is denied;
(ii) the class is decertified; or (iii) Counterparty is excluded from the class
by the court.

Such forbearance to enforce an agreement to arbitrate shall not constitute a
waiver of any rights under this Master Confirmation except to the extent stated
herein.

26. Counterparts. This Master Confirmation may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Master Confirmation by signing and delivering one
or more counterparts.

 

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EXECUTION COPY

Counterparty hereby agrees (a) to check this Master 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 GS&Co.) correctly sets forth the terms of the agreement between
GS&Co. and Counterparty with respect to any particular Transaction to which this
Master Confirmation relates, by manually signing this Master 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
Equity Derivatives Documentation Department, Facsimile No. 212-428-1980/83.

 

Yours faithfully, GOLDMAN, SACHS & CO. By:   /s/ David Goldenberg   Authorized
Signatory   David Goldenberg, Vice President

 

Agreed and Accepted By: GILEAD SCIENCES, INC. By:   /s/ John F. Milligan, Ph.D.
  Name:   John F. Milligan, Ph.D.   Title:   Chief Operating Officer and Chief
Financial Officer

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SCHEDULE A

SUPPLEMENTAL CONFIRMATION

 

To:   

Gilead Sciences, Inc.

333 Lakeside Drive

Foster City, CA 94404

From:    Goldman, Sachs & Co. Subject:    Collared Accelerated Stock Buyback
Ref. No:    [Insert Reference No.] Date:    [Insert Date]

The purpose of this Supplemental Confirmation is to confirm the terms and
conditions of the Transaction entered into between Goldman, Sachs & Co.
(“GS&Co.”) and Gilead Sciences, Inc. (“Counterparty”) (together, the
“Contracting Parties”) on the Trade Date specified below. This Supplemental
Confirmation is a binding contract between GS&Co. and Counterparty as of the
relevant Trade Date for the Transaction referenced below.

1. This Supplemental Confirmation supplements, forms part of, and is subject to
the Master Confirmation dated as of February 29, 2008 (the “Master
Confirmation”) between the Contracting Parties, as amended and supplemented from
time to time. All provisions contained in the Master Confirmation govern this
Supplemental Confirmation except as expressly modified below.

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

 

Trade Date:    [            ] Forward Price Adjustment Amount:    USD [        ]
Hedge Period End Date:    [                ]

Scheduled Termination Date:

   [                ]

First Acceleration Date:

   [                ]

Prepayment Amount:

   USD [                ]

Prepayment Date:

   [            ]

Initial Shares:

   [                ] Shares

Initial Share Delivery Date:

   [            ]

Minimum Shares:

   As set forth in the Trade Notification, to be a number of Shares equal to (a)
the Prepayment Amount divided by (b) [ ]% of the Hedge Period Reference Price.

Maximum Shares:

   As set forth in the Trade Notification, to be a number of Shares equal to (a)
the Prepayment Amount divided by (b) [ ]% of the Hedge Period Reference Price.

 

A-1

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Additional Relevant Days:    The 10 Exchange Business Days immediately following
the Termination Date.

3. Counterparty represents and warrants to GS&Co. that neither it nor any
“affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) has
made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under
the Exchange Act during either (i) the four full calendar weeks immediately
preceding the Trade Date or (ii) during the calendar week in which the Trade
Date occurs.

4. This Supplemental Confirmation may be executed in any number of counterparts,
all of which shall constitute one and the same instrument, and any party hereto
may execute this Supplemental Confirmation by signing and delivering one or more
counterparts.

 

A-2

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Counterparty hereby agrees (a) to check this Supplemental 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 GS&Co.) correctly sets forth the terms of the agreement between
GS&Co. and Counterparty with respect to the Transaction to which this
Supplemental Confirmation relates, by manually signing this Supplemental
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 Equity Derivatives Documentation Department, facsimile
No. 212-428-1980/83.

 

Yours sincerely, GOLDMAN, SACHS & CO. By:       Authorized Signatory

 

Agreed and Accepted By: GILEAD SCIENCES, INC. By:       Name:   Title:

 

A-3

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SCHEDULE B

TRADE NOTIFICATION

 

To:   

Gilead Sciences, Inc.

333 Lakeside Drive

Foster City, CA 94404

From:    Goldman, Sachs & Co. Subject:    Collared Accelerated Stock Buyback
Ref. No:    [Insert Reference No.] Date:    [Insert Date]

The purpose of this Trade Notification is to notify you of certain terms in the
Transaction entered into between Goldman, Sachs & Co. (“GS&Co.”) and Gilead
Sciences, Inc. (“Counterparty”) (together, the “Contracting Parties”) on the
Trade Date specified below.

This Trade Notification supplements, forms part of, and is subject to the
Supplemental Confirmation dated as of [Insert Date of Supplemental Confirmation]
(the “Supplemental Confirmation”) between the Contracting Parties, as amended
and supplemented from time to time. The Supplemental Confirmation is subject to
the Master Confirmation dated as of February 29, 2008 (the “Master
Confirmation”) between the Contracting Parties, as amended and supplemented from
time to time.

 

Hedge Completion Date:    [            ] Calculation Period Start Date:   
[            ] Hedge Period Reference Price:    USD [            ] Minimum
Shares:    [        ] Maximum Shares:    [        ]

 

Yours sincerely, GOLDMAN, SACHS & CO. By:       Authorized Signatory

 

B-1

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ANNEX A

COUNTERPARTY SETTLEMENT PROVISIONS

1. The following Counterparty Settlement Provisions shall apply to the extent
indicated under the Master Confirmation:

 

Settlement Currency:    USD Settlement Method Election:    Applicable; provided
that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the
word “Physical” in the sixth line thereof and replacing it with the words “Net
Share” and (ii) the Electing Party may make a settlement method election only if
the Electing Party represents and warrants to GS&Co. in writing on the date it
notifies GS&Co. of its election that, as of such date, the Electing Party is not
aware of any material non-public information concerning Counterparty or the
Shares and is electing the settlement method in good faith and not as part of a
plan or scheme to evade compliance with the federal securities laws. Electing
Party:    Counterparty Settlement Method    Election Date:    The Termination
Date; provided that if GS&Co. accelerates the Termination Date pursuant to the
proviso to the definition of “Termination Date,” the Settlement Method Election
Date shall be the second Exchange Business Day immediately following the
Termination Date, and the latest time for making such Settlement Method Election
shall be 10 minutes prior to the open of trading on the Exchange on such second
Exchange Business Day; and provided further that if a Friendly Transaction
Announcement occurs after the Settlement Date, the Settlement Method Election
Date for the Second Settlement shall be the date of the Friendly Transaction
Announcement. Default Settlement Method:    Cash Settlement Forward Cash
Settlement    Amount:    The Number of Shares to be Delivered multiplied by the
Settlement Price; provided that in the case of a Second Settlement occurring
after an early termination or cancellation of the relevant Transaction pursuant
to Section 6 of the Agreement or Article 12 of the Equity Definitions, the
Forward Cash Settlement Amount shall equal the lesser of (i) zero and (ii)(x)
the Payment Amount that would have been calculated for such early termination or
cancellation if the words “less than the Minimum Shares and not” and “,but not
below zero,” had been deleted from the definition of Number of Shares to be
Delivered and, for purposes of “Special Provisions for Counterparty Payments” of
the Master Confirmation, the relevant Friendly Transaction Announcement had
occurred prior to such calculation, as determined by the Calculation Agent (with
an amount that would have been owed by Counterparty expressed as a negative
number for purposes of this calculation) minus (y) the actual Payment Amount
calculated for such early termination or cancellation.

 

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Settlement Price:    The average of the VWAP Prices (or, in the case of a
Second Settlement, the Relevant Prices) for the Exchange
Business Days in the Settlement Valuation Period, subject
to Valuation Disruption as specified in the Master
Confirmation or, in the case of a Second Settlement,
subject to Section 6.6(a) of the Equity Definitions as if
such dates were Valuation Dates. Settlement Valuation Period:    A number of
Scheduled Trading Days, not to exceed 30, selected by GS&Co. in its discretion,
beginning on the Scheduled Trading Day immediately following the Termination
Date or, in the case of a Second Settlement, the date of the Friendly
Transaction Announcement; provided that GS&Co. may determine a higher number of
Scheduled Trading Days as it shall determine in good faith and in a commercially
reasonable manner to be appropriate in light of legal or regulatory
considerations. Cash Settlement:    If Cash Settlement is applicable, then Buyer
shall pay to Seller the absolute value of the Forward Cash Settlement Amount on
the Cash Settlement Payment Date. Cash Settlement    Payment Date:    The date
one Settlement Cycle following the last day of the Settlement Valuation Period.
Net Share Settlement    Procedures:    If Net Share Settlement is applicable,
Net Share Settlement shall be made in accordance with paragraphs 2 through 7
below.

2. Net Share Settlement shall be made by delivery on the Cash Settlement Payment
Date of a number of Shares satisfying the conditions set forth in paragraph 3
below (the “Registered Settlement Shares”), or a number of Shares not satisfying
such conditions (the “Unregistered Settlement Shares”), in either case with a
value equal to the absolute value of the Forward Cash Settlement Amount, with
such Shares’ value based on the value thereof to GS&Co. (which value shall, in
the case of Unregistered Settlement Shares, take into account a commercially
reasonable illiquidity discount), in each case as determined by the Calculation
Agent.

3. Counterparty may only deliver Registered Settlement Shares pursuant to
paragraph 2 above if:

(a) a registration statement covering public resale of the Registered Settlement
Shares by GS&Co. and any other underwriter(s) (the “Registration Statement”)
shall have been filed with the Securities and Exchange Commission under the
Securities Act and been declared or otherwise become effective on or prior to
the date of delivery, and no stop order shall be in effect with respect to the
Registration Statement; a printed prospectus relating to the Registered
Settlement Shares (including any prospectus supplement thereto, the
“Prospectus”) shall have been delivered to GS&Co. and any other underwriter(s),
in such quantities as GS&Co. shall reasonably have requested, on or prior to the
date of delivery;

 

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(b) the form and content of the Registration Statement and the Prospectus
(including, without limitation, any sections describing the plan of
distribution) shall be reasonably satisfactory to GS&Co.;

(c) as of or prior to the date of delivery, GS&Co. and its agents shall have
been afforded a reasonable opportunity to conduct a due diligence investigation
with respect to Counterparty customary in scope for underwritten offerings of
equity securities of similar size, as determined by GS&Co. in its good faith and
commercially reasonable discretion, taking into account market conditions
prevailing at that time and conditions and nature of Counterparty at that time
(including, without limitation, if deemed appropriate by GS&Co., the right to
have made available to them for inspection all financial and other records,
pertinent corporate documents and other information reasonably requested by
them), and the results of such investigation are satisfactory to GS&Co., in its
commercially reasonable discretion; and

(d) as of the date of delivery, an agreement (the “Underwriting Agreement”)
shall have been entered into with GS&Co. and any other underwriter(s) in
connection with the public resale of the Registered Settlement Shares by GS&Co.
and any other underwriter(s) substantially similar to underwriting agreements
customary for underwritten offerings of equity securities of similar size, in
form and substance reasonably satisfactory to GS&Co., which Underwriting
Agreement shall include, without limitation, provisions substantially similar to
those contained in such underwriting agreements relating, without limitation, to
the indemnification of, and contribution in connection with the liability of,
GS&Co. and its affiliates and the provision of customary opinions, accountants’
comfort letters and lawyers’ negative assurance letters.

4. If Counterparty delivers Unregistered Settlement Shares pursuant to paragraph
2 above, then Counterparty covenants as follows:

(a) all Unregistered Settlement Shares shall be delivered to GS&Co. (or any
affiliate of GS&Co. designated by GS&Co.) and any other initial purchaser(s)
pursuant to the exemption from the registration requirements of the Securities
Act provided by Section 4(2) thereof;

(b) as of or prior to the date of delivery, GS&Co. and any other initial
purchaser(s) and any potential purchaser of any such shares from GS&Co. (or any
affiliate of GS&Co. designated by GS&Co.) or from any other initial purchaser(s)
identified by GS&Co. shall be afforded a commercially reasonable opportunity to
conduct a due diligence investigation with respect to Counterparty customary in
scope for private placements of equity securities of similar size, as determined
by GS&Co. in its good faith and commercially reasonable discretion, taking into
account market conditions prevailing at that time and conditions and nature of
Counterparty at that time (including, without limitation, if deemed appropriate
by GS&Co., the right to have made available to them for inspection all financial
and other records, pertinent corporate documents and other information
reasonably requested by them);

(c) as of the date of delivery, Counterparty shall enter into an agreement (a
“Private Placement Agreement”) with GS&Co. (or any affiliate of GS&Co.
designated by GS&Co.) and any other initial purchaser(s) in connection with the
private placement of such shares by Counterparty to GS&Co. (or any such
affiliate) and any other initial purchaser(s) and the private resale of such
shares by GS&Co. (or any such affiliate) and any other initial purchaser(s),
substantially similar to private placement purchase agreements customary for
private placements of equity securities of similar size, in form and substance
satisfactory to GS&Co. in its good faith and commercially reasonable discretion,
which Private Placement Agreement shall include, without limitation, provisions
substantially similar to those contained in such private placement purchase
agreements relating, without limitation, to the indemnification of, and
contribution in connection with the liability of, GS&Co. and its affiliates and
any other initial purchaser(s) and the provision of customary opinions,
accountants’ comfort letters and lawyers’ negative assurance letters, and shall
provide for the payment by Counterparty of all commercially reasonable fees and
expenses in connection with such resale, including all commercially reasonable
fees and expenses of counsel for GS&Co. and any other initial purchaser(s), and
shall contain representations, warranties, covenants 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

 

3

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(d) in connection with the private placement of such shares by Counterparty to
GS&Co. (or any such affiliate) and any other initial purchaser(s) and the
private resale of such shares by GS&Co. (or any such affiliate) and any other
initial purchaser(s), Counterparty shall, if so requested by GS&Co. in its good
faith and commercially reasonable discretion, prepare, in cooperation with
GS&Co., a customary private placement memorandum in form and substance
reasonably satisfactory to GS&Co. and any other initial purchaser(s).

5. GS&Co., itself or through an affiliate (the “Selling Agent”) or any
underwriter(s), will sell all, or such lesser portion as may be required
hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares
and any Makewhole Shares (as defined below) (together, the “Settlement Shares”)
delivered by Counterparty to GS&Co. pursuant to paragraph 6 below commencing on
the Cash Settlement Payment Date and continuing until the date on which the
aggregate Net Proceeds (as such term is defined below) of such sales, as
determined by GS&Co., is equal to the absolute value of the Forward Cash
Settlement Amount (such date, the “Final Resale Date”). If the proceeds of any
sale(s) made by GS&Co., the Selling Agent or any underwriter(s), net of any fees
and commissions (including, without limitation, underwriting or placement fees)
customary for similar transactions under the circumstances at the time of the
offering, together with carrying charges and expenses incurred in connection
with the offer and sale of the Shares (including, but without limitation to, the
covering of any over-allotment or short position (syndicate or otherwise)) (the
“Net Proceeds”) exceed the absolute value of the Forward Cash Settlement Amount,
GS&Co. will refund, in USD, such excess to Counterparty on the date that is
three (3) Currency Business Days following the Final Resale Date, and, if any
portion of the Settlement Shares remains unsold, GS&Co. shall return to
Counterparty on that date such unsold Shares.

6. If the Calculation Agent determines that the Net Proceeds received from the
sale of the Registered Settlement Shares or Unregistered Settlement Shares or
any Makewhole Shares, if any, pursuant to this paragraph 6 are less than the
absolute value of the Forward Cash Settlement Amount (the amount in USD by which
the Net Proceeds are less than the absolute value of the Forward Cash Settlement
Amount being the “Shortfall” and the date on which such determination is made,
the “Deficiency Determination Date”), Counterparty shall on the Exchange
Business Day next succeeding the Deficiency Determination Date (the “Makewhole
Notice Date”) deliver to GS&Co., through the Selling Agent, a notice of
Counterparty’s election that Counterparty shall either (i) pay an amount in cash
equal to the Shortfall on the day that is one (1) Currency Business Day after
the Makewhole Notice Date, or (ii) deliver additional Shares. If Counterparty
elects to deliver to GS&Co. additional Shares, then Counterparty shall deliver
additional Shares in compliance with the terms and conditions of paragraph 3 or
paragraph 4 above, as the case may be (the “Makewhole Shares”), on the first
Clearance System Business Day which is also an Exchange Business Day following
the Makewhole Notice Date in such number as the Calculation Agent reasonably
believes would have a market value on that Exchange Business Day equal to the
Shortfall. Such Makewhole Shares shall be sold by GS&Co. and any other
underwriter(s) or initial purchaser(s) in accordance with the provisions above;
provided that if the sum of the Net Proceeds from the sale of the originally
delivered Shares and the Net Proceeds from the sale of any Makewhole Shares is
less than the absolute value of the Forward Cash Settlement Amount then
Counterparty shall, at its election, either make such cash payment or deliver to
GS&Co. further Makewhole Shares until such Shortfall has been reduced to zero.

7. Notwithstanding the foregoing, in no event shall the aggregate number of
Settlement Shares and Makewhole Shares be greater than the Reserved Shares minus
the amount of any Shares actually delivered by Counterparty under any other
Transaction(s) under this Master Confirmation (the result of such calculation,
the “Capped Number”). Counterparty represents and warrants (which shall be
deemed to be repeated on each day that a Transaction is outstanding) that the
Capped Number is equal to or less than the number of Shares determined according
to the following formula:

A – B

 

Where    A = the number of authorized but unissued shares of the Counterparty
that are not reserved for future
issuance on the date of the determination of the Capped Number; and    B = the
maximum number of Shares required to be delivered to third parties if
Counterparty elected Net Share Settlement of all transactions in the Shares
(other than Transactions in the Shares under this Master Confirmation) with all
third parties that are then currently outstanding and unexercised.

“Reserved Shares” means initially, 23,000,000 Shares. The Reserved Shares may be
increased or decreased in a Supplemental Confirmation.

 

4

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SUPPLEMENTAL CONFIRMATION

 

To:   

Gilead Sciences, Inc.

333 Lakeside Drive

Foster City, CA 94404

From:    Goldman, Sachs & Co. Subject:    Collared Accelerated Stock Buyback
Ref. No:    SDB1626953575 Date:    February 29, 2008

The purpose of this Supplemental Confirmation is to confirm the terms and
conditions of the Transaction entered into between Goldman, Sachs & Co.
(“GS&Co.”) and Gilead Sciences, Inc. (“Counterparty”) (together, the
“Contracting Parties”) on the Trade Date specified below. This Supplemental
Confirmation is a binding contract between GS&Co. and Counterparty as of the
relevant Trade Date for the Transaction referenced below.

1. This Supplemental Confirmation supplements, forms part of, and is subject to
the Master Confirmation dated as of February 29, 2008 (the “Master
Confirmation”) between the Contracting Parties, as amended and supplemented from
time to time. All provisions contained in the Master Confirmation govern this
Supplemental Confirmation except as expressly modified below.

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

 

Trade Date:    February 29, 2008 Forward Price Adjustment Amount:    USD 0.24
Hedge Period End Date:    March 7, 2008 Scheduled Termination Date:    June 25,
2008 First Acceleration Date:    April 7, 2008 Prepayment Amount:   
USD 500,000,000 Prepayment Date:    March 5, 2008 Initial Shares:    7,204,334
Shares Initial Share Delivery Date:    March 5, 2008 Minimum Shares:    As set
forth in the Trade Notification, to be a number of Shares equal to (a) the
Prepayment Amount divided by (b) 110% of the Hedge Period Reference Price.
Maximum Shares:    As set forth in the Trade Notification, to be a number of
Shares equal to (a) the Prepayment Amount divided by (b) 90% of the Hedge Period
Reference Price. Additional Relevant Days:    The 10 Exchange Business Days
immediately following the Termination Date.

 

1

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3. Counterparty represents and warrants to GS&Co. that neither it nor any
“affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) has
made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under
the Exchange Act during either (i) the four full calendar weeks immediately
preceding the Trade Date or (ii) during the calendar week in which the Trade
Date occurs.

4. This Supplemental Confirmation may be executed in any number of counterparts,
all of which shall constitute one and the same instrument, and any party hereto
may execute this Supplemental Confirmation by signing and delivering one or more
counterparts.

 

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Counterparty hereby agrees (a) to check this Supplemental 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 GS&Co.) correctly sets forth the terms of the agreement between
GS&Co. and Counterparty with respect to the Transaction to which this
Supplemental Confirmation relates, by manually signing this Supplemental
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 Equity Derivatives Documentation Department, facsimile
No. 212-428-1980/83.

 

Yours sincerely, GOLDMAN, SACHS & CO. By:   /s/ David Goldenberg   Authorized
Signatory   David Goldenberg, Vice President

 

Agreed and Accepted By: GILEAD SCIENCES, INC. By:   /s/ John F. Milligan, Ph.D.
  Name:   John F. Milligan, Ph.D.   Title:   Chief Operating Officer and Chief
Financial Officer