Exhibit 10.23.2
(JPMORGAN LOGO) [w34524w3452401.gif]
JPMorgan Chase Bank, National Association
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England
April 4, 2007
To: CapitalSource Inc.
4445 Willard Avenue, 12th Floor
Chevy Chase, MD 20815
Attention: Chief Financial Officer
Telephone No.: 301-841-2866
Facsimile No.: 301-841-2307
Re: Warrants
Reference Number: 2480428
     If a Release Notice (as defined in the Letter Agreement (the “Letter
Agreement”) dated as of February 13, 2007 between JPMorgan Chase Bank, National
Association, London Branch (“JPMorgan”), and CapitalSource Inc. (“Company”)) has
been delivered to JPMorgan pursuant to Section 2(a) of the Letter Agreement,
this Confirmation shall become effective and shall amend and supersede all prior
Confirmations regarding the Transaction (as defined herein), including, without
limitation, the ISDA confirmation between Company and JPMorgan dated March 16,
2004 (the “Original Confirmation”).
     The purpose of this letter agreement is to confirm the terms and conditions
of the Warrants issued by the Company to JPMorgan on the Trade Date specified
below (the “Transaction”). This letter agreement constitutes a “Confirmation” as
referred to in the ISDA Master Agreement specified below. This Confirmation
shall replace any previous letter and serve as the final documentation for this
Transaction.
     The definitions and provisions contained in the 1996 ISDA Equity
Derivatives Definitions (the “Equity Definitions”), as published by the
International Swaps and Derivatives Association, Inc., are incorporated into
this Confirmation. In the event of any inconsistency between the Equity
Definitions and this Confirmation, this Confirmation shall govern. This
Transaction shall be deemed to be a Share Option Transaction within the meaning
set forth in the Equity Definitions.
     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.
     1. This Confirmation evidences a complete and binding agreement between
JPMorgan and the Company as to the terms of the Transaction to which this
Confirmation relates. This Confirmation shall supplement, form a part of, and be
subject to an agreement in the form of the 2002 ISDA Master Agreement (the
“Agreement”) as if JPMorgan and the Company had executed an agreement in such
form (but without any Schedule except for the election of the laws of the State
of New York as the governing law and United States dollars as the Termination
Currency) on the Trade Date. In the event of any inconsistency between
provisions of that Agreement and this Confirmation, this Confirmation will
prevail for the purpose of the Transaction to which this Confirmation relates.
The parties hereby
JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association.
Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
Registered as a branch in England & Wales branch No. BR000746. Registered
Branch Office 125 London Wall, London EC2Y 5AJ
Authorised and regulated by the Financial Services Authority

 

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agree that no Transaction other than the Transaction to which this Confirmation
relates shall be governed by the Agreement.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:

     
General Terms:
   
 
   
Trade Date:
  March 16, 2004
 
   
Warrants:
  Equity call warrants to be issued by the Company to JPMorgan, each giving the
holder the right to purchase one Share at the Strike Price, subject to the
Settlement Terms set forth below. For the purposes of Equity Definitions, each
reference to a Warrant shall be deemed to be a reference to a Call Option.
 
   
Warrant Style:
  American
 
   
Buyer:
  JPMorgan
 
   
Seller:
  Company
 
   
Shares:
  The common stock of Company, par value USD 0.01 per Share (Exchange symbol
“CSE”)
 
   
Number of Warrants:
  7,401,420
 
   
Warrant Entitlement:
  One Share per Warrant
 
   
Multiple Exercise:
  Applicable
 
   
Minimum Number of Warrants:
  1
 
   
Maximum Number of Warrants:
  7,401,420
 
   
Strike Price:
  USD 40.3025 (which represents the Strike Price as of the Trade Date; the
Strike Price has been subsequently adjusted since the Trade Date and is as of
April 4, 2007 USD 30.5594).
 
   
Premium:
  USD 24,220,377.30 (which Premium was paid to Company on the Premium Payment
Date pursuant to the terms of the Original Confirmation).
 
   
Premium Payment Date:
  March 19, 2004
 
   
Exchange:
  The New York Stock Exchange
 
   
Related Exchange(s):
  The principal exchange(s) for options contracts or futures contracts, if any,
with respect to the Shares
 
   
Exercise and Valuation:
   
 
   
Expiration Time:
  The Valuation Time
 
   
Expiration Date(s):
  For any Daily Number of Warrants, each date specified as such in Annex A
hereto.

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Automatic Exercise:
  Applicable; and means that, a number of unexercised Warrants for each
Expiration Date equal to the Daily Number of Warrants (as adjusted pursuant to
the terms hereof) for such Expiration Date will be deemed to be automatically
exercised.
 
   
Valuation applicable to each Warrant:
   
 
   
Valuation Time:
  At the close of trading of the regular trading session on the Exchange;
provided that if the principal trading session is extended, the Calculation
Agent shall determine the Valuation Time in its sole discretion.
 
   
Valuation Date:
  Each Exercise Date. Notwithstanding anything to the contrary in the Equity
Definitions, if there is a Market Disruption Event on any Valuation Date, then
the Calculation Agent shall determine the Settlement Price for such Valuation
Date, as the case may be, on the basis of its good faith estimate of the trading
value for the relevant Shares.
 
   
Settlement Terms applicable to the Transaction:
 
   
Method of Settlement:
  Net Share Settlement; and means that, on each Settlement Date, Company shall
deliver to JPMorgan, the Share Delivery Quantity of Shares for such Settlement
Date to the account specified hereto free of payment through the Clearance
System.
 
   
Share Delivery Quantity:
  For any Settlement Date, a number of Shares, as calculated by the Calculation
Agent, equal to the Net Share Settlement Amount for such Settlement Date divided
by the Settlement Price on the Valuation Date in respect of such Settlement
Date, plus cash in lieu of any fractional shares (based on such Settlement
Price).
 
   
Net Share Settlement Amount:
  For any Settlement Date, any amount equal to (i) the Number of Warrants being
exercised on the relevant Exercise Date (or in the case of any exercise
(including any Automatic Exercise) on an Expiration Date, the Daily Number of
Warrants for such Expiration Date) multiplied by (ii) the Strike Price
Differential for such Settlement Date. For avoidance of doubt, if any Warrants
are exercised prior to the first Expiration Date, the Calculation Agent will
proportionately adjust each Daily Number of Warrants to reflect such exercise.
 
   
Strike Price Differential:
  (a) If the Settlement Price for any Valuation Date is greater than the Strike
Price, an amount equal to the excess of such Settlement Price over the Strike
Price; or
 
   
 
  (b) If such Settlement Price is less than or equal to the Strike Price, zero.
 
   
Settlement Price:
  For any Valuation Date, the closing sale price per Share quoted by the
Exchange (or, if no closing sale price is so quoted, the last reported sale
price) as of the Valuation Time on the Valuation Date.
 
   
Settlement Date:
  For any Exercise Date, the date defined as such in Section 6.2 of the Equity
Definitions, subject to Section 9(r)(i) hereof.

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Failure to Deliver:
  Applicable
 
   
Other Applicable Provisions:
  The provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 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”. “Net
Share Settled” in relation to any Warrant means that Net Share Settlement is
applicable to that Warrant.
 
   
3. Additional Terms applicable to the Transaction:
 
   
Adjustments applicable to the Warrants:
   
 
   
Method of Adjustment:
  Calculation Agent Adjustment. For avoidance of doubt, in making any
adjustments under the Equity Definitions, the Calculation Agent may adjust the
Daily Number of Warrants.
 
   
Extraordinary Events applicable to the Transaction:
 
   
Consequence of Merger Events
   
 
   
(a) Share-for-Share:
  Alternative Obligation; provided that the Calculation Agent will determine if
the Merger Event affects the theoretical value of the Transaction and if so
JPMorgan in its sole discretion may elect to make adjustments to the Strike
Price and any other term necessary to reflect the characteristics (including
volatility, dividend practice and policy and liquidity) of the New Shares.
Notwithstanding the foregoing, Cancellation and Payment shall apply in the event
the New Shares are not publicly traded on a United States national securities
exchange.
 
   
(b) Share-for-Other:
  Cancellation and Payment
 
   
(c) Share-for-Combined:
  Cancellation and Payment
 
   
Nationalization or Insolvency:
  Cancellation and Payment
 
   
4. Calculation Agent:
  JPMorgan, whose calculations and determinations shall be made in good faith
and in a commercially reasonable manner, including with respect to calculations
and determinations that are made in its sole discretion.

5. Account Details:

  (a)   Account for payments to Company:

Bank of America, New York
ABA: 026009593
Acct Name: CapitalSource Finance LLC
Acct No.: 003930250176
Account for delivery of Shares to Company:
To be determined in advance of any such delivery.

  (b)   Account for payments to JPMorgan:

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JPMorgan Chase Bank, National Association, New York
ABA: 021 000 021
Favour: JPMorgan Chase Bank, National Association – London
A/C: 0010962009 CHASUS33
Account for delivery of Shares from JPMorgan:
DTC 0060
6. Offices:
The Office of Company for the Transaction is: Inapplicable, Company is not a
Multibranch Party.
The Office of JPMorgan for the Transaction is: New York
JPMorgan Chase Bank, National Association
London Branch
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England
7. Notices: For purposes of this Confirmation:

  (a)   Address for notices or communications to Company:

CapitalSource Inc.
4445 Willard Avenue, 12th Floor
Chevy Chase, MD 20815
Attention: Chief Financial Officer
Telephone No.: 301-841-2866
Facsimile No.: 301-841-2307
Address for notices or communications to JPMorgan:
JPMorgan notice information to follow:
JPMorgan Chase Bank, National Association
277 Park Avenue, 11th Floor
New York, NY 10172
Attention: Eric Stefanik
Title: Operations Analyst
EDG Corporate Marketing
Telephone No: (212) 622-5814
Facsimile No: (212) 622-8534
8. Representations, Warranties of the Company

  (a)   The Company hereby represents and warrants to JPMorgan that the Company
has been duly incorporated and is an existing corporation in good standing under
the laws of the State of Delaware, with corporate power and authority to own its
properties and conduct its business as set forth or incorporated by reference in
or contemplated by Company’s Form S-4 Registration Statement (file number
333-140650) filed February 13, 2007, as the same may be amended (the
“Form S-4”), related to the Exchange Offer as defined in the Letter Agreement
(as amended by any subsequent annual, quarterly and current reports filed and
other filings made to the date hereof

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      under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), including, without limitation, any Form 10-K filed by the Company
subsequent to the Company’s 2005 Form 10-K) (such reports and filings,
collectively, the “Company’s Filings”); and the Company is duly authorized,
qualified or registered, as the case may be, to do business as a foreign
corporation in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such authorization,
qualification or registration, except where the failure to obtain such
authorization, qualification or registration would not, individually or in the
aggregate, have a material adverse effect on the business, financial condition,
management or results of operations of the Company and its subsidiaries, taken
as a whole (“Material Adverse Effect”).     (b)   The Company hereby represents
and warrants to JPMorgan that the Company has all necessary corporate power and
authority to execute, deliver and perform its obligations in respect of this
Transaction; such execution, delivery and performance have been duly authorized
by all necessary corporate action on the Company’s part; and this Confirmation
has been duly and validly executed and delivered by the Company and constitutes
its valid and binding obligation, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity) and except that rights to indemnification and
contribution thereunder may be limited by federal or state securities laws or
public policy relating thereto.     (c)   The Company hereby represents and
warrants to JPMorgan that neither the execution and delivery of this
Confirmation nor the incurrence or performance of obligations of the Company
hereunder will conflict with or result in a breach of the Delaware General
Corporation Law, the Company’s Second Amended and Restated Certificate of
Incorporation, as amended from time to time (the “Charter”), or by-laws (or any
equivalent documents) of the Company, or any applicable law or regulation, or
any order, writ, injunction or decree of any court or governmental authority or
agency, or any agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which the Company or any of its subsidiaries is subject, or
constitute a default under, or result in the creation of any lien under, any
such agreement or instrument, or breach or constitute a default under any
agreements and contracts of the Company and its subsidiaries filed as exhibits
to the Company’s Filings.     (d)   The Company hereby represents and warrants
to JPMorgan that no consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required in connection
with the execution, delivery or performance by the Company of this Confirmation,
except such as have been obtained or made and such as may be required under the
Securities Act of 1933 (the “Securities Act”) or state securities laws.     (e)
  The Company hereby represents and warrants to JPMorgan that the Shares of the
Company initially issuable upon exercise of the Warrant by the net share
settlement method (the “Warrant Shares”) have been reserved for issuance by all
required corporate action of the Company. The Warrant Shares have been duly
authorized and, when delivered against payment therefor (which may include Net
Share Settlement in lieu of cash) and otherwise as contemplated by the terms of
the Warrant following the exercise of the Warrant in accordance with the terms
and conditions of the Warrant, will be validly issued, fully-paid and
non-assessable, and the issuance of the Warrant Shares will not be subject to
any preemptive or similar rights.     (f)   The Company hereby represents and
warrants to JPMorgan that except as set forth or incorporated by reference in
the Form S-4, there are no pending actions, suits or proceedings against or
affecting the Company, any of its subsidiaries or any of their respective
properties that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have, or reasonably be
expected to have, a Material Adverse Effect, or would materially and adversely
affect

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      the ability of the Company to perform its obligations under this
Confirmation; and no such actions, suits or proceedings are, to the Company’s
knowledge, threatened or contemplated.     (g)   The Company hereby represents
and warrants to JPMorgan that the Company’s Filings which are incorporated by
reference in the Form S-4 do not contain an untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.    
(h)   The Company hereby represents and warrants to JPMorgan that it is an
“eligible contract participant” (as such term is defined in Section 1(a)(12) of
the Commodity Exchange Act, as amended).     (i)   The Company hereby represents
and warrants to JPMorgan that the Company is not an “investment company” or a
company “controlled” by an “investment company,” in each case within the meaning
of the Investment Company Act of 1940, as amended.     (j)   Company has all
necessary corporate power and authority to execute, deliver and perform its
obligations in respect of the letter (the “Waiver”) dated as of February 13,
2007 delivered by Company to JPMorgan and entitled “Waiver of Ownership Limit”;
such execution, delivery and performance have been duly authorized by all
necessary corporate action on Company’s part; and the Waiver has been duly and
validly executed and delivered by Company and constitutes its valid and binding
obligation, enforceable against Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).     (k)  
Assuming the accuracy of the representations made by JPMorgan in the certain
letter to the Company dated February 13, 2007, neither the execution and
delivery of the Waiver nor the incurrence or performance of obligations of
Company thereunder will conflict with or result in a breach of the Charter or
by-laws (or any equivalent documents) of Company, or any applicable law or
regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument to which
Company or any of its subsidiaries is a party or by which Company or any of its
subsidiaries is bound or to which Company or any of its subsidiaries is subject,
or constitute a default under, or result in the creation of any lien under, any
such agreement or instrument, or breach or constitute a default under any
agreements and contracts of Company or any of its significant subsidiaries filed
as exhibits to the Company’s Form 10-K.

9. Other Provisions:

  (a)   No Reliance, etc. Each party represents that (i) it is entering into the
Transaction evidenced hereby as principal (and not as agent or in any other
capacity); (ii) neither the other party nor any of its agents is acting as a
fiduciary for it; (iii) it is not relying upon any representations except those
expressly set forth in the Agreement or this Confirmation; (iv) it has not
relied on the other party for any legal, regulatory, tax, business, investment,
financial, and accounting advice, and it has made its own investment, hedging,
and trading decisions based upon its own judgment and not upon any view
expressed by the other party or any of its agents; and (v) it is entering into
this Transaction with a full understanding of the terms, conditions and risks
thereof and it is capable of and willing to assume those risks.     (b)   Share
De-listing Event. If at any time during the period from and including the Trade
Date, to and including the final Valuation Date, the Shares cease to be listed
or quoted on the Exchange for any reason (other than a Merger Event as a result
of which the shares of common stock underlying the Options are listed or quoted
on The New York Stock Exchange, The American Stock Exchange, The NASDAQ Global
Market or The NASDAQ Global Select Market (or their

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      respective successors) (the “Successor Exchange”)) and are not immediately
re-listed or quoted as of the date of such de-listing on the Successor Exchange,
then Cancellation and Payment (as defined in Section 9.6 of the Equity
Definitions treating the “Announcement Date” as the date of first public
announcement that the Share De-Listing will occur and the “Merger Date” as the
date of the Share De-Listing) shall apply, and the date of the de-listing shall
be deemed the date of termination for purposes of calculating any payment due
from one party to the other in connection with the cancellation of this
Transaction. If the Shares are immediately re-listed on a Successor Exchange
upon their de-listing from the Exchange, this Transaction shall continue in full
force and effect, provided that the Successor Exchange shall be deemed to be the
Exchange for all purposes hereunder. In addition, the Calculation Agent shall
make any adjustments it deems necessary to the terms of the Transaction in
accordance with Calculation Agent Adjustment method as defined under
Section 9.1(c) of the Equity Definitions.     (c)   Repurchase Notices. Company
shall give JPMorgan written notice of any repurchase of Shares (a “Repurchase
Notice”) at least ten Exchange Business Days prior to effecting such repurchase
if, after giving effect to such repurchase, the fraction (x) the numerator of
which is the product of (A) (a) the Number of Warrants multiplied by (b) the
Warrant Entitlement; plus (B) the product of (a) the Number of Options for the
Call Option Transaction Reference Number 2480433 between Counterparty and
JPMorgan (the “Amended Call Option Transaction”) multiplied by (b) the Option
Entitlement for the Amended Call Option Transaction; plus (B) the product of
(a) the Number of Options for the Call Option Transaction (the “New Call Option
Transaction”) between Counterparty and JPMorgan relating to the Company’s Senior
Subordinated Convertible Debentures due 2034 issued in accordance with the
exchange offer pursuant to the Company’s Form S-4 Registration Statement filed
February 13, 2007, as amended, multiplied by (b) the Option Entitlement for the
New Call Option Transaction and (y) the denominator of which is the number of
Company’s Shares outstanding on such day (such fraction expressed as a
percentage, the “Warrants Equity Percentage”) would be greater than 10.14%. Such
Repurchase Notice shall set forth the number of Shares to be outstanding after
giving effect to the relevant Share repurchase. In connection with any delivery
of any Repurchase Notice to JPMorgan, Company shall (x) concurrently with or
prior to such delivery, publicly announce and disclose the relevant repurchase
or (y) represent and warrant in such Repurchase Notice that the information set
forth in such Repurchase Notice does not constitute material non-public
information with respect to Company or the Shares.     (d)   Conversion Rate
Adjustments. Company shall provide to JPMorgan written notice (such notice, a
“Conversion Rate Adjustment Notice”) at least ten Exchange Business Days prior
to consummating or otherwise executing or engaging in any transaction or event,
other than a publicly announced cash dividend payment (a “Conversion Rate
Adjustment Event”), that would lead to an increase in the Conversion Rate (as
such term is defined in the Indenture), other than an increase pursuant to
Section 14.06(a) of the Indenture, which Conversion Rate Adjustment Notice shall
set forth the new, adjusted Conversion Rate after giving effect to such
Conversion Rate Adjustment Event (the “New Conversion Rate”); provided that no
such Conversion Rate Adjustment Notice needs to be provided unless, after giving
effect to such Conversion Rate Adjustment Event, the Warrants Equity Percentage
would be greater than 10.14%. In connection with the delivery of any Conversion
Rate Adjustment Notice to JPMorgan, Company shall (x) concurrently with or prior
to such delivery, publicly announce and disclose the Conversion Rate Adjustment
Event or (y) concurrently with such delivery, represent and warrant that the
information set forth in such Conversion Rate Adjustment Notice does not
constitute material non-public information with respect to Company or the
Shares.     (e)   Regulation M. The Company was not on the Trade Date and is not
on the date hereof engaged in a distribution, as such term is used in
Regulation M under the Exchange Act, of any securities of Company, other than a
distribution meeting the requirements of the exception set forth in sections
101(b)(10) and 102(b)(7) of Regulation M. The Company shall not, until the fifth
Exchange Business Day immediately following the Trade Date, engage in any such
distribution.

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  (f)   No Manipulation. The Company is not entering into this Transaction for
the purpose of (i) creating actual or apparent trading activity in the Shares
(or any security convertible into or exchangeable for the Shares) or
(ii) raising or depressing or otherwise manipulating the price of the Shares (or
any security convertible into or exchangeable for the Shares), in either case in
violation of Section 9 of the Exchange Act.     (g)   Board Authorization.
Company represents that it is entering into the Transaction, solely for the
purposes stated in the board resolution authorizing this Transaction and in its
public disclosure. Company further represents that there is no internal policy,
whether written or oral, of Company that would prohibit Company from entering
into any aspect of this Transaction, including, but not limited to, the
purchases of Shares to be made pursuant hereto.     (h)   Transfer or
Assignment. Company may not transfer any of its rights or obligations under this
Transaction without the prior written consent of JPMorgan. JPMorgan may transfer
or assign all or any portion of its rights or obligations under this Transaction
without consent of the Company. If after JPMorgan’s commercially reasonable
efforts, JPMorgan is unable to effect such a transfer or assignment on pricing
terms reasonably acceptable to JPMorgan and within a time period reasonably
acceptable to JPMorgan of a sufficient number of Options to reduce
(i) JPMorgan’s “beneficial ownership” (within the meaning of Section 13 of the
Exchange Act and rules promulgated thereunder) to 8.0% of Company’s outstanding
Shares or less, (ii) the Warrants Equity Percentage to 10.14% or less or
(iii) J.P. Morgan Chase & Co’s (“Bank”) Beneficial Ownership (as such term is
defined in the Charter) of Shares (as such term is defined in the Charter) to
18% or less, JPMorgan may designate any Exchange Business Day as an Early
Termination Date with respect to a portion (the “Terminated Portion”) of this
Transaction, such that (i) its “beneficial ownership” following such partial
termination will be equal to or less than 8.0%, (ii) the Warrants Equity
Percentage following such partial termination will be equal to or less than
10.14% or (iii) Bank’s Beneficial Ownership (as such term is defined in the
Charter) of Shares (as such term is defined in the Charter) following such
partial termination will be equal to or less than 18%. Solely for purposes of
this subsection, following receipt of any Repurchase Notice or Conversion Rate
Adjustment Notice, (i) JPMorgan’s “beneficial ownership” (within the meaning of
Section 13 of the Exchange Act and rules promulgated thereunder) with respect to
Shares, (ii) the Options Equity Percentage and (iii) Bank’s Beneficial Ownership
(as such term is defined in the Charter) with respect to the Shares (as such
term is defined in the Charter), as the case may be, shall incorporate the
deemed effect of the relevant Share repurchase (in the case of a Repurchase
Notice) or New Conversion Rate (in the case of a Conversion Rate Adjustment
Notice). In the event that JPMorgan so designates an Early Termination Date with
respect to a portion of this Transaction, a payment shall be made pursuant to
Section 6 of the Agreement as if (i) an Early Termination Date had been
designated in respect of a Transaction having terms identical to this
Transaction and a Number of Options equal to the Terminated Portion,
(ii) Company shall be the sole Affected Party with respect to such partial
termination and (iii) such Transaction shall be the only Terminated Transaction
(and, for the avoidance of doubt, the provisions of Section 9(p) shall apply to
any amount that is payable by JPMorgan to Company pursuant to this sentence as
if Company was not the Affected Party).         Notwithstanding any other
provision in this Confirmation to the contrary requiring or allowing JPMorgan to
purchase, sell, receive or deliver any shares or other securities to or from
Company, JPMorgan may designate any of its affiliates to purchase, sell, receive
or deliver such shares or other securities and otherwise to perform JPMorgan’s
obligations in respect of this Transaction and any such designee may assume such
obligations. JPMorgan shall be discharged of its obligations to Company to the
extent of any such performance.     (i)   Amendment. Paragraph (i) of
Section 9.7(b) of the Equity Definitions is hereby amended for purposes of this
Transaction by replacing “two-year” with “90 calendar day”.     (j)   Damages.
Neither party shall be liable under Section 6.10 of the Equity Definitions for
special, indirect or consequential damages, even if informed of the possibility
thereof.

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  (k)   [Reserved]     (l)   Dividends. If at any time during the period from
and including the Trade Date, to but excluding the Expiration Date, an
ex-dividend date for a cash dividend occurs with respect to the Shares (an
“Ex-Dividend Date”), and that dividend is greater than the Regular Dividend on a
per share basis, then the Calculation Agent will adjust the Strike Price to
preserve the fair value of the Warrant to JPMorgan after taking into account
such dividend. “Regular Dividend” shall mean USD 0.00 per Share per quarter.    
(m)   Role of Agent. Each party agrees and acknowledges that (i) J.P. Morgan
Securities Inc., an affiliate of JPMorgan (“JPMSI”), has acted solely as agent
and not as principal with respect to this Transaction and (ii) JPMSI has no
obligation or liability, by way of guaranty, endorsement or otherwise, in any
manner in respect of this Transaction (including, if applicable, in respect of
the settlement thereof). Each party agrees it will look solely to the other
party (or any guarantor in respect thereof) for performance of such other
party’s obligations under this Transaction.     (n)   Additional Provisions.    
    (i) The first paragraph of Section 9.1(c) of the Equity Definitions is
hereby amended to read as follows: (c) ‘If “Calculation Agent Adjustment” is
specified as the method of adjustment in the Confirmation of a Share Option
Transaction, then following the declaration by the Issuer of the terms of any
Potential Adjustment Event, the Calculation Agent will determine whether such
Potential Adjustment Event has a material effect on the theoretical value of the
relevant Shares or Warrants and, if so, will (i) make appropriate adjustment(s),
if any, to any one or more of:’ and, the sentence immediately preceding
Section 9.1(c)(ii) is hereby amended by deleting the words “diluting or
concentrative”.         (ii) Section 9.1(e)(vi) of the Equity Definitions is
hereby amended by deleting the words “other similar” between “any” and “event”;
deleting the words “diluting or concentrative” and replacing them with
“material”; and adding the following words at the end of the sentence “or
Warrants”.         (iii) Section 9.6(a)(ii) of the Equity Definitions is hereby
amended by (1) deleting from the third line thereof the word “or” after the word
“official” and inserting a comma therefor, and (2) deleting the period at the
end of subsection (ii) thereof and inserting the following words therefor “ or
(C) at JPMorgan’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.”         (iv) Notwithstanding Section 9.7 of the Equity
Definitions, everything in the first paragraph of Section 9.7(b) of the Equity
Definitions after the words “Calculation Agent” in the third line through the
remainder of such Section 9.7 shall be deleted and replaced with the following:
        “and based on an amount representing the Calculation Agent’s
commercially reasonable, good faith determination of the fair value to Buyer of
an option with terms that would preserve for Buyer the economic equivalent of
any payment or delivery (assuming satisfaction of each applicable condition
precedent) by the parties in respect of the relevant Transaction that would have
been required after that date but for the occurrence of the Merger Event,
Nationalization, Insolvency or De-Listing Event, as the case may be.”        
(v) Any provision in the Agreement with respect to (1) the netting of
obligations of the Company or (2) the satisfaction of the Company’s payment
obligations to the extent of JPMorgan’s payment obligations to the Company in
the same currency and in the same Transaction (including, without limitation
Section 2(c) thereof), in each case as applied solely to this Transaction, shall
not apply to the Company and, for the avoidance of doubt, the Company shall
fully satisfy such payment obligations notwithstanding any payment obligation to
the Company by JPMorgan in the same currency and in the same Transaction. In
calculating any amounts under Section 6(e) of the Agreement, notwithstanding
anything to the contrary in the Agreement, clause (i) of the foregoing

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      sentence shall apply as follows: (1) separate amounts shall be calculated
as set forth in such Section 6(e) with respect to (a) this Transaction and
(b) all other Transactions, and (2) such separate amounts shall be payable
pursuant to Section 6(d)(ii) of the Agreement.     (o)   No Collateral or
Setoff. Notwithstanding any provision of the Agreement or any other agreement
between the parties to the contrary, the obligations of the Company hereunder
are not secured by any collateral. Obligations under this Transaction shall not
be set off against any other obligations of the parties, whether arising under
the Agreement, this Confirmation, under any other agreement between the parties
hereto, by operation of law or otherwise, and no other obligations of the
parties shall be set off against obligations under this Transaction, whether
arising under the Agreement, this Confirmation, under any other agreement
between the parties hereto, by operation of law or otherwise, and each party
hereby waives any such right of setoff. Any provision in the Agreement with
respect to the satisfaction of the Company’s payment obligations to the extent
of JPMorgan’s payment obligations to the Company in the same currency and in the
same Transaction (including, without limitation Section 2(c) thereof) shall not
apply to the Company and, for the avoidance of doubt, the Company shall fully
satisfy such payment obligations notwithstanding any payment obligation to the
Company by JPMorgan in the same currency and in the same Transaction. In
calculating any amounts under Section 6(e) of the Agreement, notwithstanding
anything to the contrary in the Agreement, (i) separate amounts shall be
calculated as set forth in such Section 6(e) with respect to (a) this
Transaction and (ii) all other Transactions, and (2) such separate amounts shall
be payable pursuant to Section 6(d)(ii) of the Agreement.     (p)   Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary
Events. If, in respect of this Transaction, an amount is payable by the Company
to JPMorgan, (i) pursuant to Section 9.7 of the Equity Definitions (except in
the event of a Nationalization or Insolvency or a Merger Event, in each case, in
which the consideration to be paid to holders of Shares consists solely of cash)
or (ii) pursuant to Section 6(d)(ii) of the Agreement (except in the event of an
Event of Default in which Company is the Defaulting Party or a Termination Event
in which Company is the Affected Party, other than an Event of Default of the
type described in Section 5(a)(iii), (v), (vi) or (vii) of the Agreement or a
Termination Event of the type described in Section 5(b)(i), (ii), (iii), (iv),
or (v) or (vi) of the Agreement that resulted from an event or events outside
Company’s control) (a “Payment Obligation”), Company may, in its sole
discretion, satisfy any such Payment Obligation by the Share Termination
Alternative (as defined below) and shall give irrevocable telephonic notice to
JPMorgan, confirmed in writing within one Currency Business Day, between the
hours of 9:00 a.m. and 4:00 p.m. New York local time on the Merger Date, the
date of the occurrence of the Nationalization or Insolvency, or Early
Termination Date, as applicable (“Notice of Share Termination”). Upon Notice of
Share Termination no later than 8:00 a.m. on the Exchange Business Day
immediately following the Merger Date, the date of the occurrence of the
Nationalization or Insolvency, or Early Termination Date, as applicable, the
following provisions shall apply:

         
 
  Share Termination Alternative:   Applicable and means that Company shall
deliver to JPMorgan the Share Termination Delivery Property on the date (the
“Share Termination Payment Date”) when the Payment Obligation would otherwise be
due, subject to paragraph (r)(i) below, in satisfaction, subject to paragraph
(r)(ii) below, of the Payment Obligation in the manner reasonably requested by
JPMorgan free of payment.
 
       
 
  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

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      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 to JPMorgan 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 Company at the time of notification of the
Payment Obligation. In the case of a Private Placement of Share Termination
Delivery Units that are Restricted Shares (as defined below) as set forth in
paragraph (r)(i) below, the Share Termination Unit Price shall be determined by
the discounted price applicable to such Share Termination Delivery Units. In the
case of a Registered Settlement of Share Termination Delivery Units that are
Restricted Shares (as defined below) as set forth in paragraph (r)(ii) below,
the Share Termination Unit Price shall be the Settlement Price on the Merger
Date, the date of the occurrence of the Nationalization or Insolvency, or Early
Termination Date, as applicable.
 
       
 
  Share Termination Delivery Unit:   In the case of a Termination Event or Event
of Default, one Share or, in the case of Nationalization or Insolvency or a
Merger Event, 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 Nationalization or Insolvency or such Merger Event. If a Share
Termination Delivery Unit consists of property other than cash or New Shares,
the Calculation Agent will replace such property with cash, New Shares or a
combination thereof as components of a Share Termination Delivery Unit in such
amounts, as determined by the Calculation Agent in its discretion by
commercially reasonable means, as shall have a value equal to the value of the
property so replaced. If such Merger Event involves a choice of consideration to
be received by holders, such holder shall be deemed to have elected to receive
the maximum possible amount of cash.
 
       
 
  Failure to Deliver:   Applicable
 
       

  Other applicable provisions:   If this Transaction is to be Share Termination
Settled, the provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 (as modified
above) of the Equity Definitions will be applicable, except that all references
in such provisions to “Physically-Settled” shall be read as

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      references to “Share Termination Settled” and all references to “Shares”
shall be read as references to “Share Termination Delivery Units”. “Share
Termination Settled” in relation to this Transaction means that Share
Termination Settlement is applicable to this Transaction.

  (q)   Registration/Private Placement Procedures. If, in the reasonable opinion
of JPMorgan, following any delivery of Shares or Share Termination Delivery
Property to JPMorgan hereunder, such Shares or Share Termination Delivery
Property would be in the hands of JPMorgan subject to any applicable
restrictions with respect to any registration or qualification requirement or
prospectus delivery requirement for such Shares or Share Termination Delivery
Property pursuant to any applicable federal or state securities law (including,
without limitation, any such requirement arising under Section 5 of the
Securities Act as a result of such Shares or Share Termination Delivery Property
being “restricted securities”, as such term is defined in Rule 144 under the
Securities Act, or as a result of the sale of such Shares or Share Termination
Delivery Property being subject to paragraph (c) of Rule 145 under the
Securities Act) (such Shares or Share Termination Delivery Property, “Restricted
Shares”), then delivery of such Restricted Shares shall be effected pursuant to
either clause (i) or (ii) below at the election of Company, unless waived by
JPMorgan. Notwithstanding the foregoing, solely in respect of any Daily Number
of Warrants exercised or deemed exercised on any Expiration Date, the Company
shall elect, prior to the first Settlement Date for the first Expiration Date, a
Private Placement Settlement or Registered Settlement for all deliveries of
Restricted Shares for all such Expiration Dates, which election shall be
applicable to all Settlement Dates for such Daily Number of Warrants and the
procedures in clause (i) or clause (ii) below shall apply for all such delivered
Restricted Shares on an aggregate basis commencing after the final Settlement
Date for such Daily Number of Warrants. The Calculation Agent shall make
reasonable adjustments to settlement terms and provisions under this
Confirmation to reflect a single Private Placement or Registered Settlement for
such aggregate Restricted Shares delivered hereunder.

  (i)   If the Company elects to settle the Transaction pursuant to this clause
(i) (a “Private Placement Settlement”), then delivery of Restricted Shares by
the Company shall be effected in customary private placement procedures with
respect to such Restricted Shares reasonably acceptable to JPMorgan; provided
that the Company may not elect a Private Placement Settlement if, on the date of
its election, it has taken, or caused to be taken, any action that would make
unavailable either the exemption pursuant to Section 4(2) of the Securities Act
for the sale by the Company to JPMorgan (or any affiliate designated by
JPMorgan) of the Restricted Shares or the exemption pursuant to Section 4(1) or
Section 4(3) of the Securities Act for resales of the Restricted Shares by
JPMorgan (or any such affiliate of JPMorgan). The Private Placement Settlement
of such Registered Shares shall include customary representations, covenants,
blue sky and other governmental filings and/or registrations, indemnities to
JPMorgan, due diligence rights (for JPMorgan or any designated buyer of the
Restricted Shares by JPMorgan), opinions and certificates, and such other
documentation as is customary for private placement agreements, all reasonably
acceptable to JPMorgan. In the case of a Private Placement Settlement, JPMorgan
shall determine the appropriate discount to the Share Termination Unit Price (in
the case of settlement of Share Termination Delivery Units pursuant to paragraph
(q) above) or any Settlement Price (in the case of settlement of Shares pursuant
to Section 2 above) applicable to such Restricted Shares in a commercially
reasonable manner and appropriately adjust the amount of such Restricted Shares
to be delivered to JPMorgan hereunder; provided that in no event such number
shall be greater than the five times the Number of Warrants (the “Maximum
Amount”). Notwithstanding the Agreement or this Confirmation, the date of
delivery of such Restricted Shares shall be the Exchange Business Day following
notice by JPMorgan to the Company, of such applicable discount and the number of
Restricted Shares to be delivered pursuant to this clause (i). For the avoidance
of doubt, delivery of Restricted Shares shall be due as set forth in the

13

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      previous sentence and not be due on the Share Termination Payment Date (in
the case of settlement of Share Termination Delivery Units pursuant to paragraph
(q) above) or on the Settlement Date for such Restricted Shares (in the case of
settlement of Shares pursuant to Section 2 above).     (ii)   If the Company
elects to settle the Transaction pursuant to this clause (ii) (a “Registration
Settlement”), then the Company shall promptly (but in any event no later than
the beginning of the Resale Period (as defined below)) file and use its
reasonable best efforts to make effective under the Securities Act a
registration statement or supplement or amend an outstanding registration
statement in form and substance reasonably satisfactory to JPMorgan, to cover
the resale of such Restricted Shares in accordance with a customary underwriting
agreement that includes covenants, conditions, representations, underwriting
discounts (if applicable), commissions (if applicable), indemnities, due
diligence rights, opinions and certificates, and such other documentation, all
mutually acceptable to the Company and JPMorgan. If JPMorgan is satisfied with
such procedures and documentation, it shall sell the Restricted Shares pursuant
to such registration statement during a period (the “Resale Period”) commencing
on the Exchange Business Day following delivery of such Restricted Shares
(which, for the avoidance of doubt, shall be (x) any Settlement Date in the case
of an exercise of Warrants prior to the first Expiration Date pursuant to
Section 2 above, (y) the Share Termination Payment Date in case of settlement of
Share Termination Delivery Units pursuant to paragraph (q) above or (z) the
Settlement Date in respect of the final Expiration Date for all Daily Number of
Warrants) and ending on the earliest of (i) the Exchange Business Day on which
JPMorgan completes the sale of all Restricted Shares or, in the case of
settlement of Share Termination Delivery Units, a sufficient number of
Restricted Shares so that the realized net proceeds of such sales exceed the
Payment Obligation (as defined above), (ii) the date upon which all Restricted
Shares have been sold or transferred pursuant to Rule 144 (or similar provisions
then in force) or Rule 145(d)(1) or (2) (or any similar provision then in force)
under the Securities Act and (iii) the date upon which all Restricted Shares may
be sold or transferred by a non-affiliate pursuant to Rule 144(k) (or any
similar provision then in force) or Rule 145(d)(3) (or any similar provision
then in force under the Securities Act. If the Payment Obligation exceeds the
realized net proceeds from such resale, Company shall transfer to JPMorgan by
the open of the regular trading session on the Exchange on the Exchange Trading
Day immediately following the last day of the Resale Period the amount of such
excess (the “Additional Amount”) in cash or in a number of Shares
(“Make-whole Shares”) in an amount that, based on the Settlement Price on the
last day of the Resale Period (as if such day was the “Valuation Date” for
purposes of computing such Settlement Price), has a dollar value equal to the
Additional Amount. The Resale Period shall continue to enable the sale of the
Make-whole Shares. If Company elects to pay the Additional Amount in Shares, the
requirements and provisions for Registration Settlement shall apply. This
provision shall be applied successively until the Additional Amount is equal to
zero. In no event shall the Company deliver a number of Restricted Shares
greater than the Maximum Amount.     (iii)   Without limiting the generality of
the foregoing, Company agrees that any Restricted Shares delivered to JPMorgan,
as purchaser of such Restricted Shares, (i) may be transferred by and among
JPMorgan Chase Bank and its affiliates and Company shall effect such transfer
without any further action by JPMorgan and (ii) after the minimum “holding
period” within the meaning of Rule 144(d) under the Securities Act has elapsed
after any Settlement Date for such Restricted Shares, Company shall promptly
remove, or cause the transfer agent for such Restricted Shares to remove, any
legends referring to any such restrictions or requirements from such Restricted
Shares upon delivery by JPMorgan (or such affiliate of JPMorgan) to Company or
such transfer agent of seller’s and broker’s representation letters customarily
delivered by JPMorgan in connection with resales of restricted securities
pursuant to Rule 144 under the Securities Act, without any

14

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      further requirement for the delivery of any certificate, consent,
agreement, opinion of counsel, notice or any other document, any transfer tax
stamps or payment of any other amount or any other action by JPMorgan (or such
affiliate of JPMorgan).

      If the Private Placement Settlement or the Registration Settlement shall
not be effected as set forth in clauses (i) or (ii), as applicable, then failure
to effect such Private Placement Settlement or such Registration Settlement
shall constitute an Event of Default with respect to which Company shall be the
Defaulting Party.     (r)   Limit on Beneficial Ownership. Notwithstanding any
other provisions hereof, JPMorgan may not exercise any Warrant hereunder, and
Automatic Exercise shall not apply with respect thereto, to the extent (but only
to the extent) that, after such receipt, JPMorgan would directly or indirectly
beneficially own (as such term is defined for purposes of Section 13(d) of the
Exchange Act) in excess of 9.9% of the outstanding Shares. Any purported
delivery hereunder shall be void and have no effect to the extent (but only to
the extent) that, after such delivery, JPMorgan would directly or indirectly so
beneficially own in excess of 9.9% of the outstanding Shares. If any delivery
owed to JPMorgan hereunder is not made, in whole or in part, as a result of this
provision, the Company’s obligation to make such delivery shall not be
extinguished and the Company shall make such delivery as promptly as practicable
after, but in no event later than one Business Day after, JPMorgan gives notice
to the Company that, after such delivery, JPMorgan would not directly or
indirectly so beneficially own in excess of 9.9% of the outstanding Shares.    
(s)   Share Deliveries. The Company acknowledges and agrees that, to the extent
the holder of this Warrant is not then an affiliate and has not been an
affiliate for 90 days (it being understood that JPMorgan will not be considered
an affiliate under this Section 9(r) solely by reason of its receipt of Shares
pursuant to this Transaction), and otherwise satisfies all holding period and
other requirements of Rule 144 of the Securities Act applicable to it, any
delivery of Shares or Share Termination Property hereunder at any time after
2 years from the Trade Date shall be eligible for resale under Rule 144(k) of
the Securities Act and the Company agrees to promptly remove, or cause the
transfer agent for such Shares or Share Termination Property, to remove, any
legends referring to any restrictions on resale under the Securities Act from
the Shares or Share Termination Property. The Company further agrees, for any
delivery of Shares or Share Termination Property hereunder at any time after
1 year from the Trade Date but within 2 years of the Trade Date, to the to the
extent the holder of this Warrant then satisfies the holding period and other
requirements of Rule 144 of the Securities Act, to promptly remove, or cause the
transfer agent for such Restricted Share to remove, any legends referring to any
such restrictions or requirements from such Restricted Shares. Such Restricted
Shares will be de-legended upon delivery by JPMorgan (or such affiliate of
JPMorgan) to the Company or such transfer agent of customary seller’s and
broker’s representation letters in connection with resales of restricted
securities pursuant to Rule 144 of the Securities Act, without any further
requirement for the delivery of any certificate, consent, agreement, opinion of
counsel, notice or any other document, any transfer tax stamps or payment of any
other amount or any other action by JPMorgan (or such affiliate of JPMorgan).
The Company further agrees that any delivery of Shares or Share Termination
Delivery Property prior to the date that is 1 year from the Trade Date, may be
transferred by and among JPMorgan and its affiliates and the Company shall
effect such transfer without any further action by JPMorgan. Notwithstanding
anything to the contrary herein, the Company agrees that any delivery of Shares
or Share Termination Delivery Property shall be effected by book-entry transfer
through the facilities of DTC, or any successor depositary, if at the time of
delivery, such class of Shares or class of Share Termination Delivery Property
is in book-entry form at DTC or such successor depositary. Notwithstanding
anything to the contrary herein, to the extent the provisions of Rule 144 of the
Securities Act or any successor rule are amended, or the applicable
interpretation thereof by the Securities Exchange Commission or any court change
after the Trade Date, the agreements of the Company herein shall be deemed
modified to the extent necessary, in the opinion of outside counsel of the
Company, to comply with Rule 144 of the Securities Act, including Rule 144(k) as
in effect at the time of delivery of the relevant Shares or Share Termination
Property.

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  (t)   Governing Law. New York law (without reference to choice of law
doctrine).     (u)   Indemnification. Company agrees to indemnify and hold
harmless JPMorgan and its affiliates and their respective officers, directors,
employees, affiliates, advisors, agents and controlling persons (each, an
“Indemnified Person”) from and against any and all losses (including, without
limitation, losses relating to JPMorgan’s hedging or trading activities, losses
relating to JPMorgan’s hedging activities as a consequence of becoming, or of
the risk of becoming, a Section 16 “insider,” any losses resulting from the
operation of any ownership limitations contained in the Charter and any losses
in connection therewith with respect to this Transaction), claims, damages,
judgments, liabilities and expenses (including reasonable attorney’s fees),
joint or several, which an Indemnified Person may become subject to, as a result
of (i) Company’s failure to publicly announce and disclose the contents of any
Repurchase Notice or Conversion Rate Adjustment Notice, as the case may be, or
(ii) Company’s failure to provide JPMorgan with a Repurchase Notice on the day
and in the manner specified in Section 9(c); and to reimburse, within 30 days,
upon written request, each of such Indemnified Persons for any reasonable legal
or other expenses incurred in connection with investigating, preparing for,
providing testimony or other evidence in connection with or defending any of the
foregoing. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
the Indemnified Person as a result of Company’s failure to publicly announce and
disclose the contents of any Repurchase Notice or Conversion Rate Adjustment
Notice, as the case may be, such Indemnified Person shall promptly notify
Company in writing, and Company, upon request of the Indemnified Person, shall
retain counsel reasonably satisfactory to the Indemnified Person to represent
the Indemnified Person and any others Company may designate in such proceeding
and shall pay the fees and expenses of such counsel related to such proceeding.
Company shall not be liable for any settlement of any proceeding contemplated by
this subsection that is effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff, Company
agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Company shall not, without
the prior written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding contemplated by this subsection that is in
respect of which any Indemnified Person is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Person, unless
such settlement includes an unconditional release of such Indemnified Person
from all liability on claims that are the subject matter of such proceeding on
terms reasonably satisfactory to such Indemnified Person. If the indemnification
provided for in this subsection is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then Company hereunder, in lieu of indemnifying such Indemnified
Person thereunder, shall contribute to the amount paid or payable by such
Indemnified Person as a result of such losses, claims, damages or liabilities.
The remedies provided for in this subsection are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any Indemnified
Party at law or in equity. The indemnity and contribution agreements contained
in this subsection shall remain operative and in full force and effect
regardless of the termination of this Transaction.     (v)   Tax Disclosure.
Effective from the date of commencement of discussions concerning the
Transaction, Company 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 Company relating
to such tax treatment and tax structure.     (w)   Right to Extend. JPMorgan may
postpone, in whole or in part, any Expiration Date or any other date of
valuation or delivery with respect to some or all of the relevant Warrants (in
which event the Calculation Agent shall make appropriate adjustments to the
Daily Number of Warrants with respect to one or more Expiration Dates) if
JPMorgan determines, in its commercially reasonable judgment, that such
extension is reasonably necessary or appropriate to preserve JPMorgan’s hedging
or hedge unwind activity hereunder in light of existing liquidity conditions or
to enable JPMorgan to effect purchases of Shares in connection with its hedging,
hedge unwind or

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      settlement activity hereunder in a manner that would, if JPMorgan were
Issuer or an affiliated purchaser of Issuer, be in compliance with applicable
legal, regulatory or self-regulatory requirements, or with related policies and
procedures applicable to JPMorgan.     (x)   Securities Contract; Swap
Agreement. The parties hereto intend for: (a) the Transaction to be a
“securities contract” and a “swap agreement” as defined in the Bankruptcy Code
(Title 11 of the United States Code) (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), 546(e), 546(g), 555 and 560 of the Bankruptcy
Code; (b) a party’s right to liquidate the Transaction and to exercise any other
remedies upon the occurrence of any Event of Default under the Agreement with
respect to the other party to constitute a “contractual right” as described in
the Bankruptcy Code; and (c) each payment and delivery of cash, securities or
other property hereunder to constitute a “margin payment” or “settlement
payment” and a “transfer” as defined in the Bankruptcy Code..     (y)   Waiver
of Jury Trial. Each party waives, to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in respect of any suit, action or
proceeding relating to this Transaction. Each party (i) certifies that no
representative, agent or attorney of the other party has represented, expressly
or otherwise, that such other party would not, in the event of such a suit,
action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges
that it and the other party have been induced to enter into this Transaction, as
applicable, by, among other things, the mutual waivers and certifications
provided herein.

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(JPMORGAN LOGO) [w34524w3452401.gif]
     Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to EDG Confirmation
Group, J.P. Morgan Securities Inc., 277 Park Avenue, 11th Floor, New York, NY
10172-3401, or by fax to (212) 622 8519.
Very truly yours,

                  J.P. Morgan Securities Inc., as agent for         JPMorgan
Chase Bank, National Association    
 
           
 
  By:   /s/ JEFF ZAJKOWSKI    
 
     
 
        Authorized Signatory         Name: Jeff Zajkowski    

          Accepted and confirmed     as of the Trade Date:    
 
        CapitalSource Inc.    
 
       
By:
  /s/ JEFFREY LIPSON    
 
 
 
    Authorized Signatory     Name: Jeffrey Lipson
            Vice President & Treasurer    

JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association.
Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
Registered as a branch in England & Wales branch No. BR000746. Registered
Branch Office 125 London Wall, London EC2Y 5AJ
Authorised and regulated by the Financial Services Authority