EXHIBIT 10.6

Execution Copy

 

 

 

June 11, 2008

 

 

 

To:

 

Sotheby’s
1334 York Avenue
New York, NY 10021
Attn: Mike Gillis
Telephone: 212-894-2352
Facsimile: 212-894-2245

 

 

 

From:

 

Bank of America, N.A.
c/o Banc of America Securities LLC
Bank of America Tower at One Bryant Park
New York, NY 10036
Attn: John Servidio
Telephone: 646-855-7127
Facsimile: 212-230-8610

 

 

 

Re:

 

Issuer Warrant Transaction
(Transaction Reference Number: NY-35264)

Ladies and Gentlemen:

The purpose of this communication (this “Confirmation”) is to set forth the
terms and conditions of the above-referenced transaction entered into on the
Trade Date specified below (the “Transaction”) between Bank of America, N.A.
(“Dealer”) and Sotheby’s (“Issuer”). This communication constitutes a
“Confirmation” as referred to in the ISDA Master Agreement specified below.

1. This Confirmation is subject to, and incorporates, the definitions and
provisions of the 2006 ISDA Definitions (the “2006 Definitions”) and the
definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”, and together with the 2006 Definitions, the
“Definitions”), in each case as published by the International Swaps and
Derivatives Association, Inc. (“ISDA”). In the event of any inconsistency
between the 2006 Definitions and the Equity Definitions, the Equity Definitions
will govern. For purposes of the Equity Definitions, each reference herein to a
Warrant shall be deemed to be a reference to a Call Option or an Option, as
context requires.

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

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

2. The Transaction is a Warrant Transaction, which shall be considered a Share
Option Transaction for purposes of the Equity Definitions. The terms of the
particular Transaction to which this Confirmation relates are as follows:

 

General Terms:

 

 

Trade Date:

 

June 11, 2008

Effective Date:

 

June 17, 2008, or such other date as agreed between the parties, subject to
Section 8(n) below

 

 

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Components:

 

The Transaction will be divided into individual Components, each with the terms
set forth in this Confirmation, and, in particular, with the Number of Warrants
and Expiration Date set forth in this Confirmation. The payments and deliveries
to be made upon settlement of the Transaction will be determined separately for
each Component as if each Component were a separate Transaction under the
Agreement.

Warrant Style:

 

European

Warrant Type:

 

Call

Seller:

 

Issuer

Buyer:

 

Dealer

Shares:

 

The Common Stock of Issuer, par value USD 0.10 per share (Ticker Symbol: “BID”).

Number of Warrants:

 

For each Component, as provided in Annex A to this Confirmation, subject to
Section 8(o) below.

Warrant Entitlement:

 

One Share per Warrant

Strike Price:

 

USD 44.9050

Premium:

 

USD9,756,251.90 (Premium per Warrant USD 3.790944); provided that if the Number
of Warrants is increased pursuant to Section 8(o) below, an additional Premium
equal to the product of the number of Additional Warrants (as defined below) and
the Premium per Warrant shall be paid on the Additional Premium Payment Date.

Premium Payment Date:

 

The Effective Date

Additional Premium Payment Date:

 

The closing date for the purchase and sale of the additional convertibles notes
issued to the Initial Purchasers (as defined in the Purchase Agreement dated as
of the Trade Date between Issuer, Banc of America Securities LLC and Goldman,
Sachs & Co., as representative of the Initial Purchasers party thereto (the
“Purchase Agreement”)) pursuant to Section 2(c) of the Purchase Agreement.

Exchange:

 

New York Stock Exchange

Related Exchange:

 

All Exchanges

Procedures for Exercise:

 

 

In respect of any Component:

 

 

Expiration Time:

 

Valuation Time

Expiration Date:

 

As provided in Annex A to this Confirmation (or, if such date is not a Scheduled
Trading Day, the next following Scheduled Trading Day that is not already an
Expiration Date for another Component); provided that if that date is a
Disrupted Day, the Expiration Date for such Component shall be the first
succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is
not deemed to be an Expiration Date in respect of any other Component of the
Transaction hereunder; and provided further that if the Expiration Date has not
occurred pursuant to the preceding proviso as of the Final Disruption Date, the
Final Disruption Date shall be the Expiration Date (irrespective of whether such
date is

 

 

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an Expiration Date occurring on the Final Disruption Date in respect of any
other Component for the Transaction) and, notwithstanding anything to the
contrary in this Confirmation or the Definitions, the Relevant Price for the
Expiration Date shall be the prevailing market value per Share determined by the
Calculation Agent in a commercially reasonable manner. Notwithstanding the
foregoing and anything to the contrary in the Equity Definitions, if a Market
Disruption Event occurs on any Expiration Date, the Calculation Agent may
determine that such Expiration Date is a Disrupted Day only in part, in which
case the Calculation Agent shall make adjustments to the number of Warrants for
the relevant Component for which such day shall be the Expiration Date and shall
designate the Scheduled Trading Day determined in the manner described in the
immediately preceding sentence as the Expiration Date for the remaining Warrants
for such Component. Section 6.6 of the Equity Definitions shall not apply to any
Valuation Date occurring on an Expiration Date. “Final Disruption Date” means
December 9, 2013.

Market Disruption Event:

 

Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words
“during the one hour period that ends at the relevant Valuation Time, Latest
Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case
may be,” in clause (ii) thereof.

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.

Automatic Exercise:

 

Applicable; and means that the Number of Warrants for each Component will be
deemed to be automatically exercised at the Expiration Time on the Expiration
Date for such Component unless Dealer notifies Seller in writing prior to the
Expiration Time on the Expiration Date that it does not wish Automatic Exercise
to occur, in which case Automatic Exercise will not apply.

Issuer’s Telephone Number and Telex and/or Facsimile Number and Contact Details
for purpose of Giving Notice:

 

To be provided by Issuer.

Settlement Terms:

 

 

In respect of any Component:

 

 

Settlement Currency:

 

USD

Net Share Settlement:

 

On each Settlement Date, Issuer shall deliver to Dealer a number of Shares equal
to the Number of Shares to be Delivered for such Settlement Date to the account
specified by Dealer and cash in lieu of any fractional shares valued at the
Relevant Price on the Valuation Date corresponding to such Settlement Date.

Number of Shares to be Delivered:

 

In respect of any Exercise Date, subject to the last sentence of Section 9.5 of
the Equity Definitions, the product of (i) the number of Warrants exercised or
deemed exercised on such Exercise Date, (ii) the Warrant Entitlement and (iii)
(A) the excess of the VWAP Price on the Valuation Date occurring on such
Exercise Date over the Strike Price divided by (B) such VWAP Price.

 

 

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The Number of Shares to be Delivered shall be delivered by Issuer to Dealer no
later than 4:00 P.M. (local time in New York City) on the relevant Settlement
Date.

VWAP Price:

 

For any Valuation Date, the dollar volume weighted average price per Share for
such Valuation Date based on transactions executed on the Exchange during such
Valuation Date, as reported on Bloomberg Screen “BID.N <Equity> AQR” (or any
successor thereto) or, in the event such price is not so reported on such
Valuation Date for any reason, as reasonably determined by the Calculation
Agent.

Other Applicable Provisions:

 

The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except that the
Representation and Agreement contained in Section 9.11 of the Equity Definitions
shall be modified by excluding any representations therein relating to
restrictions, obligations, limitations or requirements under applicable
securities laws as a result of the fact that Seller is the Issuer of the Shares)
and 9.12 of the Equity Definitions will be applicable as if “Physical
Settlement” applied to the Transaction.

Adjustments:

 

 

In respect of any Component:

 

 

Method of Adjustment:

 

Calculation Agent Adjustment

Extraordinary Dividend:

 

Any dividend or distribution (i) that has an ex-dividend date occurring on or
after the Trade Date and on or prior to the Expiration Date and (ii) the amount
or value of which exceeds the Ordinary Dividend Amount for such dividend or
distribution, as determined by the Calculation Agent.

Ordinary Dividend Amount:

 

For the period beginning on the Trade Date and ending on the last day of the
second calendar quarter of 2008, USD 0; for all other calendar quarters, USD
0.15 per quarter per Share.

Extraordinary Events:

 

 

New Shares:

 

In the definition of New Shares in Section 12.1(i) of the Equity Definitions,
the text in clause (i) thereof shall be deleted in its entirety (including the
word “and” following clause (i)) and replaced with “publicly quoted, traded or
listed 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)”.

Consequences of Merger Events:

 

 

(a) Share-for-Share:

 

Modified Calculation Agent Adjustment

(b) Share-for-Other:

 

Cancellation and Payment (Calculation Agent Determination)

(c) Share-for-Combined:

 

Cancellation and Payment (Calculation Agent Determination)

Tender Offer:

 

Applicable

Consequences of Tender Offers:

 

 

(a) Share-for-Share:

 

Modified Calculation Agent Adjustment

(b) Share-for-Other:

 

Cancellation and Payment (Calculation Agent Determination) on that portion of
the Other Consideration that consists of cash;

 

 

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Modified Calculation Agent Adjustment on the remainder of the Other
Consideration.

 

 

(c) Share-for-Combined:

 

Modified Calculation Agent Adjustment

Modified Calculation Agent Adjustment:

 

If, in respect of any Merger Event to which Modified Calculation Agent
Adjustment applies, the adjustments to be made in accordance with Section
12.2(e)(i) of the Equity Definitions would result in Issuer being different from
the issuer of the Shares, then with respect to such Merger Event, as a condition
precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity
Definitions, Issuer and the issuer of the Shares shall, prior to the Merger
Date, have entered into such documentation containing representations,
warranties and agreements relating to securities law and other issues as
requested by Dealer that Dealer has determined, in its reasonable discretion, to
be reasonably necessary or appropriate to allow Dealer to continue as a party to
the Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions,
and to preserve its hedging or hedge unwind activities in connection with the
Transaction in a manner compliant with applicable legal, regulatory or
self-regulatory requirements, or with related policies and procedures applicable
to Dealer, and if such conditions are not met or if the Calculation Agent
determines that no adjustment that it could make under Section 12.2(e)(i) of the
Equity Definitions will produce a commercially reasonable result, then the
consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall
apply.

Nationalization, Insolvency or Delisting:

 

Cancellation and Payment (Calculation Agent Determination); provided that in
addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it
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
thereafter be deemed to be the Exchange.

Additional Disruption Events:

 

 

(a) Change in Law:

 

Applicable

(b) Failure to Deliver:

 

Applicable

(c) Insolvency Filing:

 

Applicable

(d) Loss of Stock Borrow:

 

Applicable

       Maximum Stock Loan Rate:

 

150 basis points per annum

(e) Increased Cost of Stock Borrow:

 

Applicable

       Initial Stock Loan Rate:

 

50 basis points per annum

Hedging Party:

 

Dealer for all applicable Additional Disruption Events

 

 

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Determining Party:

 

Dealer for all applicable Extraordinary Events; provided that in the case of a
Change in Law, the Determining Party shall deliver, within five Exchange
Business Days of a written request by the other party, a written explanation of
any calculation made by it, and including, where applicable, the methodology and
data applied, it being understood that the Determining Party shall not be
obligated to disclose any proprietary models used by it for such calculation.

Non-Reliance:

 

Applicable

Agreements and Acknowledgments Regarding Hedging Activities:

 

Applicable

Additional Acknowledgments:

 

Applicable

3. Calculation Agent:

 

Dealer. All calculations and determinations by the Calculation Agent shall be
made in good faith and in a commercially reasonable manner. The Calculation
Agent shall deliver, within five Exchange Business Days of a written request by
Issuer, a written explanation of any calculation made by it, and including,
where applicable, the methodology and data applied, it being understood that the
Calculation Agent shall not be obligated to disclose any proprietary models used
by it for such calculation.

4. Account Details:

 

 

Dealer Payment Instructions:

 

Bank of America
New York, NY
SWIFT: BOFAUS65
Bank Routing: 026o009o593
Account Name: Bank of America
Account No.: 0012333 o34172

Issuer Payment Instructions:

 

To be provided by Issuer.

5. Offices:

The Office of Dealer for the Transaction is: New York

Bank of America, N.A.

c/o Banc of America Securities LLC

Bank of America Tower at One Bryant Park

New York, NY 10036

Attention:

John Servidio

Telephone:

646-855-7217

Facsimile:

212-230-8610

The Office of Issuer for the Transaction is: Not applicable

6. Notices: For purposes of this Confirmation:

(a) Address for notices or communications to Issuer:

 

To:

Sotheby’s

 

1334 York Avenue

 

New York, NY 10021

Attn:

Mike Gillis

Telephone:

212-894-2352

Facsimile:

212-894-2245

(b) Address for notices or communications to Dealer:

 

 

6

 

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To:

 

Bank of America, N.A.
c/o Banc of America Securities LLC
Bank of America Tower at One Bryant Park
New York, NY 10036

Attn:

 

John Servidio

Telephone:

 

646-855-7127

Facsimile:

 

212-230-8610

7. Representations, Warranties and Agreements:

(a) In addition to the representations and warranties in the Agreement and those
contained elsewhere herein, Issuer represents and warrants to and for the
benefit of, and agrees with, Dealer as follows:

(i) On the Trade Date, and as of the date of any election by Issuer of the Share
Termination Alternative under (and as defined in) Section 8(a) below, (A) none
of Issuer and its officers and directors is aware of any material nonpublic
information regarding Issuer or the Shares and (B) all reports and other
documents filed by Issuer with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), when
considered as a whole (with the more recent such reports and documents deemed to
amend inconsistent statements contained in any earlier such reports and
documents), do not contain any untrue statement of a material fact or any
omission of a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they were
made, not misleading.

(ii) Without limiting the generality of Section 13.1 of the Equity Definitions,
Issuer acknowledges that Dealer is not making any representations or warranties
with respect to the treatment of the Transaction under FASB Statements 128, 133,
149 (each as amended), or 150, EITF Issue No. 00-19, 01-6, 03-6 or 07-5 (or any
successor issue statements) or under FASB’s Liabilities & Equity Project.

(iii) Prior to the Trade Date, Issuer shall deliver to Dealer a consent of the
Finance Committee of Issuer’s board of directors authorizing the Transaction, a
resolution of Issuer’s board of directors delegating the relevant authority to
such Finance Committee and such other certificate or certificates as Dealer
shall reasonably request.

(iv) Issuer is not entering into this Confirmation to create actual or apparent
trading activity in the Shares (or any security convertible into or exchangeable
for Shares) or to raise or depress or otherwise manipulate the price of the
Shares (or any security convertible into or exchangeable for Shares) or
otherwise in violation of the Exchange Act.

(v) Issuer is not, and after giving effect to the transactions contemplated
hereby will not be, an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.

(vi) On the Trade Date (A) the assets of Issuer at their fair valuation exceed
the liabilities of Issuer, including contingent liabilities, (B) the capital of
Issuer is adequate to conduct the business of Issuer and (C) Issuer has the
ability to pay its debts and obligations as such debts mature and does not
intend to, or does not believe that it will, incur debt beyond its ability to
pay as such debts mature.

(vii) Issuer shall not take any action to decrease the number of Available
Shares below the Capped Number (each as defined below).

(viii) The representations and warranties of Issuer set forth in Section 3 of
the Agreement are true and correct.

(ix) Issuer understands no obligations of Dealer to it hereunder will be
entitled to the benefit of deposit insurance and that such obligations will not
be guaranteed by any Affiliate of Dealer or any governmental agency.

(x) (A) On the Trade Date and during the period starting on the first Expiration
Date and ending on the last Expiration Date (the “Settlement Period”), the
Shares or securities that are convertible into, or exchangeable or exercisable
for Shares, are not, and shall not be, subject to a “restricted period,” as such
term is defined in Regulation M under the Exchange Act (“Regulation M”) and (B)
Issuer shall not engage in any “distribution,” as such term is defined in
Regulation M, other than a distribution meeting the requirements of

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the exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M,
from the Trade Date until the second Exchange Business Day immediately following
the Trade Date or from the commencement of the Settlement Period until the
second Exchange Business Day immediately following the Settlement Period, as
applicable.

(xi) During the Settlement Period, neither Issuer nor any “affiliate” or
“affiliated purchaser” (each as defined in Rule 10b-18 of the Exchange Act
(“Rule 10b-18”)) shall directly or indirectly (including, without limitation, by
means of any cash-settled or other derivative instrument) purchase, offer to
purchase, place any bid or limit order that would effect a purchase of, or
commence any tender offer relating to, any Shares (or an equivalent interest,
including a unit of beneficial interest in a trust or limited partnership or a
depository share) or any security convertible into or exchangeable or
exercisable for Shares, except through Dealer.

(xii) The Shares of Issuer initially issuable upon exercise of the Warrant (the
“Warrant Shares”) have been reserved for issuance by all required corporate
action of Issuer. 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.

(b) Each of Dealer and Issuer agrees and represents that it is an “eligible
contract participant” as defined in

Section 1a(12) of the U.S. Commodity Exchange Act, as amended.

(c) Each of Dealer and Issuer acknowledges that the offer and sale of the
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, Dealer represents and warrants to Issuer that (i) it
has the financial ability to bear the economic risk of its investment in the
Transaction and is able to bear a total loss of its investment, (ii) it is an
“accredited investor” as that term is defined in Regulation D as promulgated
under the Securities Act, (iii) it is entering into the Transaction for its own
account without a view to the distribution or resale thereof and (iv) the
assignment, transfer or other disposition of the Transaction has not been and
will not be registered under the Securities Act and is restricted under this
Confirmation, the Securities Act and state securities laws.

(d) Each of Dealer and Issuer agrees and acknowledges that Dealer is a
“financial institution,” “swap participant” and “financial participant” within
the meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11 of the United
States Code (the “Bankruptcy Code”). The parties hereto further agree and
acknowledge (A) that this Confirmation is (i) a “securities contract,” as such
term is defined in Section 741(7) of the Bankruptcy Code, with respect to which
each payment and delivery hereunder or in connection herewith is a “termination
value,” “payment amount” or “other transfer obligation” within the meaning of
Section 362 of the Bankruptcy Code and a “settlement payment” within the meaning
of Section 546 of the Bankruptcy Code, and (ii) a “swap agreement,” as such term
is defined in Section 101(53B) of the Bankruptcy Code, with respect to which
each payment and delivery hereunder or in connection herewith is a “termination
value,” a “payment amount” or “other transfer obligation” within the meaning of
Section 362 of the Bankruptcy Code and a “transfer” within the meaning of
Section 546 of the Bankruptcy Code, and (B) that Dealer is entitled to the
protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17),
362(b)(27), 362(o), 546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the
Bankruptcy Code.

(e) Issuer shall deliver to Dealer an opinion of counsel, dated as of the
Effective Date and reasonably acceptable to Dealer in form and substance.

8. Other Provisions:

(a) Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events. If Issuer shall owe Dealer any amount pursuant to Sections
12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of
an Insolvency, a Nationalization, a Tender Offer or a Merger Event, in each
case, in which the consideration or proceeds to be paid to holders of Shares
consists solely of cash) or pursuant to Section 6(e) of the Agreement (except in
the event of an Event of Default in which Issuer is the Defaulting Party or a
Termination Event in which Issuer is the Affected Party, that resulted from an
event or events within Issuer’s control) (a “Payment Obligation”), Issuer shall
have the right, in its sole discretion, to satisfy any such Payment Obligation
by the Share Termination Alternative (as defined below) by giving irrevocable
telephonic notice to Dealer, confirmed in writing within one Scheduled Trading
Day, between the hours of 9:00 A.M. and 4:00 P.M. New York City time on the
Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or
other date the Transaction is cancelled or terminated, as applicable (“Notice of
Share Termination”), provided that if Issuer does not elect to satisfy its
Payment

 

 

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Obligation by the Share Termination Alternative, Dealer shall have the right, in
its sole discretion, to require Issuer to satisfy its Payment Obligation by the
Share Termination Alternative, notwithstanding Issuer’s failure to elect or
election to the contrary. Upon such Notice of Share Termination, the following
provisions shall apply on the Scheduled Trading Day immediately following the
Merger Date, the Tender Offer Date, Announcement Date, Early Termination Date or
other date the Transaction is cancelled or terminated, as applicable:

 

Share Termination Alternative:

 

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

Share Termination Delivery
Property:

 

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

Share Termination Unit Price:

 

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

Share Termination Delivery Unit:

 

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

Failure to Deliver:

 

Applicable

Other applicable provisions:

 

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

(b) Registration/Private Placement Procedures. (i) If, in the reasonable
judgment of Dealer based on the advice of outside counsel, for any reason (other
than the status of Dealer as an “affiliate” as such term is defined in Rule 144
under the Securities Act, determined without regard to this Transaction or any
Shares received hereunder), any Shares or any securities of Issuer or its
affiliates comprising any Share Termination Delivery Units deliverable to Dealer
hereunder (any such Shares or securities, “Delivered Securities”) would not be
immediately freely transferable by Dealer under Rule 144 under the Securities
Act, then the provisions set forth in this Section 8(b) shall apply. At the
election of Issuer by notice to Dealer within one Exchange Business Day after
the relevant delivery obligation arises, but in any event at least one Exchange
Business Day prior to the date on which such delivery obligation is due, either
(A) all Delivered Securities delivered by Issuer to Dealer shall be, at the time
of such delivery, covered by an effective registration statement of Issuer for
immediate resale by Dealer (such registration statement and the corresponding
prospectus (the “Prospectus”) (including, without limitation, any sections
describing the plan of distribution) in form and content commercially reasonably
satisfactory to Dealer including, without limitation, with regard to disclosure
of

 

 

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matters identified during the due diligence investigation described below) or
(B) Issuer shall deliver additional Delivered Securities so that the value of
such Delivered Securities, as determined by the Calculation Agent to reflect an
appropriate liquidity discount, equals the value of the number of Delivered
Securities that would otherwise be deliverable if such Delivered Securities were
freely tradeable (without prospectus delivery) upon receipt by Dealer (such
value, the “Freely Tradeable Value”); provided that Issuer may not make the
election described in this clause (B) 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 delivery by
Issuer to Dealer (or any affiliate designated by Dealer) of the Delivered
Securities or the exemption pursuant to Section 4(1) or Section 4(3) of the
Securities Act for resales of the Delivered Securities by Dealer (or any such
affiliate of Dealer). (For the avoidance of doubt, as used in this paragraph (b)
only, the term “Issuer” shall mean the issuer of the relevant securities, as the
context shall require.)

(ii) If Issuer makes the election described in clause (b)(i)(A) above:

(A) Dealer (or an Affiliate of Dealer designated by Dealer) shall be afforded a
reasonable opportunity to conduct a due diligence investigation with respect to
Issuer that is customary in scope for underwritten offerings of equity
securities;

(B) Dealer (or an Affiliate of Dealer designated by Dealer) and Issuer shall
enter into an agreement (a “Registration Agreement”) on commercially reasonable
terms in connection with the public resale of such Delivered Securities by
Dealer or such Affiliate substantially similar to underwriting agreements
customary for underwritten offerings of equity securities, in form and substance
commercially reasonably satisfactory to Dealer or such Affiliate and Issuer,
which Registration Agreement shall include, without limitation, provisions
substantially similar to those contained in such underwriting agreements
relating to the indemnification of, and contribution in connection with the
liability of, Dealer and its Affiliates and Issuer, shall provide for the
payment by Issuer of all expenses in connection with such resale, including all
registration costs and all fees and expenses of counsel for Dealer, and shall
provide for the delivery of accountants’ “comfort letters” to Dealer or such
Affiliate with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Prospectus; and

(C) Issuer shall have no obligation to maintain a Prospectus or comply with this
clause (b)(ii) during such period that any Delivered Securities are determined
by Dealer, upon the advice of Dealer’s outside counsel, to be freely
transferable by Dealer under Rule 144 under the Securities Act (the “Rule 144
Availability Period”).

(iii) If Issuer makes the election described in clause (b)(i)(B) above:

(A) Dealer (or an Affiliate of Dealer designated by Dealer) and any potential
institutional purchaser of any such Delivered Securities from Dealer or such
Affiliate identified by Dealer shall be afforded a commercially reasonable
opportunity to conduct a due diligence investigation in compliance with
applicable law with respect to Issuer customary in scope for private placements
of equity securities (including, without limitation, 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);

(B) Dealer (or an Affiliate of Dealer designated by Dealer) and Issuer shall
enter into an agreement (a “Private Placement Agreement”) on commercially
reasonable terms in connection with the private placement of such Delivered
Securities by Issuer to Dealer or such Affiliate and the private resale of such
shares by Dealer or such Affiliate, substantially similar to private placement
purchase agreements customary for private placements of equity securities, in
form and substance commercially reasonably satisfactory to Dealer and Issuer,
which Private Placement Agreement shall include, without limitation, provisions
substantially similar to those contained in such private placement purchase
agreements relating to the indemnification of, and contribution in connection
with the liability of, Dealer and its Affiliates and Issuer, shall provide for
the payment by Issuer of all expenses in connection with such resale, including
all fees and expenses of counsel for Dealer, shall contain representations,
warranties and agreements of Issuer reasonably necessary or advisable to
establish and maintain the availability of an exemption from the registration
requirements of the Securities Act for such resales at all times other than
during the Rule 144 Availability Period, and shall use best efforts to provide
for the delivery of accountants’ “comfort letters” to Dealer or such Affiliate
with respect to the financial statements and certain financial information
contained in or incorporated by reference into the offering memorandum prepared
for the resale of such Shares;

 

 

10

 

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(C) Issuer agrees that any Delivered Securities so delivered to Dealer, (i) may
be transferred by and among Dealer and its Affiliates, and Issuer shall effect
such transfer without any further action by Dealer and (ii) after the minimum
“holding period” within the meaning of Rule 144(d) under the Securities Act has
elapsed with respect to such Delivered Securities, Issuer shall promptly remove,
or cause the transfer agent for such Shares or securities to remove, any legends
referring to any such restrictions or requirements from such Delivered
Securities upon delivery by Dealer (or such Affiliate of Dealer) to Issuer or
such transfer agent of any seller’s and broker’s representation letters
customarily delivered by Dealer in connection with resales of restricted
securities pursuant to Rule 144 under 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 Dealer (or such affiliate of Dealer); and

(D) Neither Issuer nor Dealer shall take, or cause 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 Issuer to Dealer (or any affiliate designated by
Dealer) of the Shares or Share Termination Delivery Units, as the case may be,
or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act
for resales of the Shares or Share Termination Delivery Units, as the case may
be, by Dealer (or any such affiliate of Dealer).

(c) Make-whole. If Issuer makes the election described in clause (b)(i)(B) of
paragraph (b) of this Section 8, then Dealer or its affiliate may sell such
Shares or Share Termination Delivery Units, as the case may be, during a period
(the “Resale Period”) commencing on the Exchange Business Day following delivery
of such Shares or Share Termination Delivery Units, as the case may be, and
ending on the Exchange Business Day on which Dealer completes the sale of all
such Shares or Share Termination Delivery Units, as the case may be, or a
sufficient number of Shares or Share Termination Delivery Units, as the case may
be, so that the realized net proceeds of such sales exceed the Freely Tradeable
Value (such amount of the Freely Tradeable Value, the “Required Proceeds”). If
any of such delivered Shares or Share Termination Delivery Units remain after
such realized net proceeds exceed the Required Proceeds, Dealer shall return
such remaining Shares or Share Termination Delivery Units to Issuer. If the
Required Proceeds exceed the realized net proceeds from such resale, Issuer
shall transfer to Dealer 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 additional Shares or Share Termination Delivery Units, as the case
may be (“Make-whole Shares”), in an amount that, based on the Relevant Price on
the last day of the Resale Period (as if such day was the “Valuation Date” for
purposes of computing such Relevant Price), has a dollar value equal to the
Additional Amount. The Resale Period shall continue to enable the sale of the
Make-whole Shares in the manner contemplated by this Section 8(c). This
provision shall be applied successively until the Additional Amount is equal to
zero, subject to Section 8(e).

(d) Beneficial Ownership. Notwithstanding anything to the contrary in the
Agreement or this Confirmation, in no event shall Dealer be entitled to receive,
or shall be deemed to receive, any Shares in connection with this Transaction
if, immediately upon giving effect to such receipt of such Shares (i) Dealer’s
Beneficial Ownership would be equal to or greater than 8.0% of the outstanding
Shares or (ii) Dealer or any “affiliate” or “associate” of Dealer, would be an
“interested stockholder” of Issuer, as all such terms are defined in Section 203
of the Delaware General Corporation Law (each of clause (i) and (ii) above, an
“Ownership Limitation”). If any delivery owed to Dealer hereunder is not made,
in whole or in part, as a result of an Ownership Limitation, Dealer’s right to
receive such delivery shall not be extinguished and Issuer shall make such
delivery as promptly as practicable after, but in no event later than one
Exchange Business Day after, Dealer gives notice to Issuer that such delivery
would not result in any of such Ownership Limitations being breached. “Dealer’s
Beneficial Ownership” means the “beneficial ownership” (within the meaning of
Section 13 of the Exchange Act and the rules promulgated thereunder
(collectively, “Section 13”) of Shares by Dealer, together with any affiliate or
other person subject to aggregation with Dealer under Section 13, or by any
“group” (within the meaning of Section 13) of which Dealer is or may be deemed
to be a part. Notwithstanding anything in the Agreement or this Confirmation to
the contrary, Dealer (or the affiliate designated by Dealer pursuant to Section
8(k) below) shall not become the record or beneficial owner, or otherwise have
any rights as a holder, of any Shares that Dealer (or such affiliate) is not
entitled to receive at any time pursuant to this Section 8(d), until such time
as such Shares are delivered pursuant to this Section 8(d).

(e) Limitations on Settlement by Issuer. Notwithstanding anything herein or in
the Agreement to the contrary, in no event shall Issuer be required to deliver
Shares in connection with the Transaction in excess of 7,720,703 Shares (the
“Capped Number”). Issuer represents and warrants (which shall be deemed to be
repeated on each day that the Transaction is outstanding) that the Capped Number
is equal to or less than the number of authorized but unissued Shares of the
Issuer that are not reserved for future issuance in connection with transactions
in the Shares (other than the

 

 

11

 

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Transaction) on the date of the determination of the Capped Number (such Shares,
the “Available Shares”). In the event Issuer shall not have delivered the full
number of Shares otherwise deliverable as a result of this Section 8(e) (the
resulting deficit, the “Deficit Shares”), Issuer shall be continually obligated
to deliver, from time to time until the full number of Deficit Shares have been
delivered pursuant to this paragraph, Shares when, and to the extent, that (i)
Shares are repurchased, acquired or otherwise received by Issuer or any of its
subsidiaries after the Trade Date (whether or not in exchange for cash, fair
value or any other consideration), (ii) authorized and unissued Shares reserved
for issuance in respect of other transactions prior to such date which prior to
the relevant date become no longer so reserved or (iii) Issuer additionally
authorizes any unissued Shares that are not reserved for other transactions.
Issuer shall promptly notify Dealer of the occurrence of any of the foregoing
events (including the number of Shares subject to clause (i), (ii) or (iii) and
the corresponding number of Shares to be delivered) and promptly deliver such
Shares thereafter.

(f) Right to Extend. Dealer may postpone any Exercise 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
Number of Shares to be Delivered with respect to one or more Components), if
Dealer determines, in its reasonable discretion, that such extension is
reasonably necessary or appropriate to preserve Dealer’s hedging or hedge unwind
activity hereunder in light of existing liquidity conditions or to enable Dealer
to effect purchases of Shares in connection with its hedging, hedge unwind or
settlement activity hereunder in a manner that would, if Dealer 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 Dealer.

(g) Equity Rights. Dealer acknowledges and agrees that this Confirmation is not
intended to convey to it rights with respect to the Transaction that are senior
to the claims of common stockholders in the event of Issuer’s bankruptcy. For
the avoidance of doubt, the parties agree that the preceding sentence shall not
apply at any time other than during Issuer’s bankruptcy to any claim arising as
a result of a breach by Issuer of any of its obligations under this Confirmation
or the Agreement. For the avoidance of doubt, the parties acknowledge that this
Confirmation is not secured by any collateral that would otherwise secure the
obligations of Issuer herein under or pursuant to any other agreement.

(h) Amendments to Equity Definitions and the Agreement. The following amendments
shall be made to the Equity Definitions and to the Agreement:

(i) The first sentence of Section 11.2(c) of the Equity Definitions, prior to
clause (A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation
Agent Adjustment” is specified as the Method of Adjustment in the related
Confirmation of a Share Option Transaction, then following the announcement or
occurrence 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 options on the Shares and, if so,
will (i) make appropriate adjustment(s), if any, to any one or more of:’ and,
the portion of such sentence immediately preceding clause (ii) thereof is hereby
amended by deleting the words “diluting or concentrative” and the words
“(provided that no adjustments will be made to account solely for changes in
volatility, expected dividends, stock loan rate or liquidity relative to the
relevant Shares)” and replacing such latter phrase with the words “(and, for the
avoidance of doubt, adjustments may be made to account solely for material
changes in volatility, expected dividends, stock loan rate or liquidity relative
to the relevant Shares)”;

(ii) Sections 11.2(a) and 11.2(e)(vii) of the Equity Definitions are hereby
amended by deleting the words “diluting or concentrative” and replacing them
with “material” and adding the phrase “or Warrants” at the end of the sentence;

(iii) Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1)
deleting from the fourth line thereof the word “or” after the word “official”
and inserting a comma therefor, and (2) deleting the semicolon at the end of
subsection (B) thereof and inserting the following words therefor “or (C) at
Dealer’s option, the occurrence of any of the events specified in Section
5(a)(vii) (1) through (9) of the ISDA 2002 Master Agreement with respect to that
Issuer.”;

(iv) Section 12.9(b)(iv) of the Equity Definitions is hereby amended by:

(A) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)”
following subsection (A) and (3) the phrase “in each case” in subsection (B);
and

(B) deleting the phrase “neither the Non-Hedging Party nor the Lending Party
lends Shares in the amount of the Hedging Shares or” in the penultimate
sentence; and

 

 

12

 

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(v) Section 12.9(b)(v) of the Equity Definitions is hereby amended by:

(A) adding the word “or” immediately before subsection “(B)” and deleting the
comma at the end of subsection (A); and

(B) (1) deleting subsection (C) in its entirety, (2) deleting the word “or”
immediately preceding subsection (C) and (3) deleting the penultimate sentence
in its entirety and replacing it with the sentence “The Determining Party will
determine the Cancellation Amount payable by one party to the other.” and (4)
deleting clause (X) in the final sentence.

(i) Transfer and Assignment. Dealer may transfer or assign its rights and
obligations hereunder and under the Agreement, in whole or in part, at any time
to any person or entity whatsoever without the consent of Issuer.

(j) Disclosure. Effective from the date of commencement of discussions
concerning the Transaction, Issuer 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
Issuer relating to such tax treatment and tax structure.

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

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

(i) Dealer reasonably determines that it is advisable to terminate a portion of
the Transaction so that Dealer’s related hedging activities will comply with
applicable securities laws, rules or regulations or related policies and
procedures of Dealer (whether or not such requirements, policies or procedures
are imposed by law or have been voluntarily adopted by Dealer), or Dealer,
despite using commercially reasonable efforts, is unable or reasonably
determines that it is illegal for Dealer to hedge its obligations pursuant to
this Transaction in the public market without registration under the Securities
Act or as a result of any legal, regulatory or self-regulatory requirements;

(ii) any Person (as defined below) or “group” (within the meaning of Section
13(d) of the Exchange Act), other than Issuer, its subsidiaries or their
respective employee benefit plans, files a Schedule TO or any schedule, form or
report under the Exchange Act disclosing that such person or group has become
the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the
Exchange Act, of more than 50% of the voting power of all shares of Issuer’s
capital stock entitled to vote generally in elections of directors;

(iii) consummation of any share exchange, exchange offer, tender offer,
consolidation or merger of Issuer pursuant to which the Shares will be converted
into cash, securities or other property or any sale, lease or other transfer in
one transaction or a series of transactions of all or substantially all of the
consolidated assets of Issuer and its subsidiaries, taken as a whole, to any
Person other than one of Issuer’s subsidiaries;

(iv) continuing directors cease to constitute at least a majority of the
Issuer’s board of directors;

(v) Issuer’s stockholders approve any plan or proposal for liquidation or
dissolution of Issuer; or

(vi) the Shares cease to be listed on a U.S. national securities exchange.

Notwithstanding the foregoing, a transaction set forth in clause (ii) or (iii)
above will not constitute an Additional Termination Event if at least 90% of the
consideration paid for the Shares (excluding cash payments for fractional
shares) in such transaction or transactions otherwise constituting an Additional
Termination Event consists of shares of common stock, depositary receipts or
other certificates representing common equity interests, in each case,

 

 

13

 

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traded on any of the New York Stock Exchange, the American Stock Exchange, the
NASDAQ Global Select Market or the NASDAQ Global Market (or any of their
respective successors) (or will be so traded or quoted immediately following the
completion of such transaction or transactions).

“Person” includes any syndicate or group that would be deemed to be a “person”
under Section 13(d)(3) of the Exchange Act.

“Continuing Directors” means a director who either was a member of Issuer’s
board of directors on the Trade Date or who becomes a member of the board of
directors subsequent to that date and whose election, appointment or nomination
for election by Issuer’s stockholders is duly approved by a majority of the
continuing directors on Issuer’s board of directors at the time of such
approval, either by a specific vote or by approval of the proxy statement issued
by Issuer on behalf of the entire board of directors in which such individual is
named as nominee for director.

(m) Netting and Set-off. Each party waives any and all rights it may have to set
off obligations arising under the Agreement and the Transaction against other
obligations between the parties, whether arising under any other agreement,
applicable law or otherwise.

(n) Effectiveness. If, prior to the Effective Date, Dealer reasonably determines
that it is advisable to cancel the Transaction because of concerns that Dealer’s
related hedging activities could be viewed as not complying with applicable
securities laws, rules or regulations, the Transaction shall be cancelled and
shall not become effective, and neither party shall have any obligation to the
other party in respect of the Transaction.

(o) Amendment. If the Initial Purchasers (as defined in the Purchase Agreement)
exercise their option pursuant to Section 2(c) of the Purchase Agreement to
purchase additional convertible notes as set forth therein, then Dealer and
Issuer will amend this Confirmation to increase the Number of Warrants by a
corresponding number of additional Warrants to be issued by Issuer to Dealer
(such Warrants, the “Additional Warrants”), effective upon payment by Dealer to
Issuer of the additional Premium on the Additional Premium Payment Date. In
particular, the Number of Warrants in respect of any Component shall be
increased by a number of Additional Warrants equal to the product of (i) the
Number of Warrants for such Component as reflected on Annex A to this
Confirmation and (ii) a fraction (A) whose numerator is the aggregate principal
amount of the convertible notes issued pursuant to such exercise and (B) whose
denominator is the aggregate principal amount of the convertible notes issued
prior to such exercise (with such result rounded down to the nearest whole
number and any remainder allocated to the final Component).

(p) Delivery of Cash. For the avoidance of doubt, nothing in this Confirmation
shall be interpreted as requiring the Issuer to deliver cash in respect of the
settlement of the Transaction, except in circumstances where the required cash
settlement thereof is permitted for classification of the contract as equity by
EITF Issue No. 00-19 as in effect on the Trade Date (including, without
limitation, where the Issuer so elects to deliver cash or fails timely to elect
to deliver Shares or Share Termination Delivery Property in respect of such
settlement).

(q) Waiver of Trial by Jury. EACH OF ISSUER AND BUYER HEREBY IRREVOCABLY WAIVES
(ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF
ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THE TRANSACTION OR THE ACTIONS OF BUYER OR ITS AFFILIATES IN THE
NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

(r) Governing Law; Jurisdiction. THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH ALL
MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND
ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

 

 

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Counterparty hereby agrees (a) to check this Confirmation carefully and promptly
upon receipt so that errors or discrepancies can be promptly identified and
rectified and (b) to confirm that the foregoing (in the exact form provided by
Dealer) correctly sets forth the terms of the agreement between Dealer and
Counterparty with respect to the Transaction, by manually signing this
Confirmation or this page hereof as evidence of agreement to such terms and
providing the other information requested herein and promptly returning an
executed copy to us.

 

 

 

Yours faithfully,

 

 

BANK OF AMERICA, N.A.

 

By:

[c54472_christopher.jpg]

 

 

 

--------------------------------------------------------------------------------

 

 

 

Name:

Christopher A. Hutmaker

 

 

 

Title:

Managing Director

Agreed and Accepted By:

SOTHEBY’S

 

 

 

 

 

By: 

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

Name: 

 

 

 

 

Title: 

 

 

 

 

--------------------------------------------------------------------------------

Counterparty hereby agrees (a) to check this Confirmation carefully and promptly
upon receipt so that errors or discrepancies can be promptly identified and
rectified and (b) to confirm that the foregoing (in the exact form provided by
Dealer) correctly sets forth the terms of the agreement between Dealer and
Counterparty with respect to the Transaction, by manually signing this
Confirmation or this page hereof as evidence of agreement to such terms and
providing the other information requested herein and promptly returning an
executed copy to us.

 

 

 

Yours faithfully,

 

 

BANK OF AMERICA, N.A.

       

 

By:

 

 

 

--------------------------------------------------------------------------------

 

 

 

Name:

 

 

 

 

Title:

 

Agreed and Accepted By:

SOTHEBY’S

 

By: 

[c54472_michel.jpg]

 

--------------------------------------------------------------------------------

 

Name:

Michael L. Gillis

 

Title:

SVP, Treasurer

 

 

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Annex A

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

 

Component Number

 

Number of Warrants

 

Expiration Date

1.

 

58,824

 

September 17, 2013

2.

 

58,824

 

September 18, 2013

3.

 

58,824

 

September 19, 2013

4.

 

58,824

 

September 20, 2013

5.

 

58,824

 

September 23, 2013

6.

 

58,824

 

September 24, 2013

7.

 

58,824

 

September 25, 2013

8.

 

58,824

 

September 26, 2013

9.

 

58,824

 

September 27, 2013

10.

 

58,824

 

September 30, 2013

11.

 

58,824

 

October 1, 2013

12.

 

58,824

 

October 2, 2013

13.

 

58,824

 

October 3, 2013

14.

 

58,824

 

October 4, 2013

15.

 

58,824

 

October 7, 2013

16.

 

58,824

 

October 8, 2013

17.

 

58,824

 

October 9, 2013

18.

 

58,824

 

October 10, 2013

19.

 

58,824

 

October 11, 2013

20.

 

58,824

 

October 14, 2013

21.

 

58,824

 

October 15, 2013

22.

 

58,824

 

October 16, 2013

23.

 

58,824

 

October 17, 2013

24.

 

58,824

 

October 18, 2013

25.

 

58,824

 

October 21, 2013

26.

 

58,824

 

October 22, 2013

27.

 

58,824

 

October 23, 2013

28.

 

58,824

 

October 24, 2013

29.

 

58,824

 

October 25, 2013

30.

 

58,824

 

October 28, 2013

31.

 

58,824

 

October 29, 2013

32.

 

58,824

 

October 30, 2013

33.

 

58,824

 

October 31, 2013

34.

 

58,824

 

November 1, 2013

35.

 

58,824

 

November 4, 2013

36.

 

58,824

 

November 5, 2013

37.

 

58,824

 

November 6, 2013

38.

 

58,824

 

November 7, 2013

39.

 

58,824

 

November 8, 2013

40.

 

58,824

 

November 11, 2013

41.

 

58,824

 

November 12, 2013

42.

 

58,824

 

November 13, 2013

43.

 

58,824

 

November 14, 2013

44.

 

58,824

 

November 15, 2013

45.

 

58,824

 

November 18, 2013

46.

 

58,824

 

November 19, 2013

47.

 

58,824

 

November 20, 2013

48.

 

58,824

 

November 21, 2013

49.

 

58,824

 

November 22, 2013

50.

 

58,844

 

November 25, 2013

 

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