exv10w4






Exhibit 10.4



Form of Additional Warrant Transaction Confirmation


THE TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS SUBJECT TO RESTRICTIONS PURSUANT TO
SECTION 4 OF ARTICLE IV OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF KAISER ALUMINUM
CORPORATION. KAISER ALUMINUM CORPORATION WILL FURNISH A COPY OF ITS AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION TO ANY HOLDER OF SUCH SECURITIES WITHOUT CHARGE UPON WRITTEN REQUEST
ADDRESSED TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.




[Dealer]1

[                    ]

[                    ]

[                    ]




March 26, 2010




	 	 	 
	To: Kaiser Aluminum Corporation
	27422 Portola Parkway, Suite 200
	Foothill Ranch, CA 92610-2831
	Attention:

	 	Chief Financial Officer
	Telephone No.:

	 	(949) 614-1740
	Facsimile No.:

	 	(949) 614-1930





Re: Additional Warrants




     The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the Warrants issued by Kaiser Aluminum Corporation (“Company”) to [                    ]
(“Dealer”) as of 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 agreements and serve as the final documentation for this
Transaction.



     The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), 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 Dealer and 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 Dealer and 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 (without reference to choice of law doctrine, other than Title 14 of the New York General
Obligations Law)) 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 agree that no Transaction other than the
Transaction to which this Confirmation relates shall be governed by the Agreement. If there exists
any ISDA Master Agreement between Dealer and Company or any confirmation or other agreement between
Dealer and Company (other than this Confirmation) pursuant to which an ISDA Master Agreement is
deemed to exist between Dealer and Company, then notwithstanding anything to the contrary in such
ISDA Master Agreement, such confirmation or agreement or any






 




			
	1	 	On March 26, 2010, Kaiser Aluminum
Corporation entered into an agreement in substantially the form hereof with
each of Bank of America, N.A. (“BofA”), JPMorgan Chase Bank, National
Association (“JPM”) and Wells Fargo Bank, National Association (“Wells”).





 









 




other agreement to which Dealer and Company are parties, the Transaction shall not be considered a
Transaction under, or otherwise governed by, such existing or deemed ISDA Master Agreement.



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:

	 	March 26, 2010
	 
	 	 
	     Warrants:

	 	Equity call warrants, 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
the Equity Definitions, each reference to a
Warrant herein shall be deemed to be a
reference to a Call Option.
	 
	 	 
	     Warrant Style:

	 	European
	 
	 	 
	     Seller:

	 	Company
	 
	 	 
	     Buyer:

	 	Dealer
	 
	 	 
	     Shares:

	 	The common stock of Company, par value USD
0.01 per Share (Exchange symbol “KALU”)
	 
	 	 
	     Number of Warrants:

	 	[BofA, 170,733; JPM, 206,949; and Wells,
139,691] subject to adjustment as provided
herein. For the avoidance of doubt, the
Number of Warrants shall be reduced by any
Warrants deemed exercised or expired
unexercised as provided in “Automatic
Exercise.” In no event will the Number of
Warrants be less than zero.
	 
	 	 
	     Warrant Entitlement:

	 	One Share per Warrant
	 
	 	 
	     Strike Price:

	 	USD 61.3600, subject to Section 9(v).
	 
	 	 
	     Premium:

	 	USD [BofA, 788,370.00; JPM, 675,649.87; and
Wells, 572,368.50]
	 
	 	 
	     Premium Payment Date:

	 	March 29, 2010
	 
	 	 
	     Exchange:

	 	The NASDAQ Global Select Market
	 
	 	 
	     Related Exchange(s):

	 	All Exchanges
	 
	 	 
	Procedures for Exercise.
	 	 
	 
	 	 
	     Expiration Time:

	 	The Valuation Time
	 
	 	 
	     Expiration Date(s):

	 	Each Scheduled Trading Day during the period
from, and including, the First Expiration
Date to, but excluding, the 120th Scheduled
Trading Day following the First Expiration
Date shall be an “Expiration Date” for a
number of Warrants equal to the Daily Number
of Warrants on such date; provided that,
notwithstanding anything to the contrary in
the Equity Definitions, if any such date is
a Disrupted Day, the Calculation Agent shall






2









 






	 	 	 
	 

	 	make adjustments, if applicable, to the
Daily Number of Warrants, which may include
reducing such Daily Number of Warrants to
zero for which such day shall be an
Expiration Date and shall designate a
Scheduled Trading Day or a number of
Scheduled Trading Days as the Expiration
Date(s) for the remaining Daily Number of
Warrants or a portion thereof for the
originally scheduled Expiration Date; and
provided further that if such Expiration
Date has not occurred pursuant to this
clause as of the eighth Scheduled Trading
Day following the last scheduled Expiration
Date under this Transaction, the Calculation
Agent shall have the right to declare such
Scheduled Trading Day to be the final
Expiration Date and the Calculation Agent
shall determine its good faith estimate of
the fair market value for the Shares as of
the Valuation Time on that eighth Scheduled
Trading Day or on any subsequent Scheduled
Trading Day, as the Calculation Agent shall
determine using commercially reasonable
means.
	 
	 	 
	     First Expiration Date:

	 	July 1, 2015 (or if such day is not a
Scheduled Trading Day, the next following
Scheduled Trading Day), subject to Market
Disruption Event below.
	 
	 	 
	     Daily Number of Warrants:

	 	For any Expiration Date, the Number of
Warrants that have not expired or been
exercised as of such day, divided by the
remaining number of Expiration Dates
(including such day), rounded down to the
nearest whole number, subject to adjustment
pursuant to the provisos to “Expiration
Date(s)”.
	 
	 	 
	     Automatic Exercise:

	 	Applicable; and means that for each
Expiration Date, a number of Warrants 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 at the Exercise Time
on such Expiration Date unless Dealer
notifies Company prior to the Expiration
Time on such Expiration Date that it does
not wish Automatic Exercise to occur, in
which case Automatic Exercise will not apply
to such Expiration Date and the Daily Number
of Warrants for such Expiration Date will
expire unexercised.
	 
	 	 
	     Market Disruption Event:

	 	Section 6.3(a)(ii) of the Equity Definitions
is hereby amended by replacing clause (ii)
in its entirety with “(ii) an Exchange
Disruption or” and inserting immediately
following clause (iii) the phrase “; in each
case that the Calculation Agent determines
is material.”
	 
	 	 
	Valuation Terms.
	 	 
	 
	 	 
	     Valuation Time:

	 	Scheduled Closing Time; provided that if the
principal trading session is extended, the
Calculation Agent shall determine the
Valuation Time in its reasonable discretion.
	 
	 	 
	     Valuation Date:

	 	Each Exercise Date






3









 






	 	 	 
	Settlement Terms.
	 	 
	 
	 	 
	     Settlement Method:

	 	Net Share Settlement
	 
	 	 
	     Net Share Settlement:

	 	On the relevant Settlement Date, Company
shall deliver to Dealer a number of Shares
equal to the Share Delivery Quantity 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, rounded
down to the nearest whole number plus any
Fractional Share Amount.
	 
	 	 
	     Net Share
Settlement Amount:

	 	For any Settlement Date, an amount equal to
the product of (i) the Number of Warrants
exercised or deemed exercised on the
relevant Exercise Date, (ii) the Strike
Price Differential in respect of the
relevant Valuation Date and (iii) the
Warrant Entitlement.
	 
	 	 
	     Settlement Price:

	 	For any Valuation Date, the per Share
volume-weighted average price as displayed
under the heading “Bloomberg VWAP” on
Bloomberg page KALU.UQ<equity> AQR (or
any successor thereto) in respect of the
period from the scheduled opening time of
the Exchange to the Scheduled Closing Time
on such Valuation Date (or if such
volume-weighted average price is
unavailable, the market value of one Share
on such Valuation Date, as determined by the
Calculation Agent). Notwithstanding the
foregoing, if (i) any Expiration Date is a
Disrupted Day and (ii) the Calculation Agent
determines that such Expiration Date shall
be an Expiration Date for fewer than the
Daily Number of Warrants, as described
above, then the Settlement Price for the
relevant Valuation Date shall be the
volume-weighted average price per Share on
such Valuation Date on the Exchange, as
determined by the Calculation Agent based on
such sources as it deems appropriate using a
volume-weighted methodology, for the portion
of such Valuation Date for which the
Calculation Agent determines there is no
Market Disruption Event.
	 
	 	 
	     Settlement Date(s):

	 	As determined in reference to Section 9.4 of
the Equity Definitions, subject to Section
9(k)(i) hereof.
	 
	 	 
	     Other Applicable Provisions:

	 	The provisions of Sections 9.1(c), 9.8, 9.9,
9.11, 9.12 and 10.5 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.
	 
	 	 
	     Representation
and Agreement:

	 	Notwithstanding Section 9.11 of the Equity
Definitions, the parties acknowledge that
any Shares delivered to Dealer may be, upon
delivery, subject to (a) restrictions






4









 






	 	 	 
	 

	 	and limitations arising from Company’s status as
issuer of the Shares under applicable
securities laws; (b) applicable provisions
with respect to transfers of Company’s
securities imposed by Company’s certificate
of incorporation, as such provisions may
have been agreed to be interpreted in any
other agreement between Dealer and Company;
and (c) applicable provisions with respect
to transfer of Company’s securities imposed
by this Confirmation or any other agreement
between Dealer and Company.






	 	 	 
	3.     Additional Terms applicable to the
Transaction.
	 	 
	 
	 	 
	     Adjustments applicable to the Warrants:
	 	 
	 
	 	 
	          Method of Adjustment:

	 	Calculation Agent Adjustment. For the
avoidance of doubt, in making any adjustments
under the Equity Definitions, the Calculation
Agent may make adjustments, if any, to any one
or more of the Strike Price, the Number of
Warrants, the Daily Number of Warrants and the
Warrant Entitlement. Notwithstanding the
foregoing, any cash dividends or distributions
on the Shares, whether or not extraordinary,
shall be governed by Section 9(f) of this
Confirmation in lieu of Article 10 or Section
11.2(c) of the Equity Definitions.
	 
	 	 
	     Extraordinary Events applicable
to the Transaction:
	 	 
	 
	 	 
	          New Shares:

	 	Section 12.1(i) of the Equity Definitions is
hereby amended (a) by deleting the text in
clause (i) thereof in its entirety (including
the word “and” following clause (i)) and
replacing it with the phrase “publicly quoted,
traded or listed (or whose related depositary
receipts are publicly quoted, traded or listed)
on any of the New York Stock Exchange, The
NASDAQ Global Select Market or The NASDAQ
Global Market (or their respective successors)”
and (b) by inserting immediately prior to the
period the phrase “and (iii) of an entity or
person organized under the laws of the United
States, any State thereof or the District of
Columbia that also becomes Company under the
Transaction following such Merger Event or
Tender Offer”.
	 
	 	 
	     Consequence of Merger Events:
	 	 
	 
	 	 
	          Merger Event:

	 	Applicable
	 
	 	 
	               Share-for-Share:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	               Share-for-Other:

	 	Cancellation and Payment (Calculation Agent
Determination)
	 
	 	 
	               Share-for-Combined:

	 	Cancellation and Payment (Calculation Agent
Determination); provided that Dealer may elect,
in its commercially reasonable judgment,
Component Adjustment (Calculation Agent
Determination).






5









 






	 	 	 
	Consequence of Tender Offers:
	 	 
	 
	 	 
	     Tender Offer:

	 	Applicable
	 
	 	 
	          Share-for-Share:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	          Share-for-Other:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	          Share-for-Combined:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	Nationalization, Insolvency or Delisting:

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

	 	Applicable; provided that Section
12.9(a)(ii)(X) of the Equity Definitions is
hereby amended by replacing the word “Shares”
with the phrase “Hedge Positions”.
	 
	 	 
	     Failure to Deliver:

	 	Not Applicable
	 
	 	 
	     Insolvency Filing:

	 	Applicable
	 
	 	 
	     Hedging Disruption:

	 	Applicable; provided that:
	 
	 	 
	 

	 	(i) Section 12.9(a)(v) of the Equity
Definitions is hereby modified by inserting the
following two phrases at the end of such
Section:
	 
	 	 
	 

	 	“For the avoidance of doubt, the term “equity
price risk” shall be deemed to include, but
shall not be limited to, stock price and
volatility risk. And, for the further avoidance
of doubt, any such transactions or assets
referred to in phrases (A) or (B) above must be
available on commercially reasonable pricing
terms.”; and
	 
	 	 
	 

	 	(ii) Section 12.9(b)(iii) of the Equity
Definitions is hereby modified by inserting in
the third line thereof, after the words “to
terminate the Transaction”, the following
words:
	 
	 	 
	 

	 	“or a portion of the Transaction affected by
such Hedging Disruption”.
	Increased Cost of Hedging:

	 	Not Applicable






6









 






	 	 	 
	     Loss of Stock Borrow:

	 	Applicable
	 
	 	 
	          Maximum Stock Loan Rate:

	 	200 basis points
	 
	 	 
	     Increased Cost of Stock Borrow:

	 	Applicable
	 
	 	 
	          Initial Stock Loan Rate:

	 	25 basis points
	 
	 	 
	     Hedging Party:

	 	For all applicable Additional Disruption
Events, Dealer.
	 
	 	 
	Determining Party:

	 	For all applicable Extraordinary Events, Dealer.
	 
	 	 
	Non-Reliance:

	 	Applicable
	 
	 	 
	Agreements and Acknowledgments Regarding Hedging Activities:
	 	Applicable
	 
	 	 
	Additional Acknowledgments:

	 	Applicable
	 
	 	 
	4. Calculation Agent.

	 	Dealer; provided that all determinations made by the Calculation Agent
shall be made in a good faith and in a commercially reasonable manner. Following any calculation made hereunder
by the Calculation Agent, Company may request that the Calculation Agent deliver to Company, at an email address
specified by Company, a report displaying in reasonable detail the basis for such calculation. Upon receipt of
such request, the Calculation Agent will provide such a report to Company by e-mail to the e-mail address provided
by Company; provided, however, that in no event will the Calculation Agent be obligated to provide to Company any
proprietary models used by it or any other party.







	5.	 	Account Details.






	 	(a)	 	Account for payments to Company:
	 
	 	 	 	[                    ]
	 
	 	 	 	Account for delivery of Shares from Company:
	 
	 	 	 	[                    ]
	 
	 	(b)	 	Account for payments to Dealer:
	 
	 	 	 	[                    ]
	 
	 	 	 	Account for delivery of Shares to Dealer:
	 
	 	 	 	[                    ]






	6.	 	Offices.






	 	(a)	 	The Office of Company for the Transaction is: Inapplicable, Company is not a
Multibranch Party.
	 
	 	(b)	 	The Office of Dealer for the Transaction is: [                    ]
	 
	 	 	 	[                    ]





7









 






	7.	 	Notices.






	 	(a)	 	Address for notices or communications to Company:
	 
	 	 	 	Kaiser Aluminum Corporation
	 	 	 	27422 Portola Parkway, Suite 200
	 	 	 	Foothill Ranch, CA 92610-2831
	 	 	 	Attention:          Chief Financial Officer
	 	 	 	Telephone No.: (949) 614-1740
	 	 	 	Facsimile No.:   (949) 614-1930






	 	(b)	 	Address for notices or communications to Dealer:
	 
	 	 	 	[                    ]
	 	 	 	Attention: [Title of contact]
	 	 	 	Telephone No: [                    ]
	 	 	 	Facsimile No: [                    ]






	8.	 	Representations and Warranties of Company.
	 
	 	 	Each of the representations and warranties of Company set forth in Section 3 of the Purchase
Agreement (the “Purchase Agreement”) dated as of March 23, 2010 between Company and J.P.
Morgan Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
representatives of the several Initial Purchasers party thereto, are true and correct and
are hereby deemed to be repeated to Dealer as if set forth herein. Company hereby further
represents and warrants to Dealer on the date hereof, on and as of the Premium Payment Date
and, in the case of the representations in Section 8(d), at all times until termination of
the Transaction, that:






	 	(a)	 	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 Company’s
part; and this Confirmation 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) and
except that rights to indemnification and contribution hereunder may be limited by
federal or state securities laws or public policy relating thereto.
	 
	 	(b)	 	Neither the execution and delivery of this Confirmation nor the incurrence or
performance of obligations of Company hereunder will conflict with or result in a
breach of the certificate of incorporation 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.
	 
	 	(c)	 	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 Company of this Confirmation, except such as have been
obtained or made and such as may be required under the Securities Act of 1933, as
amended (the “Securities Act”) or state securities laws.
	 
	 	(d)	 	A number of Shares equal to the sum of (i) the Maximum Number of Shares and
(ii) the “Maximum Number of Shares” (as defined in the letter agreement dated March 23,
2010 between Dealer and Company regarding Base Warrants (the “Base Warrant
Confirmation”)) (such sum,





8









 





	 	 	 	the “Warrant Shares”) have been reserved for issuance by all
required corporate action of 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 Warrants following the exercise of the Warrants in
accordance with the terms and conditions of the Warrants, 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.
	 
	 	(e)	 	Company is not and will not be required to register as an “investment company”
as such term is defined in the Investment Company Act of 1940, as amended.
	 
	 	(f)	 	Company is an “eligible contract participant” (as such term is defined in
Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is
an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange
Act).
	 
	 	(g)	 	Company and each of its affiliates is not, on the date hereof, in possession of
any material non-public information with respect to Company.






	9.	 	Other Provisions.






	 	(a)	 	Opinions. Company shall deliver to Dealer an opinion of counsel, dated
as of the Trade Date, with respect to the matters set forth in Sections 8(a) through
(d) of this Confirmation. Delivery of such opinion to Dealer shall be a condition
precedent for the purpose of Section 2(a)(iii) of the Agreement with respect to each
obligation of Dealer under Section 2(a)(i) of the Agreement.
	 
	 	(b)	 	Repurchase Notices. Company shall, on any day on which Company effects
any repurchase of Shares other than an Excluded Repurchase, promptly give Dealer a
written notice of such repurchase (a “Repurchase Notice”) on such day if following such
repurchase, the number of outstanding Shares on such day, subject to any adjustments
provided herein, is (i) less than [BofA, 17.4700; JPM, 17.7342; and Wells, 17.1447]
million (in the case of the first such notice) or (ii) thereafter more than [BofA,
0.0873; JPM, 0.0886; and Wells, 0.0857] million (each number as adjusted by the
Calculation Agent on account of stock splits and similar events) less than the number
of Shares included in the immediately preceding Repurchase Notice.
	 
	 	(c)	 	Regulation M. Company is not on the Trade Date and, as of the “Trade
Date” (as defined in the Base Warrant Confirmation) was not, engaged in a distribution,
as such term is used in Regulation M under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), of any securities of Company, other than a distribution
meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7)
of Regulation M. Company shall not, until the second Exchange Business Day immediately
following the Trade Date, engage in any such distribution.
	 
	 	(d)	 	No Manipulation. Company is not entering into this Transaction to
create actual or apparent trading activity in the Shares (or any security convertible
into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the
price of the Shares (or any security convertible into or exchangeable for the Shares)
or otherwise in violation of the Exchange Act.
	 
	 	(e)	 	Transfer or Assignment. Company may not transfer any of its rights or
obligations under this Transaction without the prior written consent of Dealer. Dealer
may, without Company’s consent, transfer or assign all or any part of its rights or
obligations under this Transaction to any third party. Dealer will promptly provide
Company with notice of any such transfer or assignment. If at any time at which (A)
the Section 16 Percentage exceeds 4.5%, (B) the Warrant Equity Percentage exceeds
14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any
such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”),
Dealer is unable after using its commercially reasonable efforts to effect a transfer
or assignment of Warrants to a third party on pricing terms reasonably acceptable to
Dealer and within a time period reasonably acceptable to Dealer such that no Excess
Ownership Position exists, then Dealer may designate any Exchange Business Day as an
Early Termination Date with respect to a portion of the Transaction (the “Terminated
Portion”), such that following such




9









 






	 	 	 	partial termination no Excess Ownership Position
exists. In the event that Dealer so designates an Early Termination Date with respect
to a Terminated Portion, a payment shall be made pursuant to
Section 6 of the Agreement as if (1) an Early Termination Date had been designated
in respect of a Transaction having terms identical to this Transaction and a Number
of Warrants equal to the number of Warrants underlying the Terminated Portion, (2)
Company were the sole Affected Party with respect to such partial termination and
(3) the Terminated Portion were the sole Affected Transaction (and, for the
avoidance of doubt, the provisions of Section 9(j) shall apply to any amount that is
payable by Company to Dealer pursuant to this sentence as if Company was not the
Affected Party). The “Section 16 Percentage” as of any day is the fraction,
expressed as a percentage, (A) the numerator of which is the number of Shares that
Dealer and each person subject to aggregation of Shares with Dealer under Section 13
or Section 16 of the Exchange Act and rules promulgated thereunder (the “Dealer
Group”) directly or indirectly beneficially own (as defined under Section 13 or
Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the
denominator of which is the number of Shares outstanding. The “Warrant Equity
Percentage” as of any day is the fraction, expressed as a percentage, (A) the
numerator of which is the sum of (1) the product of the Number of Warrants and the
Warrant Entitlement and (2) the aggregate number of Shares underlying any other
warrants purchased by Dealer from Company, and (B) the denominator of which is the
number of Shares outstanding. The “Share Amount” as of any day is the number of
Shares that Dealer and any person whose ownership position would be aggregated with
that of Dealer (Dealer or any such person, a “Dealer Person”) under Section 203 of
the Delaware General Corporation Law or any other law, rule, regulation, regulatory
order or organizational documents or contracts of Company that are, in each case,
applicable to ownership of Shares (“Applicable Restrictions”), owns, beneficially
owns, constructively owns, controls, holds the power to vote or otherwise meets a
relevant definition of ownership under any Applicable Restriction, as determined by
Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of
Shares equal to (A) the minimum number of Shares that could give rise to reporting
or registration obligations or other requirements (including obtaining prior
approval from any person or entity) of a Dealer Person, or could result in an
adverse effect on a Dealer Person, under any Applicable Restriction, as determined
by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares
outstanding. 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, or make or receive any payment in cash, to or from
Company, Dealer may designate any of its affiliates to purchase, sell, receive or
deliver such Shares or other securities, or make or receive such payment in cash,
and otherwise to perform Dealer’s obligations in respect of this Transaction and any
such designee may assume such obligations. Dealer shall be discharged of its
obligations to Company to the extent of any such performance.
	 
	 	(f)	 	Dividends. If at any time during the period from and including the
Trade Date, to and including the final Expiration Date, (i) an ex-dividend date for a
cash dividend occurs with respect to the Shares (an “Ex-Dividend Date”), and that
dividend differs from the Regular Dividend on a per Share basis or (ii) if no
Ex-Dividend Date for a cash dividend occurs with respect to the Shares in any quarterly
dividend period of Company, then the Calculation Agent will adjust any of the Strike
Price, Number of Warrants and/or Daily Number of Warrants to preserve the fair value of
the Warrants to Dealer after taking into account such dividend or lack thereof.
“Regular Dividend” shall mean for any calendar quarter, USD 0.24 for the first cash
dividend or distribution on the Shares for which the Ex-Dividend Date falls within such
calendar quarter, and zero for any subsequent dividend or distribution on the Shares
for which the Ex-Dividend Date falls within the same calendar quarter.
	 
	 	(g)	 	[Boilerplate agency provision of Dealer, if applicable.]
	 
	 	(h)	 	Additional Provisions.






	 	(i)	 	Amendments to the Equity Definitions:






10











 






	 	(A)	 	Section 11.2(a) of the Equity Definitions is
hereby amended by deleting the words “diluting or concentrative” and
replacing them with the word “material”; and adding the phrase “or
Warrants” at the end of the sentence.
	 
	 	(B)	 	Section 11.2(c) of the Equity Definitions is
hereby amended by (x) replacing the words “a diluting or concentrative”
with “an”, (y) adding the phrase “or Warrants” after the words “the
relevant Shares” in the same sentence and (z) deleting the phrase
“(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 Share)” and replacing it with the phrase
“(and, for the avoidance of doubt, adjustments may be made to account
solely for changes in volatility, expected dividends, stock loan rate
or liquidity relative to the relevant Shares)”.
	 
	 	(C)	 	Section 11.2(e)(vii) of the Equity Definitions
is hereby amended by deleting the words “a diluting or concentrative”
and replacing them with the word “a material”; and adding the phrase
“or Warrants” at the end of the sentence.
	 
	 	(D)	 	Section 12.6(a)(ii) of the Equity Definitions
is hereby amended by (1) deleting from the fourth line thereof the word
“or” after the word “official” and inserting a comma therefor, and (2)
deleting the semi-colon at the end of subsection (B) thereof and
inserting the following words therefor “or (C) at Dealer’s option, the
occurrence of any of the events specified in Section 5(a)(vii) (1)
through (9) of the ISDA Master Agreement with respect to that Issuer”.
	 
	 	(E)	 	Section 12.9(b)(iv) of the Equity Definitions
is hereby amended by:






	 	(x)	 	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
	 
	 	(y)	 	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.






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






	 	(x)	 	adding the word “or” immediately
before subsection “(B)” and deleting the comma at the end of
subsection (A); and
	 
	 	(y)	 	(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 Hedging Party
will determine the Cancellation Amount payable by one party to
the other.”






	 	(ii)	 	Notwithstanding anything to the contrary in this Confirmation,
upon the occurrence of one of the following events, with respect to this
Transaction, (1) Dealer shall have the right to designate such event an
Additional Termination Event and designate an Early Termination Date pursuant
to Section 6(b) of the Agreement, (2) Company shall be deemed the sole Affected
Party with respect to such Additional Termination Event and (3) the Transaction
shall be deemed the sole Affected Transaction:






	 	(A)	 	A “person” or “group” within the meaning of
Section 13(d) of the Exchange Act, other than Company, its subsidiaries
and its and their employee benefit plans, has become the direct or
indirect “beneficial owner,” as defined in Rule




11









 






	 	 	 	13d-3 under the Exchange Act, of shares of the common equity of
Company representing more than 50% of the voting power of such common
equity.
	 
	 	(B)	 	Consummation of (I)(i) any recapitalization,
reclassification or change of the Shares (other than changes resulting
from a subdivision or combination or changes in par value) as a result
of which the Shares would be converted into, or exchanged for, stock,
other securities, other property or assets or (ii) any share exchange,
consolidation or merger of Company pursuant to which the Shares will be
converted into cash, securities or other property (in each of clauses
(i) and (ii), other than any such transaction which is effected solely
to change the Company’s jurisdiction of incorporation to another State
within the United States of America or the District of Columbia and
that results in a reclassification, conversion or exchange of
outstanding Shares solely into shares of common stock of the surviving
entity) or (II) any sale, lease or other transfer in one transaction or
a series of transactions of all or substantially all of the
consolidated assets of Company and its subsidiaries, taken as a whole,
to any person; provided, however, that a transaction where the holders
of all classes of Company’s common equity immediately prior to such
transaction that is a share exchange, consolidation or merger own, as a
result of such transaction, directly or indirectly, more than 50% of
all classes of common equity of the continuing or surviving corporation
or transferee or the parent thereof immediately after such event shall
not constitute an Additional Termination Event. Notwithstanding the
foregoing, any event set forth in this clause (B) shall not constitute
an Additional Termination Event if 90% or more of the consideration
received or to be received by holders of the Shares, excluding cash
payments for fractional Shares or pursuant to appraisal rights, in
connection with such event consists of shares of common stock traded on
a national securities exchange or which will be so traded or quoted
when issued or exchanged in connection with such event.
	 
	 	(C)	 	Dealer, despite using commercially reasonable
efforts, is unable or reasonably determines that, during the period
beginning on, and including, the fourth Exchange Business Day
immediately following the Trade Date and ending on, and including, the
one-year anniversary of the fourth Exchange Business Day immediately
following the Trade Date, it is impractical or illegal, to hedge its
exposure with respect 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 or related policies and
procedures (whether or not such requirements, policies or procedures
are imposed by law or have been voluntarily adopted by Dealer).






	 	(i)	 	No Collateral or Setoff. Notwithstanding any provision of the
Agreement or any other agreement between the parties to the contrary, the obligations
of Company hereunder are not secured by any collateral. Obligations under this
Transaction shall not be set off by Company 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. Any provision
in the Agreement with respect to the satisfaction of Company’s payment obligations to
the extent of Dealer’s payment obligations to Company in the same currency and in the
same Transaction (including, without limitation Section 2(c) thereof) shall not apply
to Company and, for the avoidance of doubt, Company shall fully satisfy such payment
obligations notwithstanding any payment obligation to Company by Dealer 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, (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. For the avoidance of doubt and
notwithstanding anything to the contrary provided in this Section 9(i), in the event of




12









 






	 	 	 	bankruptcy or liquidation of either Company or Dealer, neither party shall have the
right to set off any obligation that it may have to the other party under this
Transaction against any obligation such other party may have to it, whether arising
under the Agreement, this Confirmation or any other agreement between the parties
hereto, by operation of law or otherwise.
	 
	 	(j)	 	Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events. If, in respect of this Transaction, an amount is payable by
Company to Dealer, (i) pursuant to Section 12.7 or Section 12.9 of the Equity
Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement (a “Payment
Obligation”), Company shall have the right, in its sole discretion, to satisfy any such
Payment Obligation by the Share Termination Alternative (as defined below) (except that
Company shall not make such an election in the event of a Nationalization, Insolvency,
Merger Event or Tender Offer in which the consideration to be paid to holders of shares
consists solely of cash or 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), (vii) or (viii) of the
Agreement or a Termination Event of the type described in Section 5(b) of the
Agreement, in each case that resulted from an event or events outside Company’s
control) and shall give irrevocable telephonic notice to Dealer, confirmed in writing
within one Scheduled Trading Day, no later than 12:00 p.m. (New York City time) on the
Merger Date, Tender Offer Date, Announcement Date (in the case of a Nationalization,
Insolvency or Delisting), Early Termination Date or date of cancellation, as
applicable; provided that if Company does not validly elect to satisfy its Payment
Obligation by the Share Termination Alternative, Dealer shall have the right to require
Company to satisfy its Payment Obligation by the Share Termination Alternative.





	 	 	 	 	 
	 

	 	Share Termination Alternative:
	 	If applicable, Company shall deliver to Dealer
the Share Termination Delivery Property on the date (the “Share Termination
Payment Date”) on which the Payment Obligation would otherwise be due pursuant
to Section 12.7 or Section 12.9 of the Equity Definitions or Section 6(d)(ii)
of the Agreement, as applicable, subject to Section 9(k)(i) below, in
satisfaction, subject to Section 9(k)(ii) below, of the Payment Obligation in
the manner reasonably requested by Dealer 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 amount of 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 to Dealer 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. The Calculation Agent shall notify Company of
such Share Termination Unit Price 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






13









 






	 	 	 	 	 
	 

	 	 	 	in Section 9(k)(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
Registration Settlement of Share Termination
Delivery Units that are Restricted Shares (as
defined below) as set forth in Section
9(k)(ii) below, the Share Termination Unit
Price shall be the Settlement Price on the
Merger Date, the Tender Offer Date, the
Announcement Date (in the case of a
Nationalization, Insolvency or Delisting), the
date of cancellation or the Early Termination
Date, as applicable.
	 
	 	 	 	 
	 

	 	Share Termination Delivery Unit:
	 	In the case of a Termination Event,
Event of Default Additional Disruption Event or Delisting, one Share or, in the
case of Nationalization, Insolvency, Tender Offer or 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, Insolvency, Tender Offer or Merger Event. If such
Nationalization, Insolvency, Tender Offer or 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:
	 	Inapplicable
	 
	 	 	 	 
	 

	 	Other applicable provisions:
	 	If Share Termination Alternative is
applicable, the provisions of Sections 9.8, 9.9, 9.11, 9.12 and 10.5 (as
modified above) of the Equity Definitions will be applicable, except that all
references in such provisions to “Physically-settled” shall be read as
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 Alternative is applicable to this Transaction.







	 	(k)	 	Registration/Private Placement Procedures. If, in the reasonable
opinion of Dealer, following any delivery of Shares or Share Termination Delivery
Property to Dealer hereunder, such Shares or Share Termination Delivery Property would
be in the hands of Dealer 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 Dealer waives the need for
registration/private placement procedures set forth in (i) and (ii) below.
Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants
exercised or deemed exercised on




14









 






	 	 	 	any Expiration Date, Company shall elect, prior to the first Settlement Date for the
First Expiration Date, a Private Placement Settlement or Registration Settlement for
all deliveries of Restricted Shares for all such Expiration Dates which election
shall be applicable to all Settlement Dates for such 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 Warrants.
The Calculation Agent shall make reasonable adjustments to settlement terms and
provisions under this Confirmation to reflect a single Private Placement or
Registration Settlement for such aggregate Restricted Shares delivered hereunder.






	 	(i)	 	If Company elects to settle the Transaction pursuant to this
clause (i) (a “Private Placement Settlement”), then delivery of Restricted
Shares by Company shall be effected in customary private placement procedures
with respect to such Restricted Shares reasonably acceptable to Dealer;
provided that 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 Company to Dealer (or any affiliate designated
by Dealer) 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
Dealer (or any such affiliate of Dealer). The Private Placement Settlement of
such Restricted Shares shall include customary representations, covenants, blue
sky and other governmental filings and/or registrations, indemnities to Dealer,
due diligence rights (for Dealer or any designated buyer of the Restricted
Shares by Dealer), opinions and certificates, and such other documentation as
is customary for private placement agreements, all reasonably acceptable to
Dealer. In the case of a Private Placement Settlement, Dealer shall determine
the appropriate discount to the Share Termination Unit Price (in the case of
settlement of Share Termination Delivery Units pursuant to Section 9(j) 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 number of such Restricted Shares
to be delivered to Dealer hereunder; provided that, in no event shall Company
deliver a number of Restricted Shares greater than 2.0 times the Number of
Shares (the “Maximum Number of Shares”). Notwithstanding the Agreement or
this Confirmation, the date of delivery of such Restricted Shares shall be the
Exchange Business Day following notice by Dealer to 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 previous sentence and not be due on the Share
Termination Payment Date (in the case of settlement of Share Termination
Delivery Units pursuant to Section 9(j) above) or on the Settlement Date for
such Restricted Shares (in the case of settlement in Shares pursuant to Section
2 above).
	 
	 	 	 	In the event Company shall not have delivered the full number of Restricted
Shares otherwise applicable as a result of the proviso above relating to the
Maximum Number of Shares (such deficit, the “Deficit Restricted Shares”),
Company shall be continually obligated to deliver, from time to time until
the full number of Deficit Restricted Shares have been delivered pursuant to
this paragraph, Restricted Shares when, and to the extent, that (i) Shares
are repurchased, acquired or otherwise received by Company 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 and (iii)
Company additionally authorizes any unissued Shares that are not reserved
for other transactions. Company shall immediately 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
Restricted Shares to be delivered) and promptly deliver such Restricted
Shares thereafter.




15









 






	 	(ii)	 	If Company elects to settle the Transaction pursuant to this
clause (ii) (a “Registration Settlement”), then Company shall promptly (but in
any event no later than the beginning of the Resale Period) 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 Dealer, to cover the
resale of such Restricted Shares in accordance with customary resale
registration procedures, including covenants, conditions, representations,
underwriting discounts (if applicable), commissions (if applicable),
indemnities due diligence rights, opinions and certificates, and such other
documentation as is customary for equity resale underwriting agreements, all
reasonably acceptable to Dealer. If Dealer, in its sole reasonable discretion,
is not satisfied with such procedures and documentation Private Placement
Settlement shall apply. If Dealer 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) the Share Termination Payment Date in case
of settlement in Share Termination Delivery Units pursuant to Section 9(j)
above or (y) 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 Dealer 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 equals or
exceeds 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)(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 (or any similar provision then in force) or Rule 145(d)(2) (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 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 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 Company deliver a number
of Restricted Shares greater than the Maximum Number of Shares.
	 
	 	(iii)	 	Without limiting the generality of the foregoing, Company
agrees that any Restricted Shares delivered to Dealer, as purchaser of such
Restricted Shares, (i) may be transferred by and among Dealer and its
affiliates and Company shall effect such transfer without any further action by
Dealer and (ii) after the period of 6 months from the Trade Date (or 1 year
from the Trade Date if, at such time, informational requirements of Rule 144(c)
are not satisfied with respect to Company) 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 request
by Dealer (or such affiliate of Dealer) to Company or such transfer agent,
without any 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).






	 	 	 	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




16









 






	 	 	 	Registration Settlement shall constitute an Event of Default with respect to which
Company shall be the Defaulting Party.






	 	(l)	 	Limit on Beneficial Ownership. Notwithstanding any other provisions
hereof, Dealer may not exercise any Warrant hereunder or be entitled to take delivery
of any Shares deliverable hereunder, and Automatic Exercise shall not apply with
respect to any Warrant hereunder, to the extent (but only to the extent) that, after
such receipt of any Shares upon the exercise of such Warrant or otherwise hereunder and
after taking into account any Shares deliverable to Dealer under the Base Warrant
Confirmation, (i) the Section 16 Percentage would exceed 4.5%, or (ii) the Share Amount
would exceed the Applicable Share Limit. Any purported delivery hereunder shall be
void and have no effect to the extent (but only to the extent) that, after such
delivery and after taking into account any Shares deliverable to Dealer under the Base
Warrant Confirmation, the Section 16 Percentage would exceed 4.5%, or (ii) the Share
Amount would exceed the Applicable Share Limit. If any delivery owed to Dealer
hereunder is not made, in whole or in part, as a result of this provision, Company’s
obligation to make such delivery shall not be extinguished and Company shall make such
delivery as promptly as practicable after, but in no event later than one Business Day
after, Dealer gives notice to Company that, after such delivery, (i) the Section 16
Percentage would not exceed 4.5%, and (ii) the Share Amount would not exceed the
Applicable Share Limit.
	 
	 	(m)	 	Share Deliveries. 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
three months days (it being understood that Dealer will not be considered an affiliate
under this paragraph 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
Delivery Property hereunder at any time after 6 months from the Trade Date (or 1 year
from the Trade Date if, at such time, informational requirements of Rule 144(c) are not
satisfied with respect to Company) shall be eligible for resale under Rule 144 of the
Securities Act and Company agrees to promptly remove, or cause the transfer agent for
such Shares or Share Termination Delivery Property, to remove, any legends referring to
any restrictions on resale under the Securities Act from the Shares or Share
Termination Delivery Property. Company further agrees that any delivery of Shares or
Share Termination Delivery Property prior to the date that is 6 months from the Trade
Date (or 1 year from the Trade Date if, at such time, informational requirements of
Rule 144(c) are not satisfied with respect to Company), may be transferred by and among
Dealer and its affiliates and Company shall effect such transfer without any further
action by Dealer. Notwithstanding anything to the contrary herein, 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 and Exchange Commission or any court change after the Trade
Date, the agreements of Company herein shall be deemed modified to the extent
necessary, in the opinion of outside counsel of Company, to comply with Rule 144 of the
Securities Act, as in effect at the time of delivery of the relevant Shares or Share
Termination Delivery Property.
	 
	 	(n)	 	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.
	 
	 	(o)	 	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




17









 






	 	 	 	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.
	 
	 	(p)	 	Maximum Share Delivery. Notwithstanding any other provision of this
Confirmation or the Agreement, in no event will Company at any time be required to
deliver more than the Maximum Number of Shares to Dealer in connection with this
Transaction, subject to the provisions regarding Deficit Restricted Shares in Section
9(k).
	 
	 	(q)	 	Right to Extend. Dealer 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 Dealer determines, in its commercially reasonable judgment, 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.
	 
	 	(r)	 	Status of Claims in Bankruptcy. Dealer acknowledges and agrees that
this Confirmation is not intended to convey to Dealer rights against Company with
respect to the Transaction that are senior to the claims of common stockholders of
Company in any United States bankruptcy proceedings of Company; provided that nothing
herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the
event of a breach by Company of its obligations and agreements with respect to the
Transaction; provided, further, that nothing herein shall limit or shall be deemed to
limit Dealer’s rights in respect of any transactions other than the Transaction.
	 
	 	(s)	 	Securities Contract; Swap Agreement. The parties hereto intend for (i)
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,
(ii) 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 (iii) 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.
	 
	 	(t)	 	Early Unwind. In the event the sale of the “Option Securities” (as
defined in the Purchase Agreement) is not consummated with the Initial Purchasers for
any reason, or Company fails to deliver to Dealer opinions of counsel as required
pursuant to Section 9(a), in each case by 5:00 p.m. (New York City time) on the Premium
Payment Date, or such later date as agreed upon by the parties (the Premium Payment
Date or such later date the “Early Unwind Date”), the Transaction shall automatically
terminate (the “Early Unwind”), on the Early Unwind Date and (i) the Transaction and
all of the respective rights and obligations of Dealer and Company under the
Transaction shall be cancelled and terminated and (ii) each party shall be released and
discharged by the other party from and agrees not to make any claim against the other
party with respect to any obligations or liabilities of the other party arising out of
and to be performed in connection with the Transaction either prior to or after the
Early Unwind Date. Each of Dealer and Company represent and acknowledge to the other
that, upon an Early Unwind, all obligations with respect to the Transaction shall be
deemed fully and finally discharged.
	 
	 	(u)	 	Payment by Dealer. In the event that (i) an Early Termination Date
occurs or is designated with respect to the Transaction as a result of a Termination
Event or an Event of Default (other than an Event of Default arising under Section
5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Dealer owes to Company an
amount calculated under Section 6(e) of the Agreement, or (ii) Dealer




18









 






	 	 	 	owes to Company, pursuant to Section 12.7 or Section 12.9 of the Equity Definitions,
an amount calculated under Section 12.8 of the Equity Definitions, such amount shall
be deemed to be zero.
	 
	 	(v)	 	Strike Price Adjustment. Notwithstanding anything to the contrary in the Agreement,
this Confirmation or the Equity Definitions, in no event shall the Strike Price be adjusted or
reduced to less than USD 44.55, other than in connection with stock splits or similar changes to
the Issuer’s capitalization.




19









 











     Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it to [                                        ].



	 	 	 	 	 	 	 
	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 

	 	[Dealer]	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 

	 	 
	 	 	Authorized Signatory	 	 
	 

	 	Name:	 	 	 






Accepted and confirmed

as of the Trade Date:




Kaiser Aluminum Corporation




By:  
Authorized Signatory

Name:




[Signature Page to the Additional Warrant Transaction]