Document:

EX-10.1

 

EXHIBIT
10.1

[FORM
OF 2010 CONVERTIBLE BOND HEDGE TRANSACTION CONFIRMATION]

	 	 	 
	r

	 	June 6, 2007
	 
	 	 
	To:

	 	Integra LifeSciences Holdings Corporation
	 

	 	311 Enterprise Drive
	 

	 	Plainsboro, New Jersey 08536
	 

	 	Attn: Richard Gorelick
	 

	 	Telephone: (609) 936-2238
	 

	 	Facsimile: (609) 275-1082
	 
	 	 
	From:

	 	[Dealer]
	 

	 	 
	 

	 	 
	 

	 	 
	 

	 	 
	 
	 	 
	Re:

	 	Convertible Bond Hedge Transaction
	 

	 	(Transaction Reference Number:            )

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 [Dealer] (“Dealer”) and Integra LifeSciences Holdings Corporation
(“Counterparty”). This communication constitutes a “Confirmation” as referred to in the ISDA
Master Agreement specified below.

     1. This Confirmation is subject to, and incorporates, the definitions and provisions of the
2000 ISDA Definitions (including the Annex thereto) (the “2000 Definitions”) and the definitions
and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and
together with the 2000 Definitions, the “Definitions”), in each case as published by the
International Swaps and Derivatives Association, Inc. (“ISDA”). In the event of any inconsistency
between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern.
Certain defined terms used herein have the meanings assigned to them in the Indenture to be dated
as of June 11, 2007 between Counterparty and Wells Fargo Bank, N.A. as trustee (the “Indenture”)
relating to the USD 150,000,000 principal amount of 2.75% convertible securities due 2010 (the
“Convertible Securities”). In the event of any inconsistency between the terms defined in the
Indenture and this Confirmation, this Confirmation shall govern. For the avoidance of doubt,
references herein to sections of the Indenture are based on the draft of the Indenture most
recently reviewed by the parties at the time of execution of this Confirmation. If any relevant
sections of the Indenture are changed, added or renumbered following execution of this Confirmation
but prior to or upon the execution of the Indenture, the parties will amend this Confirmation in
good faith to preserve the economic intent of the parties.

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

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

     2. The Transaction constitutes a Share Option Transaction for purposes of the Equity
Definitions. The terms of the particular Transaction to which this Confirmation relates are as
follows:

General Terms:

	 	 	 	 	 
	 

	 	Trade Date:
	 	June 6, 2007

1

 

	 	 	 	 	 
	 

	 	Effective Date:
	 	The closing date of the offering of the Convertible Securities.
	 
	 	 	 	 
	 

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

	 	Option Type:
	 	Call
	 
	 	 	 	 
	 

	 	Seller:
	 	Dealer
	 
	 	 	 	 
	 

	 	Buyer:
	 	Counterparty
	 
	 	 	 	 
	 

	 	Shares:
	 	The Common Stock of Counterparty, par value USD 0.01 per share (Ticker Symbol: “IART”).
	 
	 	 	 	 
	 

	 	Number of Options:
	 	    % of the number of Convertible Securities in denominations of USD 1,000
principal amount issued by Counterparty on the closing date for the initial issuance of
the Convertible Securities; provided that if the initial purchasers (as defined in the
Purchase Agreement defined below) exercise their option to purchase additional
Convertible Securities pursuant to Section 2 of the Purchase Agreement related to the
purchase and sale of the Convertible Securities dated as of June 6, 2007 among
Counterparty and Banc of America Securities LLC, J.P. Morgan Securities Inc. and Morgan
Stanley & Co., Incorporated, as representatives of the several initial purchasers party
thereto, as amended, modified or supplemented from time to time (the “Purchase
Agreement”), then on the Additional Premium Payment Date, the Number of Options shall
be automatically increased by     % of the number of Convertible Securities in
denominations of USD 1,000 principal amount issued pursuant to such exercise (such
Convertible Securities, the “Additional Convertible Securities”). For the avoidance of
doubt, the Number of Options outstanding shall be reduced by each exercise of Options
hereunder.
	 
	 	 	 	 
	 

	 	Number of Shares:
	 	As of any date, the product of the Number of Options and the Conversion
Rate.
	 
	 	 	 	 
	 

	 	Conversion Rate:
	 	As defined in the Indenture, but without regard to any adjustments to the
Conversion Rate pursuant to Sections 10.01(b), 10.04(g) or 10.04(h) of the Indenture.
	 
	 	 	 	 
	 

	 	Strike Price:
	 	USD 66.2616
	 
	 	 	 	 
	 

	 	Premium:
	 	USD         ; provided that if the Number of Options is increased pursuant to the
proviso to the definition of “Number of Options” above, an additional Premium equal to
the product of the number of Options by which the Number of Options is so increased and
USD        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 Convertible Securities.
	 
	 	 	 	 
	 

	 	Exchange:
	 	The NASDAQ Global Select Market.
	 
	 	 	 	 
	 

	 	Related Exchange:
	 	All Exchanges.
	 
	 	 	 	 
	Procedures for Exercise:	 	 
	 
	 	 	 	 
	 

	 	Potential Exercise Dates:
	 	Each Conversion Date.
	 
	 	 	 	 
	 

	 	Conversion Date:
	 	Each “Conversion Date” as defined in the Indenture.

2

 

	 	 	 	 	 
	 

	 	Required Exercise on

Conversion Dates:
	 	On each Conversion Date, a number of Options equal to 25% of the number of
Convertible Securities in denominations of USD 1,000 principal amount submitted for
conversion on such Conversion Date in accordance with the terms of the Indenture shall
be automatically exercised, subject to “Notice of Exercise” below.
	 
	 	 	 	 
	 

	 	Expiration Date:
	 	The earlier of (i) the last day on which any Convertible Securities remain
outstanding and (ii) the maturity date of the Convertible Securities.
	 
	 	 	 	 
	 

	 	Automatic Exercise:
	 	As provided above under “Required Exercise on Conversion Dates”, subject
to the provisions of “Notice of Exercise” below.
	 
	 	 	 	 
	 

	 	Notice of Exercise:
	 	Notwithstanding anything to the contrary in the Equity Definitions, in
order to exercise any Options, Counterparty must notify Dealer in writing prior to 5:00
p.m., New York City time, on the Scheduled Valid Day prior to the scheduled first day
of the applicable Settlement Averaging Period relating to the Convertible Securities
converted on the Conversion Date occurring on the relevant Exercise Date (such
Convertible Securities, the “Relevant Convertible Securities”) of (i) the number of
Options being exercised on such Exercise Date, (ii) the scheduled first day of the
applicable Settlement Averaging Period, (iii) the scheduled settlement date under the
Indenture for the Relevant Convertible Securities and (iv) whether Counterparty has
elected to satisfy its conversion obligations with respect to the Relevant Convertible
Securities in Shares only (as described in Section 10.02(b) of the Indenture) (“Gross
Share Settlement”); provided that with respect to Options relating to Relevant
Convertible Securities with a Conversion Date occurring on or after December 15, 2009,
such Notice of Exercise may be given on or prior to the second Scheduled Valid Day
immediately preceding the Expiration Date and need only specify the number of Options
being exercised.
	 
	 	 	 	 
	 

	 	Notice of Gross
Share Settlement:
	 	If Counterparty has elected Gross Share Settlement for all
Convertible Securities with a Conversion Date occurring on or after December 15, 2009,
then with respect to Options relating to such Convertible Securities, Counterparty
shall notify Dealer in writing of such election before 5:00 p.m. (New York City time)
on or prior to December 15, 2009.
	 
	 	 	 	 
	 

	 	Notice of Notes
Share Cap:
	 	If the conversion obligation of Counterparty with respect to any
Relevant Convertible Securities is capped by application of the “notes share cap” (as
defined in the Indenture), then with respect to Options relating to such Convertible
Securities, Counterparty shall notify Dealer in writing of (i) the application of such
cap and (ii) the number of Shares deliverable with respect to each Relevant Convertible
Security before 5:00 p.m. (New York City time) on or prior to the final day of the
applicable Settlement Averaging Period with respect to such Relevant Convertible
Securities.
	 
	 	 	 	 
	 

	 	Dealer’s Telephone
Number

and Telex and/or
Facsimile 
Number
and Contact Details
for purpose of

Giving Notice:
	 	To be provided by Dealer.

3

 

	 	 	 	 	 
	Settlement Terms:	 	 
	 
	 	 	 	 
	 

	 	Settlement Method:
	 	Net Share Settlement.
	 
	 	 	 	 
	 

	 	Net Share Settlement:
	 	In lieu of the obligations set forth in Sections 8.1 and 9.1
of the Equity Definitions, and subject to “Notice of Exercise” above, in respect of an
Exercise Date occurring on a Conversion Date Dealer will deliver to Counterparty, on
the relevant Settlement Date, a number of Shares equal to the Net Shares in respect of
any Option exercised or deemed exercised hereunder. In no event will the Net Shares be
less than zero.
	 
	 	 	 	 
	 

	 	Net Shares:
	 	In respect of any Option exercised or deemed exercised, a number of
Shares equal to (i) the sum of the quotients, for each Valid Day during the Settlement
Averaging Period for such Exercise Date, of (A) the product of (x) the excess, if any,
of the Relevant Price over the Strike Price on such Valid Day and (y) the Conversion
Rate on such Valid Day divided by (B) such Relevant Price, divided by (ii) the number
of Valid Days in the Settlement Averaging Period; provided that if the calculation
contained in clause (A) above results in a negative number, such number shall be
replaced with the number “zero”; and provided further that if the calculation set forth
above results in a number of Shares in excess of the “notes share cap” (as defined in
the Indenture), as applicable, the Net Shares shall be equal to the number of Shares of
the “notes share cap.” Notwithstanding the foregoing, if Counterparty has elected Gross
Share Settlement and so specified in the Notice of Exercise, or if applicable, the
Notice of Gross Share Settlement, then with respect to any Option relating to the
Relevant Convertible Securities with a Conversion Date occurring on or following
December 15, 2009, the Net Shares shall be equal to the lesser of (i) a number of
Shares determined as described above and (ii) a number of Shares equal to the Net
Convertible Value for such Option divided by the Obligation Price.
	 
	 	 	 	 
	 

	 	 	 	Dealer will deliver cash in lieu of any fractional
Shares to be delivered with respect to any Net Shares
valued at the Relevant Price for the last Valid Day of
the Settlement Averaging Period.
	 
	 	 	 	 
	 

	 	Net Convertible Value:
	 	With respect to an Option, (i) the Total Convertible Value
for such Option minus (ii) USD 1,000.
	 
	 	 	 	 
	 

	 	Total Convertible Value:
	 	With respect to an Option, (i) the aggregate number of
Shares, if any, that Counterparty is obligated to deliver to the holder of a
Convertible Security in a denomination of USD 1,000 for the relevant Conversion Date
pursuant to Section 10.02(b) of the Indenture multiplied by (ii) the Obligation Price.
	 
	 	 	 	 
	 

	 	Obligation Price:
	 	The opening price per Share as displayed under the heading “Op” on
Bloomberg page IART.UQ <equity> (or any successor thereto) on the Obligation
Valuation Date.
	 
	 	 	 	 
	 

	 	Obligation
Valuation Date:
	 	Settlement Date
	 
	 	 	 	 
	 

	 	Settlement
Averaging Period:
	 	For any Option, (i) with respect to an Option with a Conversion
Date occurring prior to December 15, 2009, the fifty (50)

4

 

	 	 	 	 	 
	 

	 	 	 	consecutive Valid Day period beginning on, and
including, the second Valid Day following such
Conversion Date (or the one hundred (100) consecutive
Valid Day period commencing on, and including, the
second Valid Day following such Conversion Date if
Counterparty has elected Gross Share Settlement and
specified Gross Share Settlement in the Notice of
Exercise) or (ii) with respect to an Option with a
Conversion Date occurring on or following December 15,
2009, the fifty (50) consecutive Valid Day period
beginning on, and including, the fifty-second
(52nd) Scheduled Valid Day immediately prior
to the Expiration Date (or the one hundred (100)
consecutive Valid Day period commencing on, and
including, the one hundred and second
(102nd) Scheduled Valid Day immediately
prior to the Expiration Date if Counterparty has
delivered a Notice of Gross Share Settlement to Dealer
on or prior to December 15, 2009).
	 
	 	 	 	 
	 

	 	Settlement Date:
	 	For any Option, the third Valid Day following the final day of the
applicable Settlement Averaging Period with respect to such Option.
	 
	 	 	 	 
	 

	 	Settlement Currency:
	 	USD
	 
	 	 	 	 
	 

	 	Valid Day:
	 	A day on which (i) there is no Market Disruption Event and (ii) trading
in the Shares generally occurs on the Exchange or, if the Shares are not then listed on
the Exchange, on the principal other U.S. national or regional securities exchange on
which the Shares are then listed or, if the Shares are not then listed on a U.S.
national or regional securities exchange, in the principal other market on which the
Shares are then traded. If the Shares (or other security for which a Relevant Price
must be determined) are not so listed or quoted, a Valid Day means a Business Day.
	 
	 	 	 	 
	 

	 	Scheduled Valid Day:
	 	A day that is scheduled to be a Valid Day on the primary U.S. national
securities exchange or market on which the Shares are listed or admitted to trading.
	 
	 	 	 	 
	 

	 	Market Disruption Event:
	 	Section 6.3(a) of the Equity Definitions is hereby replaced in its
entirety by the following:
	 
	 	 	 	 
	 

	 	 	 	“‘Market Disruption Event’ means in respect of a Share,
(i) a failure by the Exchange or, if the Shares are not
then listed on the Exchange, by the principal other
U.S. national or regional securities exchange on which
the Shares are then listed or, if the Shares are not
then listed on a U.S. national or regional securities
exchange, by the principal other market on which the
Shares are then traded, to open for trading during its
regular trading session or (ii) the occurrence or
existence prior to 1:00 p.m., New York City time, on
any Scheduled Valid Day for the Shares for an aggregate
one half hour period of any suspension or limitation
imposed on trading (by reason of movements in price
exceeding limits permitted by the stock exchange or
otherwise) in the Shares or in any options, contracts
or futures contracts relating to the Shares.”
	 
	 	 	 	 
	 

	 	Relevant Price:
	 	On any Valid Day, the per Share volume-weighted average price as displayed
under the heading “Bloomberg VWAP” on Bloomberg page IART.UQ <equity> AQR (or any
successor thereto) in respect of the period from the scheduled opening time

5

 

	 	 	 	 	 
	 

	 	 	 	of the Exchange to the Scheduled Closing Time of the
Exchange on such Valid Day (or if such volume-weighted
average price is unavailable, the market value of one
Share on such Valid Day, as determined by the
Calculation Agent using a volume-weighted average
method). The Relevant Price will be determined without
regard to after hours trading or any other trading
outside of the regular trading session hours of the
Exchange.
	 
	 	 	 	 
	 

	 	Other Applicable
Provisions:
	 	To the extent Dealer is obligated to deliver Shares
hereunder, the provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (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 arising as a
result of the fact that Counterparty is the Issuer of the Shares) and 9.12 of the
Equity Definitions will be applicable, except that all references in such provisions to
“Physically-Settled” shall be read as references to “Net Share Settled”. “Net Share
Settled” in relation to any Option means that Dealer is obligated to deliver Shares
hereunder.
	 
	 	 	 	 
	 

	 	Restricted
Certificated Shares:
	 	Notwithstanding anything to the contrary in the Equity
Definitions, Dealer may, in whole or in part, deliver Shares in certificated form
representing the Number of Shares to be Delivered to Counterparty in lieu of delivery
through the Clearance System. With respect to such certificated Shares, the
Representation and Agreement contained in Section 9.11 of the Equity Definitions shall
be modified by deleting the remainder of the provision after the word “encumbrance” in
the fourth line thereof.
	 
	 	 	 	 
	Share Adjustments:	 	 
	 
	 	 	 	 
	 

	 	Method of Adjustment:
	 	Notwithstanding Section 11.2 of the Equity Definitions, upon the
occurrence of any event or condition set forth in Section 10.04 of the Indenture, the
Calculation Agent shall make a corresponding adjustment, if necessary, to the terms
relevant to the exercise, settlement or payment of the Transaction; provided that in no
event shall there be any adjustment hereunder as a result of an adjustment to the
Conversion Rate pursuant to Sections 10.04(g) or 10.04(h) of the Indenture.
Immediately upon the occurrence of any adjustment of the Conversion Rate pursuant to
Section 10.04, Counterparty shall notify the Calculation Agent of such adjustment, and
once the adjustments to be made to the terms of the Indenture and the Convertible
Securities in respect of such adjustment have been determined, Counterparty shall
immediately notify the Calculation Agent in writing of the details of such adjustments.
	 
	 	 	 	 
	Extraordinary Events:	 	 
	 
	 	 	 	 
	 

	 	Merger Event:
	 	Notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event”
means the occurrence of any event or condition set forth in Section 10.06 of the
Indenture.
	 
	 	 	 	 
	 

	 	Tender Offer:
	 	Applicable. Notwithstanding Section 12.1(d) of the Equity Definitions, a
“Tender Offer” means the occurrence of any event or condition set forth in clause (1)
of the definition of Fundamental Change in Section 1.01 of the Indenture.

6

 

	 	 	 	 	 
	 

	 	Consequences of Merger
Events and Tender
Offers:
	 	Notwithstanding Sections 12.2 and 12.3 of the Equity Definitions, upon the
occurrence of a Merger Event or Tender Offer, the Calculation Agent shall make the
corresponding adjustment in respect of any adjustment under the Indenture to any one or
more of the nature of the Shares, the Number of Options, the Option Entitlement and any
other variable relevant to the exercise, settlement or payment for the Transaction;
provided that such adjustment shall be made without regard to any adjustment to the
Conversion Rate pursuant to Sections 10.01(b), 10.04(g) or 10.04(h) of the Indenture;
and provided further that the Calculation Agent may limit or alter any such adjustment
referenced in this paragraph so that the fair value of the Transaction to Dealer is not
reduced as a result of such 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 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) Hedging Disruption:
	 	Applicable
	 
	 	 	 	 
	 

	 	     (e) Increased
Cost of Hedging:
	 	Applicable
	 
	 	 	 	 
	 

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

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

	 	Non-Reliance:
	 	Applicable
	 
	 	 	 	 
	 

	 	Agreements and
Acknowledgments 

Regarding
Hedging Activities:
	 	Applicable
	 
	 	 	 	 
	 

	 	Additional Acknowledgments:
	 	 Applicable
	 
	 	 	 	 
	 

	 	3.     Calculation Agent:
	 	 Dealer

	 	4.	 	Account Details:
	 
	 	 	 	Dealer Payment Instructions:

	 	 	 	Counterparty Payment Instructions:

7

 

To be provided by Counterparty.

	 	5.	 	Offices:
	 
	 	 	 	The Office of Dealer for the Transaction is:

	 	 	 	The Office of Counterparty for the Transaction is:

311 Enterprise Drive, Plainsboro, New Jersey 08536

	 	6.	 	Notices: For purposes of this Confirmation:
	 
	 	(a)	 	Address for notices or communications to Counterparty:

	 	 	 	 	 
	 

	 	To:
	 	Integra LifeSciences Holdings Corporation
	 

	 	 	 	311 Enterprise Drive
	 

	 	 	 	Plainsboro, New Jersey 08536
	 

	 	Attn:
	 	Richard Gorelick
	 

	 	Telephone:
	 	(609) 936-2238
	 

	 	Facsimile:
	 	(609) 275-1082

	 	(b)	 	Address for notices or communications to Dealer:

	 	 	 	 	 
	 

	 	To:
	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	Attn:
	 	 
	 

	 	Telephone:
	 	 

	 	7.	 	Representations, Warranties and Agreements:

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

     (i) On the Trade Date, (A) none of Counterparty and its officers and directors is aware
of any material nonpublic information regarding Counterparty or the Shares and (B) all
reports and other documents filed by Counterparty with the Securities and Exchange
Commission pursuant to the Securities 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) (A) On the Trade Date, 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) Counterparty shall not engage in any “distribution,” as such term is defined in
Regulation M, other than a distribution meeting the requirements of the exceptions set forth
in sections 101(b)(10) and 102(b)(7) of Regulation M until the second Exchange Business Day
immediately following the Trade Date.

     (iii) On the Trade Date, neither Counterparty nor any “affiliate” or “affiliated
purchaser” (each as defined in Rule 10b-18 under 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

8

 

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 either one of Deutsche Bank Securities Inc., Morgan
Stanley & Co. International plc. or Citigroup Global Markets Inc.

     (iv) Without limiting the generality of Section 13.1 of the Equity Definitions,
Counterparty acknowledges that Dealer is not making any representations or warranties with
respect to the treatment of the Transaction under FASB Statements 128, 133 or 149 (each as
amended) or 150, EITF Issue No. 00-19, 01-06 or 03-06 (or any successor issue statements) or
under FASB’s Liabilities & Equity Project.

     (v) Without limiting the generality of Section 3(a)(iii) of the Agreement, the
Transaction will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.

     (vi) Prior to the Trade Date, Counterparty shall deliver to Dealer a resolution of
Counterparty’s board of directors authorizing the Transaction and such other certificate or
certificates as Dealer shall reasonably request.

     (vii) Counterparty is not entering into the Transaction 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.

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

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

     (x) The representations and warranties of Counterparty set forth in Section 3 of the
Agreement and Section 1 of the Purchase Agreement are true and correct and are hereby deemed
to be repeated to Dealer as if set forth herein.

     (xi) Counterparty 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.

     (b) Each of Dealer and Counterparty agrees and represents that it is an “eligible contract
participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended.

     (c) Each of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to
it is intended to be exempt from registration under the Securities Act of 1933, as amended (the
“Securities Act”), by virtue of Section 4(2) thereof. Accordingly, Counterparty represents and
warrants to Dealer that (i) it has the financial ability to bear the economic risk of its
investment in the Transaction and is able to bear a total loss of its investment, (ii) it is an
“accredited investor” as that term is defined in Regulation D as promulgated under the Securities
Act, (iii) it is entering into the Transaction for its own account and without a view to the
distribution or resale thereof, 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) The parties hereto intend for: (a) the Transaction to be a “securities contract” and a
“swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the
“Bankruptcy Code”), and the parties hereto to be entitled to the protections afforded by, among
other Sections, Sections 362(b)(6), 555 and 560 of the Bankruptcy Code; (b) a party’s right to
liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of
Default under the Agreement with respect to the other party to constitute a “contractual right” as
described in the Bankruptcy Code; (c) any cash, securities or other property provided as
performance assurance, credit support or collateral with respect to the Transaction to constitute
“margin payments” and “transfers” under a “swap agreement” as defined in the Bankruptcy Code; and
(d) all payments for, under or in connection with the Transaction, all payments for the Shares and
the transfer of such Shares to constitute “settlement payments” and “transfers” under a “swap
agreement” as defined in the Bankruptcy Code.

9

 

     Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date and
reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in
Section 3(a) of the Agreement.

     8. Other Provisions:

     (a) Additional Termination Events. The occurrence of (i) an event of default with respect to
Counterparty under the terms of the Convertible Securities as set forth in Section 6.01 of the
Indenture, (ii) an Amendment Event or (iii) a Repayment Event shall be an Additional Termination
Event with respect to which the Transaction is the sole Affected Transaction and Counterparty is
the sole Affected Party and Dealer shall be the party entitled to designate an Early Termination
Date pursuant to Section 6(b) of the Agreement; provided that in the case of a Repayment Event the
Transaction shall be subject to termination only in respect of the number of Convertible Securities
that cease to be outstanding in connection with or as a result of such Repayment Event.

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

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

     (b) Alternative Calculations and Payment on Early Termination and on Certain Extraordinary
Events. If, subject to Section 8(k) below, Dealer shall owe Counterparty any amount pursuant to
Section 12.2 or 12.3 of the Equity Definitions and “Consequences of Merger Events and Tender
Offers” above, or Sections 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(d)(ii) of the Agreement (except in the event of an Event of Default in which Counterparty
is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party, that
resulted from an event or events within Counterparty’s control) (a “Payment Obligation”),
Counterparty shall have the right, in its sole discretion, to require Dealer to satisfy any such
Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable
telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, between the
hours of 9:00 A.M. and 4:00 P.M. New York City time on the Merger Date, Tender Offer Date,
Announcement Date or Early Termination Date, as applicable (“Notice of Share Termination”);
provided that if Counterparty does not validly request Dealer to satisfy its Payment Obligation by
the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to satisfy
its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s
election to the contrary. For the avoidance of doubt, the parties agree that in calculating the
Payment Obligation the Determining Party may consider the purchase price paid in connection with
the purchase of Share Termination Delivery Property. 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 or Early Termination Date, as applicable:

	 	 	 
	Share Termination Alternative:

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

10

 

	 	 	 
	Property:

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

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

	 	In the case of a Termination Event, Event
of Default or Delisting, one Share or, in
the case of an Insolvency,
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 arising as a result of the fact that
Counterparty is the Issuer of the Shares)
and 9.12 of the Equity Definitions will
be applicable, except that all references
in such provisions to
“Physically-Settled” shall be read as
references to “settled by Share
Termination Alternative” and all
references to “Shares” shall be read as
references to “Share Termination Delivery
Units”.

     (c) Disposition of Hedge Shares. Counterparty hereby agrees that if, in the good faith
reasonable judgment of Dealer, any Shares (the “Hedge Shares”) acquired by Dealer for the purpose
of hedging its obligations pursuant to the Transaction cannot be sold in the public market by
Dealer without registration under the Securities Act, Counterparty shall promptly, at its election:
(i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to
Dealer an effective registration statement under the Securities Act to cover the resale of such
Hedge Shares and (A) enter into an agreement, in form and substance satisfactory to Dealer,
substantially in the form of an underwriting agreement for a registered offering, (B) provide
accountant’s “comfort” letters customary in form and substance for registered offerings of equity
securities, (C) provide disclosure opinions of nationally recognized outside counsel to
Counterparty reasonably acceptable to Dealer, (D) provide other customary opinions, certificates
and closing documents customary in form and substance for registered offerings of equity securities
and (E) afford Dealer a reasonable opportunity to conduct a “due diligence” investigation with
respect to Counterparty customary in scope for underwritten offerings of equity securities;
provided, however, that if Dealer, in its sole reasonable discretion, is not satisfied with access
to due diligence materials, the results of its due diligence investigation, or the procedures and
documentation for the registered offering referred to above, then clause (ii) or clause (iii) of
this Section 8(c) shall apply at the election of Counterparty; (ii) in order to allow Dealer to
sell the Hedge Shares in a private placement, enter into a private placement agreement
substantially similar to private placement purchase agreements customary for private placements of
equity securities, in form and substance satisfactory to Dealer, including customary
representations, covenants, blue sky and other governmental filings and/or registrations,
indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of the Hedge Shares
from Dealer), opinions and certificates and such other documentation as is customary for private
placements agreements, all reasonably acceptable to Dealer (in which case, the Calculation Agent
shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable
judgment, to compensate Dealer for any discount from the public market price of the Shares incurred
on the sale of Hedge Shares in a private placement); or (iii) purchase the Hedge Shares from Dealer
at the Relevant Price on such

11

 

Exchange Business Days, and in the amounts, requested by Dealer, provided that Counterparty
shall not be required to purchase any Hedge Shares from Dealer unless it elects to do so, solely at
its discretion, in accordance with this Section 8(c)(iii).

     (d) Amendment to Equity Definitions. The following amendment shall be made to the Equity
Definitions:

     (i) 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 2002 Master Agreement with
respect to that Issuer.”

     (ii) Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing
“either party may elect” with “Dealer may elect” and (2) replacing “notice to the other
party” with “notice to Counterparty” in the first sentence of such section.

     (e) Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any
repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase
Notice”) on such day if, following such repurchase, the Notice Percentage as determined on such day
is (i) greater than 6% and (ii) greater by 0.5% than the Notice Percentage included in the
immediately preceding Repurchase Notice (or, in the case of the first such Repurchase Notice,
greater than the Notice Percentage as of the date hereof). The “Notice Percentage” as of any day
is the fraction, expressed as a percentage, the numerator of which is the Number of Shares plus the
“Number of Shares” under the convertible bond hedge transaction dated the date hereof between
Counterparty and Dealer relating to the 2.375% convertible securities due 2012 (the “2012
Convertible Bond Hedge”) and the denominator of which is the number of Shares outstanding on such
day. In the event that Counterparty fails to provide Dealer with a Repurchase Notice on the day
and in the manner specified in this Section 8(e) then Counterparty agrees to indemnify and hold
harmless Dealer, its affiliates and their respective directors, officers, employees, agents and
controlling persons (Dealer and each such person being an “Indemnified Party”) from and against any
and all losses, claims, damages and liabilities (or actions in respect thereof), joint or several,
to which such Indemnified Party may become subject under applicable securities laws, including
without limitation, Section 16 of the Exchange Act, relating to or arising out of such failure. If
for any reason the foregoing indemnification is unavailable to any Indemnified Party or
insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to the
maximum extent permitted by law, to the amount paid or payable by the Indemnified Party as a result
of such loss, claim, damage or liability. In addition, Counterparty will reimburse any Indemnified
Party for all expenses (including reasonable counsel fees and expenses) as they are incurred (after
notice to Counterparty) in connection with the investigation of, preparation for or defense or
settlement of any pending or threatened claim or any action, suit or proceeding arising therefrom,
whether or not such Indemnified Party is a party thereto and whether or not such claim, action,
suit or proceeding is initiated or brought by or on behalf of Counterparty. This indemnity shall
survive the completion of the Transaction contemplated by this Confirmation and any assignment and
delegation of the Transaction made pursuant to this Confirmation or the Agreement and shall inure
to the benefit of any permitted assignee of Dealer.

     (f) Transfer and Assignment. Dealer may transfer or assign its rights and obligations
hereunder and under the Agreement, in whole or in part, to (i) any of its affiliates, (ii) any
entities sponsored or organized by, or on behalf of or for the benefit of, Dealer, or (iii) any
third party that has a credit rating for its long-term unsecured, unsubordinated debt at the time
of such transfer at least equal to the lower of the rating of Dealer at the time of such transfer
or “A-” by Standard & Poor’s Ratings Services, or any successor thereto, or “A3” by Moody’s
Investors Service, or any successor thereto, in each case without the consent of Counterparty.
Dealer shall notify Counterparty as soon as practicable of any such transfer or assignment effected
pursuant to this Section 8(f). If at any time at which the Equity Percentage exceeds 8%, Dealer,
in its discretion, is unable to effect such a transfer or assignment after its commercially
reasonable efforts on pricing terms reasonably acceptable to Dealer such that the Equity Percentage
is reduced to 8% or less, Dealer may designate any Scheduled Trading Day as an Early Termination
Date with respect to a portion (the “Terminated Portion”) of the Transaction, such that the Equity
Percentage following such partial termination will be equal to or less than 8%. In the event that
Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a
payment or delivery shall be made pursuant to Section 6 of the Agreement and Section 8(b) of this
Confirmation as if (i) an Early Termination Date had been designated in respect of a Transaction
having terms identical to the Terminated Portion of the Transaction, (ii) Counterparty shall be the
sole Affected Party with respect to such partial termination and (iii) such portion of the
Transaction shall be the only Terminated Transaction. The “Equity Percentage” as of any day is the
fraction, expressed as a percentage, (A) the numerator of which is the sum of (x) the number of
Shares that Dealer

12

 

or any of its affiliates beneficially own (within the meaning of Section 13 of the Exchange
Act) on such day, other than any Shares so owned as a hedge of the Transaction or as a hedge of
the 2012 Convertible Bond Hedge and (y) the Number of Shares plus the “Number of Shares” under the
2012 Convertible Bond Hedge and (B) the denominator of which is the number of Shares outstanding on
such day.

     (g) Staggered Settlement. If Dealer reasonably determines that it would not be practicable or
advisable to deliver, or to acquire for delivery, any or all of the Shares to be delivered by
Dealer on any Settlement Date for the Transaction, Dealer may, by notice to Counterparty prior to
any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more dates
(each, a “Staggered Settlement Date”) or at two or more times on the Nominal Settlement Date as
follows:

     (i) in such notice, Dealer will specify to Counterparty the related Staggered
Settlement Dates (each of which will be on or prior to such Nominal Settlement Date, but not
prior to the beginning of the applicable Settlement Averaging Period) or delivery times and
how it will allocate the Shares it is required to deliver hereunder among the Staggered
Settlement Dates or delivery times; and

     (ii) the aggregate number of Shares that Dealer will deliver to Counterparty hereunder
on all such Staggered Settlement Dates and delivery times will equal the number of Shares
that Dealer would otherwise be required to deliver on such Nominal Settlement Date.

     (h) Right to Extend. Dealer may postpone any Potential Exercise Date or any other date of
valuation or delivery by Dealer, with respect to some or all of the relevant Options (in which
event the Calculation Agent shall make appropriate adjustments to the Shares it is required to
deliver hereunder), if Dealer determines, in its commercially 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 Counterparty or an affiliated purchaser of Counterparty, be
in compliance with applicable legal, regulatory or self-regulatory requirements, or with related
policies and procedures applicable to Dealer.

     (i) Disclosure. Effective from the date of commencement of discussions concerning the
Transaction, Counterparty and each of its employees, representatives, or other agents may disclose
to any and all persons, without limitation of any kind, the tax treatment and tax structure of the
Transaction and all materials of any kind (including opinions or other tax analyses) that are
provided to Counterparty relating to such tax treatment and tax structure.

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

     (k) Netting and Set-off.

     (i) If on any date cash would otherwise be payable or Shares or other property would
otherwise be deliverable hereunder or pursuant to the Agreement or pursuant to any other
agreement between the parties by Counterparty to Dealer and cash would otherwise be payable
or Shares or other property would otherwise be deliverable hereunder or pursuant to the
Agreement or pursuant to any other agreement between the parties by Dealer to Counterparty
and the type of property required to be paid or delivered by each such party on such date is
the same, then, on such date, each such party’s obligation to make such payment or delivery
will be automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable or deliverable by one such party exceeds the aggregate amount
that would otherwise have been payable or deliverable by the other such party, replaced by
an obligation of the party by whom the larger aggregate amount would have been payable or
deliverable to pay or deliver to the other party the excess of the larger aggregate amount
over the smaller aggregate amount.

     (ii) In addition to and without limiting any rights of set-off that a party hereto may
have as a matter of law, pursuant to contract or otherwise, upon the occurrence of an Early
Termination Date, Dealer shall have the right to terminate, liquidate and otherwise close
out the Transaction and to set off any obligation or right that Dealer or any affiliate of
Dealer may have to or against Counterparty hereunder or under the Agreement against any
right or obligation Dealer or any of its affiliates may have against or to Counterparty,
including without limitation any right to receive a payment or delivery pursuant to any
provision of the

13

 

Agreement or hereunder. In the case of a set-off of any obligation to release, deliver
or pay assets against any right to receive assets of the same type, such obligation and
right shall be set off in kind. In the case of a set-off of any obligation to release,
deliver or pay assets against any right to receive assets of any other type, the value of
each of such obligation and such right shall be determined by the Calculation Agent and the
result of such set-off shall be that the net obligor shall pay or deliver to the other party
an amount of cash or assets, at the net obligor’s option, with a value (determined, in the
case of a delivery of assets, by the Calculation Agent) equal to that of the net obligation.
In determining the value of any obligation to release or deliver Shares or any right to
receive Shares, the value at any time of such obligation or right shall be determined by
reference to the market value of the Shares at such time, as determined by the Calculation
Agent. If an obligation or right is unascertained at the time of any such set-off, the
Calculation Agent may in good faith estimate the amount or value of such obligation or
right, in which case set-off will be effected in respect of that estimate, and the relevant
party shall account to the other party at the time such obligation or right is ascertained.

     (iii) Notwithstanding any provision of the Agreement (including without limitation
Section 6(f) thereof) and this Confirmation (including without limitation this Section 8(k))
or any other agreement between the parties to the contrary, (A) Counterparty shall not net
or set off its obligations under the Transaction, if any, against its rights against Dealer
under any other transaction or instrument; (B) Dealer may net and set off any rights of
Dealer against Counterparty arising under the Transaction only against obligations of Dealer
to Counterparty arising under any transaction or instrument if such transaction or
instrument does not convey rights to Dealer senior to the claims of common stockholders in
the event of Counterparty’s bankruptcy; and (C) in the event of Counterparty’s bankruptcy,
Dealer waives any and all rights it may have to set-off in respect of the Transaction,
whether arising under agreement, applicable law or otherwise. Dealer will give notice to
Counterparty of any netting or set off effected under this provision.

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

     (m) Early Unwind. In the event the sale by Counterparty of the Convertible Securities is not
consummated with the initial purchasers pursuant to the Purchase Agreement for any reason by the
close of business in New York on June 11, 2007 (or such later date as agreed upon by the parties,
which in no event shall be later than June 15, 2007) (June 11, 2007 or such later date being the
“Early Unwind Date”), the Transaction shall automatically terminate (the “Early Unwind”), on the
Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of
Dealer and Counterparty thereunder shall be cancelled and terminated and (ii) Counterparty shall
purchase from the Dealer on the Early Unwind Date all Shares purchased by Dealer or one of more of
its affiliates in connection with this Transaction and shall pay to Dealer an amount in cash equal
to the aggregate amount of costs and expenses relating to the unwinding of Dealer’s hedging
activities in respect of the Transaction (including market losses incurred in reselling any Shares
purchased by Dealer or its affiliates in connection with such hedging activities). The amount of
any such reimbursement shall be determined by the Dealer in its sole good faith discretion.
Following such termination, cancellation and payment, each party shall be released and discharged
by the other party from and agrees not to make any claim against the other party with respect to
any obligations or liabilities of the other party arising out of and to be performed in connection
with the Transaction either prior to or after the Early Unwind Date. Dealer and Counterparty
represent and acknowledge to the other that upon an Early Unwind and following the payment referred
to above, all obligations with respect to the Transaction shall be deemed fully and finally
discharged.

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

     (o) Governing Law; Submission to 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 COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK IN CONNECTION WITH ALL

14

 

MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF
INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

     (p) Amendment to Section 6(d)(ii). Section 6(d)(ii) of the Agreement is modified by deleting
the words “on the day” in the second line thereof and substituting therefor the words “on the day
that is three Local Business Days after the day” and by deleting the words “two Local Business
Days” in the fourth line thereof and substituting therefor the words “three Local Business Days”.

[Signature Pages Follow]

15

 

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

	 	 	 	 	 	 	 
	 	 	Yours faithfully,
	 
	 	 	 	 	 	 
	 	 	[Dealer]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

[Signature Page to the 2010 Convertible Bond Hedge Transaction]

 

 

Agreed and Accepted By:

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

[Signature Page to the 2010 Convertible Bond Hedge Transaction]EX-10.2

 

	 	 	 	 
	

	 	 	 	Exhibit 10.2
	

	 	June 6, 2007	 
	 
	 	 	 
	To:

	 	Integra LifeSciences Holdings Corporation	[Form of 2012 Convertible
	 

	 	311 Enterprise Drive	Bond Hedge	 
	 

	 	Plainsboro, New Jersey 08536	Transaction Confirmation]
	 

	 	Attn: Richard Gorelick	 
	 

	 	Telephone: (609) 936-2238	 
	 

	 	Facsimile: (609) 275-1082	 
	 
	 	 	 
	From:

	 	Dealer	 
	 
	 	 	 
	Re:

	 	Convertible Bond Hedge Transaction	 
	 

	 	(Transaction Reference Number:                    )	 

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 Dealer (“Dealer”) and Integra LifeSciences Holdings Corporation
(“Counterparty”). This communication constitutes a “Confirmation” as referred to in the ISDA
Master Agreement specified below.

     1. This Confirmation is subject to, and incorporates, the definitions and provisions of the
2000 ISDA Definitions (including the Annex thereto) (the “2000 Definitions”) and the definitions
and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and
together with the 2000 Definitions, the “Definitions”), in each case as published by the
International Swaps and Derivatives Association, Inc. (“ISDA”). In the event of any inconsistency
between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern.
Certain defined terms used herein have the meanings assigned to them in the Indenture to be dated
as of June 11, 2007 between Counterparty and Wells Fargo Bank, N.A. as trustee (the “Indenture”)
relating to the USD 150,000,000 principal amount of 2.375% convertible securities due 2012 (the
“Convertible Securities”). In the event of any inconsistency between the terms defined in the
Indenture and this Confirmation, this Confirmation shall govern. For the avoidance of doubt,
references herein to sections of the Indenture are based on the draft of the Indenture most
recently reviewed by the parties at the time of execution of this Confirmation. If any relevant
sections of the Indenture are changed, added or renumbered following execution of this Confirmation
but prior to or upon the execution of the Indenture, the parties will amend this Confirmation in
good faith to preserve the economic intent of the parties.

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

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

     2. The Transaction constitutes a Share Option Transaction for purposes of the Equity
Definitions. The terms of the particular Transaction to which this Confirmation relates are as
follows:

General Terms:

	 	 	 	 	 
	 

	 	Trade Date:
	 	June 6, 2007

1

 

	 	 	 	 	 
	 

	 	Effective Date:
	 	The closing date of the offering of the Convertible Securities.
	 
	 	 	 	 
	 

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

	 	Option Type:
	 	Call
	 
	 	 	 	 
	 

	 	Seller:
	 	Dealer
	 
	 	 	 	 
	 

	 	Buyer:
	 	Counterparty
	 
	 	 	 	 
	 

	 	Shares:
	 	The Common Stock of Counterparty, par value USD 0.01 per share (Ticker Symbol:
	 

	 	 	 	“IART”).
	 
	 	 	 	 
	 

	 	Number of Options:
	 	     % of the number of Convertible Securities in denominations of USD 1,000
principal amount issued by Counterparty on the closing date for the initial issuance of
the Convertible Securities; provided that if the initial purchasers (as defined in the
Purchase Agreement defined below) exercise their option to purchase additional
Convertible Securities pursuant to Section 2 of the Purchase Agreement related to the
purchase and sale of the Convertible Securities dated as of June 6, 2007 among
Counterparty and Banc of America Securities LLC, J.P. Morgan Securities Inc. and Morgan
Stanley & Co., Incorporated, as representatives of the several initial purchasers party
thereto, as amended, modified or supplemented from time to time (the “Purchase
Agreement”), then on the Additional Premium Payment Date, the Number of Options shall
be automatically increased by      % of the number of Convertible Securities in
denominations of USD 1,000 principal amount issued pursuant to such exercise (such
Convertible Securities, the “Additional Convertible Securities”). For the avoidance of
doubt, the Number of Options outstanding shall be reduced by each exercise of Options
hereunder.
	 
	 	 	 	 
	 

	 	Number of Shares:
	 	As of any date, the product of the Number of Options and the Conversion
Rate.
	 
	 	 	 	 
	 

	 	Conversion Rate:
	 	As defined in the Indenture, but without regard to any adjustments to the
Conversion Rate pursuant to Sections 10.01(b), 10.04(g) or 10.04(h) of the Indenture.
	 
	 	 	 	 
	 

	 	Strike Price:
	 	USD 64.9625
	 
	 	 	 	 
	 

	 	Premium:
	 	USD      ; provided that if the Number of Options is increased pursuant to the
proviso to the definition of “Number of Options” above, an additional Premium equal to
the product of the number of Options by which the Number of Options is so increased and
USD       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 Convertible Securities.
	 
	 	 	 	 
	 

	 	Exchange:
	 	The NASDAQ Global Select Market.
	 
	 	 	 	 
	 

	 	Related Exchange:
	 	All Exchanges.
	 
	 	 	 	 
	Procedures for Exercise:	 	 
	 
	 	 	 	 
	 

	 	Potential Exercise Dates:
	 	Each Conversion Date.
	 
	 	 	 	 
	 

	 	Conversion Date:
	 	Each “Conversion Date” as defined in the Indenture.

2

 

	 	 	 	 	 
	 

	 	Required Exercise on
Conversion Dates:
	 	On each Conversion Date, a number of Options equal to 25% of the number of
Convertible Securities in denominations of USD 1,000 principal amount submitted for
conversion on such Conversion Date in accordance with the terms of the Indenture shall
be automatically exercised, subject to “Notice of Exercise” below.
	 
	 	 	 	 
	 

	 	Expiration Date:
	 	The earlier of (i) the last day on which any Convertible Securities remain
outstanding and (ii) the maturity date of the Convertible Securities.
	 
	 	 	 	 
	 

	 	Automatic Exercise:
	 	As provided above under “Required Exercise on Conversion Dates”, subject
to the provisions of “Notice of Exercise” below.
	 
	 	 	 	 
	 

	 	Notice of Exercise:
	 	Notwithstanding anything to the contrary in the Equity Definitions, in
order to exercise any Options, Counterparty must notify Dealer in writing prior to 5:00
p.m., New York City time, on the Scheduled Valid Day prior to the scheduled first day
of the applicable Settlement Averaging Period relating to the Convertible Securities
converted on the Conversion Date occurring on the relevant Exercise Date (such
Convertible Securities, the “Relevant Convertible Securities”) of (i) the number of
Options being exercised on such Exercise Date, (ii) the scheduled first day of the
applicable Settlement Averaging Period, (iii) the scheduled settlement date under the
Indenture for the Relevant Convertible Securities and (iv) whether Counterparty has
elected to satisfy its conversion obligations with respect to the Relevant Convertible
Securities in Shares only (as described in Section 10.02(b) of the Indenture) (“Gross
Share Settlement”); provided that with respect to Options relating to Relevant
Convertible Securities with a Conversion Date occurring on or after December 15, 2011,
such Notice of Exercise may be given on or prior to the second Scheduled Valid Day
immediately preceding the Expiration Date and need only specify the number of Options
being exercised.
	 
	 	 	 	 
	 

	 	Notice of Gross
Share Settlement:
	 	If Counterparty has elected Gross Share Settlement for all
Convertible Securities with a Conversion Date occurring on or after December 15, 2011,
then with respect to Options relating to such Convertible Securities, Counterparty
shall notify Dealer in writing of such election before 5:00 p.m. (New York City time)
on or prior to December 15, 2011.
	 
	 	 	 	 
	 

	 	Notice of Notes Share Cap:
	 	If the conversion obligation of Counterparty with respect to any
Relevant Convertible Securities is capped by application of the “notes share cap” (as
defined in the Indenture), then with respect to Options relating to such Convertible
Securities, Counterparty shall notify Dealer in writing of (i) the application of such
cap and (ii) the number of Shares deliverable with respect to each Relevant Convertible
Security before 5:00 p.m. (New York City time) on or prior to the final day of the
applicable Settlement Averaging Period with respect to such Relevant Convertible
Securities.
	 
	 	 	 	 
	 

	 	Dealer’s Telephone Number 

and Telex and/or
Facsimile Number 

and Contact Details
for purpose of 

Giving Notice:
	 	To be provided by Dealer.

3

 

	 	 	 	 	 
	Settlement Terms:	 	 
	 
	 	 	 	 
	 

	 	Settlement Method:
	 	Net Share Settlement.
	 
	 	 	 	 
	 

	 	Net Share Settlement:
	 	In lieu of the obligations set forth in Sections 8.1 and 9.1
of the Equity Definitions, and subject to “Notice of Exercise” above, in respect of an
Exercise Date occurring on a Conversion Date Dealer will deliver to Counterparty, on
the relevant Settlement Date, a number of Shares equal to the Net Shares in respect of
any Option exercised or deemed exercised hereunder. In no event will the Net Shares be
less than zero.
	 
	 	 	 	 
	 

	 	Net Shares:
	 	In respect of any Option exercised or deemed exercised, a number of
Shares equal to (i) the sum of the quotients, for each Valid Day during the Settlement
Averaging Period for such Exercise Date, of (A) the product of (x) the excess, if any,
of the Relevant Price over the Strike Price on such Valid Day and (y) the Conversion
Rate on such Valid Day divided by (B) such Relevant Price, divided by (ii) the number
of Valid Days in the Settlement Averaging Period; provided that if the calculation
contained in clause (A) above results in a negative number, such number shall be
replaced with the number “zero;” and provided further that if the calculation set forth
above results in a number of Shares in excess of the “notes share cap” (as defined in
the Indenture), as applicable, the Net Shares shall be equal to the number of Shares of
the “notes share cap.” Notwithstanding the foregoing, if Counterparty has elected Gross
Share Settlement and so specified in the Notice of Exercise, or if applicable, the
Notice of Gross Share Settlement, then with respect to any Option relating to the
Relevant Convertible Securities with a Conversion Date occurring on or following
December 15, 2011, the Net Shares shall be equal to the lesser of (i) a number of
Shares determined as described above and (ii) a number of Shares equal to the Net
Convertible Value for such Option divided by the Obligation Price.
	 
	 	 	 	 
	 

	 	 	 	Dealer will deliver cash in lieu of any fractional
Shares to be delivered with respect to any Net Shares
valued at the Relevant Price for the last Valid Day of
the Settlement Averaging Period.
	 
	 	 	 	 
	 

	 	Net Convertible Value:
	 	With respect to an Option, (i) the Total Convertible Value
for such Option minus (ii) USD 1,000.
	 
	 	 	 	 
	 

	 	Total Convertible Value:
	 	With respect to an Option, (i) the aggregate number of
Shares, if any, that Counterparty is obligated to deliver to the holder of a
Convertible Security in a denomination of USD 1,000 for the relevant Conversion Date
pursuant to Section 10.02(b) of the Indenture multiplied by (ii) the Obligation Price.
	 
	 	 	 	 
	 

	 	Obligation Price:
	 	The opening price per Share as displayed under the heading “Op” on
Bloomberg page IART.UQ <equity> (or any successor thereto) on the Obligation
Valuation Date.
	 
	 	 	 	 
	 

	 	Obligation Valuation Date:
	 	Settlement Date
	 
	 	 	 	 
	 

	 	Settlement Averaging Period:
	 	For any Option, (i) with respect to an Option with a Conversion
Date occurring prior to December 15, 2011, the fifty (50)

4

 

	 	 	 	 	 
	 

	 	 	 	consecutive Valid Day period beginning on, and
including, the second Valid Day following such
Conversion Date (or the one hundred (100) consecutive
Valid Day period commencing on, and including, the
second Valid Day following such Conversion Date if
Counterparty has elected Gross Share Settlement and
specified Gross Share Settlement in the Notice of
Exercise) or (ii) with respect to an Option with a
Conversion Date occurring on or following December 15,
2011, the fifty (50) consecutive Valid Day period
beginning on, and including, the fifty-second
(52nd) Scheduled Valid Day immediately prior
to the Expiration Date (or the one hundred (100)
consecutive Valid Day period commencing on, and
including, the one hundred and second
(102nd) Scheduled Valid Day immediately
prior to the Expiration Date if Counterparty has
delivered a Notice of Gross Share Settlement to Dealer
on or prior to December 15, 2011).
	 
	 	 	 	 
	 

	 	Settlement Date:
	 	For any Option, the third Valid Day following the final day of the
applicable Settlement Averaging Period with respect to such Option.
	 
	 	 	 	 
	 

	 	Settlement Currency:
	 	USD
	 
	 	 	 	 
	 

	 	Valid Day:
	 	A day on which (i) there is no Market Disruption Event and (ii) trading
in the Shares generally occurs on the Exchange or, if the Shares are not then listed on
the Exchange, on the principal other U.S. national or regional securities exchange on
which the Shares are then listed or, if the Shares are not then listed on a U.S.
national or regional securities exchange, in the principal other market on which the
Shares are then traded. If the Shares (or other security for which a Relevant Price
must be determined) are not so listed or quoted, a Valid Day means a Business Day.
	 
	 	 	 	 
	 

	 	Scheduled Valid Day:
	 	A day that is scheduled to be a Valid Day on the primary U.S. national
securities exchange or market on which the Shares are listed or admitted to trading.
	 
	 	 	 	 
	 

	 	Market Disruption Event:
	 	Section 6.3(a) of the Equity Definitions is hereby replaced in its
entirety by the following:
	 
	 	 	 	 
	 

	 	 	 	“‘Market Disruption Event’ means in respect of a Share,
(i) a failure by the Exchange or, if the Shares are not
then listed on the Exchange, by the principal other
U.S. national or regional securities exchange on which
the Shares are then listed or, if the Shares are not
then listed on a U.S. national or regional securities
exchange, by the principal other market on which the
Shares are then traded, to open for trading during its
regular trading session or (ii) the occurrence or
existence prior to 1:00 p.m., New York City time, on
any Scheduled Valid Day for the Shares for an aggregate
one half hour period of any suspension or limitation
imposed on trading (by reason of movements in price
exceeding limits permitted by the stock exchange or
otherwise) in the Shares or in any options, contracts
or futures contracts relating to the Shares.”
	 
	 	 	 	 
	 

	 	Relevant Price:
	 	On any Valid Day, the per Share volume-weighted average price as displayed
under the heading “Bloomberg VWAP” on Bloomberg page IART.UQ <equity> AQR (or any
successor thereto) in respect of the period from the scheduled opening time

5

 

	 	 	 	 	 
	 

	 	 	 	of the Exchange to the Scheduled Closing Time of the
Exchange on such Valid Day (or if such volume-weighted
average price is unavailable, the market value of one
Share on such Valid Day, as determined by the
Calculation Agent using a volume-weighted average
method). The Relevant Price will be determined without
regard to after hours trading or any other trading
outside of the regular trading session hours of the
Exchange.
	 
	 	 	 	 
	 

	 	Other Applicable Provisions:
	 	To the extent Dealer is obligated to deliver Shares
hereunder, the provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (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 arising as a
result of the fact that Counterparty is the Issuer of the Shares) and 9.12 of the
Equity Definitions will be applicable, except that all references in such provisions to
“Physically-Settled” shall be read as references to “Net Share Settled”. “Net Share
Settled” in relation to any Option means that Dealer is obligated to deliver Shares
hereunder.
	 
	 	 	 	 
	 

	 	Restricted Certificated Shares:
	 	 Notwithstanding anything to the contrary in the Equity
Definitions, Dealer may, in whole or in part, deliver Shares in certificated form
representing the Number of Shares to be Delivered to Counterparty in lieu of delivery
through the Clearance System. With respect to such certificated Shares, the
Representation and Agreement contained in Section 9.11 of the Equity Definitions shall
be modified by deleting the remainder of the provision after the word “encumbrance” in
the fourth line thereof.
	 
	 	 	 	 
	Share Adjustments:	 	 
	 
	 	 	 	 
	 

	 	Method of Adjustment:
	 	Notwithstanding Section 11.2 of the Equity Definitions, upon the
occurrence of any event or condition set forth in Sections 10.04 of the Indenture, the
Calculation Agent shall make a corresponding adjustment, if necessary, to the terms
relevant to the exercise, settlement or payment of the Transaction; provided that in no
event shall there be any adjustment hereunder as a result of an adjustment to the
Conversion Rate pursuant Sections 10.04(g) or 10.04(h) of the Indenture. Immediately
upon the occurrence of any adjustment of the Conversion Rate pursuant to Section 10.04,
Counterparty shall notify the Calculation Agent of such adjustment, and once the
adjustments to be made to the terms of the Indenture and the Convertible Securities in
respect of such adjustment have been determined, Counterparty shall immediately notify
the Calculation Agent in writing of the details of such adjustments.
	 
	 	 	 	 
	Extraordinary Events:	 	 
	 
	 	 	 	 
	 

	 	Merger Event:
	 	Notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event”
means the occurrence of any event or condition set forth in Section 10.06 of the
Indenture.
	 
	 	 	 	 
	 

	 	Tender Offer:
	 	Applicable. Notwithstanding Section 12.1(d) of the Equity Definitions, a
“Tender Offer” means the occurrence of any event or condition set forth in clause (1)
of the definition of Fundamental Change in Section 1.01 of the Indenture.

6

 

	 	 	 	 	 
	 

	 	Consequences of Merger
Events and
Tender Offers:
	 	Notwithstanding Sections 12.2 and 12.3 of the Equity Definitions, upon the
occurrence of a Merger Event or Tender Offer, the Calculation Agent shall make the
corresponding adjustment in respect of any adjustment under the Indenture to any one or
more of the nature of the Shares, the Number of Options, the Option Entitlement and any
other variable relevant to the exercise, settlement or payment for the Transaction;
provided that such adjustment shall be made without regard to any adjustment to the
Conversion Rate Sections 10.01(b), 10.04(g) or 10.04(h) of the Indenture; and provided
further that the Calculation Agent may limit or alter any such adjustment referenced in
this paragraph so that the fair value of the Transaction to Dealer is not reduced as a
result of such 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 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) Hedging Disruption:
	 	Applicable
	 
	 	 	 	 
	 

	 	     (e) Increased Cost of
Hedging:
	 	Applicable
	 
	 	 	 	 
	 

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

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

	 	Non-Reliance:
	 	Applicable
	 
	 	 	 	 
	 

	 	Agreements and Acknowledgments 

Regarding Hedging Activities:
	 	Applicable
	 
	 	 	 	 
	 

	 	Additional Acknowledgments:
	 	Applicable
	 
	 	 	 	 
	 

	 	3.     Calculation
Agent:
	 	Dealer

	 	4.	 	Account Details:
	 
	 	 	 	Dealer Payment Instructions:

	 	 	 	Counterparty Payment Instructions:

7

 

To be provided by Counterparty.

	 	5.	 	Offices:
	 
	 	 	 	The Office of Dealer for the Transaction is:

	 	 	 	The Office of Counterparty for the Transaction is:

311 Enterprise Drive, Plainsboro, New Jersey 08536

	 	6.	 	Notices: For purposes of this Confirmation:
	 
	 	(a)	 	Address for notices or communications to Counterparty:

	 	 	 	 	 
	 

	 	To:
	 	Integra LifeSciences Holdings Corporation
	 

	 	 	 	311 Enterprise Drive
	 

	 	 	 	Plainsboro, New Jersey 08536
	 

	 	Attn:
	 	Richard Gorelick
	 

	 	Telephone:
	 	(609) 936-2238
	 

	 	Facsimile:
	 	(609) 275-1082

	 	(b)	 	Address for notices or communications to Dealer:

	 	7.	 	Representations, Warranties and Agreements:

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

     (i) On the Trade Date, (A) none of Counterparty and its officers and directors is aware
of any material nonpublic information regarding Counterparty or the Shares and (B) all
reports and other documents filed by Counterparty with the Securities and Exchange
Commission pursuant to the Securities 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) (A) On the Trade Date, 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) Counterparty shall not engage in any “distribution,” as such term is defined in
Regulation M, other than a distribution meeting the requirements of the exceptions set forth
in sections 101(b)(10) and 102(b)(7) of Regulation M until the second Exchange Business Day
immediately following the Trade Date.

     (iii) On the Trade Date, neither Counterparty nor any “affiliate” or “affiliated
purchaser” (each as defined in Rule 10b-18 under 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)

8

 

or any security convertible into or exchangeable or exercisable for Shares, except
through either one of Deutsche Bank Securities Inc., Wachovia Bank, National Association or
Citigroup Global Markets Inc.

     (iv) Without limiting the generality of Section 13.1 of the Equity Definitions,
Counterparty acknowledges that Dealer is not making any representations or warranties with
respect to the treatment of the Transaction under FASB Statements 128, 133 or 149 (each as
amended) or 150, EITF Issue No. 00-19, 01-06 or 03-06 (or any successor issue statements) or
under FASB’s Liabilities & Equity Project.

     (v) Without limiting the generality of Section 3(a)(iii) of the Agreement, the
Transaction will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.

     (vi) Prior to the Trade Date, Counterparty shall deliver to Dealer a resolution of
Counterparty’s board of directors authorizing the Transaction and such other certificate or
certificates as Dealer shall reasonably request.

     (vii) Counterparty is not entering into the Transaction 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.

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

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

     (x) The representations and warranties of Counterparty set forth in Section 3 of the
Agreement and Section 1 of the Purchase Agreement are true and correct and are hereby deemed
to be repeated to Dealer as if set forth herein.

     (xi) Counterparty 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.

     (b) Each of Dealer and Counterparty agrees and represents that it is an “eligible contract
participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended.

     (c) Each of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to
it is intended to be exempt from registration under the Securities Act of 1933, as amended (the
“Securities Act”), by virtue of Section 4(2) thereof. Accordingly, Counterparty represents and
warrants to Dealer that (i) it has the financial ability to bear the economic risk of its
investment in the Transaction and is able to bear a total loss of its investment, (ii) it is an
“accredited investor” as that term is defined in Regulation D as promulgated under the Securities
Act, (iii) it is entering into the Transaction for its own account and without a view to the
distribution or resale thereof, 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) The parties hereto intend for: (a) the Transaction to be a “securities contract” and a
“swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the
“Bankruptcy Code”), and the parties hereto to be entitled to the protections afforded by, among
other Sections, Sections 362(b)(6), 555 and 560 of the Bankruptcy Code; (b) a party’s right to
liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of
Default under the Agreement with respect to the other party to constitute a “contractual right” as
described in the Bankruptcy Code; (c) any cash, securities or other property provided as
performance assurance, credit support or collateral with respect to the Transaction to constitute
“margin payments” and “transfers” under a “swap agreement” as defined in the Bankruptcy Code; and
(d) all payments for, under or in connection with the Transaction, all payments for the Shares and
the transfer of such Shares to constitute “settlement payments” and “transfers” under a “swap
agreement” as defined in the Bankruptcy Code

     Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date and
reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in
Section 3(a) of the Agreement.

9

 

     8. Other Provisions:

     (a) Additional Termination Events. The occurrence of (i) an event of default with respect to
Counterparty under the terms of the Convertible Securities as set forth in Section 6.01 of the
Indenture, (ii) an Amendment Event or (iii) a Repayment Event shall be an Additional Termination
Event with respect to which the Transaction is the sole Affected Transaction and Counterparty is
the sole Affected Party and Dealer shall be the party entitled to designate an Early Termination
Date pursuant to Section 6(b) of the Agreement; provided that in the case of a Repayment Event the
Transaction shall be subject to termination only in respect of the number of Convertible Securities
that cease to be outstanding in connection with or as a result of such Repayment Event.

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

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

     (b) Alternative Calculations and Payment on Early Termination and on Certain Extraordinary
Events. If, subject to Section 8(k) below, Dealer shall owe Counterparty any amount pursuant to
Section 12.2 or 12.3 of the Equity Definitions and “Consequences of Merger Events and Tender
Offers” above, or Sections 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(d)(ii) of the Agreement (except in the event of an Event of Default in which Counterparty
is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party, that
resulted from an event or events within Counterparty’s control) (a “Payment Obligation”),
Counterparty shall have the right, in its sole discretion, to require Dealer to satisfy any such
Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable
telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, between the
hours of 9:00 A.M. and 4:00 P.M. New York City time on the Merger Date, Tender Offer Date,
Announcement Date or Early Termination Date, as applicable (“Notice of Share Termination”);
provided that if Counterparty does not validly request Dealer to satisfy its Payment Obligation by
the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to satisfy
its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s
election to the contrary. For the avoidance of doubt, the parties agree that in calculating the
Payment Obligation the Determining Party may consider the purchase price paid in connection with
the purchase of Share Termination Delivery Property. 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 or Early Termination Date, as applicable:

	 	 	 
	Share Termination Alternative:

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

	 	A number of Share Termination Delivery
Units, as calculated by the Calculation
Agent, equal to the Payment Obligation
divided by the Share Termination Unit
Price. The Calculation Agent shall adjust
the Share Termination Delivery Property by

10

 

	 	 	 
	 

	 	replacing any fractional portion of a security therein with an amount of cash
equal to the value of such fractional security based on the values used to
calculate the Share Termination Unit Price.
	 
	 	 
	Share Termination Unit Price:

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

	 	In the case of a Termination Event, Event
of Default or Delisting, one Share or, in
the case of an Insolvency,
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 arising as a result of the fact that
Counterparty is the Issuer of the Shares)
and 9.12 of the Equity Definitions will
be applicable, except that all references
in such provisions to
“Physically-Settled” shall be read as
references to “settled by Share
Termination Alternative” and all
references to “Shares” shall be read as
references to “Share Termination Delivery
Units”.

     (c) Disposition of Hedge Shares. Counterparty hereby agrees that if, in the good faith
reasonable judgment of Dealer, any Shares (the “Hedge Shares”) acquired by Dealer for the purpose
of hedging its obligations pursuant to the Transaction cannot be sold in the public market by
Dealer without registration under the Securities Act, Counterparty shall promptly, at its election:
(i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to
Dealer an effective registration statement under the Securities Act to cover the resale of such
Hedge Shares and (A) enter into an agreement, in form and substance satisfactory to Dealer,
substantially in the form of an underwriting agreement for a registered offering, (B) provide
accountant’s “comfort” letters customary in form and substance for registered offerings of equity
securities, (C) provide disclosure opinions of nationally recognized outside counsel to
Counterparty reasonably acceptable to Dealer, (D) provide other customary opinions, certificates
and closing documents customary in form and substance for registered offerings of equity securities
and (E) afford Dealer a reasonable opportunity to conduct a “due diligence” investigation with
respect to Counterparty customary in scope for underwritten offerings of equity securities;
provided, however, that if Dealer, in its sole reasonable discretion, is not satisfied with access
to due diligence materials, the results of its due diligence investigation, or the procedures and
documentation for the registered offering referred to above, then clause (ii) or clause (iii) of
this Section 8(c) shall apply at the election of Counterparty; (ii) in order to allow Dealer to
sell the Hedge Shares in a private placement, enter into a private placement agreement
substantially similar to private placement purchase agreements customary for private placements of
equity securities, in form and substance satisfactory to Dealer, including customary
representations, covenants, blue sky and other governmental filings and/or registrations,
indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of the Hedge Shares
from Dealer), opinions and certificates and such other documentation as is customary for private
placements agreements, all reasonably acceptable to Dealer (in which case, the Calculation Agent
shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable
judgment, to compensate Dealer for any discount from the public market price of the Shares incurred
on the sale of Hedge Shares in a private placement); or (iii) purchase the Hedge Shares from Dealer
at the Relevant Price on such Exchange Business Days, and in the amounts, requested by Dealer,
provided that Counterparty shall not be required to purchase any Hedge Shares from Dealer unless it
elects to do so, solely at its discretion, in accordance with this Section 8(c)(iii).

11

 

     (d) Amendment to Equity Definitions. The following amendment shall be made to the Equity
Definitions:

     (i) 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 2002 Master Agreement with
respect to that Issuer.”

     (ii) Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing
“either party may elect” with “Dealer may elect” and (2) replacing “notice to the other
party” with “notice to Counterparty” in the first sentence of such section.

     (e) Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any
repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase
Notice”) on such day if, following such repurchase, the Notice Percentage as determined on such day
is (i) greater than 6% and (ii) greater by 0.5% than the Notice Percentage included in the
immediately preceding Repurchase Notice (or, in the case of the first such Repurchase Notice,
greater than the Notice Percentage as of the date hereof). The “Notice Percentage” as of any day
is the fraction, expressed as a percentage, the numerator of which is the Number of Shares plus the
“Number of Shares” under the convertible bond hedge transaction dated the date hereof between
Counterparty and Dealer relating to the 2.75% convertible securities due 2010 (the “2010
Convertible Bond Hedge”) and the denominator of which is the number of Shares outstanding on such
day. In the event that Counterparty fails to provide Dealer with a Repurchase Notice on the day
and in the manner specified in this Section 8(e) then Counterparty agrees to indemnify and hold
harmless Dealer, its affiliates and their respective directors, officers, employees, agents and
controlling persons (Dealer and each such person being an “Indemnified Party”) from and against any
and all losses, claims, damages and liabilities (or actions in respect thereof), joint or several,
to which such Indemnified Party may become subject under applicable securities laws, including
without limitation, Section 16 of the Exchange Act, relating to or arising out of such failure. If
for any reason the foregoing indemnification is unavailable to any Indemnified Party or
insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to the
maximum extent permitted by law, to the amount paid or payable by the Indemnified Party as a result
of such loss, claim, damage or liability. In addition, Counterparty will reimburse any Indemnified
Party for all expenses (including reasonable counsel fees and expenses) as they are incurred (after
notice to Counterparty) in connection with the investigation of, preparation for or defense or
settlement of any pending or threatened claim or any action, suit or proceeding arising therefrom,
whether or not such Indemnified Party is a party thereto and whether or not such claim, action,
suit or proceeding is initiated or brought by or on behalf of Counterparty. This indemnity shall
survive the completion of the Transaction contemplated by this Confirmation and any assignment and
delegation of the Transaction made pursuant to this Confirmation or the Agreement and shall inure
to the benefit of any permitted assignee of Dealer.

     (f) Transfer and Assignment. Dealer may transfer or assign its rights and obligations
hereunder and under the Agreement, in whole or in part, to (i) any of its affiliates, (ii) any
entities sponsored or organized by, or on behalf of or for the benefit of, Dealer, or (iii) any
third party that has a credit rating for its long-term unsecured, unsubordinated debt at the time
of such transfer at least equal to the lower of the rating of Dealer at the time of such transfer
or “A-” by Standard & Poor’s Ratings Services, or any successor thereto, or “A3” by Moody’s
Investors Service, or any successor thereto, in each case without the consent of Counterparty.
Dealer shall notify Counterparty as soon as practicable of any such transfer or assignment effected
pursuant to this Section 8(f). If at any time at which the Equity Percentage exceeds 8%, Dealer,
in its discretion, is unable to effect such a transfer or assignment after its commercially
reasonable efforts on pricing terms reasonably acceptable to Dealer such that the Equity Percentage
is reduced to 8% or less, Dealer may designate any Scheduled Trading Day as an Early Termination
Date with respect to a portion (the “Terminated Portion”) of the Transaction, such that the Equity
Percentage following such partial termination will be equal to or less than 8%. In the event that
Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a
payment or delivery shall be made pursuant to Section 6 of the Agreement and Section 8(b) of this
Confirmation as if (i) an Early Termination Date had been designated in respect of a Transaction
having terms identical to the Terminated Portion of the Transaction, (ii) Counterparty shall be the
sole Affected Party with respect to such partial termination and (iii) such portion of the
Transaction shall be the only Terminated Transaction. The “Equity Percentage” as of any day is the
fraction, expressed as a percentage, (A) the numerator of which is the sum of (x) the number of
Shares that Dealer or any of its affiliates beneficially own (within the meaning of Section 13 of
the Exchange Act) on such day, other than any Shares so owned as a hedge of the Transaction or as
a hedge of the 2010 Convertible Bond Hedge and (y) the Number of Shares plus the “Number of Shares”
under the 2010 Convertible Bond Hedge and (B) the denominator of which is the number of Shares
outstanding on such day.

12

 

     (g) Staggered Settlement. If Dealer reasonably determines that it would not be practicable or
advisable to deliver, or to acquire for delivery, any or all of the Shares to be delivered by
Dealer on any Settlement Date for the Transaction, Dealer may, by notice to Counterparty prior to
any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more dates
(each, a “Staggered Settlement Date”) or at two or more times on the Nominal Settlement Date as
follows:

     (i) in such notice, Dealer will specify to Counterparty the related Staggered
Settlement Dates (each of which will be on or prior to such Nominal Settlement Date, but not
prior to the beginning of the applicable Settlement Averaging Period) or delivery times and
how it will allocate the Shares it is required to deliver hereunder among the Staggered
Settlement Dates or delivery times; and

     (ii) the aggregate number of Shares that Dealer will deliver to Counterparty hereunder
on all such Staggered Settlement Dates and delivery times will equal the number of Shares
that Dealer would otherwise be required to deliver on such Nominal Settlement Date.

     (h) Right to Extend. Dealer may postpone any Potential Exercise Date or any other date of
valuation or delivery by Dealer, with respect to some or all of the relevant Options (in which
event the Calculation Agent shall make appropriate adjustments to the Shares it is required to
deliver hereunder), if Dealer determines, in its commercially 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 Counterparty or an affiliated purchaser of Counterparty, be
in compliance with applicable legal, regulatory or self-regulatory requirements, or with related
policies and procedures applicable to Dealer.

     (i) Disclosure. Effective from the date of commencement of discussions concerning the
Transaction, Counterparty and each of its employees, representatives, or other agents may disclose
to any and all persons, without limitation of any kind, the tax treatment and tax structure of the
Transaction and all materials of any kind (including opinions or other tax analyses) that are
provided to Counterparty relating to such tax treatment and tax structure.

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

     (k) Netting and Set-off.

     (i) If on any date cash would otherwise be payable or Shares or other property would
otherwise be deliverable hereunder or pursuant to the Agreement or pursuant to any other
agreement between the parties by Counterparty to Dealer and cash would otherwise be payable
or Shares or other property would otherwise be deliverable hereunder or pursuant to the
Agreement or pursuant to any other agreement between the parties by Dealer to Counterparty
and the type of property required to be paid or delivered by each such party on such date is
the same, then, on such date, each such party’s obligation to make such payment or delivery
will be automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable or deliverable by one such party exceeds the aggregate amount
that would otherwise have been payable or deliverable by the other such party, replaced by
an obligation of the party by whom the larger aggregate amount would have been payable or
deliverable to pay or deliver to the other party the excess of the larger aggregate amount
over the smaller aggregate amount.

     (ii) In addition to and without limiting any rights of set-off that a party hereto may
have as a matter of law, pursuant to contract or otherwise, upon the occurrence of an Early
Termination Date, Dealer shall have the right to terminate, liquidate and otherwise close
out the Transaction and to set off any obligation or right that Dealer or any affiliate of
Dealer may have to or against Counterparty hereunder or under the Agreement against any
right or obligation Dealer or any of its affiliates may have against or to Counterparty,
including without limitation any right to receive a payment or delivery pursuant to any
provision of the Agreement or hereunder. In the case of a set-off of any obligation to
release, deliver or pay assets against any right to receive assets of the same type, such
obligation and right shall be set off in kind. In the case of a set-off of any obligation
to release, deliver or pay assets against any right to receive assets of any other type, the
value of each of such obligation and such right shall be determined by the Calculation Agent
and the result of such set-off shall be that the net obligor shall pay or deliver to the
other party an amount of cash or assets, at the net

13

 

obligor’s option, with a value (determined, in the case of a delivery of assets, by the
Calculation Agent) equal to that of the net obligation. In determining the value of any
obligation to release or deliver Shares or any right to receive Shares, the value at any
time of such obligation or right shall be determined by reference to the market value of the
Shares at such time, as determined by the Calculation Agent. If an obligation or right is
unascertained at the time of any such set-off, the Calculation Agent may in good faith
estimate the amount or value of such obligation or right, in which case set-off will be
effected in respect of that estimate, and the relevant party shall account to the other
party at the time such obligation or right is ascertained.

     (iii) Notwithstanding any provision of the Agreement (including without limitation
Section 6(f) thereof) and this Confirmation (including without limitation this Section 8(k))
or any other agreement between the parties to the contrary, (A) Counterparty shall not net
or set off its obligations under the Transaction, if any, against its rights against Dealer
under any other transaction or instrument; (B) Dealer may net and set off any rights of
Dealer against Counterparty arising under the Transaction only against obligations of Dealer
to Counterparty arising under any transaction or instrument if such transaction or
instrument does not convey rights to Dealer senior to the claims of common stockholders in
the event of Counterparty’s bankruptcy; and (C) in the event of Counterparty’s bankruptcy,
Dealer waives any and all rights it may have to set-off in respect of the Transaction,
whether arising under agreement, applicable law or otherwise. Dealer will give notice to
Counterparty of any netting or set off effected under this provision.

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

     (m) Early Unwind. In the event the sale by Counterparty of the Convertible Securities is not
consummated with the initial purchasers pursuant to the Purchase Agreement for any reason by the
close of business in New York on June 11, 2007 (or such later date as agreed upon by the parties,
which in no event shall be later than June 15, 2007) (June 11, 2007 or such later date being the
“Early Unwind Date”), the Transaction shall automatically terminate (the “Early Unwind”), on the
Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of
Dealer and Counterparty thereunder shall be cancelled and terminated and (ii) Counterparty shall
purchase from the Dealer on the Early Unwind Date all Shares purchased by Dealer or one of more of
its affiliates in connection with this Transaction and shall pay to Dealer an amount in cash equal
to the aggregate amount of costs and expenses relating to the unwinding of Dealer’s hedging
activities in respect of the Transaction (including market losses incurred in reselling any Shares
purchased by Dealer or its affiliates in connection with such hedging activities). The amount of
any such reimbursement shall be determined by the Dealer in its sole good faith discretion.
Following such termination, cancellation and payment, each party shall be released and discharged
by the other party from and agrees not to make any claim against the other party with respect to
any obligations or liabilities of the other party arising out of and to be performed in connection
with the Transaction either prior to or after the Early Unwind Date. Dealer and Counterparty
represent and acknowledge to the other that upon an Early Unwind and following the payment referred
to above, all obligations with respect to the Transaction shall be deemed fully and finally
discharged.

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

     (o) Governing Law; Submission to 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 COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE
IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

     (p) Amendment to Section 6(d)(ii). Section 6(d)(ii) of the Agreement is modified by deleting
the words “on the day” in the second line thereof and substituting therefor the words “on the day
that is three Local Business Days after

14

 

the day” and by deleting the words “two Local Business Days” in the fourth line thereof and
substituting therefor the words “three Local Business Days”.

[Signature Pages Follow]

15

 

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

	 	 	 	 	 	 	 
	 	 	Yours faithfully,
	 
	 	 	 	 	 	 
	 	 	[Dealer]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

[Signature Page to the 2012 Convertible Bond Hedge Transaction]

 

 

Agreed and Accepted By:

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

[Signature Page to the 2012 Convertible Bond Hedge Transaction]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}]]