Document:

exv10w3

 

EXHIBIT 10.3

GOLDMAN, SACHS & CO.  ONE NEW YORK PLAZA | NEW YORK, NEW YORK 10004 |TEL: (212) 902-1000

Opening Transaction

	 	 	 
	 

	 	Illumina, Inc.
	To:
	 	9885 Towne Centre Drive
	 

	 	Suite 200
	 
	 	San Diego, CA 92121
	 
	 	 
	A/C:

	 	028598837
	 
	 	 
	From:

	 	Goldman, Sachs & Co.
	 
	 	 
	Re:

	 	Issuer Warrant Transaction
	 
	 	 
	Ref. No:

	 	SDB1624694339
	 
	 	 
	Date:

	 	February 12, 2007

Dear Sir(s):

     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 Goldman, Sachs & Co. (“Dealer”) and Illumina, Inc. (“Issuer”). This
communication constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified
below.

     1. This Confirmation is subject to, and incorporates, the definitions and provisions of the
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. For
purposes of the Equity Definitions, each reference herein to a Warrant shall be deemed to be a
reference to a Call Option or an Option, as context requires.

     Each party is hereby advised, and each such party acknowledges, that the other party has
engaged in, or refrained from engaging in, substantial financial transactions and has taken other
material actions in reliance upon the parties’ entry into the Transaction to which this
Confirmation relates on the terms and conditions set forth below.

     This Confirmation evidences a complete and binding agreement between Dealer and Issuer as to
the terms of the Transaction to which this Confirmation relates. This Confirmation shall be
subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement as if
Dealer and Issuer had executed an agreement in such form on the date hereof (but without any
Schedule except for (i) the election of Loss and Second Method and US Dollars (“USD”) as the
Termination Currency and (ii) the replacement of the word “third” in the last line of Section
5(a)(i) with the word “first”).

     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.

 

 

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

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

General Terms:

	 	 	 	 	 
	 

	 	Trade Date:
	 	February 12, 2007
	 
	 	 	 	 
	 

	 	Effective Date:
	 	February 16, 2007, subject to Section 8(l) below
	 
	 	 	 	 
	 

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

	 	Warrant Style:
	 	European
	 
	 	 	 	 
	 

	 	Warrant Type:
	 	Call
	 
	 	 	 	 
	 

	 	Seller:
	 	Issuer
	 
	 	 	 	 
	 

	 	Buyer:
	 	Dealer
	 
	 	 	 	 
	 

	 	Shares:
	 	The Common Stock of Issuer, par value USD0.01 per share (Ticker Symbol: “ILMN”).
	 
	 	 	 	 
	 

	 	Number of Warrants:
	 	For each Component, as provided in Annex A to this Confirmation.
	 
	 	 	 	 
	 

	 	Warrant Entitlement:
	 	One Share per Warrant
	 
	 	 	 	 
	 

	 	Strike Price:
	 	USD62.87
	 
	 	 	 	 
	 

	 	Premium:
	 	USD56,619,500 (Premium per Warrant USD10.09)
	 
	 	 	 	 
	 

	 	Premium Payment Date:
	 	 The Effective Date
	 
	 	 	 	 
	 

	 	Exchange:
	 	NASDAQ Global Market
	 
	 	 	 	 
	 

	 	Related Exchange:
	 	All Exchanges

Procedures for Exercise:

     In respect of any Component:

	 	 	 	 	 
	 

	 	Expiration Time:
	 	Valuation Time
	 

	 	Expiration Date:
	 	As provided in Annex A to this Confirmation (or, if such date is
not a Scheduled Trading Day, the next following Scheduled Trading Day that is not
already an Expiration Date for another Component); provided

2

 

	 	 	 	 	 
	 

	 	 	 	that if that date is a Disrupted Day, the
Expiration Date for such Component shall be the
first succeeding Scheduled Trading Day that is
not a Disrupted Day and is not or is not deemed
to be an Expiration Date in respect of any other
Component of the Transaction; and provided
further that if the Expiration Date has not
occurred pursuant to the preceding proviso as of
the Final Disruption Date, the Final Disruption
Date shall be the Expiration Date (irrespective
of whether such date is an Expiration Date
occurring on the Final Disruption Date in respect
of any other Component for the Transaction) and
the Calculation Agent shall determine the VWAP
Price of the Shares as of the Valuation Time on
such day. Notwithstanding the foregoing and
anything to the contrary in the Equity
Definitions, if a Market Disruption Event occurs
on any Expiration Date, the Calculation Agent may
determine that such Expiration Date is a
Disrupted Day only in part, in which case the
Calculation Agent shall make adjustments to the
Number of Warrants for the relevant Component for
which such day shall be the Expiration Date and
shall designate the Scheduled Trading Day
determined in the manner described in the
immediately preceding sentence as the Expiration
Date for the remaining Warrants for such
Component. “Final Disruption Date” means July
25, 2014. Section 6.6 of the Equity Definitions
shall not apply to any Valuation Date occurring
on an Expiration Date.
	 
	 	 	 	 
	 

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

	 	Automatic Exercise:
	 	Applicable and means that each Warrant not previously exercised under
the Transaction will be deemed to be automatically exercised at the Expiration Time on
the Expiration Date unless Buyer notifies Seller (by telephone or in writing) prior to
the Expiration Time on the Expiration Date that it does not wish Automatic Exercise to
occur, in which case Automatic Exercise will not apply.

	 	 	 	 	 	 	 
	 

	 	Issuer’s Telephone Number
and Telex and/or Facsimile Number
and Contact Details for purpose of
Giving Notice:
	 	To:
	 	Illumina, Inc.
	 

	 	 	 	Attn:
	 	Christian O. Henry
	 

	 	 	 	 	 	Senior Vice President, Chief
	 

	 	 	 	 	 	Financial Officer
	 

	 	 	 	Telephone:
	 	858-202-4508
	 

	 	 	 	Facsimile:
	 	858-202-4599

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	 	With a copy to:	 	 	 	 
	 

	 	 	 	Attn:
	 	Glenn Pollner
	 

	 	 	 	 	 	Dewey Ballantine LLP
	 

	 	 	 	Facsimile:
	 	212-259-6333

Settlement Terms:

     In respect of any Component:

	 	 	 	 	 
	 

	 	Settlement Currency:
	 	USD
	 

	 	Net Share Settlement:
	 	On each Settlement Date, Issuer shall deliver to Dealer a
number of Shares equal to the Number of Shares to be Delivered for such Settlement
Date to the account specified by Dealer and cash in lieu of any fractional Share
valued at the Relevant Price on the Valuation Date corresponding to such Settlement
Date. If, in the reasonable opinion of Issuer or Dealer based on advice of counsel,
for any reason, the Shares deliverable upon Net Share Settlement would not be
immediately freely transferable by Dealer under Rule 144(k) under the Securities Act
of 1933, as amended (the “Securities Act”), then Dealer may elect to either (x) accept
delivery of such Shares notwithstanding any restriction on transfer or (y) have the
provisions set forth in Section 8(b) below apply.
	 
	 	 	 	 
	 

	 	 	 	The Number of Shares to be Delivered shall be
delivered by Issuer to Dealer no later than 12:00
noon (local time in New York City) on the
relevant Settlement Date.
	 
	 	 	 	 
	 

	 	Number of Shares to be Delivered:
	 	In respect of any Exercise Date, subject to the last
sentence of Section 9.5 of the Equity Definitions, the product of (i) the number of
Warrants exercised or deemed exercised on such Exercise Date, (ii) the Warrant
Entitlement and (iii) (A) the excess, if any, of the VWAP Price on the Valuation Date
occurring on such Exercise Date over the Strike Price (or, if there is no such excess,
zero) divided by (B) such VWAP Price.
	 
	 	 	 	 
	 

	 	VWAP Price:
	 	For any Valuation Date, as determined by the Calculation Agent based
on the NASDAQ Volume Weighted Average Price per Share for the regular trading session
(including any extensions thereof) of the Exchange on such Valuation Date (without
regard to pre-open or after hours trading outside of such regular trading session for
such Valuation Date), as published by Bloomberg at 4:15 p.m. New York time (or 15
minutes following the end of any extension of the regular trading session) on such
Valuation Date, on Bloomberg page “ILMN.Q <Equity> AQR” (or any successor
thereto) (or if such published volume-weighted average price is unavailable or is
manifestly incorrect, the market value of one Share on such Valuation Date, as
determined by the Calculation Agent using a volume-weighted method).

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

Adjustments:

     In respect of any Component:

	 	 	 	 	 
	 

	 	Method of Adjustment:
	 	Calculation Agent Adjustment; provided that in respect of an
Extraordinary Dividend, “Calculation Agent Adjustment” shall be as described below.
	 
	 	 	 	 
	 

	 	Extraordinary Dividend:
	 	Any cash dividend or distribution on the Shares with an ex-dividend
date occurring on or after the Trade Date and on or prior to the Expiration Date.
	 
	 	 	 	 
	 

	 	Calculation Agent Adjustment
in Respect of an
Extraordinary Dividend:
	 	In respect of an Extraordinary Dividend, the Calculation Agent will
adjust the Strike Price, the Number of Warrants, the Warrant Entitlement and any other
variable relevant to the exercise, settlement, payment or other terms of the
Transaction to preserve the fair value of the Transaction to Buyer after taking into
account such Extraordinary Dividend.

Extraordinary Events:

	 	 	 	 	 
	 

	 	Consequences of Merger Events:	 	 
	 
	 	 	 	 
	 

	 	   (a) Share-for-Share:
	 	Modified Calculation Agent Adjustment
	 
	 	 	 	 
	 

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

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

	 	Tender Offer:
	 	Applicable
	 
	 	 	 	 
	 

	 	Consequences of Tender Offers:	 	 
	 
	 	 	 	 
	 

	 	   (a) Share-for-Share:
	 	Modified Calculation Agent Adjustment
	 
	 	 	 	 
	 

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

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

	 	Reference Markets:
	 	For the avoidance of doubt, and without limiting the generality of the
foregoing provisions, any adjustment effected by the Calculation Agent pursuant to
Section 12.2(e) and/or Section 12.3(d) of the Equity Definitions may (but need not) be

5

 

	 	 	 	 	 
	 

	 	 	 	determined by reference to the adjustment(s) made
in respect of Merger Events or Tender Offers, as
the case may be, in the convertible bond market.
	 
	 	 	 	 
	 

	 	Notice of Merger or Tender
Offer Consideration:
	 	Upon the occurrence of a Share-for-Other or
Share-for-Combined Merger Event or Tender Offer that causes the Shares to be converted
into the right to receive more than a single type of consideration (determined based
in part upon any form of stockholder election), Issuer shall reasonably promptly (but
in any event prior to the Merger Date or Tender Offer Date) notify the Calculation
Agent of (x) the weighted average of the types and amounts of consideration received
by the holders of Shares who affirmatively make such an election or (y) if no holder
of Shares affirmatively makes such an election, the weighted average of the types and
amount of consideration actually received by holders of Shares.
	 
	 	 	 	 
	 

	 	Nationalization, Insolvency

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

	 	Additional Disruption Events:	 	 
	 
	 	 	 	 
	 

	 	   (a) Change in Law:
	 	Applicable
	 
	 	 	 	 
	 

	 	   (b) Failure to Deliver:
	 	Applicable
	 
	 	 	 	 
	 

	 	   (c) Insolvency Filing:
	 	Applicable
	 
	 	 	 	 
	 

	 	   (d) Hedging Disruption:
	 	Applicable
	 
	 	 	 	 
	 

	 	   (e) Increased Cost of
Hedging:
	 	Not Applicable
	 
	 	 	 	 
	 

	 	   (f) Loss of Stock Borrow:
	 	Not Applicable
	 
	 	 	 	 
	 

	 	   (g) Increased Cost of
Stock Borrow:
	 	Applicable
	 
	 	 	 	 
	 

	 	     Initial Stock Loan Rate:
	 	0.25% per annum
	 
	 	 	 	 
	 

	 	Hedging Party:
	 	Buyer for all applicable Additional Disruption Events
	 
	 	 	 	 
	 

	 	Determining Party:
	 	Buyer for all applicable Additional Disruption Events
	 
	 	 	 	 
	 

	 	Non-Reliance:
	 	Applicable
	 
	 	 	 	 
	 

	 	Agreements and Acknowledgments	 	 

6

 

	 	 	 
	Regarding Hedging Activities:

	 	Applicable, provided, however, that Agreements and
Acknowledgements Regarding Hedging Activities shall be subject to the other respective
representations, warranties and agreements set forth herein.
	 
	 	 
	Additional Acknowledgments:

	 	Applicable
	 
	 	 
	3. Calculation Agent:

	 	Dealer.

4. Account Details:

     Dealer Payment Instructions:

Chase Manhattan Bank New York

For A/C Goldman, Sachs & Co.

A/C #930-1-011483

ABA: 021-000021

	 	 	 
	   Issuer Payment Instructions:

	 	To be provided by Issuer.

5. Offices:

     The Office of Dealer for the Transaction is:

          One New York Plaza, New York, New York 10004

     Issuer is not a multibranch party.

6. Notices: For purposes of this Confirmation:

	 	 	 	 	 
	(a)	 	Address for notices or communications to Issuer:
	 
	 	 	 	 
	 

	 	To:
	 	Illumina, Inc.
	 

	 	Attn:
	 	Christian O. Henry
	 

	 	 	 	Senior Vice President, Chief Financial Officer
	 

	 	Telephone:
	 	858-202-4508
	 

	 	Facsimile:
	 	858-202-4599
	 
	 	 	 	 
	 

	 	With a copy to:	 	 
	 
	 	 	 	 
	 

	 	Attn:
	 	Glenn Pollner
	 

	 	 	 	Dewey Ballantine LLP
	 

	 	Facsimile:
	 	212-259-6333
	 
	 	 	 	 
	(b)	 	Address for notices or communications to Dealer:
	 
	 	 	 	 
	 

	 	To:
	 	Goldman, Sachs & Co.
	 

	 	 	 	One New York Plaza
	 

	 	 	 	New York, NY 10004
	 

	 	Attn:
	 	Equity Operations: Options and Derivatives
	 

	 	Telephone:
	 	(212) 902-1981
	 

	 	Facsimile:
	 	(212) 428-1980/1983
	 
	 	 	 	 
	 

	 	With a copy to:	 	 
	 
	 	 	 	 
	 

	 	Attn:
	 	Tracey McCabe
	 

	 	 	 	Equity Capital Markets
	 

	 	Telephone:
	 	(212) 357-0428
	 

	 	Facsimile:
	 	(212) 902-3000

7. Representations, Warranties and Agreements:

7

 

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

     (i) On the Trade Date, (A) Issuer is not aware of any material nonpublic information
regarding Issuer or the Shares and (B) all reports and other documents filed by Issuer with
the Securities and Exchange Commission pursuant to the 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) taken together with
Issuer’s press release dated the date hereof, do not contain any untrue statement of a
material fact or any omission of a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances in which they were made,
not misleading.

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

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

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

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

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

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

     (viii) The representations and warranties of Issuer set forth in Section 3 of the
Agreement and Section 1 of the Purchase Agreement (the “Purchase Agreement”) dated as of
the Trade Date between Issuer and Dealer and Deutsche Bank Securities Inc., as
representatives of the Purchasers (as defined in the Purchase Agreement) party thereto are
true and correct in all material respects.

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

     (x) If the Relevant Price of the Shares is greater than USD37.26 on any of the five
Exchange Business Days immediately preceding the first Expiration Date (determined as if
each such Exchange Business Day were a Valuation Date), then during the period starting on
the first Expiration Date and ending on the last Expiration Date (the “Settlement Period”),
the Shares or securities that are convertible into, or exchangeable or exercisable for
Shares, are not, and shall not be, subject to a “restricted period,” as such term is
defined in Regulation M under the Exchange Act (“Regulation M”) and (B) Issuer shall not
engage in any “distribution,” as such term is defined in Regulation M, other than a
distribution meeting the requirements of 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 Settlement Period.

8

 

     (xi) If the Relevant Price of the Shares is greater than USD37.26 on any of the five
Exchange Business Days immediately preceding the first Expiration Date (determined as if
each such Exchange Business Day were a Valuation Date), then during the Settlement Period
and on any other Exercise Date, neither Issuer nor any “affiliate” or “affiliated
purchaser” (each as defined in Rule 10b-18 of the Exchange Act (“Rule 10b-18”)) shall
directly or indirectly (including, without limitation, by means of any cash-settled or
other derivative instrument) purchase, offer to purchase, place any bid or limit order that
would effect a purchase of, or commence any tender offer relating to, any Shares (or an
equivalent interest, including a unit of beneficial interest in a trust or limited
partnership or a depository share) or any security convertible into or exchangeable or
exercisable for Shares.

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

     (c) Each of Dealer and Issuer acknowledges that the offer and sale of the Transaction to it is
intended to be exempt from registration under the Securities Act of 1933, as amended (the
“Securities Act”), by virtue of Section 4(2) thereof. Accordingly, Dealer represents and warrants
to Issuer that (i) it has the financial ability to bear the economic risk of its investment in the
Transaction and is able to bear a total loss of its investment and its investments in and
liabilities in respect of the Transaction, which it understands are not readily marketable, are not
disproportionate to its net worth, and it is able to bear any loss in connection with the
Transaction, including the loss of its entire investment in the Transaction, (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, (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, (v) its financial condition is such that it has no need for liquidity with respect to its
investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing
or contemplated undertaking or indebtedness and is capable of assessing the merits of and
understanding (on its own behalf or through independent professional advice), and understands and
accepts, the terms, conditions and risks of the Transaction.

     (d) Each of Dealer and Issuer agrees and acknowledges (A) that this Confirmation is (i) a
“securities contract,” as such term is defined in Section 741(7) of Title 11 of the United States
Code (the “Bankruptcy Code”), with respect to which each payment and delivery hereunder is a
“settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a
“swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect
to which each payment and delivery hereunder is a “transfer,” as such term is defined in Section
101(54) of the Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by,
among other sections, Section 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy
Code.

     (e) Issuer 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 certain matters to be agreed
upon.

     (f) Each party acknowledges and agrees to be bound by the Conduct Rules of the National
Association of Securities Dealers, Inc. applicable to transactions in options, and further agrees
not to violate the position and exercise limits set forth therein.

     8. Other Provisions:

     (a) Alternative Calculations and Payment on Early Termination and on Certain Extraordinary
Events. If, subject to Section 8(j) below, Issuer shall owe Buyer any amount pursuant to Sections
12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of an Insolvency, a
Nationalization, a Tender Offer or a Merger Event, in each case, in which the consideration or
proceeds to be paid to holders of Shares consists solely of cash) or pursuant to Section 6(d)(ii)
of the Agreement (except in the event of an Event of Default in which Issuer is the Defaulting
Party or a Termination Event in which Issuer is the Affected Party, that resulted from an event or
events within Issuer’s control) (a “Payment Obligation”), Issuer shall have the right, in its sole
discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as defined
below) by giving irrevocable telephonic notice to Buyer, 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

9

 

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

Property:

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

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

	 	In the case of a Termination Event, Event
of Default or Delisting, one Share or, in
the case of an Insolvency,
Nationalization, Merger Event or Tender
Offer, a Share or 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 of Shares, such
holder shall be deemed to have elected to
receive (x) the weighted average of the
types and amounts of consideration
received by the holders of Shares who
affirmatively make such an election or
(y) if no holder of Shares affirmatively
makes such an election, the weighted
average of the types and amount of
consideration actually received by
holders of Shares.
	 
	 	 
	Failure to Deliver:

	 	Applicable
	 
	 	 
	Other applicable provisions:

	 	If Share Termination Alternative is
applicable, the provisions of Sections
9.8, 9.9, 9.10, 9.11 (except that the
Representation and Agreement contained in
Section 9.11 of the Equity Definitions
shall be modified by excluding any
representations therein relating to
restrictions, obligations, limitations or
requirements under applicable securities
laws as a result of the fact that Seller
is the Issuer of the Shares) and 9.12 of
the Equity Definitions will be applicable
as if “Physical Settlement” applied to
the Transaction, and all references to
“Shares” shall be read as references to
“Share Termination Delivery Units”. If,
in the reasonable opinion of Issuer or
Dealer on advice of counsel, for any
reason, any securities comprising the
Share Termination Delivery Units
deliverable pursuant to this Section 8(a)
would not be immediately freely
transferable by Dealer under Rule 144(k)
under the Securities Act, then Dealer may
elect to either (x) accept delivery of
such securities notwithstanding any
restriction on

10

 

	 	 	 
	 

	 	transfer or (y) have the provisions set forth in Section 8(b) below apply.

The parties hereby agree that, notwithstanding anything to the contrary herein or in the Agreement,
in the event that following the payment of the Premium by Dealer to Issuer (i) an Early Termination
Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated
with respect to the Transaction and, as a result, Dealer owes to Issuer an amount calculated under
Section 6(e) of the Agreement or (ii) an Extraordinary Event occurs that results in the termination
or cancellation of any Transaction pursuant to Article 12 of the Equity Definitions and, as a
result, Dealer owes to Counterparty a Cancellation Amount or other amount in respect of the
Transaction, such amount shall be deemed to be zero.

     (b) Registration/Private Placement Procedures. (i) With respect to the Transaction, the
following provisions shall apply to the extent provided for above opposite the caption “Net Share
Settlement” in Section 2 or in paragraph (a) of this Section 8. If so applicable, then, at the
election of Issuer by notice to Buyer within one Exchange Business Day after the relevant delivery
obligation arises, but in any event at least one Exchange Business Day prior to the date on which
such delivery obligation is due, either (A) all Shares or Share Termination Delivery Units, as the
case may be, delivered by Issuer to Buyer shall be, at the time of such delivery, covered by an
effective registration statement of Issuer for immediate resale by Buyer (such registration
statement and the corresponding prospectus (the “Prospectus”) (including, without limitation, any
sections describing the plan of distribution) in form and content commercially reasonably
satisfactory to Buyer) or (B) Issuer shall deliver additional Shares or Share Termination Delivery
Units, as the case may be, so that the value of such Shares or Share Termination Delivery Units, as
determined by the Calculation Agent in a commercially reasonable manner to reflect an appropriate
liquidity discount, equals the value of the number of Shares or Share Termination Delivery Units
that would otherwise be deliverable if such Shares or Share Termination Delivery Units were freely
tradeable (without prospectus delivery) upon receipt by Buyer (such value, the “Freely Tradeable
Value”); provided that Issuer may not make the election described in this clause (B) if, on the
date of its election, it has taken, or caused to be taken, any action that would make unavailable
either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Issuer to
Dealer (or any affiliate designated by Dealer) of the Shares or the exemption pursuant to Section
4(1) or Section 4(3) of the Securities Act for resales of the Shares by Dealer (or any such
affiliate of Dealer); provided further that, if requested by Dealer, Issuer shall make the election
described in this clause (B) with respect to Shares delivered on all Settlement Dates no later than
one Exchange Business Day prior to the first Exercise Date, and the applicable procedures described
below shall apply to all Shares delivered on the Settlement Dates on an aggregate basis. (For the
avoidance of doubt, as used in this paragraph (b) only, the term “Issuer” shall mean the issuer of
the relevant securities, as the context shall require.)

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

     (A) Buyer (or an Affiliate of Buyer designated by Buyer) shall be afforded a
reasonable opportunity to conduct a due diligence investigation with respect to Issuer that
is customary in scope for underwritten offerings of equity securities and that yields
results that are commercially reasonably satisfactory to Buyer or such Affiliate, as the
case may be, in its discretion; and

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

11

 

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

     (A) Buyer (or an Affiliate of Buyer designated by Buyer) and any potential
institutional purchaser of any such Shares or Share Termination Delivery Units, as the case
may be, from Buyer or such Affiliate identified by Buyer shall be afforded a commercially
reasonable opportunity to conduct a due diligence investigation in compliance with
applicable law with respect to Issuer customary in scope for private placements of equity
securities (including, without limitation, the right to have made available to them for
inspection all financial and other records, pertinent corporate documents and other
information reasonably requested by them), subject to execution by such recipients of
customary confidentiality agreements reasonably acceptable to Issuer;

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

     (C) Issuer agrees that any Shares or Share Termination Delivery Units so delivered to
Dealer, (i) unless otherwise prohibited by law, may be transferred by and among Dealer and
its affiliates, and Issuer shall effect such transfer without any further action by Dealer
and (ii) after the minimum “holding period” within the meaning of Rule 144(k) under the
Securities Act has elapsed with respect to such Shares or any securities issued by Issuer
comprising such Share Termination Delivery Units, Issuer shall promptly remove, or cause
the transfer agent for such Shares or securities to remove, any legends referring to any
such restrictions or requirements from such Shares or securities upon delivery by Dealer
(or such affiliate of Dealer) to Issuer or such transfer agent of seller’s and broker’s
representation letters customarily delivered by Dealer in connection with resales of
restricted securities pursuant to Rule 144 under the Securities Act, without any further
requirement for the delivery of any certificate, consent, agreement, opinion of counsel,
notice or any other document, any transfer tax stamps or payment of any other amount or any
other action by Dealer (or such affiliate of Dealer).

     (c) Make-whole Shares. If Issuer makes the election described in clause (b)(i)(B) of paragraph
(b) of this Section 8, then in either case Dealer or its affiliate may sell (which sale shall be
made in a commercially reasonable manner) such Shares or Share Termination Delivery Units, as the
case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day
following delivery of such Shares or Share Termination Delivery Units, as the case may be, and
ending on the Exchange Business Day on which Dealer completes the sale of all such Shares or Share
Termination Delivery Units, as the case may be, or a sufficient number of Shares or Share
Termination Delivery Units, as the case may be, so that the realized net proceeds of such sales
exceed the Freely Tradeable Value. If any of such delivered Shares or Share Termination Delivery
Units remain after such realized net proceeds exceed the Freely Tradeable Value, Dealer shall
return such remaining Shares or Share Termination Delivery Units to Issuer. If the Freely
Tradeable Value exceeds the realized net proceeds from such resale, Issuer shall transfer to Dealer
by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately
following the last day of the Resale Period the amount of such excess (the “Additional Amount”) at
Issuer’s election in cash or in a number of additional Shares (“Make-whole Shares”) in an

12

 

amount that, based on the Relevant Price on the last day of the Resale Period (as if such day was
the “Valuation Date” for purposes of computing such Relevant Price), has a dollar value equal to
the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole
Shares in the manner contemplated by this Section 8(c). This provision shall be applied
successively until the Additional Amount is equal to zero, subject to Section 8(e).

     (d) Beneficial Ownership. Notwithstanding anything to the contrary in the Agreement or this
Confirmation, in no event shall Buyer be entitled to receive, or shall be deemed to receive, any
Shares if, upon such receipt of such Shares, either (x) the “beneficial ownership” (within the
meaning of Section 13 of the Exchange Act and the rules promulgated thereunder) of Shares by Buyer,
together with its affiliates subject to aggregation with Buyer under such Section 13 and rules
(collectively, the “Section 13 Buyer Group”), would be equal to or greater than 7.5% or more of the
outstanding Shares or (y) the “Beneficial Ownership” (as defined in the Rights Agreement by and
Between Issuer and Equiserve Trust Company, N.A., as Rights Agent, dated as of May 3, 2001 (the
“Rights Agreement”)) of Buyer, together with all its Affiliates and Associates (each as defined in
the Rights Agreement) (collectively, the “Rights Agreement Buyer Group”), would be equal to or
greater than 13% of the outstanding Shares. If any delivery owed to Buyer hereunder is not made,
in whole or in part, as a result of this provision, Issuer’s obligation to make such delivery shall
not be extinguished and Issuer shall make such delivery as promptly as practicable after, but in no
event later than one Exchange Business Day after, Buyer gives notice to Issuer that such delivery
would not result in either (x) the Section 13 Buyer Group directly or indirectly so beneficially
owning in excess of 7.5% of the outstanding Shares or (y) the Rights Agreement Buyer Group directly
or indirectly so beneficially owning in excess of 13% of the outstanding Shares.

     (e) Limitations on Settlement by Issuer. Notwithstanding anything herein or in the Agreement
to the contrary, in no event shall Issuer be required to deliver Shares in connection with the
Transaction in excess of 11,222,421 (as such number may be adjusted from time to time in accordance
with the provisions hereof) (the “Capped Number”). Issuer represents and warrants (which shall be
deemed to be repeated on each day that the Transaction is outstanding) that the Capped Number is
equal to or less than the number of authorized but unissued Shares of the Issuer that are not
reserved for future issuance in connection with transactions in the Shares (other than the
Transaction) on the date of the determination of the Capped Number (such Shares, the “Available
Shares”). In the event Issuer shall not have delivered the full number of Shares otherwise
deliverable as a result of this Section 8(e) (the resulting deficit, the “Deficit Shares”), Issuer
shall be continually obligated to deliver, from time to time until the full number of Deficit
Shares have been delivered pursuant to this paragraph, Shares when, and to the extent, that (i)
Shares are repurchased, acquired or otherwise received by Issuer or any of its subsidiaries after
the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii)
authorized and unissued Shares reserved for issuance in respect of other transactions prior to such
date which prior to the relevant date become no longer so reserved and (iii) Issuer additionally
authorizes and unissued Shares that are not reserved for other transactions. Issuer shall
immediately notify Dealer of the occurrence of any of the foregoing events (including the number of
Shares subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be delivered)
and promptly deliver such Shares thereafter.

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

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

     (i) The first sentence of Section 11.2(c) of the Equity Definitions, prior to clause
(A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment”
is specified as the Method of Adjustment in the related Confirmation of a Share Option
Transaction, then following the announcement or occurrence of any Potential Adjustment
Event, the Calculation Agent will determine whether such Potential Adjustment Event has a
material effect

13

 

on the theoretical value of the relevant Shares or options on the Shares and, if so,
will (i) make appropriate adjustment(s), if any, to any one or more of:’ and, the portion
of such sentence immediately preceding clause (ii) thereof is hereby amended by deleting
the words “diluting or concentrative” and the words “(provided that no adjustments will be
made to account solely for changes in volatility, expected dividends, stock loan rate or
liquidity relative to the relevant Shares)” and replacing such latter phrase with the words
“(and, for the avoidance of doubt, adjustments may be made to account solely for changes in
volatility, expected dividends, stock loan rate or liquidity relative to the relevant
Shares)”; and

     (ii) Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the
words “diluting or concentrative” and replacing them with “material”.

     (h) Transfer and Assignment. Buyer may transfer or assign its rights and obligations
hereunder and under the Agreement, in whole or in part, at any time to any person or entity
whatsoever without the consent of Issuer. In connection with any transfer or assignment by Buyer
of its rights and obligations hereunder and under the Agreement, Buyer shall promptly provide
written notice to Issuer of such transfer or assignment, as the case may be, and the identity of
the relevant transferee or assignee.

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

     (j) Netting and Set-off. 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) Issuer shall not net or set
off its obligations under the Transaction against its rights against Buyer under any other
transaction or instrument; and (B) Buyer shall not net or set off any rights of Buyer against
Issuer arising under the Transaction against its obligations to Issuer arising under any other
transaction or instrument.

     (k) Additional Termination Event. If within the period commencing on the Trade Date and ending
on the second anniversary of the Premium Payment Date, Buyer reasonably determines based on advice
of counsel that it is advisable to terminate a portion of the Transaction so that Buyer’s related
hedging activities will comply with applicable securities laws, rules or regulations, then an
Additional Termination Event shall be deemed to have occurred with respect to which the Transaction
is the sole Affected Transaction and Issuer is the sole Affected Party, provided that with respect
to such Additional Termination Event, Dealer may choose to treat part of the Transaction as the
sole Affected Transaction, and, upon the termination of the Affected Transaction, a Transaction
with terms identical to those set forth herein except with a Number of Warrants equal to the
unaffected number of Warrants shall be treated for all purposes as the Transaction, which shall
remain in full force and effect.

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

     (m) Extension of Settlement. Dealer may divide any Component into additional Components and
designate the Expiration Date and the Number of Warrants for each such Component if Dealer
determines, in its reasonable discretion based on advice of counsel, that such further division is
necessary or advisable to preserve Dealer’s hedging activity hereunder in light of existing
liquidity conditions in the cash market or stock loan market or to enable Dealer to effect
purchases of Shares in connection with its hedging activity hereunder in a manner that would, if
Dealer were Issuer or an affiliated purchaser of Issuer, be compliance with applicable legal and
regulatory requirements.

     (n) Governing Law and Waiver of Jury Trial. THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK. EACH PARTY HEREBY

14

 

WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE AGREEMENT, THIS
CONFIRMATION OR THE TRANSACTION (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION.

     (o) Submission to Jurisdiction. Each party hereby irrevocably and unconditionally submits for
itself and its property in any legal action or proceeding by the other party against it relating to
the Transaction to which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the exclusive jurisdiction of the Supreme Court of the State of New York,
sitting in New York County, the courts of the United States of America for the Southern District of
New York, and appellate courts from any thereof.

     (p) Amendment. If the Purchasers party to the Purchase Agreement exercise their right to
purchase additional convertible notes as set forth therein, then, at the discretion of Issuer,
Dealer and Issuer will either enter into a new confirmation evidencing warrants to be issued by
Issuer to Dealer on substantially identical terms as this Confirmation or amend this Confirmation
(in each case on pricing terms substantially identical to those set forth herein, including, for
the avoidance of doubt, at the same Premium per Option) (such additional confirmation or amendment
to this Confirmation to provide for the payment by Dealer to Issuer of the additional premium
related thereto).

     (q) Counterparts. This Confirmation may be executed in several counterparts, each of which
shall be deemed an original but all of which together shall constitute one and the same instrument.

15

 

     Issuer 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 Issuer 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 Equity Derivatives
Documentation Department, Facsimile No. (212) 428-1980/83.

	 	 	 
	 

	 	Yours faithfully,
	 
	 	 
	 
	 	 
	 

	 	GOLDMAN, SACHS & CO.
	 
	 	 
	 

	 	/s/  Conrad Langenegger, Vice President
	 

	 	 
	 

	 	Authorized Signatory

Agreed and Accepted By:

ILLUMINA, INC.

	 	 	 
	By:

	 	/s/ Christian O. Henry
	 

	 	Name: Christian O. Henry
	 

	 	Title: Senior Vice President & Chief Financial Officer

 

 

Annex A

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

	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date
	1
	 	140,280	 	May 16, 2014
	2
	 	140,280	 	May 19, 2014
	3
	 	140,280	 	May 20, 2014
	4
	 	140,280	 	May 21, 2014
	5
	 	140,280	 	May 22, 2014
	6
	 	140,280	 	May 23, 2014
	7
	 	140,280	 	May 27, 2014
	8
	 	140,280	 	May 28, 2014
	9
	 	140,280	 	May 29, 2014
	10
	 	140,280	 	May 30, 2014
	11
	 	140,280	 	June 2, 2014
	12
	 	140,280	 	June 3, 2014
	13
	 	140,280	 	June 4, 2014
	14
	 	140,280	 	June 5, 2014
	15
	 	140,280	 	June 6, 2014
	16
	 	140,280	 	June 9, 2014
	17
	 	140,280	 	June 10, 2014
	18
	 	140,280	 	June 11, 2014
	19
	 	140,280	 	June 12, 2014
	20
	 	140,280	 	June 13, 2014
	21
	 	140,280	 	June 16, 2014
	22
	 	140,280	 	June 17, 2014
	23
	 	140,280	 	June 18, 2014
	24
	 	140,280	 	June 19, 2014
	25
	 	140,280	 	June 20, 2014
	26
	 	140,280	 	June 23, 2014
	27
	 	140,280	 	June 24, 2014
	28
	 	140,280	 	June 25, 2014
	29
	 	140,280	 	June 26, 2014
	30
	 	140,280	 	June 27, 2014
	31
	 	140,281	 	June 30, 2014
	32
	 	140,281	 	July 1, 2014
	33
	 	140,281	 	July 2, 2014
	34
	 	140,281	 	July 3, 2014
	35
	 	140,281	 	July 7, 2014
	36
	 	140,281	 	July 8, 2014
	37
	 	140,281	 	July 9, 2014
	38
	 	140,281	 	July 10, 2014
	39
	 	140,281	 	July 11, 2014
	40
	 	140,281.50	 	July 14, 2014exv10w4

 

EXHIBIT 10.4

Deutsche Bank AG London

Winchester house

1 Great Winchester St, London

EC2N 2DB

Telephone: 44 20 7545 8000

c/o Deutsche Bank Securities
Inc.

60 Wall Street

New York, NY 10005

Telephone: 212-250-2500

Internal Reference: 159078

	 	 	 	 	 
	 

	 	DATE:
	 	February 12, 2007
	 
	 	 	 	 
	 

	 	TO:
	 	Illumina, Inc.
	 

	 	ATTENTION:
	 	Christian O. Henry
	 

	 	 	 	Senior Vice President, Chief Financial Officer
	 

	 	TELEPHONE:
	 	858-202-4508
	 

	 	FACSIMILE:
	 	858-202-4599
	 
	 	 	 	 
	 

	 	FROM:
	 	Deutsche Bank AG London
	 

	 	TELEPHONE:
	 	+ 44 20 7545 8193
	 

	 	FACSIMILE:
	 	+ 44 11 3336 2009
	 
	 	 	 	 
	 

	 	SUBJECT:
	 	Issuer Warrant Transaction
	 
	 	 	 	 
	 

	 	REFERENCE NUMBER(S):
	 	159078

     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 Deutsche Bank AG acting through its London branch (“Bank”) and Illumina,
Inc. (“Issuer”). This communication constitutes a “Confirmation” as referred to in the ISDA Master
Agreement specified below.

     DEUTSCHE BANK AG IS NOT REGISTERED AS A BROKER DEALER UNDER THE U.S. SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED. DEUTSCHE BANK SECURITIES INC. HAS ACTED SOLELY AS AGENT IN CONNECTION WITH
THE TRANSACTION AND HAS NO OBLIGATION, BY WAY OF ISSUANCE, ENDORSEMENT,

	 	 	 
	Chairman of the Supervisory Board: Clemens Borsig
Board of Managing Directors: Hermann-Josef Lamberti,
Josef Ackermann,Tessen von Heydebreck,Anthony Dilorio,Hugo
Banziger

	 	Deutsche Bank AG is regulated by the FSA for the conduct of designated
Investment business in the UK, is a member of the London Stock Exchange and is
a limited liability company incorporated in the Federal Republic of Germany HRB
No. 30 000 District Court of Frankfurt am Main; Branch Registration No. in England and
Wales BR000005, Registered address: Winchester House, 1 Great Winchester Street, London EC2N 2DB.

 

 

GUARANTEE OR OTHERWISE WITH RESPECT TO THE PERFORMANCE OF EITHER PARTY UNDER THE TRANSACTION.
DEUTSCHE BANK AG, LONDON BRANCH IS NOT A MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION
(SIPC).

     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. For
purposes of the Equity Definitions, each reference herein to a Warrant shall be deemed to be a
reference to a Call Option or an Option, as context requires.

     Each party is hereby advised, and each such party acknowledges, that the other party has
engaged in, or refrained from engaging in, substantial financial transactions and has taken other
material actions in reliance upon the parties’ entry into the Transaction to which this
Confirmation relates on the terms and conditions set forth below.

     This Confirmation evidences a complete and binding agreement between Bank and Issuer 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 1992 ISDA Master Agreement as if Bank and Issuer
had executed an agreement in such form on the date hereof (but without any Schedule except for (i)
the election of Loss and Second Method and US Dollars (“USD”) as the Termination Currency and (ii)
the replacement of the word “third” in the last line of Section 5(a)(i) with the word “first”).

     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.

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

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

	 	 	 
	General Terms:
	 	 
	 
	 	 
	           Trade Date:

	 	February 12, 2007
	 
	 	 
	           Effective Date:

	 	February 16, 2007, subject to Section 8(l) below
	 
	 	 
	           Components:

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

	 	European

2

 

	 	 	 
	          Warrant Type:

	 	Call
	 
	 	 
	          Seller:

	 	Issuer
	 
	 	 
	          Buyer:

	 	Bank
	 
	 	 
	          Shares:

	 	The Common Stock of Issuer, par value USD0.01 per share (Ticker Symbol: “ILMN”).
	 
	 	 
	          Number of Warrants:

	 	For each Component, as provided in Annex A to this Confirmation.
	 
	 	 
	          Warrant Entitlement:

	 	One Share per Warrant
	 
	 	 
	          Strike Price:

	 	USD62.8740
	 
	 	 
	          Premium:

	 	USD24,265,500 (Premium per Warrant USD10.0904)
	 
	 	 
	          Premium Payment Date:

	 	The Effective Date
	 
	 	 
	          Exchange:

	 	NASDAQ Global Market
	 
	 	 
	          Related Exchange:

	 	All Exchanges
	 
	 	 
	Procedures for Exercise:
	 	 
	 
	 	 
	     In respect of any Component:
	 	 
	 
	 	 
	          Expiration Time:

	 	Valuation Time
	 
	 	 
	          Expiration Date:

	 	As provided in Annex A to this Confirmation (or, if such date is
not a Scheduled Trading Day, the next following Scheduled Trading Day that is not
already an Expiration Date for another Component); provided that if that date is a
Disrupted Day, the Expiration Date for such Component shall be the first succeeding
Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed to be an
Expiration Date in respect of any other Component of the Transaction; and provided
further that if the Expiration Date has not occurred pursuant to the preceding proviso
as of the Final Disruption Date, the Final Disruption Date shall be the Expiration
Date (irrespective of whether such date is an Expiration Date occurring on the Final
Disruption Date in respect of any other Component for the Transaction) and the
Calculation Agent shall determine the VWAP Price of the Shares as of the Valuation
Time on such day. Notwithstanding the foregoing and anything to the contrary in the
Equity Definitions, if a Market Disruption Event occurs on any Expiration Date, the
Calculation Agent may determine that such Expiration Date is a Disrupted Day only in
part, in which case the Calculation Agent shall make adjustments to the Number of
Warrants for the relevant Component for which such day shall be the Expiration Date
and shall designate the Scheduled Trading Day determined in the manner described in
the immediately preceding sentence as the Expiration Date for the remaining Warrants
for such Component. “Final Disruption Date” means July 25, 2014. Section 6.6 of the
Equity Definitions shall

3

 

	 	 	 
	 

	 	not apply to any Valuation Date occurring on an
Expiration Date.
	 
	 	 
	          Market Disruption Event:

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

	 	Applicable and means that each Warrant not previously exercised under
the Transaction will be deemed to be automatically exercised at the Expiration Time on
the Expiration Date unless Buyer notifies Seller (by telephone or in writing) prior to
the Expiration Time on the Expiration Date that it does not wish Automatic Exercise to
occur, in which case Automatic Exercise will not apply.

	 	 	 	 	 
	          Issuer’s Telephone Number

          and Telex and/or Facsimile Number

          and Contact Details for purpose of

          Giving Notice:

	 	To:
	 	Illumina, Inc.
	 

	 	Attn:
	 	Christian O. Henry
	 

	 	 	 	Senior Vice President, Chief
	 

	 	 	 	Financial Officer
	 

	 	Telephone:
	 	858-202-4508
	 

	 	Facsimile:
	 	858-202-4599
	 
	 	 	 	 
	With a copy to:
	 	 	 	 
	 
	 	 	 	 
	 

	 	Attn:
	 	Glenn Pollner
	 

	 	 	 	Dewey Ballantine LLP
	 

	 	Facsimile:
	 	212-259-6333

	 	 	 
	Settlement Terms:
	 	 
	 
	 	 
	     In respect of any Component:
	 	 
	 
	 	 
	          Settlement Currency:

	 	USD
	 
	 	 
	          Net Share Settlement:

	 	On each Settlement Date, Issuer shall deliver to Bank a
number of Shares equal to the Number of Shares to be Delivered for such Settlement
Date to the account specified by Bank and cash in lieu of any fractional Share valued
at the Relevant Price on the Valuation Date corresponding to such Settlement Date.
If, in the reasonable opinion of Issuer or Bank based on advice of counsel, for any
reason, the Shares deliverable upon Net Share Settlement would not be immediately
freely transferable by Bank under Rule 144(k) under the Securities Act of 1933, as
amended (the “Securities Act”), then Bank may elect to either (x) accept delivery of
such Shares notwithstanding any restriction on transfer or (y) have the provisions set
forth in Section 8(b) below apply.
	 
	 	 
	 

	 	The Number of Shares to be Delivered shall be
delivered by Issuer to Bank no later than 12:00 noon

4

 

	 	 	 
	 

	 	(local time in New York City) on the relevant
Settlement Date.
	 
	 	 
	          Number of Shares to be Delivered:

	 	In respect of any Exercise Date, subject to the last
sentence of Section 9.5 of the Equity Definitions, the product of (i) the number of
Warrants exercised or deemed exercised on such Exercise Date, (ii) the Warrant
Entitlement and (iii) (A) the excess, if any, of the VWAP Price on the Valuation Date
occurring on such Exercise Date over the Strike Price (or, if there is no such excess,
zero) divided by (B) such VWAP Price.
	 
	 	 
	          VWAP Price:

	 	For any Valuation Date, as determined by the Calculation Agent based
on the NASDAQ Volume Weighted Average Price per Share for the regular trading session
(including any extensions thereof) of the Exchange on such Valuation Date (without
regard to pre-open or after hours trading outside of such regular trading session for
such Valuation Date), as published by Bloomberg at 4:15 p.m. New York time (or 15
minutes following the end of any extension of the regular trading session) on such
Valuation Date, on Bloomberg page “ILMN.Q <Equity> AQR” (or any successor
thereto) (or if such published volume-weighted average price is unavailable or is
manifestly incorrect, the market value of one Share on such Valuation Date, as
determined by the Calculation Agent using a volume-weighted method).
	 
	 	 
	          Other Applicable Provisions:

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

	 	Calculation Agent Adjustment; provided that in respect of an
Extraordinary Dividend, “Calculation Agent Adjustment” shall be as described below.
	 
	 	 
	          Extraordinary Dividend:

	 	Any cash dividend or distribution on the Shares with an ex-dividend
date occurring on or after the Trade Date and on or prior to the Expiration Date.
	 
	 	 
	          Calculation Agent Adjustment
          in Respect
of an Extraordinary
          Dividend:

	 	In respect of an Extraordinary Dividend, the Calculation Agent will
adjust the Strike Price, the Number of Warrants, the Warrant Entitlement and any other
variable relevant to the exercise, settlement, payment or other terms of the
Transaction to preserve

5

 

	 	 	 
	 

	 	the fair value of the Transaction to Buyer after
taking into account such Extraordinary Dividend.
	 
	 	 
	Extraordinary Events:
	 	 
	 
	 	 
	          Consequences of Merger Events:
	 	 
	 
	 	 
	               (a)Share-for-Share:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	               (b) Share-for-Other:

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

	 	Cancellation and Payment (Calculation Agent Determination)
	 
	 	 
	          Tender Offer:

	 	Applicable
	 
	 	 
	          Consequences of Tender Offers:
	 	 
	 
	 	 
	               (a)Share-for-Share:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	               (b) Share-for-Other:

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

	 	Cancellation and Payment (Calculation Agent Determination)
	 
	 	 
	          Reference Markets:

	 	For the avoidance of doubt, and without limiting the generality of the
foregoing provisions, any adjustment effected by the Calculation Agent pursuant to
Section 12.2(e) and/or Section 12.3(d) of the Equity Definitions may (but need not) be
determined by reference to the adjustment(s) made in respect of Merger Events or
Tender Offers, as the case may be, in the convertible bond market.
	 
	 	 
	          Notice of Merger or Tender
          Offer Consideration:

	 	Upon the occurrence of a Share-for-Other or
Share-for-Combined Merger Event or Tender Offer that causes the Shares to be converted
into the right to receive more than a single type of consideration (determined based
in part upon any form of stockholder election), Issuer shall reasonably promptly (but
in any event prior to the Merger Date or Tender Offer Date) notify the Calculation
Agent of (x) the weighted average of the types and amounts of consideration received
by the holders of Shares who affirmatively make such an election or (y) if no holder
of Shares affirmatively makes such an election, the weighted average of the types and
amount of consideration actually received by holders of Shares.
	 
	 	 
	          Nationalization, Insolvency or
          Delisting:

	 	Cancellation and Payment (Calculation Agent Determination);
provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity
Definitions, it shall also constitute a Delisting if the Exchange is located in the
United States and the Shares are not immediately re-listed, re-traded or re-quoted on
any of the New York Stock Exchange, the

6

 

	 	 	 
	 

	 	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:

	 	Not Applicable
	 
	 	 
	     (f) Loss of Stock Borrow:

	 	Not Applicable
	 
	 	 
	     (g) Increased Cost of Stock Borrow:

	 	Applicable
	 
	 	 
	          Initial Stock Loan Rate:

	 	0.25% per annum
	 
	 	 
	Hedging Party:

	 	Buyer for all applicable Additional Disruption Events
	 
	 	 
	Determining Party:

	 	Buyer for all applicable Additional Disruption Events
	 
	 	 
	Non-Reliance:

	 	Applicable
	 
	 	 
	Agreements and Acknowledgments Regarding
Hedging Activities:

	 	Applicable, provided, however, that Agreements and
Acknowledgements Regarding Hedging Activities shall be subject to the other respective
representations, warranties and agreements set forth herein.
	 
	 	 
	Additional Acknowledgments:

	 	Applicable
	 
	 	 
	3. Calculation Agent:

	 	Bank.
	 
	 	 
	4. Account Details:
	 	 
	 
	 	 
	     Bank Payment Instructions:
	 	 
	 
	 	 
	               Bank of New York
	 	 
	               ABA 021-000-018
	 	 
	               Deutsche Bank Securities Inc.
	 	 
	               A/C 8900327634
	 	 
	               FFC: 145-91012-10
	 	 
	 
	 	 
	     Issuer Payment Instructions:

	 	To be provided by Issuer.
	 
	 	 
	5. Offices:
	 	 
	 
	 	 
	     The Office of Bank for the Transaction is:
	 	 
	 
	 	 
	          Winchester house, 1 Great Winchester St, London EC2N 2DB
	 
	 	 
	     Issuer is not a multibranch party.
	 	 

7

 

     6. Notices: For purposes of this Confirmation:

     (a) Address for notices or communications to Issuer:

	 	 	 	 	 
	 

	 	To:
	 	Illumina, Inc.
	 

	 	Attn:
	 	Christian O. Henry
	 

	 	 	 	Senior Vice President, Chief Financial Officer
	 

	 	Telephone:
	 	858-202-4508
	 

	 	Facsimile:
	 	858-202-4599
	 
	 	 	 	 
	 

	 	With a copy to:	 	 
	 
	 	 	 	 
	 

	 	Attn:
	 	Glenn Pollner
	 

	 	 	 	Dewey Ballantine LLP
	 

	 	Facsimile:
	 	212-259-6333

     (b) Address for notices or communications to Bank:

	 	 	 	 	 
	 

	 	To:
	 	Deutsche Bank AG London
	 

	 	 	 	C/o Deutsche Bank Seucirties Inc.
	 

	 	 	 	60 Wall Street
	 

	 	 	 	New York, NY 10005
	 
	 	 	 	 
	 

	 	Attn:
	 	Documentation Department:
	 

	 	Telephone:
	 	+ 44 20 7545 8193
	 

	 	Facsimile:
	 	+ 44 11 3336 2009

     7. Representations, Warranties and Agreements:

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

     (i) On the Trade Date, (A) Issuer is not aware of any material nonpublic information
regarding Issuer or the Shares and (B) all reports and other documents filed by Issuer with
the Securities and Exchange Commission pursuant to the 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) taken together with
Issuer’s press release dated the date hereof, do not contain any untrue statement of a
material fact or any omission of a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances in which they were made,
not misleading.

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

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

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

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

8

 

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

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

     (viii) The representations and warranties of Issuer set forth in Section 3 of the
Agreement and Section 1 of the Purchase Agreement (the “Purchase Agreement”) dated as of
the Trade Date between Issuer and Deutsche Bank Securities Inc. and Goldman, Sachs & Co.,
as representatives of the Purchasers (as defined in the Purchase Agreement) party thereto
are true and correct in all material respects.

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

     (x) If the Relevant Price of the Shares is greater than USD37.26 on any of the five
Exchange Business Days immediately preceding the first Expiration Date (determined as if
each such Exchange Business Day were a Valuation Date), then during the period starting on
the first Expiration Date and ending on the last Expiration Date (the “Settlement Period”),
the Shares or securities that are convertible into, or exchangeable or exercisable for
Shares, are not, and shall not be, subject to a “restricted period,” as such term is
defined in Regulation M under the Exchange Act (“Regulation M”) and (B) Issuer shall not
engage in any “distribution,” as such term is defined in Regulation M, other than a
distribution meeting the requirements of 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 Settlement Period.

     (xi) If the Relevant Price of the Shares is greater than USD37.26 on any of the five
Exchange Business Days immediately preceding the first Expiration Date (determined as if
each such Exchange Business Day were a Valuation Date), then during the Settlement Period
and on any other Exercise Date, neither Issuer nor any “affiliate” or “affiliated
purchaser” (each as defined in Rule 10b-18 of the Exchange Act (“Rule 10b-18”)) shall
directly or indirectly (including, without limitation, by means of any cash-settled or
other derivative instrument) purchase, offer to purchase, place any bid or limit order that
would effect a purchase of, or commence any tender offer relating to, any Shares (or an
equivalent interest, including a unit of beneficial interest in a trust or limited
partnership or a depository share) or any security convertible into or exchangeable or
exercisable for Shares.

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

     (c) Each of Bank and Issuer acknowledges that the offer and sale of the Transaction to it is
intended to be exempt from registration under the Securities Act of 1933, as amended (the
"Securities Act”), by virtue of Section 4(2) thereof. Accordingly, Bank represents and warrants to
Issuer that (i) it has the financial ability to bear the economic risk of its investment in the
Transaction and is able to bear a total loss of its investment and its investments in and
liabilities in respect of the Transaction, which it understands are not readily marketable, are not
disproportionate to its net worth, and it is able to bear any loss in connection with the
Transaction, including the loss of its entire investment in the Transaction, (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, (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, (v) its financial condition is such that it has no need for liquidity with respect to its
investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing
or contemplated undertaking or indebtedness and is capable of assessing the
merits of and understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of the Transaction.

9

 

     (d) Each of Bank and Issuer agrees and acknowledges (A) that this Confirmation is (i) a
“securities contract,” as such term is defined in Section 741(7) of Title 11 of the United States
Code (the “Bankruptcy Code”), with respect to which each payment and delivery hereunder is a
“settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a
“swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect
to which each payment and delivery hereunder is a “transfer,” as such term is defined in Section
101(54) of the Bankruptcy Code, and (B) that Bank is entitled to the protections afforded by, among
other sections, Section 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code.

     (e) Issuer shall deliver to Bank an opinion of counsel, dated as of the Trade Date and
reasonably acceptable to Bank in form and substance, with respect to certain matters to be agreed
upon.

     (f) Each party acknowledges and agrees to be bound by the Conduct Rules of the National
Association of Securities Dealers, Inc. applicable to transactions in options, and further agrees
not to violate the position and exercise limits set forth therein.

     8. Other Provisions:

     (a) Alternative Calculations and Payment on Early Termination and on Certain Extraordinary
Events. If, subject to Section 8(j) below, Issuer shall owe Buyer any amount pursuant to Sections
12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of an Insolvency, a
Nationalization, a Tender Offer or a Merger Event, in each case, in which the consideration or
proceeds to be paid to holders of Shares consists solely of cash) or pursuant to Section 6(d)(ii)
of the Agreement (except in the event of an Event of Default in which Issuer is the Defaulting
Party or a Termination Event in which Issuer is the Affected Party, that resulted from an event or
events within Issuer’s control) (a “Payment Obligation”), Issuer shall have the right, in its sole
discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as defined
below) by giving irrevocable telephonic notice to Buyer, 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”). 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 Issuer shall
deliver to Bank the Share Termination
Delivery Property on the date on which
the Payment Obligation would otherwise be
due pursuant to Section 12.7 or 12.9 of
the Equity Definitions or Section
6(d)(ii) of the Agreement, as applicable
(the “Share Termination Payment Date”),
in satisfaction of the Payment
Obligation.
	 
	 	 
	Share Termination Delivery 

Property:

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

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

	 	In the case of a Termination Event, Event
of Default or Delisting, one Share or, in
the case of an Insolvency,
Nationalization, Merger Event or
Tender Offer, a Share or a unit consisting of the number or amount of each type
of property received by a holder of one Share (without

10

 

	 	 	 
	 

	 	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 of Shares, such
holder shall be deemed to have elected to receive (x) the weighted average of
the types and amounts of consideration received by the holders of Shares who
affirmatively make such an election or (y) if no holder of Shares affirmatively
makes such an election, the weighted average of the types and amount of
consideration actually received by holders of Shares.
	 
	 	 
	Failure to Deliver:

	 	Applicable
	 
	 	 
	Other applicable provisions:

	 	If Share Termination Alternative is
applicable, the provisions of Sections 9.8,
9.9, 9.10, 9.11 (except that the
Representation and Agreement contained in
Section 9.11 of the Equity Definitions shall
be modified by excluding any representations
therein relating to restrictions,
obligations, limitations or requirements
under applicable securities laws as a result
of the fact that Seller is the Issuer of the
Shares) and 9.12 of the Equity Definitions
will be applicable as if “Physical
Settlement” applied to the Transaction, and
all references to “Shares” shall be read as
references to “Share Termination Delivery
Units”. If, in the reasonable opinion of
Issuer or Bank on advice of counsel, for any
reason, any securities comprising the Share
Termination Delivery Units deliverable
pursuant to this Section 8(a) would not be
immediately freely transferable by Bank under
Rule 144(k) under the Securities Act, then
Bank may elect to either (x) accept delivery
of such securities notwithstanding any
restriction on transfer or (y) have the
provisions set forth in Section 8(b) below
apply.

The parties hereby agree that, notwithstanding anything to the contrary herein or in the Agreement,
in the event that following the payment of the Premium by Bank to Issuer (i) an Early Termination
Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated
with respect to the Transaction and, as a result, Bank owes to Issuer an amount calculated under
Section 6(e) of the Agreement or (ii) an Extraordinary Event occurs that results in the termination
or cancellation of any Transaction pursuant to Article 12 of the Equity Definitions and, as a
result, Bank owes to Counterparty a Cancellation Amount or other amount in respect of the
Transaction, such amount shall be deemed to be zero.

     (b) Registration/Private Placement Procedures. (i) With respect to the Transaction, the
following provisions shall apply to the extent provided for above opposite the caption “Net Share
Settlement” in Section 2 or in paragraph (a) of this Section 8. If so applicable, then, at the
election of Issuer by notice to Buyer within one Exchange Business Day after the relevant delivery
obligation arises, but in any event at least one Exchange Business Day prior to the date on which
such delivery obligation is due, either (A) all Shares or Share Termination Delivery Units, as the
case may be, delivered by Issuer to Buyer shall be, at the time of such delivery, covered by an
effective registration statement of Issuer for immediate resale by Buyer (such registration
statement and the corresponding prospectus (the “Prospectus”) (including, without limitation, any
sections describing the plan of distribution) in form and content commercially reasonably
satisfactory to Buyer) or (B) Issuer shall deliver additional Shares or Share Termination Delivery
Units, as the case may be, so that the value of such Shares or Share Termination Delivery Units, as
determined by the Calculation Agent in a commercially reasonable manner to reflect an appropriate
liquidity discount, equals the value of the number of Shares or Share Termination Delivery Units
that would otherwise be deliverable if such Shares or Share Termination Delivery Units were freely
tradeable (without prospectus delivery) upon receipt by Buyer (such value, the “Freely Tradeable
Value”); provided that Issuer may not make the election described in this clause (B) if, on the
date of its election, it has taken, or caused to be taken, any action that would make unavailable
either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Issuer to Bank
(or any affiliate
designated by Bank) of the Shares or the exemption pursuant to Section 4(1) or Section 4(3) of
the Securities Act for resales of the Shares by Bank (or any such affiliate of Bank); provided
further that, if

11

 

requested by Bank, Issuer shall make the election described in this clause (B)
with respect to Shares delivered on all Settlement Dates no later than one Exchange Business Day
prior to the first Exercise Date, and the applicable procedures described below shall apply to all
Shares delivered on the Settlement Dates on an aggregate basis. (For the avoidance of doubt, as
used in this paragraph (b) only, the term “Issuer” shall mean the issuer of the relevant
securities, as the context shall require.)

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

     (A) Buyer (or an Affiliate of Buyer designated by Buyer) shall be afforded a
reasonable opportunity to conduct a due diligence investigation with respect to Issuer that
is customary in scope for underwritten offerings of equity securities and that yields
results that are commercially reasonably satisfactory to Buyer or such Affiliate, as the
case may be, in its discretion; and

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

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

     (A) Buyer (or an Affiliate of Buyer designated by Buyer) and any potential
institutional purchaser of any such Shares or Share Termination Delivery Units, as the case
may be, from Buyer or such Affiliate identified by Buyer shall be afforded a commercially
reasonable opportunity to conduct a due diligence investigation in compliance with
applicable law with respect to Issuer customary in scope for private placements of equity
securities (including, without limitation, the right to have made available to them for
inspection all financial and other records, pertinent corporate documents and other
information reasonably requested by them), subject to execution by such recipients of
customary confidentiality agreements reasonably acceptable to Issuer;

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

12

 

     (C) Issuer agrees that any Shares or Share Termination Delivery Units so delivered to
Bank, (i) unless otherwise prohibited by law, may be transferred by and among Bank and its
affiliates, and Issuer shall effect such transfer without any further action by Bank and
(ii) after the minimum “holding period” within the meaning of Rule 144(k) under the
Securities Act has elapsed with respect to such Shares or any securities issued by Issuer
comprising such Share Termination Delivery Units, Issuer shall promptly remove, or cause
the transfer agent for such Shares or securities to remove, any legends referring to any
such restrictions or requirements from such Shares or securities upon delivery by Bank (or
such affiliate of Bank) to Issuer or such transfer agent of seller’s and broker’s
representation letters customarily delivered by Bank in connection with resales of
restricted securities pursuant to Rule 144 under the Securities Act, without any further
requirement for the delivery of any certificate, consent, agreement, opinion of counsel,
notice or any other document, any transfer tax stamps or payment of any other amount or any
other action by Bank (or such affiliate of Bank).

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

     (d) Beneficial Ownership. Notwithstanding anything to the contrary in the Agreement or this
Confirmation, in no event shall Buyer be entitled to receive, or shall be deemed to receive, any
Shares if, upon such receipt of such Shares, either (x) the “beneficial ownership” (within the
meaning of Section 13 of the Exchange Act and the rules promulgated thereunder) of Shares by Buyer,
together with its affiliates subject to aggregation with Buyer under such Section 13 and rules
(collectively, the “Section 13 Buyer Group”), would be equal to or greater than 7.5% or more of the
outstanding Shares or (y) the “Beneficial Ownership” (as defined in the Rights Agreement by and
Between Issuer and Equiserve Trust Company, N.A., as Rights Agent, dated as of May 3, 2001 (the
"Rights Agreement”)) of Buyer, together with all its Affiliates and Associates (each as defined in
the Rights Agreement) (collectively, the “Rights Agreement Buyer Group”), would be equal to or
greater than 13% of the outstanding Shares. If any delivery owed to Buyer hereunder is not made,
in whole or in part, as a result of this provision, Issuer’s obligation to make such delivery shall
not be extinguished and Issuer shall make such delivery as promptly as practicable after, but in no
event later than one Exchange Business Day after, Buyer gives notice to Issuer that such delivery
would not result in either (x) the Section 13 Buyer Group directly or indirectly so beneficially
owning in excess of 7.5% of the outstanding Shares or (y) the Rights Agreement Buyer Group directly
or indirectly so beneficially owning in excess of 13% of the outstanding Shares.

     (e) Limitations on Settlement by Issuer. Notwithstanding anything herein or in the Agreement
to the contrary, in no event shall Issuer be required to deliver Shares in connection with the
Transaction in excess of 4,809,608 (as such number may be adjusted from time to time in accordance
with the provisions hereof) (the “Capped Number”). Issuer represents and warrants (which shall be
deemed to be repeated on each day that the Transaction is outstanding) that the Capped Number is
equal to or less than the number of authorized but unissued Shares of the Issuer that are not
reserved for future issuance in

13

 

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

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

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

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

     (ii) Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the
words “diluting or concentrative” and replacing them with “material”.

     (h) Transfer and Assignment. Buyer may transfer or assign its rights and obligations
hereunder and under the Agreement, in whole or in part, at any time to any person or entity
whatsoever without the consent of Issuer. In connection with any transfer or assignment by Buyer
of its rights and obligations hereunder and under the Agreement, Buyer shall promptly provide
written notice to Issuer of such transfer or assignment, as the case may be, and the identity of
the relevant transferee or assignee.

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

     (j) Netting and Set-off. 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) Issuer shall not net or set
off its obligations under the Transaction against its rights against Buyer under any other
transaction or instrument; and (B) Buyer shall not net or set off any rights of Buyer against
Issuer arising under the Transaction against its obligations to Issuer arising under any other
transaction or instrument.

14

 

     (k) Additional Termination Event. If within the period commencing on the Trade Date and ending
on the second anniversary of the Premium Payment Date, Buyer reasonably determines based on advice
of counsel that it is advisable to terminate a portion of the Transaction so that Buyer’s related
hedging activities will comply with applicable securities laws, rules or regulations, then an
Additional Termination Event shall be deemed to have occurred with respect to which the Transaction
is the sole Affected Transaction and Issuer is the sole Affected Party, provided that with respect
to such Additional Termination Event, Bank may choose to treat part of the Transaction as the sole
Affected Transaction, and, upon the termination of the Affected Transaction, a Transaction with
terms identical to those set forth herein except with a Number of Warrants equal to the unaffected
number of Warrants shall be treated for all purposes as the Transaction, which shall remain in full
force and effect.

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

     (m) Extension of Settlement. Bank may divide any Component into additional Components and
designate the Expiration Date and the Number of Warrants for each such Component if Bank
determines, in its reasonable discretion based on advice of counsel, that such further division is
necessary or advisable to preserve Bank’s hedging activity hereunder in light of existing liquidity
conditions in the cash market or stock loan market or to enable Bank to effect purchases of Shares
in connection with its hedging activity hereunder in a manner that would, if Bank were Issuer or an
affiliated purchaser of Issuer, be compliance with applicable legal and regulatory requirements.

     (n) Governing Law and Waiver of Jury Trial. THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK. EACH PARTY HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THE AGREEMENT, THIS CONFIRMATION OR THE TRANSACTION (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     (o) Submission to Jurisdiction. Each party hereby irrevocably and unconditionally submits for
itself and its property in any legal action or proceeding by the other party against it relating to
the Transaction to which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the exclusive jurisdiction of the Supreme Court of the State of New York,
sitting in New York County, the courts of the United States of America for the Southern District of
New York, and appellate courts from any thereof.

     (p) Amendment. If the Purchasers party to the Purchase Agreement exercise their right to
purchase additional convertible notes as set forth therein, then, at the discretion of Issuer, Bank
and Issuer will either enter into a new confirmation evidencing warrants to be issued by Issuer to
Bank on substantially identical terms as this Confirmation or amend this Confirmation (in each case
on pricing terms substantially identical to those set forth herein, including, for the avoidance of
doubt, at the same Premium per Option) (such additional confirmation or amendment to this
Confirmation to provide for the payment by Bank to Issuer of the additional premium related
thereto).

     (o) Method of Delivery. Whenever delivery of funds or other assets is required hereunder by or
to Issuer, such delivery shall be effected through Deutsche Bank Securities, Inc. (“DBSI”). In
addition,

15

 

all notices, demands and communications of any kind relating to the Transaction between Bank
and Issuer shall be transmitted exclusively through DBSI.

     (p) Counterparts. This Confirmation may be executed in several counterparts, each of which
shall be deemed an original but all of which together shall constitute one and the same
instrument.

16

 

Counterparty hereby agrees to check this Confirmation and to confirm that the foregoing correctly
sets forth the terms of the Transaction by signing in the space provided below and returning to
Deutsche a facsimile of the fully-executed Confirmation to + 44 11 3336 2009. Originals shall be
provided for your execution upon your request.

We are very pleased to have executed the Transaction with you and we look forward to completing
other transactions with you in the near future.

Very truly yours,

DEUTSCHE BANK AG LONDON

	 	 	 	 	 
	By:
	 	/s/ Andrea Leung	 	 
	 

	 	 

Name: Andrea Leung
	 	 
	 

	 	Title: Managing Director	 	 
	By:
	 	/s/ Lee Frankenfield	 	 
	 

	 	 

Name: Lee Frankenfield
	 	 
	 

	 	Title: Managing Director	 	 

DEUTSCHE BANK SECURITIES INC.,

acting solely as Agent in connection with this Transaction

	 	 	 	 	 
	By:
	 	/s/ Andrea Leung	 	 
	 	 	 
	Name: Andrea Leung	 	 
	Title: Managing Director	 	 
	 
	 	 	 	 
	By:
	 	/s/ Lee Frankenfield	 	 
	 	 	 
	Name: Lee Frankenfield	 	 
	Title: Managing Director	 	 

Counterparty hereby agrees to, accepts and confirms the terms of the foregoing as of the Trade Date.

ILLUMINA, INC.

	 	 	 
	By:

	 	/s/ Christian O. Henry
	 

	 	Name: Christian O. Henry
	 

	 	Title: Senior Vice President & Chief Financial Officer

 

 

Annex A

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

	 	 	 	 	 	 	 
	Component Number	 	Number of Warrants	 	Expiration Date
	1

	 	 	60,120	 	 	May 16, 2014
	2

	 	 	60,120	 	 	May 19, 2014
	3

	 	 	60,120	 	 	May 20, 2014
	4

	 	 	60,120	 	 	May 21, 2014
	5

	 	 	60,120	 	 	May 22, 2014
	6

	 	 	60,120	 	 	May 23, 2014
	7

	 	 	60,120	 	 	May 27, 2014
	8

	 	 	60,120	 	 	May 28, 2014
	9

	 	 	60,120	 	 	May 29, 2014
	10

	 	 	60,120	 	 	May 30, 2014
	11

	 	 	60,120	 	 	June 2, 2014
	12

	 	 	60,120	 	 	June 3, 2014
	13

	 	 	60,120	 	 	June 4, 2014
	14

	 	 	60,120	 	 	June 5, 2014
	15

	 	 	60,120	 	 	June 6, 2014
	16

	 	 	60,120	 	 	June 9, 2014
	17

	 	 	60,120	 	 	June 10, 2014
	18

	 	 	60,120	 	 	June 11, 2014
	19

	 	 	60,120	 	 	June 12, 2014
	20

	 	 	60,120	 	 	June 13, 2014
	21

	 	 	60,120	 	 	June 16, 2014
	22

	 	 	60,120	 	 	June 17, 2014
	23

	 	 	60,120	 	 	June 18, 2014
	24

	 	 	60,120	 	 	June 19, 2014
	25

	 	 	60,120	 	 	June 20, 2014
	26

	 	 	60,120	 	 	June 23, 2014
	27

	 	 	60,120	 	 	June 24, 2014
	28

	 	 	60,120	 	 	June 25, 2014
	29

	 	 	60,120	 	 	June 26, 2014
	30

	 	 	60,120	 	 	June 27, 2014
	31

	 	 	60,120	 	 	June 30, 2014
	32

	 	 	60,120	 	 	July 1, 2014
	33

	 	 	60,120	 	 	July 2, 2014
	34

	 	 	60,120	 	 	July 3, 2014
	35

	 	 	60,120	 	 	July 7, 2014
	36

	 	 	60,120	 	 	July 8, 2014
	37

	 	 	60,120	 	 	July 9, 2014
	38

	 	 	60,120	 	 	July 10, 2014
	39

	 	 	60,120	 	 	July 11, 2014
	40

	 	 	60,124	 	 	July 14, 2014

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