Document:

Execution
      Copy

     

     

     

    Confirmation
      of OTC Convertible Note Hedge

     

    
      	Date:	 	June 19, 2007
	 	 	 
	To:	 	Iconix Brand Group, Inc.
              (“Counterparty”)
              Attention:
                Chief Executive Officer 

              Telephone
                No.: 212
                730 0030

              Facsimile
                No.:  212
                391 0127

            
	 	 	 
	From:	 	Merrill Lynch International
              (“MLI”)

    

     

    MLI
      Reference: 078173808

     

    Dear
      Sir
      / Madam:

     

    The
      purpose of this letter agreement (this “Confirmation”)
      is
      to
      amend and restate the terms and conditions of the above-referenced transaction
      entered into among Counterparty, MLI and Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the “Agent”
      or
“MLPFS”)
      on
      the
      Trade Date specified below (the “Transaction”).
      This
      Confirmation amends, restates and supercedes in its entirety the Confirmation
      in
      respect of the Transaction dated as of June 14, 2007. This Confirmation
      constitutes a “Confirmation” as referred to in the Agreement specified
      below.

     

    The
      definitions and provisions contained in the 2000 ISDA Definitions (the
“Swap
      Definitions”)
      and
      the
      2002 ISDA Equity Derivatives Definitions (the “Equity
      Definitions” and,
      together with the Swap Definitions, the “Definitions”),
      in
      each
      case as published by the International Swaps and Derivatives Association,
      Inc.
      are
      incorporated into this Confirmation. In the event of any inconsistency between
      the Swap Definitions and the Equity Definitions, the Equity Definitions will
      govern, and in the event of any inconsistency between the Definitions and this
      Confirmation, this Confirmation will govern. References herein to a
“Transaction” shall be deemed to be references to a “Share Option Transaction”
for purposes of the Equity Definitions and a “Swap Transaction” for the purposes
      of the Swap Definitions.

     

    This
      Confirmation evidences a complete binding agreement between you and us as to
      the
      terms of the Transaction
      to which this Confirmation relates. This Confirmation (notwithstanding anything
      to the contrary herein),
      shall be subject to, and form part of, an agreement in the 1992 form of the
      ISDA
      Master Agreement (Multicurrency Cross Border) (the “Master
      Agreement”
      or
“Agreement”)
      as
      if we
      had executed an agreement in such
      form
      (but without any Schedule and with the elections specified in the “ISDA Master
      Agreement” Section of this Confirmation) on the Trade Date. In the event of any
      inconsistency between the provisions of that Agreement and
      this
      Confirmation, this Confirmation will prevail for the purpose of this
      Transaction. The parties hereby agree that
      the
      Transaction evidenced by this Confirmation shall be the only Transaction subject
      to and governed by the Agreement. 

     

    The
      parties acknowledge that this Confirmation is entered into on the date hereof
      with the understanding that the provisions of the Note Indenture (as defined
      below) that are referred to herein will conform to the descriptions thereof
      in
      the Offering Memorandum dated June 14, 2007 (the "Offering Memorandum") relating
      to the Reference Notes (as defined below). The parties agree that in the event
      of any inconsistency between the Note Indenture and Offering Memorandum, the
      parties will amend this Confirmation in good faith to preserve the intent of
      the
      parties.

     

    The
      terms
      of the particular Transaction to which this Confirmation relates are as follows:
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    General
      Terms: 

     

    
      	
              Trade
                Date:

            	
              June
                14, 2007

            
	 	 
	
              Effective
                Date:

            	
              The
                date of issuance of the Reference Notes.

            
	 	 
	
              Option
                Style:

            	
              Modified
                American, as described under “Settlement Terms” below.

            
	 	 
	
              Option
                Type:

            	
              Call

            
	 	 
	
              Seller:

            	
              MLI

            
	 	 
	
              Buyer:

            	
              Counterparty

            
	 	 
	
              Shares:

            	
              The
                shares of common stock, $0.001 par
                value, of Counterparty (Security Symbol: “ICON” or such other securities
                or property into which the Reference Notes are convertible on the
                date of
                determination in accordance with the Note Indenture.

            
	 	 
	
              Premium:

            	
              $45,781,500.00

            
	 	 
	
              Premium
                Payment Date:

            	
              The
                Effective Date.

            
	 	 
	
              Exchange:

            	
              NASDAQ
                Global Market

            
	 	 
	
              Related
                Exchange(s):

            	
              All
                Exchanges

            
	 	 
	
              Reference
                Notes:

            	
              1.875%
                Convertible Senior Subordinated Notes due 2012, original principal
                amount
                $287,500,000 

            
	 	 
	
              Applicable
                Portion of the Reference
                Notes:

            	
              60.00%.
                For the avoidance of doubt, the Calculation Agent shall, as it deems
                necessary, take into account the Applicable Portion of the Reference
                Notes
                in determining
                or calculating any delivery or payment obligations hereunder, whether
                upon a Conversion Date (as defined below) or otherwise.

            
	 	 
	
              Note
                Indenture:

            	
              The
                indenture, dated as of closing of the issuance of the Reference Notes,
                between Counterparty and The Bank of New York, as trustee relating
                to the
                Reference Notes, as
                the same may be amended, modified or supplemented from time to time.
                Certain defined terms used herein have the meanings assigned to them
                in
                the Note
                Indenture.

            
	 	 
	
              Procedures
                for Exercise:

            	 
	 	 
	
              Potential
                Exercise Dates:

            	
              As
                specified below under “Exercise
                Notice”.

            

    

     

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

     

    
      	
              Conversion
                Date:

            	
              Each
                “conversion date” for any Reference Note pursuant to the terms of the Note
                Indenture occurring
                before the Expiration Date.

               

              The
                principal amount of Reference Notes converted
                on
                each Conversion Date shall be
                the “Conversion
                Amount”
                for
                such Conversion Date.

               

              If
                the Conversion Amount for any Conversion Date is less than the aggregate
                principal amount of Reference Notes then outstanding, then the terms
                of
                this Transaction shall continue to apply, subject to the terms and
                conditions set forth herein,
                with respect to the remaining outstanding principal amount of the
                Reference
                Notes. For the avoidance of doubt, an exchange in lieu of conversion
                pursuant to Section 4.02(d) of the Note Indenture shall not be considered
                a conversion of the Reference Notes surrendered to a financial institution
                pursuant to such Section 4.02(d).

            
	 	 
	
              Exercise
                Period:

            	
              The
                period from and excluding the Effective Date to and including the
                Expiration Date.

            
	 	 
	
              Expiration
                Date:

            	
              The
                earliest of (i) the maturity date of the Reference Notes, (ii) the
                first
                day on which none of such Reference Notes remain outstanding, whether
                by
                virtue of conversion, issuer repurchase or otherwise and (iii) the
                designation
                of an Early Termination Date hereunder in respect of the termination
                of
                the Transaction
                in whole but not in part in accordance with this
                Agreement.

            
	 	 
	
              Exercise
                Notice:

            	
              Notwithstanding
                anything to the contrary in the Equity Definitions, in
                order to exercise any Options hereunder, Buyer shall provide Seller
                with
                written notice (“Exercise
                Notice”)
                prior to 5:00 p.m. New York City time on the Scheduled Trading Day
                prior
                to the first Trading Day in the Conversion Reference Period (both
                as
                defined in the Note Indenture) relating to the Reference Notes converted
                on the relevant Conversion Date of (i) the number of Reference Notes
                being
                converted on the relevant Conversion Date, (ii) the first Trading
                Day in
                the relevant Conversion Reference Period for the Reference Notes,
                and
                (iii) the applicable Cash Percentage (as defined in the Note Indenture),
                if any; provided
                that with respect to Reference Notes converted during the period
                beginning
                on June 1, 2012 and ending on the business day immediately preceding
                the
                Final Maturity Date (as defined in the Note Indenture) of the Reference
                Notes, the related Exercise Notice need not contain the information
                specified in clause (i) of this sentence and, in order to exercise
                any
                Options hereunder, Buyer shall deliver to Seller prior to 5:00 p.m.
                New
                York City time on the Scheduled Trading Day prior to such Final Maturity
                Date a written notice (“Supplemental
                Exercise Notice”)
                setting forth the number of Reference Notes converted during such
                period;
                and provided
                further
                that the delivery by Buyer of an Exercise Notice after the Conversion
                Reference Period has commenced but prior to the close of business
                on the
                fifth Trading Day of such Conversion Reference Period shall be effective,
                in which case the Settlement Method shall be Net Share Settlement
                but
                without regard to subsection (ii) of the definition of Net Share
                Settlement and subject to adjustments to the Net Share Settlement
                Amount
                as specified below.

            

    

     

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    

     

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

            	
              Address:
                Merrill Lynch International

              Merrill
                Lynch Financial Centre

              2
                King Edward Street

              London
                EC1A 1HQ

              Attention:
                Manager, Fixed Income Settlements Facsimile No.: +44 207 995
                2004

              Telephone
                No.: +44 207 995 3769

            
	 	 
	
              Settlement
                Terms:

            	 
	 	 
	
              Settlement
                Method
                Election:

            	
              Net
                Share Settlement or Net Cash Settlement consistent with Buyer’s election
                with respect to the Reference Notes converted on the applicable Conversion
                Date; provided that Net Share Settlement shall apply in the event
                that
                Buyer elects to deliver any Shares in connection with the applicable
                Conversion Date; and provided further that it shall be a condition
                for
                Buyer’s right to elect Net Cash Settlement or settlement pursuant to
                clause (ii) of Net Share Settlement that Buyer delivers to Seller
                with the
                related Exercise Notice a representation signed by Buyer that Buyer
                has
                publicly disclosed all material information necessary for Buyer to
                be able
                to purchase or sell Shares in compliance with applicable federal
                securities laws. 

            
	 	 
	
              Electing
                Party:

            	
              Buyer

            
	 	 
	
              Settlement
                Date:

            	
              Subject
                to the delivery of an Exercise Notice and, if applicable, a Supplemental
                Exercise Notice to the Seller, the third (3rd) Exchange Business
                Day
                following the final Trading Day in the applicable Conversion Reference
                Period in respect of the relevant Conversion
                Date.

            

    

     

    
      
        
        

      

      
        -
          4
          -

        
          

        

      

      
        
        

      

    

     

    
      	
              Net
                Share Settlement:

            	
              In
                lieu of the obligations set forth in Sections 8.1 and 9.1 of the
                Equity
                Definitions, Seller shall deliver to Buyer on the related Settlement
                Date
                (i) a number of Shares equal to the related Net Share Settlement
                Amount,
                provided that in the event that the number of Shares calculated comprises
                any fractional Share, only whole Shares shall be delivered and an
                amount
                equal to the value of such fractional Share shall be payable by Seller
                to
                Buyer in cash and (ii) (x) an amount in cash equal to the cash amount,
                if
                any, paid by Buyer in excess of the principal amount of the applicable
                Reference Notes for such Conversion Date under the Note Indenture
                multiplied by (y) the Applicable Portion of the Reference Notes,
                provided
                that the delivery obligation set forth in clause (i) and (ii) of
                this
                paragraph shall be determined excluding any Shares or cash that
                Counterparty is obligated to deliver to holders of the applicable
                Reference Notes as a result of (a) any discretionary adjustments
                to the
                Conversion Rate by
                Counterparty or (b) in the event of a make-whole adjustment to the
                Conversion Rate following a specified accounting change as described
                in
                the Offering Memorandum under “Description of Notes - Make whole premium
                upon a specified accounting change,” such portion of such adjustment as is
                set forth in clause (B) of the final sentence of the first paragraph
                under
                “Description of Notes - Make whole premium upon a specified accounting
                change” (corresponding to an additional number of Shares equivalent to $20
                per $1,000 principal amount of Reference Notes). The provisions of
                Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions
                shall apply to any delivery of Shares hereunder, provided that the
                Representation and Agreement 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 Buyer is the issuer
                of the
                Shares.

            
	 	 
	
              Net
                Cash Settlement:

            	
              In
                lieu of the obligations set forth in Section 8.1 of the Equity
                Definitions, on the Settlement Date Seller shall deliver to Buyer
                an
                amount in cash equal to the related Net Cash Settlement
                Amount.

            
	 	 
	
              Net
                Share Settlement Amount:

            	
              For
                each Conversion Date, the number of Shares equal to the Shares delivered
                by Buyer for such Conversion Date as required under the Note Indenture
                multiplied by the Applicable Portion of the Reference Notes; provided
                that
                if an Exercise Notice with respect to such Conversion Date has not
                been
                delivered to the Seller prior to the first Trading Day of the Conversion
                Reference Period applicable to such Conversion Date, the Net Share
                Settlement Amount for such Conversion Date shall be adjusted by the
                Calculation Agent to account for the consequences of the reduced
                number of
                Trading Days from the delivery of the Exercise Notice to the end
                of the
                applicable Conversion Reference Period with respect to such Conversion
                Date. No reduction of the Net Share Settlement Amount shall reduce
                the Net
                Share Settlement Amount below zero.

            
	 	 
	
              Net
                Cash Settlement Amount:

            	
              For
                each Conversion Date, an amount equal to the cash delivered by the
                Buyer
                in
                excess of the principal amount of the applicable Reference Notes
                for such
                Conversion
                Date as required under the Note Indenture multiplied by the Applicable
                Portion of
                the Reference Notes, provided that such cash amount shall be determined
                excluding any cash that Counterparty is obligated to deliver to holders
                of
                the applicable
                Reference Notes as a result of any adjustments to the Conversion
                Rate
                described in clauses (a) or (b) under “Net Share Settlement” above.
                

            
	 	 
	
              Adjustments:

            	 

    

     

    
      
        
        

      

      
        -
          5
          -

        
          

        

      

      
        
        

      

    

     

    
      	
              Method
                of Adjustment:

            	
              Calculation
                Agent Adjustment; provided that the terms of this Transaction shall
                be
                adjusted in accordance with adjustments of the Conversion Rate of
                the
                Reference Notes as provided in the Note Indenture; provided further
                (without limitation of the provisions set forth above under “Net Share
                Settlement” and “Net Cash Settlement Amount”) that no adjustment in
                respect of any Potential Adjustment Event or Extraordinary Event
                shall be
                made hereunder as a result of any adjustments to the Conversion Rate
                described in clauses (a) or (b) under “Net Share Settlement” above.
                

            
	 	 
	
              Potential
                Adjustment Event:

            	
              Notwithstanding
                Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event”
                means, subject to the preceding paragraph, the occurrence of an event
                or
                condition that would result in an adjustment of the Conversion Rate
                of the
                Reference Notes pursuant to the Note Indenture.

            
	 	 
	
              Extraordinary
                Events:

            	 
	 	 
	
              Merger
                Events:

            	
              Notwithstanding
                Section 12.1(b) of the Equity Definitions, a “Merger Event” means the
                occurrence of any event or condition to which Section 4.10 of the
                Note
                Indenture applies.

            
	 	 
	
              Consequences
                for Merger Events:

            	 
	 	 
	
              Share-for-Share:

            	
              The
                Transaction will be adjusted in accordance with the Reference Notes
                as
                provided in the Note Indenture.

            
	 	 
	
              Share-for-Other:

            	
              The
                Transaction will be adjusted in accordance with the Reference Notes
                as
                provided in the Note Indenture.

            
	 	 
	
              Share-for-Combined:

            	
              The
                Transaction will be adjusted in accordance with the Reference Notes
                as
                provided in the Note Indenture.

            
	 	 
	
              Tender
                Offer:

            	
              Applicable,
                subject to “Consequences of Tender Offers” below.

              Notwithstanding
                Section 12.1(d) of the Equity Definitions, “Tender Offer” means the
                occurrence of any event or condition set forth in Section 4.06(a)(7)
                of
                the Note Indenture.

            
	 	 
	
              Consequences
                of Tender Offers:

            	
              The
                Transaction will be adjusted in accordance with the Reference Notes
                as
                provided in the Note Indenture.

            
	 	 
	
              Nationalization,
                Insolvency and Delisting:

            	
              Cancellation
                and Payment (Calculation Agent Determination), provided that Buyer
                shall
                have the right to elect in its sole discretion whether any Cancellation
                Amount shall be settled in cash or Shares. In addition to the provisions
                of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute
                a Delisting if the Exchange is located in the United States and the
                Shares
                are not immediately re-listed, re-traded or re-quoted on any of the
                New
                York Stock Exchange, the American Stock Exchange,
                the NASDAQ Global Market or
                the
                NASDAQ Global Select 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:

            	 

    

     

    
      
        
        

      

      
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          6
          -

        
          

        

      

      
        
        

      

    

     

    
      	
              Change
                in Law:

            	
              Applicable

            
	 	 
	
              Failure
                to Deliver:

            	
              Applicable
                as amended by this Agreement. If there is inability in the market
                to
                deliver Shares due to illiquidity on a day that would have been a
                Settlement Date, then the Settlement Date shall be the first succeeding
                Exchange Business Day on which there is no such inability to deliver,
                but
                in no such event shall the Settlement Date be later than the date
                that is
                two (2) Exchange Business Days immediately following what would have
                been
                the Settlement Date but for such inability to deliver.

            
	 	 
	
              Insolvency
                Filing:

            	
              Applicable

            
	 	 
	
              Hedging
                Disruption Event:

            	
              Not
                Applicable

            
	 	 
	
              Increased
                Cost of Hedging:

            	
              Not
                Applicable

            
	 	 
	
              Loss
                of Stock Borrow:

            	
              Not
                Applicable

            
	 	 
	
              Increased
                Cost of Stock Borrow:

            	
              Not
                Applicable

            
	 	 
	
              Hedging
                Party:

            	
              Not
                Applicable

            
	 	 
	
              Determining
                Party:

            	
              Seller

            
	 	 
	
              Non-Reliance:

            	
              Applicable

            
	 	 
	
              Agreements
                and Acknowledgments Regarding Hedging Activities:

            	
              Applicable

            
	 	 
	
              Additional
                Acknowledgments:

            	
              Applicable

            

    

     

    Additional
      Agreements, Representations and Covenants of Buyer, Etc.:

     

    
      	
              1.

            	
              Buyer
                hereby represents and warrants to Seller, on each day from the Trade
                Date
                to and including the earlier of (i) July 20, 2007 and (ii) the date
                by
                which Seller is able to initially complete a hedge of its position
                relating
                to this Transaction, that:

            

    

     

    
      	 	
              a.

            	
              it
                will effect (and cause any “affiliated purchaser” (as defined in Rule
                10b-18
                promulgated under the Securities Exchange Act of 1934, as amended
                (the
                “Exchange
                Act”))
                to
                effect) any purchases, direct or indirect (including by means of
                any
                cash-settled or other derivative instrument), of Shares or
                any security convertible into or exchangeable or exercisable for
                Shares
                solely through Agent in a manner that would not cause any purchases
                by
                Seller of its hedge in connection with this Transaction
                not to comply applicable securities
                laws;

            

    

     

    
      	 	
              b.

            	
              it
                will not engage in, or be engaged in, any “distribution,” as such term is
                defined in Regulation M promulgated under the Exchange Act, other
                than a
                distribution meeting the requirements of the exceptions
                set forth in sections 101(b)(10)
                and 102(b)(7)
                of Regulation M (it being understood that
                Buyer makes no representation pursuant to this clause in respect
                of any
                action or inaction taken
                by Seller or any initial purchaser of the Reference Notes);
                and

            

    

     

    
      
        
        

      

      
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          7
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              c.

            	
              Buyer
                has publicly disclosed all material information necessary for Buyer
                to be
                able to purchase or sell
                Shares in compliance with applicable federal securities laws.

            

    

     

    
      	
              2.

            	
              If
                Buyer would be obligated to pay cash (other than payment of the Premium)
                to, receive cash from, Seller pursuant to the terms of this Agreement
                for any reason without having had the right (other than pursuant
                to this
                paragraph (2)) to elect to
                deliver or receive Shares in satisfaction of such payment obligation,
                then
                Buyer may elect (by giving notice to Seller no later than 8 a.m.
                New York
                time on the Exchange Business Day immediately following the date
                of
                occurrence of the event giving rise to such payment obligation) that
                such
                payment obligation shall be satisfied by the delivery of a number
                of
                Shares (or, if the Shares have been converted
                into other securities or property in connection with an Extraordinary
                Event, a number or amount of
                such other securities or property as a holder of Shares would be
                entitled
                to receive upon the consummation
                or closing of such Extraordinary Event) having a cash value equal
                to the
                amount of such payment obligation.
                Such
                number or amount of Shares or other securities or property to be
                delivered
                shall
                be
                determined by the Calculation Agent
                to
                be
                the number of Shares or number or amount of such other securities
                or property that could be purchased or sold, as applicable, over
                a
                reasonable period of time with the
                cash equivalent of such payment obligation). Settlement relating
                to any
                delivery of Shares or other securities or property pursuant to this
                paragraph (2) shall occur within a reasonable period of time.
                Notwithstanding anything herein or in the Agreement to the contrary,
                the
                aggregate number of Shares that Counterparty may be required to deliver
                to
                MLI under this Transaction shall not exceed 9, 388, 615 Shares, as
                adjusted by the Calculation Agent to account for any subdivision,
                stock-split, stock combination, reclassification or similar dilutive
                or
                anti-dilutive event with respect to the
                Shares.

            

    

     

    
      	
              3.

            	
              Notwithstanding
                any provision in the Note Indenture, this Confirmation or the Agreement
                to
                the contrary, each
                of the “Applicable
                Conversion Rate” (as such term is defined in the Note Indenture), the Net
                Share Settlement
                Amount, the Net Cash Settlement Amount and any other amount hereunder
                determined by reference to the Applicable
                Conversion Rate shall be determined without regard to any provisions
                in
                the Note
                Indenture allowing Counterparty to unilaterally increase the “Applicable
                Conversion Rate.” 

            

    

     

    
      	
              4.

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

            

    

     

    
      	
              5.

            	
              As
                of the Trade Date and each date on which a payment or delivery is
                made by
                Counterparty hereunder, (i) the
                assets of Counterparty at their fair valuation exceed the liabilities
                of
                Counterparty, including contingent liabilities; (ii) the capital
                of
                Counterparty is adequate to conduct its business; and (iii) Counterparty
                has the ability
                to pay its debts and other obligations as such obligations mature
                and does
                not intend to, or believe that
                it will, incur debt or other obligations beyond its ability to pay
                as such
                obligations mature.

            

    

     

    
      	
              6.

            	
              The
                representations and warranties set forth in Section 1 of the Purchase
                Agreement (as defined below) are hereby deemed to be repeated to
                MLI as if
                set forth herein.

            

    

     

    Additional
      Termination Events: 

     

    The
      occurrence of any of the following shall be an Additional Termination Event
      for
      purposes of this Transaction:

     

    
      	
              1.

            	
              Amendment
                Event. If
                an Amendment Event (as defined below) occurs, MLI shall have the
                right to
                designate an Early Termination Date pursuant to Section 6(b) of the
                Agreement
                with respect to this Transaction only and, notwithstanding anything
                to the
                contrary herein, no payments shall be required hereunder in
                connection with such Amendment
                Event.

            

    

     

    
      
        
        

      

      
        -
          8
          -

        
          

        

      

      
        
        

      

    

     

    “Amendment
      Event”
      means
      that the Counterparty, without MLI’s consent, amends, modifies, supplements or
      obtains a waiver of (a) any term
      of
      the Note Indenture (as in effect prior to such amendment, modification,
      supplement or waiver) or the Reference Notes relating to the principal amount,
      coupon,
      maturity, repurchase obligation of the Counterparty or redemption right of
      the
      Counterparty, (b) any term relating to conversion of the Reference Notes,
      including, without limitation, any changes to the conversion price, conversion
      settlement dates or conversion conditions or (c) any term that would require
      consent of the holders
      of 100% of the principal amount of the Reference Notes to amend;

     

    
      	
              2.

            	
              Repayment
                Event. If
                a Repayment Event (as defined below) occurs, MLI shall have the right
                to
                designate an Early Termination Date pursuant to Section 6(b) of the
                Agreement with respect to this Transaction only to
                the extent of the principal amount of Reference Notes that cease
                to be
                outstanding as a result of such Repayment Event and, notwithstanding
                anything to the contrary herein, no payments shall be required hereunder
                in connection with such Repayment
                Event.

            

    

     

    “Repayment
      Event” means
      that (a) any Reference Notes are repurchased (whether in connection with or
      as
      a
      result of a fundamental change, howsoever defined, or for any other reason)
      by
      the Counterparty, (b) any Reference Notes are delivered to the Counterparty
      in
      exchange for delivery of any property or assets of the Counterparty
      or any of its subsidiaries (howsoever described), other than as a result of
      and
      in connection with
      a
      Conversion Date, (c) any principal of any of the Reference Notes is repaid
      prior
      to the Final Maturity Date (as defined in the Note Indenture) (whether following
      acceleration of the Reference Notes or otherwise),
      provided that no payments of cash made in respect of the conversion of a
      Reference Note shall be
      deemed
      a payment of principal under this clause (c), (d) any Reference Notes are
      exchanged by or for the benefit of the holders thereof for any other securities
      of the Counterparty or any of its Affiliates (or any other property, or any
      combination thereof) pursuant to any exchange offer or similar transaction
      or
      (e) any of the Reference Notes is surrendered by Counterparty to the trustee
      for
      cancellation, other than registration of
      a
      transfer of such Reference Notes or as a result of and in connection with a
      Conversion Date.

     

    
      	
              3.

            	
              Initial
                Purchase Event. If
                an Initial Purchase Event (as defined below) occurs, this Transaction
                shall terminate
                automatically in its entirety and, notwithstanding anything to the
                contrary herein, only the payments
                specified below shall be required hereunder in connection with such
                Initial Purchase Event.

            

    

     

    “Initial
      Purchase Event”
      means
      that the transactions contemplated by the Purchase Agreement between the
      Counterparty, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Lehman
      Brothers Inc.,
      dated as
      of June 14, 2007, (the
      “Purchase
      Agreement”)
      shall
      fail to close for any reason by the closing date for the offering of the
      Reference Notes as specified in the Purchase Agreement.

     

    If
      an
      Initial Purchase Event occurs for any reason other than a breach of the Purchase
      Agreement by the Initial Purchasers, then all payments previously made hereunder
      shall be returned to the person making such payment,
      including the Premium, less an amount equal to the sum of (X) the product of
      (a)
      5,442,675 Shares,
      (b) 0.50 and (c)
      an
      amount equal to the excess, if any, of the closing price of the Shares on the
      Trade Date over the closing
      price of the Shares on the date of the Termination Event plus (Y) the
      product of (a) 816,401 Shares,
      (b) 0.50 and (c)
      an
      amount equal to the excess, if any, of the closing price of the Shares on the
      date hereof over the closing
      price of the Shares on the date of the Termination Event (such sum, the
“Break
      Expense”);
      provided that any negative amount shall be replaced by zero and provided further
      that to the extent the Premium has not been paid,
      Buyer shall promptly pay Seller the Break Expense. Seller and Buyer agree that
      actual damages would be difficult to ascertain under these circumstances and
      that the amount of liquidated damages resulting
      from the determination in the preceding sentence is a good faith estimate of
      such damages and not a penalty.

     

    If
      an
      Initial Purchase Event occurs due to a breach of the Purchase Agreement by
      the
      Initial Purchasers, then all payments previously made hereunder, including
      the
      Premium, promptly shall be returned to the person making
      such payment and no payments shall be required hereunder in connection with
      such
      Initial Purchase
      Event.

     

    
      
        
        

      

      
        -
          9
          -

        
          

        

      

      
        
        

      

    

     

    Staggered
      Settlement: 

     

    If
      Seller
      determines reasonably and in good faith that the number of Shares required
      to be
      delivered to Buyer hereunder on any Settlement Date would exceed 8.0% of all
      outstanding Shares, then Seller may, by notice to Buyer on
      or
      prior to such Settlement Date (a “Nominal
      Settlement Date”),
      elect
      to
      deliver the Shares comprising the related
      Net Share Settlement Amount on two or more dates (each, a “Staggered
      Settlement Date”)
      or
      at two
      or more
      times on the Nominal Settlement Date as follows:

     

    
      	
              1.

            	
              in
                such notice, Seller will specify to Buyer the related Staggered Settlement
                Dates (the first of which will be
                such Nominal Settlement Date and the last of which will be no later
                than
                twenty (20) Trading Days following such Nominal Settlement Date)
                or
                delivery times and how it will allocate the Shares it is required
                to
                deliver hereunder among the Staggered Settlement Dates or delivery
                times;

            

    

     

    
      	
              2.

            	
              the
                aggregate number of Shares that Seller will deliver to Buyer hereunder
                on
                all such Staggered Settlement Dates or delivery times will equal
                the
                number of Shares that Seller would otherwise be required to deliver
                on
                such Nominal Settlement Date; and

            

    

     

    
      	
              3.

            	
              the
                Net Share Settlement terms will apply on each Staggered Settlement
                Date,
                except that the Shares comprising
                the Net Share Settlement Amount will be allocated among such Staggered
                Settlement Dates or delivery times as specified by Seller in the
                notice
                referred to in clause (1) above.

            

    

     

    Notwithstanding
      anything herein to the contrary, solely in connection with a Staggered
      Settlement Date, Seller shall be
      entitled to deliver Shares to Buyer from time to time prior to the date on
      which
      Seller would be obligated to deliver
      them to Buyer pursuant to Net Share Settlement terms set forth above, and Buyer
      agrees to credit all such early deliveries against Seller’s obligations
      hereunder in the direct order in which such obligations arise. No such early
      delivery of Shares will accelerate or otherwise affect any of Buyer’s
      obligations to Seller hereunder.

     

    Disposition
      of Hedge Shares: 

     

    Counterparty
      hereby agrees that if, in the reasonable judgment of Seller based on advice
      of
counsel,
      the
      Shares
acquired
      by Seller for the purpose of hedging its obligations pursuant to the Transaction
      (the “Hedge
      Shares”)
      cannot
      be sold in the U.S. public market by Seller without registration under the
      Securities Act, Counterparty shall, at its election: (i) in order to allow
      Seller to sell the Hedge Shares in a registered offering,
      make available to Seller an effective registration statement under the
      Securities Act to cover the resale of such Hedge Shares and (a) enter into
      an
      agreement, in form and substance mutually acceptable to Buyer and Seller,
      substantially in the form of an underwriting agreement for a registered
      offering, (b) provide accountant’s “comfort” letters in customary form for
      registered offerings of equity securities, (c) provide disclosure opinions
      of
      nationally recognized outside counsel
      to Counterparty reasonably acceptable to Seller, (d) provide other customary
      opinions, certificates and closing documents customary in form for registered
      offerings of equity securities and (e) afford Seller a reasonable opportunity
      to
      conduct a “due diligence” investigation with respect to Counterparty customary
      in scope for underwritten offerings of equity securities; provided,
      however, that
      if
      Seller, in its reasonable discretion, is not satisfied with access to due
      diligence materials, the results of its due diligence investigation, or the
      procedures and documentation
      for the registered offering referred to above, then clause (ii) or clause (iii)
      of this Section shall apply at the election of Counterparty; (ii) in order
      to
      allow Seller to sell the Hedge Shares in a private placement, enter into a
      private placement agreement substantially similar to private placement purchase
      agreements customary for private placements of equity securities, in form and
      substance mutually acceptable to Buyer and Seller, including customary
      representations, covenants, blue sky and other governmental filings and/or
      registrations, indemnities to Seller, due diligence rights (for Seller or any
      designated buyer of the Hedge Shares from Seller), opinions and certificates
      and
      such other documentation as is customary for private placements agreements,
      all
      reasonably acceptable to Seller (in which case, the Calculation Agent shall
      make
      any adjustments to the terms of the Transaction that are necessary to compensate
      Seller for any discount from the public market price of the Shares incurred
      on
      the sale of Hedge Shares in a private placement);
      or (iii) purchase the Hedge Shares from Seller at the VWAP Price on such
      Exchange Business Days, and
      in
      the amounts, requested by Seller. “VWAP
      Price”
      means,
      on any Exchange Business Day, the per Share volume-weighted
      average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page
ICON
      <equity>
      VAP (or any successor thereto) in respect of the period from 9:30 a.m. to 4:00
      p.m. (New York City time) on such Exchange Business Day (or if such
      volume-weighted average price is unavailable, the market value of one Share
      on
      such Exchange Business Day, as determined by the Calculation Agent using a
      volume-weighted method).

     

    
      
        
        

      

      
        -
          10
          -

        
          

        

      

      
        
        

      

    

     

    Repurchase
      Notices: 

     

    Counterparty
      shall, on any day on which Counterparty effects any repurchase of Shares,
      promptly give Seller a written notice of such repurchase (a “Repurchase
      Notice”)
      on
      such
      day if following such repurchase, the Notice Percentage as determined on such
      day is (i) greater than 6% and (ii) greater by 0.5% than the Notice Percentage
      included
      in the immediately preceding Repurchase Notice (or, in the case of the first
      such Repurchase Notice, greater than the Notice Percentage as of the date
      hereof). In the event that Counterparty fails to provide Seller with
a
      Repurchase Notice on the day and in the manner specified in this section, then
      Counterparty agrees to indemnify and hold harmless Seller, its affiliates and
      their respective directors, officers, employees, agents and controlling persons
      (Seller and each such person being an “Indemnified
      Party”)
      from
      and
      against any and all losses, claims, damages and liabilities (or actions in
      respect thereof), joint or several, to which such Indemnified Party may become
      subject under applicable securities laws, including without limitation, Section
      16 of the Exchange Act, relating to or arising
      out of such failure. If for any reason the foregoing indemnification is
      unavailable to any Indemnified Party or
      insufficient to hold harmless any Indemnified Party, then Counterparty shall
      contribute, to the maximum extent permitted by law, to the amount paid or
      payable by the Indemnified Party as a result of such loss, claim, damage or
      liability.
      In addition, Counterparty will reimburse any Indemnified Party for all
      reasonable and documented expenses
      (including reasonable counsel fees and expenses) as they are incurred (after
      notice to Counterparty) in connection
      with the investigation of, preparation for or defense or settlement of any
      pending or threatened claim or any
      action, suit or proceeding arising therefrom, whether or not such Indemnified
      Party is a party thereto and whether
      or not such claim, action, suit or proceeding is initiated or brought by or
      on
      behalf of Counterparty. This indemnity
      shall survive the completion of the Transaction contemplated by this
      Confirmation and any assignment and delegation of the Transaction made pursuant
      to this Confirmation or the Agreement shall inure to the benefit of any
      permitted assignee of Seller. Counterparty will not be liable to an Indemnified
      Party under this Indemnity provision to the extent that any
      loss,
      claim, damage, liability or expense is found in a final judgment by a court
      to
      have resulted from that Indemnified Party’s gross
      negligence or willful misconduct. The “Notice
      Percentage”
      as of
      any day is the fraction, expressed as a percentage, (i) the numerator of which
      is the product of (a) the Applicable Portion of the Reference Notes, (b) the
      number of outstanding Reference Notes and (c) a number of
      Shares
      per Reference Note equal to the Conversion Rate (as defined in the Note
      Indenture) and (ii) the denominator
      of which is the number of Shares outstanding on such day.

     

    Conversion
      Rate Adjustment Notices

     

    In
      connection with any adjustments to the Conversion Rate under the terms of the
      Note Indenture, Counterparty shall provide to MLI a copy of the notice of
      adjustment required to be delivered to the Trustee pursuant to Section 4.08
      of
      the Note Indenture concurrently with filing of such notice with the Trustee.
      

     

    
      
        
        

      

      
        -
          11
          -

        
          

        

      

      
        
        

      

    

    

    
      	
              Compliance
                with Securities Laws:

            	
              Each
                party represents and agrees that, in connection with this Transaction
                and
                all related or contemporaneous sales and purchases of Shares by either
                party, Buyer, or in the case of Seller, the person(s) that directly
                influences the specific trading decisions
                of Seller, has complied
                and will comply with the applicable provisions of the Securities
                Act of
                1933,
                as amended (the “Securities
                Act”),
                and
                the Exchange Act, and
                the rules and regulations each thereunder, including, without limitation,
                Section 9(a)
                of, and Rules 10b-5 and 13e and Regulation M under, the Exchange
                Act;
                provided that each party shall be entitled to rely conclusively on
                any
                information communicated by the other party concerning such other
                party’s
                market activities.

               

              Each
                party acknowledges that the offer and sale of the Transaction to
                it is
                intended to be exempt from registration under the Securities Act
                by virtue
                of Section 4(2) thereof. Accordingly, Buyer represents and warrants
                to
                Seller that (i) it has the financial ability to bear the economic
                risk of
                its investment in the Transaction and is able to bear
                a total loss of its investment, (ii) it is an “accredited investor” as
                that term is defined
                in Regulation D as promulgated under the Securities Act and (iii)
                the
                disposition
                of the Transaction is restricted under this Confirmation, the Securities
                Act and state securities laws.

            
	 	 
	 	
              Buyer
                further represents:

               

              (a) Buyer
                is not entering into this Transaction to create actual or apparent
                trading
                activity in the Shares (or any security convertible into or exchangeable
                for Shares) or to raise or depress or otherwise manipulate the price
                of
                the Shares (or any security convertible into or exchangeable for
                Shares);

               

              (b) Buyer
                acknowledges that as of the date hereof and without limiting the
                generality of Section 13.1 of the Equity Definitions, Seller is not
                making
                any representations or warranties
                with respect to the treatment of the Transaction under FASB Statements
                149
                or 150, EITF Issue No. 00-19 (or any successor issue statements)
                or under
                FASB’s
                Liabilities & Equity Project.

            
	 	 
	
              Account
                Details:

            	
              Account
                for payments to Buyer: To
                be advised. 

               

              Account
                for payment to Seller: To
                be advised. 

               

              Accounts
                for deliveries of Shares: To
                be advised.

            
	 	 
	
              Bankruptcy
                Rights:

            	
              In
                the event of Buyer’s bankruptcy, Seller’s rights in connection with this
                Transaction shall
                not exceed those rights held by common shareholders. For the avoidance
                of
                doubt, the
                parties acknowledge and agree that Seller’s rights with respect to any
                other claim arising from this Transaction prior to Buyer’s bankruptcy
                shall remain in full force and effect
                and shall not be otherwise abridged or modified in connection
                herewith.

            
	 	 
	
              Set-Off:

            	
              Each
                party waives any and all rights it may have to set-off, whether arising
                under any agreement,
                applicable law or otherwise.

            
	 	 
	
              Collateral:

            	
              None.

            

    

     

    
      
        
        

      

      
        -
          12
          -

        
          

        

      

      
        
        

      

    

     

    
      	
              Transfer:

            	
              Buyer
                shall have the right to assign its rights and delegate its
                obligations hereunder
                with respect
                to any portion of this Transaction, subject to Seller’s consent, such
                consent not to be unreasonably withheld; provided that such assignment
                or
                transfer shall be subject to receipt by Seller of opinions and documents
                reasonably satisfactory to Seller and effected on terms reasonably
                satisfactory to the Seller with respect to any legal and regulatory
                requirements relevant to the Seller; provided further that Buyer
                shall not
                be released from its obligation to deliver any Exercise Notice or
                its
                obligations pursuant to “Disposition of Hedge Shares”, “Repurchase
                Notices” or “Conversion Rate Adjustment Notices” above. Buyer agrees that
                it shall not be unreasonable for Seller to withhold its consent to
                any
                assignment or transfer if Seller determines, based upon the advice
                of
                outside counsel, that the assignment or transfer would be inadvisable
                because it could cause the hedging activities of Seller, or of Buyer’s
                transferee, related to the transactions contemplated in connection
                with
                the issuance of the Reference Notes to fail to comply with applicable
                securities laws or regulations. 

               

              If,
                as determined in Seller’s sole discretion, its “beneficial ownership”
                (within the meaning of Section 13 of the Exchange Act and rules
                promulgated thereunder) could be deemed to exceed 8% of Counterparty’s
                outstanding Shares,
                Seller may, without Counterparty’s consent, transfer or assign all or any
                part of its rights or obligations under this Transaction to reduce
                such
                “beneficial ownership” to 7.5% to any third party with a rating for its
                (or, if applicable, its Credit Support Provider’s) long term, unsecured
                and unsubordinated indebtedness of AA
                or
                better by Standard & Poor’s Ratings Service or its successor
                (“S&P”), or
                Aa3
                or better by Moody’s Investors Service (“Moody’s”) or,
                if either S&P or Moody’s ceases to rate such debt, at least an
                equivalent rating or better by a substitute rating agency mutually
                agreed
                by Company and Seller. If after Seller’s commercially reasonable efforts,
                Seller is unable to effect such a transfer or assignment on pricing
                terms
                reasonably acceptable to Seller and within a time period reasonably
                acceptable to Seller of a sufficient number of Options to reduce
                Seller’s
                “beneficial ownership” (within the meaning of Section 13 of the Exchange
                Act and rules promulgated thereunder) to 7.5% of Counterparty’s
                outstanding Shares or less, Seller may designate any Exchange Business
                Day
                as an Early Termination Date with respect to a portion (the “Terminated
                Portion”) of
                this Transaction, such that its “beneficial ownership” following such
                partial termination will be equal to or less than 7.5%. In the event
                that
                Seller so designates an Early Termination Date with respect to a
                portion
                of this Transaction, a payment shall be made pursuant to Section
                6 of the
                Agreement as if (i) an Early Termination Date had been designated
                in
                respect of a Transaction having terms identical to this Transaction
                and a
                Number of Options equal to the Terminated Portion, (ii) Counterparty
                shall
                be the sole Affected Party with respect to such partial termination
                and
                (iii) such Transaction shall be the only Terminated Transaction;
                provided
                that if the circumstances giving rise to such partial termination
                arose
                primarily due to the actions of MLI, then MLI and Counterparty both
                shall
                be Affected Parties. In circumstances in which the foregoing provisions
                relating to Seller’s right to transfer or assign its rights or obligations
                under the Transaction are not applicable, Seller may transfer any
                of its
                rights or delegate its obligations under this Transaction with the
                prior
                written consent of Buyer, which consent shall not be unreasonably
                withheld.

            
	 	 
	
              Regulation:

            	
              Seller
                is regulated by The Securities and Futures Authority
                Limited.

            

    

     

    Matters
      Relating to Agent: 

     

    
      	
              1.

            	
              MLPFS
                will be responsible for the operational aspects of the Transactions
                effected through it, such as record keeping, reporting, and confirming
                Transactions to Buyer and Seller;

            

    

     

    
      
        
        

      

      
        -
          13
          -

        
          

        

      

      
        
        

      

    

     

    
      	
              2.

            	
              Unless
                Buyer is a “major U.S. institutional investor,” as defined in Rule 15a-6
                of the Exchange Act, neither Buyer nor Seller will contact the other
                without the direct involvement of
                MLPFS;

            

    

     

    
      	
              3.

            	
              MLPFS’s
                sole role under this Agreement and with respect to any Transaction
                is as
                an agent of Buyer and Seller on a disclosed basis and MLPFS shall
                have no
                responsibility or liability to Buyer or Seller hereunder except for
                gross
                negligence or willful misconduct in the performance of its duties
                as
                agent. MLPFS is authorized to act as agent for Buyer, but only to
                the
                extent expressly required to satisfy the requirements of Rule 15a-6
                under
                the Exchange Act in respect of the Options described hereunder. MLPFS
                shall have no authority to act as agent for Buyer generally or with
                respect to transactions or other matters governed by this
                Agreement, except to the extent expressly required to satisfy the
                requirements of Rule 15a-6 or in accordance
                with express instructions from
                Buyer.

            

    

     

    ISDA
      Master Agreement: 

     

    With
      respect to the Agreement, Seller and Counterparty each agree as
      follows:

     

    “Specified
      Entity” means
      in
      relation to Seller and in relation to Counterparty for purposes of this
      Transaction: Not applicable.

     

    The
      definition of “Specified
      Transaction” in
      Section 14 of this Agreement is hereby amended by adding the text “commodity
      transaction, credit derivative transaction, repurchase or reverse purchase
      transaction, securities lending transaction, futures transaction, prime
      brokerage or margin lending transaction” after the words “foreign exchange
      transaction” in the sixth line thereof and by replacing the words “any other
      similar transaction” in the eighth line thereof with the text “any other
      transaction between the parties”. “Specified Transaction” shall exclude any
      default under a Specified Transaction if caused solely by the general
      unavailability of the currency in which payments under such Specified
      Transaction are denominated due to exchange controls or other governmental
      action.

     

    The
      “Cross
      Default” provisions
      of Section
      5(a)(vi) of
      the
      Agreement will not apply to Seller and will not apply to
      Counterparty.

     

    The
      “Credit
      Event Upon Merger” provisions
      of Section
      5(b)(iv) of
      the
      Agreement will not apply to Seller and will
      not
      apply to Counterparty.

     

    The
      “Automatic
      Early Termination” provision
      of Section
      6(a) of
      the
      Agreement will not apply to Seller or to Counterparty.

     

    Payments
      on Early Termination. For
      the
      purpose of Section
      6(e) of
      the
      Agreement: (i) Loss
      (which
      shall be determined using commercially reasonable procedures in order to produce
      a commercially reasonable result) shall apply; and (ii) the
      Second Method shall apply.

     

    “Termination
      Currency” means
      USD. 

     

    Tax
      Representations.

     

    
      	
              (a)

            	
              Payer
                Representations. For
                the purpose of Section 3(e) of the Agreement, each party represents
                to the
                other party that it is not required by any applicable law, as modified
                by
                the practice of any relevant governmental revenue authority, of any
                Relevant Jurisdiction to make any deduction or withholding for or
                on
                account of any Tax from any payment (other than interest under Section
                2(e), 6(d)(ii), or 6(e) of the Agreement)
                to be made by it to the other party under the Agreement. In making
                this
                representation, each party may rely on (i) the accuracy of any
                representations made by the other party pursuant to Section 3(f)
                of the
                Agreement, (ii) the satisfaction of the agreement contained in Section
                4(a)(i) or 4(a)(iii) of the Agreement, and the accuracy and effectiveness
                of any document provided by the other party pursuant to Section 4(a)(i)
                or
                4(a)(iii) of the Agreement, and (iii) the satisfaction of the agreement
                of
                the other party contained in Section 4(d) of the Agreement; provided
                that
                it will not be a breach of this representation where reliance is
                placed on
                clause (ii) above and the other party does not deliver a form or
                document
                under Section
                4(a)(iii) of the Agreement by reason of material prejudice to its
                legal or
                commercial position.

            

    

     

    
      
        
        

      

      
        -
          14
          -

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)

            	
              Payee
                Representations. For
                the purpose of Section 3(f) of the Agreement, each party makes the
                following representations to the other
                party:

            

    

     

    (i) MLI
      represents that it is a company organized under the laws of England
      and Wales.

     

    (ii)
       MLI
      represents that it is a “non-withholding foreign partnership” for United States
      Federal income tax purposes and each partner of MLI is a “non-U.S. branch of a
      foreign person” for purposes of section 1.1441-4(a)(3)(ii) of the United States
      Treasury Regulations and a “foreign person” for purposes of section
      1.6041-4(a)(4) of the United States Treasury Regulations.

     

    (iii) MLI
      represents that no partner of MLI is (i) a bank that has entered into this
      Agreement in the ordinary course of its trade or business of making loans,
      as
      described in section 881(c)(3)(A) of the Internal Revenue Code of 1986, as
      amended (the “Code”), (ii) a 10% shareholder of Counterparty within the meaning
      of Code section 871(h)(3)(B), or (iii) a controlled foreign corporation with
      respect to Counterparty within the meaning of Code section
      881(c)(3)(C).

     

    (iv) Counterparty
      represents that it is a corporation incorporated in Delaware.

     

    Delivery
      Requirements. For
      the
      purpose of Sections
      4(a)(i)
      and
(ii)
      of the
      Agreement, each party agrees to deliver the following documents:

    
       

      
        	
                (a)

              	
                Tax
                  forms, documents or certificates to be delivered
                  are:

              

      

       

    

    MLI
      agrees to complete (accurately and in a manner reasonably satisfactory to
Counterparty),
      execute, and deliver to Counterparty,
      United States Internal Revenue Service Form W-8 IMY and all required
      attachments, or any successor of such form(s): (i) before the first payment
      date
      under this agreement; (ii) promptly upon reasonable demand by Counterparty;
      and
      (iii) promptly upon learning that any such Form previously provided by MLI
      has
      become obsolete or incorrect.

     

    Counterparty
      agrees to complete (accurately and in a manner reasonably satisfactory to MLI),
      execute, and deliver to MLI,
      United
      States Internal Revenue Service Form W-9 or W-8 BEN, or any successor of such
      form(s): (i) before the first payment date under this agreement; (ii) promptly
      upon reasonable demand by MLI;
      and
      (iii) promptly upon learning that any such form(s) previously provided by
Counterparty
      has
      become obsolete or incorrect.

    
       

      
        	
                (b)

              	
                Other
                  documents to be delivered:

              

      

       

    

    
      	
              Party
                Required to Deliver Document

            	
              Document
                Required to be Delivered

            	
              When
                Required

            	
              Covered
                by Section 3(d) Representation

            
	
              Counterparty

            	
              Evidence
                of the authority and true signatures of each official or representative
                signing this Confirmation

            	
              Upon
                or before execution and delivery of this Confirmation

            	
              Yes

            
	
              Counterparty

            	
              Certified
                copy of the resolution of the Board of Directors or equivalent document
                authorizing the execution and delivery of this Confirmation and such
                other
                certificates as Seller shall reasonably request

            	
              Upon
                or before execution and delivery of this Confirmation

            	
              Yes

            
	
              Seller

            	
              Guarantee
                of its Credit Support Provider, substantially in the form of Exhibit
                A
                attached hereto, together with evidence of the authority and true
                signatures of the signatories, if applicable

            	
              Upon
                or before execution and delivery of this Confirmation

            	
              No

            

    

     

    
      
        
        

      

      
        -
          15
          -

        
          

        

      

      
        
        

      

    

     

    Additional
      Notice Requirements. Counterparty
      hereby agrees to promptly deliver to Seller a copy of all notices and other
      communications required or permitted to be given to the holders of any Reference
      Notes pursuant to the terms of the Note Indenture on the dates so required
      or
      permitted in the Note Indenture and all other notices given and
      other
      communications made by Counterparty in respect of the Reference Notes to holders
      of any Reference Notes.
      Counterparty further covenants to Seller that it shall promptly notify Seller
      of
      each Conversion Date, Amendment Event (including in such notice a detailed
      description of any such amendment) and Repayment Event (identifying in such
      notice the nature of such Repayment Event and the principal amount at maturity
      of Reference Notes being paid).

     

    Addresses
      for Notices. For
      the
      purpose of Section
      12(a) of
      the
      Agreement: Address
      for notices or communications to Seller for all purposes:

     

    
      
        	Address:	 	Merrill Lynch International
	
              	 	Merrill Lynch Financial Centre
	
              	 	2 King Edward Street
	
              	 	London EC1A 1HQ
	
              	 	
              
	Attention:	 	Manager, Fixed Income
                Settlements
	Facsimile No.:	 	44 207 995 2004
	Telephone No.: 	 	44 207 995
                3769

      

    

     

    Additionally,
      a copy of all notices pursuant to Sections
      5,
      6,
      and
7
      as well
      as any changes to Counterparty’s address, telephone number or facsimile number
      should be sent to:

    
       

      
        
          
            	Address:	 	GMI Counsel
	
                  	 	Merrill Lynch World Headquarters
	
                  	 	4 World Financial Center
	
                  	 	New York, New York 10080
	
                  	 	
                  
	Attention:	 	Global Equity Derivatives
	Facsimile No.:	 	212-449-6576
	Telephone No.:	 	212-449-6309

          

        

      

    

     

    Address
      for notices or communications to Counterparty for all
      purposes:

    
       

      
        
          	Address:	 	1450 Broadway, 4th
                  Floor
	
                	 	New York, NY 10018
	
                	 	
                
	Attention:	 	Chief Executive Officer
	Facsimile No.:	 	212 391 0127
	Telephone No.:	 	212 730
                  0030

        

      

    

     

    
      
        
          
          

        

        
          -
            16
            -

          
            

          

        

        
          
          

        

      

       

      In
        addition, in the case of notices or communications
        relating to Section
        5,
        6,
        11
        or
13
        of this
        Agreement, a second copy of any such notice or communication shall be addressed
        to the attention of Counterparty’ General Counsel as
        follows:

       

      
        
          
            	Address:	 	1450 Broadway, 4th
                    Floor
	
                  	 	New York, NY 10018
	
                  	 	
                  
	Attention:	 	General Counsel
	Facsimile No.:	 	212 391 0127
	Telephone No.:	 	212 819 2089; 
	 	 	 
	and	 	 

          

      

    

    
       

      
        
          	Firm:	 	Blank Rome LLP
	Address:	 	405 Lexington Avenue
                  New
                    York, NY 10174

                
	
                	 	
                
	Attention:	 	Robert J. Mittman, Esq.
	Facsimile No.:	 	212 885 5001
	Telephone No.:	 	212 885 5000

        

      

       

    

    Process
      Agent. For
      the
      purpose of Section 13(c) of the Agreement, Seller appoints as its Process
      Agent:

    
       

      
        
          	Address:	 	Merrill Lynch, Pierce, Fenner & Smith
                  Incorporated
                  222
                    Broadway, 16th
                    Floor

                  New
                    York, New York 10038

                
	
                	 	
                
	Attention:	 	Litigation Department
	
                	 	
                
	Counterparty does not
                  appoint a
                  Process Agent.

        

         

      

    

    Multibranch
      Party. For
      the
      purpose of Section
      10(c) of
      the
      Agreement: Neither Seller nor Counterparty is a Multibranch
      Party.

     

    Calculation
      Agent. "Calculation
      Agent" means MLI, acting in good faith and in a commercially reasonable
      manner.

     

    Credit
      Support Document.

     

    Seller:
      Guarantee of ML&Co. in the form attached hereto as Exhibit A. 

     

    Counterparty:
      Not Applicable

     

    Credit
      Support Provider.

     

    With
      respect to Seller: ML&Co.

     

    With
      respect to Counterparty: Not Applicable.

     

    Governing
      Law.  This
      Confirmation will be governed by, and construed in accordance with, the laws
      of
      the State of New York.

     

    Waiver
      of Jury Trial. Each
      party waives, to the fullest extent permitted by applicable law, any right
      it
      may have to a trial by jury in respect of any suit, action or proceeding
      relating to this Transaction. Each party (i) certifies that no representative,
      agent or attorney of the other party has represented, expressly or otherwise,
      that such other party would
      not, in the event of such a suit, action or proceeding, seek to enforce the
      foregoing waiver and (ii) acknowledges
      that it and the other party have been induced to enter into this Transaction,
      as
      applicable, by, among other
      things, the mutual waivers and certifications provided herein.

     

    
      
        
        

      

      
        -
          17
          -

        
          

        

      

      
        
        

      

    

     

    Netting
      of Payments. The
      provisions of Section
      2(c) of
      the
      Agreement shall not be applicable to this Transaction.

     

    Basic
      Representations. Section
      3(a) of
      the
      Agreement is hereby amended by the deletion of “and” at the end of Section
      3(a)(iv); the
      substitution of a semicolon for the period at the end of Section
      3(a)(v) and
      the
      addition of Sections
      3(a)(vi), as
      follows:

     

    Eligible
      Contract Participant; Line of Business. Each
      party 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 (“CEA”),
      this
      Agreement and the Transaction thereunder are subject to individual negotiation
      by the parties and have not been executed or traded on a “trading facility” as
      defined in Section 1a(33)
      of
      the CEA, and it has entered into this Confirmation and this Transaction in
      connection with its business or a line of business (including financial
      intermediation), or the financing of its business.

     

    Acknowledgements:

     

    
      	
              (a)

            	
              The
                parties acknowledge and agree that there are no other representations,
                agreements or other undertakings
                of the parties in relation to this Transaction, except as set forth
                in
                this Confirmation.

            

    

    
       

      
        	
                (b)

              	
                The
                  parties hereto intend for:

              

      

       

    

    
      	 	
              (i)

            	
              Seller
                to be a “financial institution” as defined in Section 101(22) of Title 11
                of the United States Code (the “Bankruptcy
                Code”)
                and this Transaction to be a “securities contract” as defined in Section
                741(7) of the Bankruptcy Code and
                a “swap agreement” as defined in Section 101(53C) of the Bankruptcy
                Code, qualifying
                for the protections of, among other sections, Sections 362(b)(6),
                362
                (b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy
                Code;

            

    

     

    
      	 	
              (ii)

            	
              a
                party’s right to liquidate this Transaction and to exercise any other
                remedies upon the occurrence of any Event of Default under the Agreement
                with respect to the other party to constitute a “contractual right” as
                defined in the Bankruptcy Code;

            

    

     

    
      	 	
              (iii)

            	
              all
                payments for, under or in connection with this Transaction, all payments
                for the Shares and the transfer of such Shares to constitute “settlement
                payments” as defined in the Bankruptcy
                Code.

            

    

     

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

     

    Amendment
      of Definition of Reference Market-Makers. The
      definition of “Reference Market-Makers” in Section
      14
      is
      hereby amended by adding in clause (a) after the word “credit” and before the
      word “and” the words “or to enter into transactions similar in nature to the
      Transaction.”

     

    Consent
      to Recording. Each
      party consents to the recording of the telephone conversations of trading and
      marketing personnel of the parties and their Affiliates in connection with
      this
      Confirmation. To the extent that one party records telephone conversations
      (the
“Recording Party”) and
      the
      other party does not (the “Non-Recording  Party”),
      the Recording Party shall in the event of any dispute, make a complete and
      unedited copy of such party’s tape of the entire day’s conversations with the
      Non-Recording Party’s personnel available to the Non-Recording Party. The
      Recording Party’s tapes may be used by either party in any forum in which a
      dispute is sought to be resolved and the Recording Party will retain tapes
      for a
      consistent period of time in accordance with the Recording Party’s policy unless
      one party notifies the other that a particular transaction is under review
      and
      warrants further retention.

     

    
      
        
        

      

      
        -
          18
          -

        
          

        

      

      
        
        

      

    

     

    Disclosure.
      Each
      party hereby acknowledges and agrees that Seller has authorized Counterparty
      to
      disclose this Transaction and any related hedging transaction between the
      parties if and to the extent that Counterparty reasonably determines
      (after consultation with Seller) that such disclosure is required by law or
      by
      the rules of the NASDAQ Global Market or
      any
      securities exchange. Notwithstanding the foregoing, effective from the date
      of
      commencement of discussions concerning the Transaction, Counterparty and each
      of
      its employees, representatives, or other agents may disclose to any and all
      persons, without limitation of any kind, the tax treatment and tax structure
      of
      the Transaction and all materials of any kind (including opinions or other
      tax
      analyses) that are provided to Counterparty relating to such tax treatment
      and
      tax structure.

     

    Severability.
      If
      any
      term, provision, covenant or condition of this Confirmation, or the application
      thereof to any party
      or
      circumstance, shall be held to be invalid or unenforceable in whole or in part
      for any reason, the remaining terms, provisions, covenants, and conditions
      hereof shall continue in full force and effect as if this Confirmation had
      been
      executed with the invalid or unenforceable provision eliminated, so long as
      this
      Confirmation as so modified continues to express, without material change,
      the
      original intentions of the parties as to the subject matter of this Confirmation
      and the deletion of such portion of this Confirmation will not substantially
      impair the respective benefits or expectations of parties to this Agreement;
      provided,
      however, that
      this
      severability provision shall not be applicable
      if any provision of Section
      2,
      5,
      6
      or
13
      of the
      Agreement (or any definition or provision in Section
      14 to
      the
      extent that it relates to, or is used in or in connection with any such Section)
      shall be so held to be invalid or unenforceable.

     

    Affected
      Parties. For
      purposes of Section
      6(e) of
      the
      Agreement, each party shall be deemed to be an Affected Party in connection
      with
      Illegality and any Tax Event.

     

    [Signatures
      follow on separate page]

     

    
      
        
        

      

      
        -
          19
          -

        
          

        

      

      
        
        

      

    

    
Please
      confirm that the foregoing correctly sets forth the terms of our agreement
      by
      executing the copy of this Confirmation enclosed for that purpose and returning
      it to us.

     

    Very
      truly yours,

     

    MERRILL
      LYNCH INTERNATIONAL 

     

    By:
      /s/ Rhonda
      Garguilo                             

    Name:
      Rhonda Garguilo

    Title:
      Authorized Signatory

     

     

    Confirmed
      as of the date first above written: 

     

    ICONIX
      BRAND GROUP, INC. 

    

    By:
      /s/ Neil
      Cole                                                  

    Name:
      Neil Cole

    Title:
      Chairman, President and CEO

     

     

    Acknowledged
      and agreed as to matters to the Agent:

     

    MERRILL
      LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

     

    Solely
      in
      its capacity as Agent hereunder

     

    By:
      /s/ Brian
      Carroll                                            

    Name:
      Brian Carroll

    Title:
      Authorized Signatory

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Execution
        Copy

       

    

     

    EXHIBIT
      A

     

    GUARANTEE
      OF MERRILL LYNCH & CO., INC.

     

    FOR
      VALUE
      RECEIVED, receipt of which is hereby acknowledged, MERRILL LYNCH & CO.,
      INC., a corporation duly organized and existing under the laws of the State
      of
      Delaware (“ML & Co.”), hereby unconditionally guarantees to Iconix Brand
      Group, Inc. (the “Company”), the due and punctual payment of any and all amounts
      payable by Merrill Lynch International, a company organized under the laws
      of
      England and Wales (“ML”), under the terms of the Confirmation of OTC Convertible
      Note Hedge between the Company and ML (ML as Seller), amended and restated
      as of
      June 18, 2007 (the “Confirmation”), including, in case of default, interest on
      any amount due, when and as the same shall become due and payable, whether
      on
      the scheduled payment dates, at maturity, upon declaration of termination or
      otherwise, according to the terms thereof. In case of the failure of ML
      punctually to make any such payment, ML & Co. hereby agrees to make such
      payment, or cause such payment to be made, promptly upon demand made by the
      Company to ML & Co.; provided, however that delay by the Company in giving
      such demand shall in no event affect ML & Co.’s obligations under this
      Guarantee. This Guarantee shall remain in full force and effect or shall be
      reinstated (as the case may be) if at any time any payment guaranteed hereunder,
      in whole or in part, is rescinded or must otherwise be returned by the Company
      upon the insolvency, bankruptcy or reorganization of ML or otherwise, all as
      though such payment had not been made.

     

    ML
&
      Co. hereby agrees that its obligations hereunder shall be unconditional,
      irrespective of the validity, regularity or enforceability of the Confirmation;
      the absence of any action to enforce the same; any waiver or consent by the
      Company concerning any provisions thereof; the rendering of any judgment against
      ML or any action to enforce the same; or any other circumstances that might
      otherwise constitute a legal or equitable discharge of a guarantor or a defense
      of a guarantor. ML covenants that this guarantee will not be discharged except
      by complete payment of the amounts payable under the Confirmation. This
      Guarantee shall continue to be effective if ML merges or consolidates with
      or
      into another entity, loses its separate legal identity or ceases to
      exist.

     

    ML
&
      Co. hereby waives diligence; presentment; protest; notice of protest,
      acceleration, and dishonor; filing of claims with a court in the event of
      insolvency or bankruptcy of ML; all demands whatsoever, except as noted in
      the
      first paragraph hereof; and any right to require a proceeding first against
      ML.

     

    ML
&
      Co. hereby certifies and warrants that this Guarantee constitutes the valid
      obligation of ML & Co. and complies with all applicable laws.

     

    This
      Guarantee shall be governed by, and construed in accordance with, the laws
      of
      the State of New York.

     

    This
      Guarantee may be terminated at any time by notice by ML & Co. to the Company
      given in accordance with the notice provisions of the Confirmation, effective
      upon receipt of such notice by the Company or such later date as may be
      specified in such notice; provided, however, that this Guarantee shall continue
      in full force and effect with respect to any obligation of ML under the
      Confirmation.

     

    This
      Guarantee becomes effective concurrent with the effectiveness of the
      Confirmation, according to its terms.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, ML & Co. has caused this Guarantee to be executed in its
      corporate name by its duly authorized representative.

     

    MERRILL
      LYNCH & CO., INC.

     

     

    By:_________________________

    Name:

    Title:

    Date:Execution
      Copy

    

    

    

    Confirmation
      of OTC Convertible Note Hedge

     

    
      	Date:	 	June 19, 2007
	
            	 	
            
	To:	 	Iconix Brand Group, Inc.
              (“Counterparty”)
	
            	 	Attention: Chief Executive
              Officer 
	
            	 	Telephone No.: 212
              730 0030
	
            	 	Facsimile No.:  212
              391 0127
	
            	 	
            
	From:	 	Lehman Brothers Inc., acting as Agent
              
	
            	 	
              Lehman
                Brothers OTC Derivatives Inc., acting as Principal (“Lehman
                Brothers”)

            
	 	 	
              Attention:
                Andrew Yare - Transaction Management Group

              Telephone:
                (212) 526-9986

              Facsimile:
                (646) 885-9546

            

    

     

    Global
      Deal ID: 311 7730

     

    Dear
      Sir
      / Madam:

     

    The
      purpose of this letter agreement (this “Confirmation”)
      is
      to
      amend and restate the terms and conditions of the above-referenced transaction
      entered into among Counterparty, Lehman Brothers and Lehman Brothers Inc.,
      (the
“Agent”
      or
“LBI”)
      on
      the
      Trade Date specified below (the “Transaction”).
      This
      Confirmation amends, restates and supercedes in its entirety the Confirmation
      in
      respect of the Transaction dated as of June 14, 2007. This Confirmation
      constitutes a “Confirmation” as referred to in the Agreement specified below.
Lehman
      Brothers OTC Derivatives Inc. is not a member of the Securities Investor
      Protection Corporation.

     

    The
      definitions and provisions contained in the 2000 ISDA Definitions (the
“Swap
      Definitions”)
      and
      the
      2002 ISDA Equity Derivatives Definitions (the “Equity
      Definitions” and,
      together with the Swap Definitions, the “Definitions”),
      in
      each
      case as published by the International Swaps and Derivatives Association,
      Inc.
      are
      incorporated into this Confirmation. In the event of any inconsistency between
      the Swap Definitions and the Equity Definitions, the Equity Definitions will
      govern, and in the event of any inconsistency between the Definitions and this
      Confirmation, this Confirmation will govern. References herein to a
“Transaction” shall be deemed to be references to a “Share Option Transaction”
for purposes of the Equity Definitions and a “Swap Transaction” for the purposes
      of the Swap Definitions.

     

    This
      Confirmation evidences a complete binding agreement between you and us as to
      the
      terms of the Transaction
      to which this Confirmation relates. This Confirmation (notwithstanding anything
      to the contrary herein),
      shall be subject to, and form part of, an agreement in the 1992 form of the
      ISDA
      Master Agreement (Multicurrency Cross Border) (the “Master
      Agreement”
      or
“Agreement”)
      as
      if we
      had executed an agreement in such
      form
      (but without any Schedule and with the elections specified in the “ISDA Master
      Agreement” Section of this Confirmation) on the Trade Date. In the event of any
      inconsistency between the provisions of that Agreement and
      this
      Confirmation, this Confirmation will prevail for the purpose of this
      Transaction. The parties hereby agree that
      the
      Transaction evidenced by this Confirmation shall be the only Transaction subject
      to and governed by the Agreement. 

     

    The
      parties acknowledge that this Confirmation is entered into on the date hereof
      with the understanding that the provisions of the Note Indenture (as defined
      below) that are referred to herein will conform to the descriptions thereof
      in
      the Offering Memorandum dated June 14, 2007 (the "Offering Memorandum") relating
      to the Reference Notes (as defined below). The parties agree that in the event
      of any inconsistency between the Note Indenture and Offering Memorandum, the
      parties will amend this Confirmation in good faith to preserve the intent of
      the
      parties.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
      terms
      of the particular Transaction to which this Confirmation relates are as follows:
      

     

    General
      Terms: 

     

    
      	
              Trade
                Date:

            	 	
              June
                14, 2007

            
	 	 	 
	
              Effective
                Date:

            	 	
              The
                date of issuance of the Reference Notes.

            
	 	 	 
	
              Option
                Style:

            	 	
              Modified
                American, as described under “Settlement Terms” below.

            
	 	 	 
	
              Option
                Type:

            	 	
              Call

            
	 	 	 
	
              Seller:

            	 	
              Lehman
                Brothers

            
	 	 	 
	
              Buyer:

            	 	
              Counterparty

            
	 	 	 
	
              Shares:

            	 	
              The
                shares of common stock, $0.001 par
                value, of Counterparty (Security Symbol: “ICON” or such other securities
                or property into which the Reference Notes are convertible on the
                date of
                determination in accordance with the Note Indenture.

            
	 	 	 
	
              Premium:

            	 	
              $30,521,000.00

            
	 	 	 
	
              Premium
                Payment Date:

            	 	
              The
                Effective Date.

            
	 	 	 
	
              Exchange:

            	 	
              NASDAQ
                Global Market

            
	 	 	 
	
              Related
                Exchange(s):

            	 	
              All
                Exchanges

            
	 	 	 
	
              Reference
                Notes:

            	 	
              1.875%
                Convertible Senior Subordinated Notes due 2012, original principal
                amount
                $287,500,000

            
	 	 	 
	
              Applicable
                Portion of the Reference
                Notes:

            	 	
              40.00%.
                For the avoidance of doubt, the Calculation Agent shall, as it deems
                necessary, take into account the Applicable Portion of the Reference
                Notes
                in determining
                or calculating any delivery or payment obligations hereunder, whether
                upon a Conversion Date (as defined below) or otherwise.

            
	 	 	 
	
              Note
                Indenture:

            	 	
              The
                indenture, dated as of closing of the issuance of the Reference Notes,
                between Counterparty and The Bank of New York, as trustee relating
                to the
                Reference Notes, as
                the same may be amended, modified or supplemented from time to time.
                Certain defined terms used herein have the meanings assigned to them
                in
                the Note
                Indenture.

            
	 	 	 
	
              Procedures
                for Exercise:

            	 	 
	 	 	 
	
              Potential
                Exercise Dates:

            	 	
              As
                specified below under “Exercise Notice”.

            
	 	 	 
	
              Conversion
                Date:

            	 	
              Each
                “conversion date” for any Reference Note pursuant to the terms of the Note
                Indenture occurring
                before the Expiration Date.

               

              The
                principal amount of Reference Notes converted
                on
                each Conversion Date shall be
                the “Conversion
                Amount”
                for
                such Conversion Date.

            

    

     

     

    Global
      Deal ID: 311 7730

     

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              If
                the Conversion Amount for any Conversion Date is less than the aggregate
                principal amount of Reference Notes then outstanding, then the terms
                of
                this Transaction shall continue to apply, subject to the terms and
                conditions set forth herein,
                with respect to the remaining outstanding principal amount of the
                Reference
                Notes. For the avoidance of doubt, an exchange in lieu of conversion
                pursuant to Section 4.02(d) of the Note Indenture shall not be considered
                a conversion of the Reference Notes surrendered to a financial institution
                pursuant to such Section 4.02(d).

            
	 	 	 
	
              Exercise
                Period:

            	 	
              The
                period from and excluding the Effective Date to and including the
                Expiration Date.

            
	 	 	 
	
              Expiration
                Date:

            	 	
              The
                earliest of (i) the maturity date of the Reference Notes, (ii) the
                first
                day on which none of such Reference Notes remain outstanding, whether
                by
                virtue of conversion, issuer repurchase or otherwise and (iii) the
                designation
                of an Early Termination Date hereunder in respect of the termination
                of
                the Transaction
                in whole but not in part in accordance with this
                Agreement.

            
	 	 	 
	
              Exercise
                Notice:

            	 	
              Notwithstanding
                anything to the contrary in the Equity Definitions, in
                order to exercise any Options hereunder, Buyer shall provide Seller
                with
                written notice (“Exercise
                Notice”)
                prior to 5:00 p.m. New York City time on the Scheduled Trading Day
                prior
                to the first Trading Day in the Conversion Reference Period (both
                as
                defined in the Note Indenture) relating to the Reference Notes converted
                on the relevant Conversion Date of (i) the number of Reference Notes
                being
                converted on the relevant Conversion Date, (ii) the first Trading
                Day in
                the relevant Conversion Reference Period for the Reference Notes,
                and
                (iii) the applicable Cash Percentage (as defined in the Note Indenture),
                if any; provided
                that with respect to Reference Notes converted during the period
                beginning
                on June 1, 2012 and ending on the business day immediately preceding
                the
                Final Maturity Date (as defined in the Note Indenture) of the Reference
                Notes, the related Exercise Notice need not contain the information
                specified in clause (i) of this sentence and, in order to exercise
                any
                Options hereunder, Buyer shall deliver to Seller prior to 5:00 p.m.
                New
                York City time on the Scheduled Trading Day prior to such Final Maturity
                Date a written notice (“Supplemental
                Exercise Notice”)
                setting forth the number of Reference Notes converted during such
                period;
                and provided
                further
                that the delivery by Buyer of an Exercise Notice after the Conversion
                Reference Period has commenced but prior to the close of business
                on the
                fifth Trading Day of such Conversion Reference Period shall be effective,
                in which case the Settlement Method shall be Net Share Settlement
                but
                without regard to subsection (ii) of the definition of Net Share
                Settlement and subject to adjustments to the Net Share Settlement
                Amount
                as specified below.

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

            	 	
                        
                Address:     Lehman
                Brothers Inc., acting as Agent

                            
                 Lehman
                Brothers OTC Derivatives Inc., acting as Principal 

                             
                745
                Seventh Avenue

                             
                New
                York, NY 10019

               

              Attention:  Andrew
                Yare - Transaction Management Group

              Telephone:
                212
                526 9986

              Facsimile: 
                646
                885 9546

            
	 	 	 
	
              Settlement
                Terms: 

            	 	 

    

     

     

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              Settlement
                Method
                Election:

            	 	
              Net
                Share Settlement or Net Cash Settlement consistent with Buyer’s election
                with respect to the Reference Notes converted on the applicable Conversion
                Date; provided that Net Share Settlement shall apply in the event
                that
                Buyer elects to deliver any Shares in connection with the applicable
                Conversion Date; and provided further that it shall be a condition
                for
                Buyer’s right to elect Net Cash Settlement or settlement pursuant to
                clause (ii) of Net Share Settlement that Buyer delivers to Seller
                with the
                related Exercise Notice a representation signed by Buyer that Buyer
                has
                publicly disclosed all material information necessary for Buyer to
                be able
                to purchase or sell Shares in compliance with applicable federal
                securities laws. 

            
	 	 	 
	
              Electing
                Party:

            	 	
              Buyer

            
	 	 	 
	
              Settlement
                Date:

            	 	
              Subject
                to the delivery of an Exercise Notice and, if applicable, a Supplemental
                Exercise Notice to the Seller, the third (3rd) Exchange Business
                Day
                following the final Trading Day in the applicable Conversion Reference
                Period in respect of the relevant Conversion Date.

            
	 	 	 
	
              Net
                Share Settlement:

            	 	
              In
                lieu of the obligations set forth in Sections 8.1 and 9.1 of the
                Equity
                Definitions, Seller shall deliver to Buyer on the related Settlement
                Date
                (i) a number of Shares equal to the related Net Share Settlement
                Amount,
                provided that in the event that the number of Shares calculated comprises
                any fractional Share, only whole Shares shall be delivered and an
                amount
                equal to the value of such fractional Share shall be payable by Seller
                to
                Buyer in cash and (ii) (x) an amount in cash equal to the cash amount,
                if
                any, paid by Buyer in excess of the principal amount of the applicable
                Reference Notes for such Conversion Date under the Note Indenture
                multiplied by (y) the Applicable Portion of the Reference Notes,
                provided
                that the delivery obligation set forth in clause (i) and (ii) of
                this
                paragraph shall be determined excluding any Shares or cash that
                Counterparty is obligated to deliver to holders of the applicable
                Reference Notes as a result of (a) any discretionary adjustments
                to the
                Conversion Rate by
                Counterparty or (b) in the event of a make-whole adjustment to the
                Conversion Rate following a specified accounting change as described
                in
                the
                Offering Memorandum under “Description of Notes - Make whole premium upon
                a specified accounting change,”
                such portion of such adjustment as is set forth in clause
                (B) of the final sentence of the first paragraph under “Description of
                Notes - Make whole premium upon a specified accounting change”
                (corresponding to an additional number of Shares equivalent to $20
                per
                $1,000 principal amount of Reference Notes).
                The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 and 9.12
                of the
                Equity Definitions shall apply to any delivery of Shares hereunder,
                provided that the Representation and Agreement 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 Buyer
                is the
                issuer of the Shares.

            
	 	 	 
	
              Net
                Cash Settlement:

            	 	
              In
                lieu of the obligations set forth in Section 8.1 of the Equity
                Definitions, on the Settlement Date Seller shall deliver to Buyer
                an
                amount in cash equal to the related Net Cash Settlement
                Amount.

            
	 	 	 
	
              Net
                Share Settlement Amount:

            	 	
              For
                each Conversion Date, the number of Shares equal to the Shares delivered
                by Buyer for such Conversion Date as required under the Note Indenture
                multiplied by the Applicable Portion of the Reference Notes; provided
                that
                if an Exercise Notice with respect to such Conversion Date has not
                been
                delivered to the Seller prior to the first Trading Day of the Conversion
                Reference Period applicable to such Conversion Date, the Net Share
                Settlement Amount for such Conversion Date shall be adjusted by the
                Calculation Agent to account for the consequences of the reduced
                number of
                Trading Days from the delivery of the Exercise Notice to the end
                of the
                applicable Conversion Reference Period with respect to such Conversion
                Date. No reduction of the Net Share Settlement Amount shall reduce
                the Net
                Share Settlement Amount below zero.

            

    

     

     

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              Net
                Cash Settlement Amount:

            	 	
              For
                each Conversion Date, an amount equal to the cash delivered by the
                Buyer
                in
                excess of the principal amount of the applicable Reference Notes
                for such
                Conversion
                Date as required under the Note Indenture multiplied by the Applicable
                Portion of
                the Reference Notes, provided that such cash amount shall be determined
                excluding any cash that Counterparty is obligated to deliver to holders
                of
                the applicable
                Reference Notes as a result of any adjustments to the Conversion
                Rate
                described in clauses (a) or (b) under “Net Share Settlement” above.
                

            
	 	 	 
	
              Adjustments:

            	 	 
	 	 	 
	
              Method
                of Adjustment:

            	 	
              Calculation
                Agent Adjustment; provided that the terms of this Transaction shall
                be
                adjusted in accordance with adjustments of the Conversion Rate of
                the
                Reference Notes as provided in the Note Indenture; provided further
                (without limitation of the provisions set forth above under “Net Share
                Settlement” and “Net Cash Settlement Amount”) that no adjustment in
                respect of any Potential Adjustment Event or Extraordinary Event
                shall be
                made hereunder as a result of any adjustments to the Conversion Rate
                described in clauses (a) or (b) under “Net Share Settlement” above.
                

            
	 	 	 
	
              Potential
                Adjustment Event:

            	 	
              Notwithstanding
                Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event”
                means, subject to the preceding paragraph, the occurrence of an event
                or
                condition that would result in an adjustment of the Conversion Rate
                of the
                Reference Notes pursuant to the Note Indenture.

            
	 	 	 
	
              Extraordinary
                Events:

            	 	 
	 	 	 
	
              Merger
                Events:

            	 	
              Notwithstanding
                Section 12.1(b) of the Equity Definitions, a “Merger Event” means the
                occurrence of any event or condition to which Section 4.10 of the
                Note
                Indenture applies.

            
	 	 	 
	
              Consequences
                for Merger Events:

            	 	 
	 	 	 
	
              Share-for-Share:

            	 	
              The
                Transaction will be adjusted in accordance with the Reference Notes
                as
                provided in the Note Indenture.

            
	 	 	 
	
              Share-for-Other:

            	 	
              The
                Transaction will be adjusted in accordance with the Reference Notes
                as
                provided in the Note Indenture.

            
	 	 	 
	
              Share-for-Combined:

            	 	
              The
                Transaction will be adjusted in accordance with the Reference Notes
                as
                provided in the Note Indenture.

            
	 	 	 
	
              Tender
                Offer:

            	 	
              Applicable,
                subject to “Consequences of Tender Offers” below.

              Notwithstanding
                Section 12.1(d) of the Equity Definitions, “Tender Offer” means the
                occurrence of any event or condition set forth in Section 4.06(a)(7)
                of
                the Note Indenture.

            

    

     

     

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              Consequences
                of Tender Offers:

            	 	
              The
                Transaction will be adjusted in accordance with the Reference Notes
                as
                provided in the Note Indenture.

            
	 	 	 
	
              Nationalization,
                Insolvency and Delisting:

            	 	
              Cancellation
                and Payment (Calculation Agent Determination), provided that Buyer
                shall
                have the right to elect in its sole discretion whether any Cancellation
                Amount shall be settled in cash or Shares. In addition to the provisions
                of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute
                a Delisting if the Exchange is located in the United States and the
                Shares
                are not immediately re-listed, re-traded or re-quoted on any of the
                New
                York Stock Exchange, the American Stock Exchange,
                the NASDAQ Global Market or
                the
                NASDAQ Global Select 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:

            	 	 
	 	 	 
	
              Change
                in Law:

            	 	
              Applicable

            
	 	 	 
	
              Failure
                to Deliver:

            	 	
              Applicable
                as amended by this Agreement. If there is inability in the market
                to
                deliver Shares due to illiquidity on a day that would have been a
                Settlement Date, then the Settlement Date shall be the first succeeding
                Exchange Business Day on which there is no such inability to deliver,
                but
                in no such event shall the Settlement Date be later than the date
                that is
                two (2) Exchange Business Days immediately following what would have
                been
                the Settlement Date but for such inability to deliver.

            
	 	 	 
	
              Insolvency
                Filing:

            	 	
              Applicable

            
	 	 	 
	
              Hedging
                Disruption Event:

            	 	
              Not
                Applicable

            
	 	 	 
	
              Increased
                Cost of Hedging:

            	 	
              Not
                Applicable

            
	 	 	 
	
              Loss
                of Stock Borrow:

            	 	
              Not
                Applicable

            
	 	 	 
	
              Increased
                Cost of Stock Borrow:

            	 	
              Not
                Applicable

            
	 	 	 
	
              Hedging
                Party:

            	 	
              Not
                Applicable

            
	 	 	 
	
              Determining
                Party:

            	 	
              Seller

            
	 	 	 
	
              Non-Reliance:

            	 	
              Applicable

            
	 	 	 
	
              Agreements
                and Acknowledgments Regarding Hedging Activities:

            	 	
              Applicable

            
	 	 	 
	
              Additional
                Acknowledgments:

            	 	
              Applicable

            

    

     

     

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      Deal ID: 311 7730

     

    
      
        
        

      

      
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    Additional
      Agreements, Representations and Covenants of Buyer, Etc.:

     

    
      	
              1.

            	
              Buyer
                hereby represents and warrants to Seller, on each day from the Trade
                Date
                to and including the earlier of (i) July 20, 2007 and (ii) the date
                by
                which Seller is able to initially complete a hedge of its position
                relating
                to this Transaction, that:

            

    

     

    
      	 	
              a.

            	
              it
                will effect (and cause any “affiliated purchaser” (as defined in Rule
                10b-18
                promulgated under the Securities Exchange Act of 1934, as amended
                (the
                “Exchange
                Act”))
                to
                effect) any purchases, direct or indirect (including by means of
                any
                cash-settled or other derivative instrument), of Shares or
                any security convertible into or exchangeable or exercisable for
                Shares
                solely through Agent in a manner that would not cause any purchases
                by
                Seller of its hedge in connection with this Transaction
                not to comply applicable securities
                laws;

            

    

     

    
      	 	
              b.

            	
              it
                will not engage in, or be engaged in, any “distribution,” as such term is
                defined in Regulation M promulgated under the Exchange Act, other
                than a
                distribution meeting the requirements of the exceptions
                set forth in sections 101(b)(10)
                and 102(b)(7)
                of Regulation M (it being understood that
                Buyer makes no representation pursuant to this clause in respect
                of any
                action or inaction taken
                by Seller or any initial purchaser of the Reference Notes);
                and

            

    

     

    
      	 	
              c.

            	
              Buyer
                has publicly disclosed all material information necessary for Buyer
                to be
                able to purchase or sell
                Shares in compliance with applicable federal securities laws.

            

    

     

    
      	
              2.

            	
              If
                Buyer would be obligated to pay cash (other than payment of the Premium)
                to, receive cash from, Seller pursuant to the terms of this Agreement
                for any reason without having had the right (other than pursuant
                to this
                paragraph (2)) to elect to
                deliver or receive Shares in satisfaction of such payment obligation,
                then
                Buyer may elect (by giving notice to Seller no later than 8 a.m.
                New York
                time on the Exchange Business Day immediately following the date
                of
                occurrence of the event giving rise to such payment obligation) that
                such
                payment obligation shall be satisfied by the delivery of a number
                of
                Shares (or, if the Shares have been converted
                into other securities or property in connection with an Extraordinary
                Event, a number or amount of
                such other securities or property as a holder of Shares would be
                entitled
                to receive upon the consummation
                or closing of such Extraordinary Event) having a cash value equal
                to the
                amount of such payment obligation.
                Such
                number or amount of Shares or other securities or property to be
                delivered
                shall
                be
                determined by the Calculation Agent
                to
                be
                the number of Shares or number or amount of such other securities
                or property that could be purchased or sold, as applicable, over
                a
                reasonable period of time with the
                cash equivalent of such payment obligation). Settlement relating
                to any
                delivery of Shares or other securities or property pursuant to this
                paragraph (2) shall occur within a reasonable period of time.
                Notwithstanding anything herein or in the Agreement to the contrary,
                the
                aggregate number of Shares that Counterparty may be required to deliver
                to
                Lehman Brothers under this Transaction shall not exceed 6,259,076
                Shares,
                as adjusted by the Calculation Agent to account for any subdivision,
                stock-split, stock combination, reclassification or similar dilutive
                or
                anti-dilutive event with respect to the
                Shares.

            

    

     

    
      	
              3.

            	
              Notwithstanding
                any provision in the Note Indenture, this Confirmation or the Agreement
                to
                the contrary, each
                of the “Applicable
                Conversion Rate” (as such term is defined in the Note Indenture), the Net
                Share Settlement
                Amount, the Net Cash Settlement Amount and any other amount hereunder
                determined by reference to the Applicable
                Conversion Rate shall be determined without regard to any provisions
                in
                the Note
                Indenture allowing Counterparty to unilaterally increase the “Applicable
                Conversion Rate.” 

            

    

     

    
      	
              4.

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

            

    

     

     

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      Deal ID: 311 7730

     

    
      
        
        

      

      
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              5.

            	
              As
                of the Trade Date and each date on which a payment or delivery is
                made by
                Counterparty hereunder, (i) the
                assets of Counterparty at their fair valuation exceed the liabilities
                of
                Counterparty, including contingent liabilities; (ii) the capital
                of
                Counterparty is adequate to conduct its business; and (iii) Counterparty
                has the ability
                to pay its debts and other obligations as such obligations mature
                and does
                not intend to, or believe that
                it will, incur debt or other obligations beyond its ability to pay
                as such
                obligations mature.

            

    

     

    
      	
              6.

            	
              The
                representations and warranties set forth in Section 1 of the Purchase
                Agreement (as defined below) are hereby deemed to be repeated to
                Lehman
                Brothers as if set forth herein.

            

    

     

    Additional
      Termination Events: 

     

    The
      occurrence of any of the following shall be an Additional Termination Event
      for
      purposes of this Transaction:

     

    
      	
              1.

            	
              Amendment
                Event. If
                an Amendment Event (as defined below) occurs, Lehman Brothers shall
                have
                the right to designate an Early Termination Date pursuant to Section
                6(b)
                of the Agreement
                with respect to this Transaction only and, notwithstanding anything
                to the
                contrary herein, no payments shall be required hereunder in
                connection with such Amendment
                Event.

            

    

     

    “Amendment
      Event”
      means
      that the Counterparty, without Lehman Brothers’ consent, amends, modifies,
      supplements or obtains a waiver of (a) any term
      of
      the Note Indenture (as in effect prior to such amendment, modification,
      supplement or waiver) or the Reference Notes relating to the principal amount,
      coupon,
      maturity, repurchase obligation of the Counterparty or redemption right of
      the
      Counterparty, (b) any term relating to conversion of the Reference Notes,
      including, without limitation, any changes to the conversion price, conversion
      settlement dates or conversion conditions or (c) any term that would require
      consent of the holders
      of 100% of the principal amount of the Reference Notes to amend;

     

    
      	
              2.

            	
              Repayment
                Event. If
                a Repayment Event (as defined below) occurs, Lehman Brothers shall
                have
                the right to designate an Early Termination Date pursuant to Section
                6(b)
                of the Agreement with respect to this Transaction only to
                the extent of the principal amount of Reference Notes that cease
                to be
                outstanding as a result of such Repayment Event and, notwithstanding
                anything to the contrary herein, no payments shall be required hereunder
                in connection with such Repayment
                Event.

            

    

     

    “Repayment
      Event” means
      that (a) any Reference Notes are repurchased (whether in connection with or
      as
      a
      result of a fundamental change, howsoever defined, or for any other reason)
      by
      the Counterparty, (b) any Reference Notes are delivered to the Counterparty
      in
      exchange for delivery of any property or assets of the Counterparty
      or any of its subsidiaries (howsoever described), other than as a result of
      and
      in connection with
      a
      Conversion Date, (c) any principal of any of the Reference Notes is repaid
      prior
      to the Final Maturity Date (as defined in the Note Indenture) (whether following
      acceleration of the Reference Notes or otherwise),
      provided that no payments of cash made in respect of the conversion of a
      Reference Note shall be
      deemed
      a payment of principal under this clause (c), (d) any Reference Notes are
      exchanged by or for the benefit of the holders thereof for any other securities
      of the Counterparty or any of its Affiliates (or any other property, or any
      combination thereof) pursuant to any exchange offer or similar transaction
      or
      (e) any of the Reference Notes is surrendered by Counterparty to the trustee
      for
      cancellation, other than registration of
      a
      transfer of such Reference Notes or as a result of and in connection with a
      Conversion Date.

     

    
      	
              3.

            	
              Initial
                Purchase Event. If
                an Initial Purchase Event (as defined below) occurs, this Transaction
                shall terminate
                automatically in its entirety and, notwithstanding anything to the
                contrary herein, only the payments
                specified below shall be required hereunder in connection with such
                Initial Purchase Event.

            

    

     

    “Initial
      Purchase Event”
      means
      that the transactions contemplated by the Purchase Agreement between the
      Counterparty, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Lehman
      Brothers Inc.,
      dated as
      of June 14, 2007, (the
      “Purchase
      Agreement”)
      shall
      fail to close for any reason by the closing date for the offering of the
      Reference Notes as specified in the Purchase Agreement.

     

     

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      Deal ID: 311 7730

     

    
      
        
        

      

      
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    If
      an
      Initial Purchase Event occurs for any reason other than a breach of the Purchase
      Agreement by the Initial Purchasers, then all payments previously made hereunder
      shall be returned to the person making such payment,
      including the Premium, less an amount equal to the sum of (X) the product of
      (a)
3,628,450
      Shares,
      (b) 0.50 and (c)
      an
      amount equal to the excess, if any, of the closing price of the Shares on the
      Trade Date over the closing
      price of the Shares on the date of the Termination Event plus (Y) the
      product of (a) 544,268 Shares,
      (b) 0.50 and (c)
      an
      amount equal to the excess, if any, of the closing price of the Shares on the
      date hereof over the closing
      price of the Shares on the date of the Termination Event (such sum, the
“Break
      Expense”);
      provided that any negative amount shall be replaced by zero and provided further
      that to the extent the Premium has not been paid,
      Buyer shall promptly pay Seller the Break Expense. Seller and Buyer agree that
      actual damages would be difficult to ascertain under these circumstances and
      that the amount of liquidated damages resulting
      from the determination in the preceding sentence is a good faith estimate of
      such damages and not a penalty.

     

    If
      an
      Initial Purchase Event occurs due to a breach of the Purchase Agreement by
      the
      Initial Purchasers, then all payments previously made hereunder, including
      the
      Premium, promptly shall be returned to the person making
      such payment and no payments shall be required hereunder in connection with
      such
      Initial Purchase
      Event.

     

    Staggered
      Settlement: 

     

    If
      Seller
      determines reasonably and in good faith that the number of Shares required
      to be
      delivered to Buyer hereunder on any Settlement Date would exceed 8.0% of all
      outstanding Shares, then Seller may, by notice to Buyer on
      or
      prior to such Settlement Date (a “Nominal
      Settlement Date”),
      elect
      to
      deliver the Shares comprising the related
      Net Share Settlement Amount on two or more dates (each, a “Staggered
      Settlement Date”)
      or
      at two
      or more
      times on the Nominal Settlement Date as follows:

     

    
      	
              1.

            	
              in
                such notice, Seller will specify to Buyer the related Staggered Settlement
                Dates (the first of which will be
                such Nominal Settlement Date and the last of which will be no later
                than
                twenty (20) Trading Days following such Nominal Settlement Date)
                or
                delivery times and how it will allocate the Shares it is required
                to
                deliver hereunder among the Staggered Settlement Dates or delivery
                times;

            

    

     

    
      	
              2.

            	
              the
                aggregate number of Shares that Seller will deliver to Buyer hereunder
                on
                all such Staggered Settlement Dates or delivery times will equal
                the
                number of Shares that Seller would otherwise be required to deliver
                on
                such Nominal Settlement Date; and

            

    

     

    
      	
              3.

            	
              the
                Net Share Settlement terms will apply on each Staggered Settlement
                Date,
                except that the Shares comprising
                the Net Share Settlement Amount will be allocated among such Staggered
                Settlement Dates or delivery times as specified by Seller in the
                notice
                referred to in clause (1) above.

            

    

     

    Notwithstanding
      anything herein to the contrary, solely in connection with a Staggered
      Settlement Date, Seller shall be
      entitled to deliver Shares to Buyer from time to time prior to the date on
      which
      Seller would be obligated to deliver
      them to Buyer pursuant to Net Share Settlement terms set forth above, and Buyer
      agrees to credit all such early deliveries against Seller’s obligations
      hereunder in the direct order in which such obligations arise. No such early
      delivery of Shares will accelerate or otherwise affect any of Buyer’s
      obligations to Seller hereunder.

     

    Disposition
      of Hedge Shares: 

     

    Counterparty
      hereby agrees that if, in the reasonable judgment of Seller based on advice
      of
counsel,
      the
      Shares
acquired
      by Seller for the purpose of hedging its obligations pursuant to the Transaction
      (the “Hedge
      Shares”)
      cannot
      be sold in the U.S. public market by Seller without registration under the
      Securities Act, Counterparty shall, at its election: (i) in order to allow
      Seller to sell the Hedge Shares in a registered offering,
      make available to Seller an effective registration statement under the
      Securities Act to cover the resale of such Hedge Shares and (a) enter into
      an
      agreement, in form and substance mutually acceptable to Buyer and Seller,
      substantially in the form of an underwriting agreement for a registered
      offering, (b) provide accountant’s “comfort” letters in customary form for
      registered offerings of equity securities, (c) provide disclosure opinions
      of
      nationally recognized outside counsel
      to Counterparty reasonably acceptable to Seller, (d) provide other customary
      opinions, certificates and closing documents customary in form for registered
      offerings of equity securities and (e) afford Seller a reasonable opportunity
      to
      conduct a “due diligence” investigation with respect to Counterparty customary
      in scope for underwritten offerings of equity securities; provided,
      however, that
      if
      Seller, in its reasonable discretion, is not satisfied with access to due
      diligence materials, the results of its due diligence investigation, or the
      procedures and documentation
      for the registered offering referred to above, then clause (ii) or clause (iii)
      of this Section shall apply at the election of Counterparty; (ii) in order
      to
      allow Seller to sell the Hedge Shares in a private placement, enter into a
      private placement agreement substantially similar to private placement purchase
      agreements customary for private placements of equity securities, in form and
      substance mutually acceptable to Buyer and Seller, including customary
      representations, covenants, blue sky and other governmental filings and/or
      registrations, indemnities to Seller, due diligence rights (for Seller or any
      designated buyer of the Hedge Shares from Seller), opinions and certificates
      and
      such other documentation as is customary for private placements agreements,
      all
      reasonably acceptable to Seller (in which case, the Calculation Agent shall
      make
      any adjustments to the terms of the Transaction that are necessary to compensate
      Seller for any discount from the public market price of the Shares incurred
      on
      the sale of Hedge Shares in a private placement);
      or (iii) purchase the Hedge Shares from Seller at the VWAP Price on such
      Exchange Business Days, and
      in
      the amounts, requested by Seller. “VWAP
      Price”
      means,
      on any Exchange Business Day, the per Share volume-weighted
      average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page
ICON
      <equity>
      VAP (or any successor thereto) in respect of the period from 9:30 a.m. to 4:00
      p.m. (New York City time) on such Exchange Business Day (or if such
      volume-weighted average price is unavailable, the market value of one Share
      on
      such Exchange Business Day, as determined by the Calculation Agent using a
      volume-weighted method).

     

     

    Global
      Deal ID: 311 7730

     

    
      
        
        

      

      
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    Repurchase
      Notices: 

     

    Counterparty
      shall, on any day on which Counterparty effects any repurchase of Shares,
      promptly give Seller a written notice of such repurchase (a “Repurchase
      Notice”)
      on
      such
      day if following such repurchase, the Notice Percentage as determined on such
      day is (i) greater than 6% and (ii) greater by 0.5% than the Notice Percentage
      included
      in the immediately preceding Repurchase Notice (or, in the case of the first
      such Repurchase Notice, greater than the Notice Percentage as of the date
      hereof). In the event that Counterparty fails to provide Seller with
a
      Repurchase Notice on the day and in the manner specified in this section, then
      Counterparty agrees to indemnify and hold harmless Seller, its affiliates and
      their respective directors, officers, employees, agents and controlling persons
      (Seller and each such person being an “Indemnified
      Party”)
      from
      and
      against any and all losses, claims, damages and liabilities (or actions in
      respect thereof), joint or several, to which such Indemnified Party may become
      subject under applicable securities laws, including without limitation, Section
      16 of the Exchange Act, relating to or arising
      out of such failure. If for any reason the foregoing indemnification is
      unavailable to any Indemnified Party or
      insufficient to hold harmless any Indemnified Party, then Counterparty shall
      contribute, to the maximum extent permitted by law, to the amount paid or
      payable by the Indemnified Party as a result of such loss, claim, damage or
      liability.
      In addition, Counterparty will reimburse any Indemnified Party for all
      reasonable and documented expenses
      (including reasonable counsel fees and expenses) as they are incurred (after
      notice to Counterparty) in connection
      with the investigation of, preparation for or defense or settlement of any
      pending or threatened claim or any
      action, suit or proceeding arising therefrom, whether or not such Indemnified
      Party is a party thereto and whether
      or not such claim, action, suit or proceeding is initiated or brought by or
      on
      behalf of Counterparty. This indemnity
      shall survive the completion of the Transaction contemplated by this
      Confirmation and any assignment and delegation of the Transaction made pursuant
      to this Confirmation or the Agreement shall inure to the benefit of any
      permitted assignee of Seller. Counterparty will not be liable to an Indemnified
      Party under this Indemnity provision to the extent that any
      loss,
      claim, damage, liability or expense is found in a final judgment by a court
      to
      have resulted from that Indemnified Party’s gross
      negligence or willful misconduct. The “Notice
      Percentage”
      as of
      any day is the fraction, expressed as a percentage, (i) the numerator of which
      is the product of (a) the Applicable Portion of the Reference Notes, (b) the
      number of outstanding Reference Notes and (c) a number of
      Shares
      per Reference Note equal to the Conversion Rate (as defined in the Note
      Indenture) and (ii) the denominator
      of which is the number of Shares outstanding on such day.

     

     

    Global
      Deal ID: 311 7730

     

    
      
        
        

      

      
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    Conversion
      Rate Adjustment Notices

     

    In
      connection with any adjustments to the Conversion Rate under the terms of the
      Note Indenture, Counterparty shall provide to Lehman Brothers a copy of the
      notice of adjustment required to be delivered to the Trustee pursuant to Section
      4.08 of the Note Indenture concurrently with filing of such notice with the
      Trustee. 

    

    
      	
              Compliance
                with Securities Laws:

            	
              Each
                party represents and agrees that, in connection with this Transaction
                and
                all related or contemporaneous sales and purchases of Shares by either
                party, Buyer, or in the case of Seller, the person(s) that directly
                influences the specific trading decisions
                of Seller, has complied
                and will comply with the applicable provisions of the Securities
                Act of
                1933,
                as amended (the “Securities
                Act”),
                and
                the Exchange Act, and
                the rules and regulations each thereunder, including, without limitation,
                Section 9(a)
                of, and Rules 10b-5 and 13e and Regulation M under, the Exchange
                Act;
                provided that each party shall be entitled to rely conclusively on
                any
                information communicated by the other party concerning such other
                party’s
                market activities.

               

              Each
                party acknowledges that the offer and sale of the Transaction to
                it is
                intended to be exempt from registration under the Securities Act
                by virtue
                of Section 4(2) thereof. Accordingly, Buyer represents and warrants
                to
                Seller that (i) it has the financial ability to bear the economic
                risk of
                its investment in the Transaction and is able to bear
                a total loss of its investment, (ii) it is an “accredited investor” as
                that term is defined
                in Regulation D as promulgated under the Securities Act and (iii)
                the
                disposition
                of the Transaction is restricted under this Confirmation, the Securities
                Act and state securities laws.

            
	 	 
	 	
              Buyer
                further represents:

               

              (a) Buyer
                is not entering into this Transaction to create actual or apparent
                trading
                activity in the Shares (or any security convertible into or exchangeable
                for Shares) or to raise or depress or otherwise manipulate the price
                of
                the Shares (or any security convertible into or exchangeable for
                Shares);

               

              (b) Buyer
                acknowledges that as of the date hereof and without limiting the
                generality of Section 13.1 of the Equity Definitions, Seller is not
                making
                any representations or warranties
                with respect to the treatment of the Transaction under FASB Statements
                149
                or 150, EITF Issue No. 00-19 (or any successor issue statements)
                or under
                FASB’s
                Liabilities & Equity Project.

            
	 	 
	
              Account
                Details:

            	
              Account
                for payments to Buyer: To
                be advised 

               

              Account
                for payment to Seller: To
                be advised 

               

              Accounts
                for deliveries of Shares: To
                be advised

            
	 	 
	
              Bankruptcy
                Rights:

            	
              In
                the event of Buyer’s bankruptcy, Seller’s rights in connection with this
                Transaction shall
                not exceed those rights held by common shareholders. For the avoidance
                of
                doubt, the
                parties acknowledge and agree that Seller’s rights with respect to any
                other claim arising from this Transaction prior to Buyer’s bankruptcy
                shall remain in full force and effect
                and shall not be otherwise abridged or modified in connection
                herewith.

            
	 	 
	
              Set-Off:

            	
              Each
                party waives any and all rights it may have to set-off, whether arising
                under any agreement,
                applicable law or otherwise.

            

    

     

     

    Global
      Deal ID: 311 7730

     

    
      
        
        

      

      
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              Collateral:

            	
              None.

            
	 	 
	
              Transfer:

            	
              Buyer
                shall have the right to assign its rights and delegate its
                obligations hereunder
                with respect
                to any portion of this Transaction, subject to Seller’s consent, such
                consent not to be unreasonably withheld; provided that such assignment
                or
                transfer shall be subject to receipt by Seller of opinions and documents
                reasonably satisfactory to Seller and effected on terms reasonably
                satisfactory to the Seller with respect to any legal and regulatory
                requirements relevant to the Seller; provided further that Buyer
                shall not
                be released from its obligation to deliver any Exercise Notice or
                its
                obligations pursuant to “Disposition of Hedge Shares”, “Repurchase
                Notices” or “Conversion Rate Adjustment Notices” above. Buyer agrees that
                it shall not be unreasonable for Seller to withhold its consent to
                any
                assignment or transfer if Seller determines, based upon the advice
                of
                outside counsel, that the assignment or transfer would be inadvisable
                because it could cause the hedging activities of Seller, or of Buyer’s
                transferee, related to the transactions contemplated in connection
                with
                the issuance of the Reference Notes to fail to comply with applicable
                securities laws or regulations. 

               

              If,
                as determined in Seller’s sole discretion, its “beneficial ownership”
                (within the meaning of Section 13 of the Exchange Act and rules
                promulgated thereunder) could be deemed to exceed 8% of Counterparty’s
                outstanding Shares,
                Seller may, without Counterparty’s consent, transfer or assign all or any
                part of its rights or obligations under this Transaction to reduce
                such
                “beneficial ownership” to 7.5% to any third party with a rating for its
                (or, if applicable, its Credit Support Provider’s) long term, unsecured
                and unsubordinated indebtedness of AA
                or
                better by Standard & Poor’s Ratings Service or its successor
                (“S&P”), or
                Aa3
                or better by Moody’s Investors Service (“Moody’s”) or,
                if either S&P or Moody’s ceases to rate such debt, at least an
                equivalent rating or better by a substitute rating agency mutually
                agreed
                by Company and Seller. If after Seller’s commercially reasonable efforts,
                Seller is unable to effect such a transfer or assignment on pricing
                terms
                reasonably acceptable to Seller and within a time period reasonably
                acceptable to Seller of a sufficient number of Options to reduce
                Seller’s
                “beneficial ownership” (within the meaning of Section 13 of the Exchange
                Act and rules promulgated thereunder) to 7.5% of Counterparty’s
                outstanding Shares or less, Seller may designate any Exchange Business
                Day
                as an Early Termination Date with respect to a portion (the “Terminated
                Portion”) of
                this Transaction, such that its “beneficial ownership” following such
                partial termination will be equal to or less than 7.5%. In the event
                that
                Seller so designates an Early Termination Date with respect to a
                portion
                of this Transaction, a payment shall be made pursuant to Section
                6 of the
                Agreement as if (i) an Early Termination Date had been designated
                in
                respect of a Transaction having terms identical to this Transaction
                and a
                Number of Options equal to the Terminated Portion, (ii) Counterparty
                shall
                be the sole Affected Party with respect to such partial termination
                and
                (iii) such Transaction shall be the only Terminated Transaction;
                provided
                that if the circumstances giving rise to such partial termination
                arose
                primarily due to the actions of Lehman Brothers, then Lehman Brothers
                and
                Counterparty both shall be Affected Parties. In circumstances in
                which the
                foregoing provisions relating to Seller’s right to transfer or assign its
                rights or obligations under the Transaction are not applicable, Seller
                may
                transfer any of its rights or delegate its obligations under this
                Transaction to any of its affiliates the obligations of which are
                guaranteed by Seller’s Credit Support Provider or, in other cases, with
                the prior written consent of Buyer, which consent shall not be
                unreasonably withheld.

            

    

     

     

    Global
      Deal ID: 311 7730

     

    
      
        
        

      

      
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    Matters
      Relating to Agent: 

     

    LBI
      is
      acting as agent on behalf of Buyer and Seller for the Transaction. LBI has
      no
      obligations, by guarantee, endorsement or otherwise, with respect to the
      performance of the Transaction by either party. 

     

    Regulatory
      Provisions:

    (a)  Buyer
      represents and warrants that it has received and read and understands the Notice
      of  Regulatory
      Treatment and the OTC Option Risk Disclosure Statement.

    

    (b)  The
      Agent
      will furnish Buyer upon written request a statement as to the source and amount
      of any  remuneration
      received or to be received by the Agent in connection with the Transaction
      evidenced hereby.

     

     

    ISDA
      Master Agreement: 

     

    With
      respect to the Agreement, Seller and Counterparty each agree as
      follows:

     

    “Specified
      Entity” means
      in
      relation to Seller and in relation to Counterparty for purposes of this
      Transaction: Not applicable.

     

    The
      definition of “Specified
      Transaction” in
      Section 14 of this Agreement is hereby amended by adding the text “commodity
      transaction, credit derivative transaction, repurchase or reverse purchase
      transaction, securities lending transaction, futures transaction, prime
      brokerage or margin lending transaction” after the words “foreign exchange
      transaction” in the sixth line thereof and by replacing the words “any other
      similar transaction” in the eighth line thereof with the text “any other
      transaction between the parties”. “Specified Transaction” shall exclude any
      default under a Specified Transaction if caused solely by the general
      unavailability of the currency in which payments under such Specified
      Transaction are denominated due to exchange controls or other governmental
      action.

     

    The
      “Cross
      Default” provisions
      of Section
      5(a)(vi) of
      the
      Agreement will not apply to Seller and will not apply to
      Counterparty.

     

    The
      “Credit
      Event Upon Merger” provisions
      of Section
      5(b)(iv) of
      the
      Agreement will not apply to Seller and will
      not
      apply to Counterparty.

     

    The
      “Automatic
      Early Termination” provision
      of Section
      6(a) of
      the
      Agreement will not apply to Seller or to Counterparty.

     

    Payments
      on Early Termination. For
      the
      purpose of Section
      6(e) of
      the
      Agreement: (i) Loss
      (which
      shall be determined using commercially reasonable procedures in order to produce
      a commercially reasonable result) shall apply; and (ii) the
      Second Method shall apply.

     

    “Termination
      Currency” means
      USD. 

     

    Tax
      Representations.

     

    
      	
              (a)

            	
              Payer
                Representations. For
                the purpose of Section 3(e) of the Agreement, each party represents
                to the
                other party that it is not required by any applicable law, as modified
                by
                the practice of any relevant governmental revenue authority, of any
                Relevant Jurisdiction to make any deduction or withholding for or
                on
                account of any Tax from any payment (other than interest under Section
                2(e), 6(d)(ii), or 6(e) of the Agreement)
                to be made by it to the other party under the Agreement. In making
                this
                representation, each party may rely on (i) the accuracy of any
                representations made by the other party pursuant to Section 3(f)
                of the
                Agreement, (ii) the satisfaction of the agreement contained in Section
                4(a)(i) or 4(a)(iii) of the Agreement, and the accuracy and effectiveness
                of any document provided by the other party pursuant to Section 4(a)(i)
                or
                4(a)(iii) of the Agreement, and (iii) the satisfaction of the agreement
                of
                the other party contained in Section 4(d) of the Agreement; provided
                that
                it will not be a breach of this representation where reliance is
                placed on
                clause (ii) above and the other party does not deliver a form or
                document
                under Section
                4(a)(iii) of the Agreement by reason of material prejudice to its
                legal or
                commercial position.

            

    

     

     

    Global
      Deal ID: 311 7730

     

    
      
        
        

      

      
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              (b)

            	
              Payee
                Representations. For
                the purpose of Section 3(f) of the Agreement, each party makes the
                following representations to the other
                party:

            

    

     

    (i) Lehman
      Brothers represents that it is a company organized under the laws of
Delaware.

     

    (ii) Counterparty
      represents that it is a corporation incorporated in Delaware.

     

    Delivery
      Requirements. For
      the
      purpose of Sections
      4(a)(i)
      and
(ii)
      of the
      Agreement, each party agrees to deliver the following documents:

    
       

      
        	
                (a)

              	
                Tax
                  forms, documents or certificates to be delivered
                  are:

              

      

       

    

    Counterparty
      agrees to complete (accurately and in a manner reasonably satisfactory to Lehman
      Brothers), execute, and deliver to Lehman Brothers,
      United
      States Internal Revenue Service Form W-9 or W-8 BEN, or any successor of such
      form(s): (i) before the first payment date under this agreement; (ii) promptly
      upon reasonable demand by Lehman
      Brothers; and (iii) promptly upon learning that any such form(s) previously
      provided by Counterparty
      has
      become obsolete or incorrect.

    
       

       

      
        	
                (b)

              	
                Other
                  documents to be delivered:

              

      

    

     

    
      	
              Party
                Required to Deliver Document

            	
              Document
                Required to be Delivered

            	
              When
                Required

            	
              Covered
                by Section 3(d) Representation

            
	
              Counterparty

            	
              Evidence
                of the authority and true signatures of each official or representative
                signing this Confirmation

            	
              Upon
                or before execution and delivery of this Confirmation

            	
              Yes

            
	
              Counterparty

            	
              Certified
                copy of the resolution of the Board of Directors or equivalent document
                authorizing the execution and delivery of this Confirmation and such
                other
                certificates as Seller shall reasonably request

            	
              Upon
                or before execution and delivery of this Confirmation

            	
              Yes

            
	
              Seller

            	
              Guarantee
                of its Credit Support Provider, substantially in the form of Exhibit
                A
                attached hereto, together with evidence of the authority and true
                signatures of the signatories, if applicable

            	
              Upon
                or before execution and delivery of this Confirmation

            	
              No

            

    

     

    Additional
      Notice Requirements. Counterparty
      hereby agrees to promptly deliver to Seller a copy of all notices and other
      communications required or permitted to be given to the holders of any Reference
      Notes pursuant to the terms of the Note Indenture on the dates so required
      or
      permitted in the Note Indenture and all other notices given and
      other
      communications made by Counterparty in respect of the Reference Notes to holders
      of any Reference Notes.
      Counterparty further covenants to Seller that it shall promptly notify Seller
      of
      each Conversion Date, Amendment Event (including in such notice a detailed
      description of any such amendment) and Repayment Event (identifying in such
      notice the nature of such Repayment Event and the principal amount at maturity
      of Reference Notes being paid).

     

     

    Global
      Deal ID: 311 7730

     

     

     

    
      
        
        

      

      
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    Addresses
      for Notices. For
      the
      purpose of Section
      12(a) of
      the
      Agreement: Address
      for notices or communications to Seller for all purposes:

     

    
      
        	Address:	 	
                Lehman
                  Brothers Inc., acting as Agent

              
	
              	 	
                Lehman
                  Brothers OTC Derivatives Inc., acting as Principal

              
	
              	 	
                745
                  Seventh Avenue

              
	
              	 	
                New
                  York, NY 10019

              
	
              	 	
              
	Attention:	 	Andrew Yare - Transaction Management
                Group
	Telephone:	 	212 526 9986
	Facsimile:	 	646 885
                9546

      

    

     

    Additionally,
      a copy of all notices pursuant to Sections
      5,
      6,
      and
7
      as well
      as any changes to Counterparty’s address, telephone number or facsimile number
      should be sent to:

    
       

      
        
          	
                  Address:

                	 	
                  Lehman
                    Brothers Inc., acting as Agent

                
	
                	 	
                  Lehman
                    Brothers OTC Derivatives Inc., acting as Principal

                
	
                	 	
                  745
                    Seventh Avenue

                
	
                	 	
                  New
                    York, NY 10019

                
	
                	 	
                
	Attention:	 	Steve Roti - US Equity Linked
	Telephone: 	 	212 526 0055
	Facsimile: 	 	917 552 0561

      

    

     

    Address
      for notices or communications to Counterparty for all
      purposes:

    
       

      
        
          	Address:	 	1450 Broadway, 4th
                  Floor
	
                	 	New York, NY 10018
	
                	 	
                
	Attention:	 	Chief Executive Officer
	Facsimile No.:	 	212 391 0127
	Telephone No.:	 	212 730
                  0030

        

      

    

     

    In
      addition, in the case of notices or communications relating to Section
      5,
      6,
      11
      or
13
      of this
      Agreement, a second copy of any such notice or communication shall be addressed
      to the attention of Counterparty’ General Counsel as follows:

    
       

      
        
          	Address:	 	1450 Broadway, 4th
                  Floor
	
                	 	New York, NY 10018
	
                	 	
                
	Attention:	 	General Counsel
	Facsimile No.:	 	212 391 0127
	Telephone No.:	 	212 819 2089; 
	
                	 	
                
	and	 	
                
	 	 	 
	Firm:	 	Blank Rome LLP
	Address:	 	405 Lexington Avenue
	
                	 	New York, NY 10174
	 	 	
                
	Attention:	 	Robert J. Mittman, Esq.
	Facsimile No.:	 	212 885 5001
	Telephone No.:	 	212 885 5000

        

         

         

      

    

    Global
      Deal ID: 311 7730

    
       

      
        
          
          

        

        
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    Process
      Agent. Seller
      does not appoint a Process Agent:

     

                             Counterparty
      does not appoint a Process Agent.

     

    Multibranch
      Party. For
      the
      purpose of Section
      10(c) of
      the
      Agreement: Neither Seller nor Counterparty is a Multibranch
      Party.

     

    Calculation
      Agent. "Calculation
      Agent" means Lehman Brothers, acting in good faith and in a commercially
      reasonable manner.

     

    Credit
      Support Document.

     

    Seller:
      Guarantee of Lehman Brothers Holdings Inc. in the form attached hereto as
      Exhibit A. 

     

    Counterparty:
      Not Applicable

     

    Credit
      Support Provider.

     

    With
      respect to Seller: Lehman
      Brothers Holdings Inc. 

     

    With
      respect to Counterparty: Not Applicable.

     

    Governing
      Law.  This
      Confirmation will be governed by, and construed in accordance with, the laws
      of
      the State of New York.

     

    Waiver
      of Jury Trial. Each
      party waives, to the fullest extent permitted by applicable law, any right
      it
      may have to a trial by jury in respect of any suit, action or proceeding
      relating to this Transaction. Each party (i) certifies that no representative,
      agent or attorney of the other party has represented, expressly or otherwise,
      that such other party would
      not, in the event of such a suit, action or proceeding, seek to enforce the
      foregoing waiver and (ii) acknowledges
      that it and the other party have been induced to enter into this Transaction,
      as
      applicable, by, among other
      things, the mutual waivers and certifications provided herein.

     

    Netting
      of Payments. The
      provisions of Section
      2(c) of
      the
      Agreement shall not be applicable to this Transaction.

     

    Basic
      Representations. Section
      3(a) of
      the
      Agreement is hereby amended by the deletion of “and” at the end of Section
      3(a)(iv); the
      substitution of a semicolon for the period at the end of Section
      3(a)(v) and
      the
      addition of Sections
      3(a)(vi), as
      follows:

     

    Eligible
      Contract Participant; Line of Business. Each
      party 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 (“CEA”),
      this
      Agreement and the Transaction thereunder are subject to individual negotiation
      by the parties and have not been executed or traded on a “trading facility” as
      defined in Section 1a(33)
      of
      the CEA, and it has entered into this Confirmation and this Transaction in
      connection with its business or a line of business (including financial
      intermediation), or the financing of its business.

     

     

    Global
      Deal ID: 311 7730

     

    
      
        
        

      

      
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    Acknowledgements:

     

    
      	
              (a)

            	
              The
                parties acknowledge and agree that there are no other representations,
                agreements or other undertakings
                of the parties in relation to this Transaction, except as set forth
                in
                this Confirmation.

            

    

    
       

      
        	
                (b)

              	
                The
                  parties hereto intend for:

              

      

       

    

    
      	 	
              (i)

            	
              Seller
                to be a “financial institution” as defined in Section 101(22) of Title 11
                of the United States Code (the “Bankruptcy
                Code”)
                and this Transaction to be a “securities contract” as defined in Section
                741(7) of the Bankruptcy Code and
                a “swap agreement” as defined in Section 101(53C) of the Bankruptcy
                Code, qualifying
                for the protections of, among other sections, Sections 362(b)(6),
                362
                (b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy
                Code;

            

    

     

    
      	 	
              (ii)

            	
              a
                party’s right to liquidate this Transaction and to exercise any other
                remedies upon the occurrence of any Event of Default under the Agreement
                with respect to the other party to constitute a “contractual right” as
                defined in the Bankruptcy Code;

            

    

     

    
      	 	
              (iii)

            	
              all
                payments for, under or in connection with this Transaction, all payments
                for the Shares and the transfer of such Shares to constitute “settlement
                payments” as defined in the Bankruptcy
                Code.

            

    

     

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

     

    Amendment
      of Definition of Reference Market-Makers. The
      definition of “Reference Market-Makers” in Section
      14
      is
      hereby amended by adding in clause (a) after the word “credit” and before the
      word “and” the words “or to enter into transactions similar in nature to the
      Transaction.”

     

    Consent
      to Recording. Each
      party consents to the recording of the telephone conversations of trading and
      marketing personnel of the parties and their Affiliates in connection with
      this
      Confirmation. To the extent that one party records telephone conversations
      (the
“Recording Party”) and
      the
      other party does not (the “Non-Recording  Party”),
      the Recording Party shall in the event of any dispute, make a complete and
      unedited copy of such party’s tape of the entire day’s conversations with the
      Non-Recording Party’s personnel available to the Non-Recording Party. The
      Recording Party’s tapes may be used by either party in any forum in which a
      dispute is sought to be resolved and the Recording Party will retain tapes
      for a
      consistent period of time in accordance with the Recording Party’s policy unless
      one party notifies the other that a particular transaction is under review
      and
      warrants further retention.

     

    Disclosure.
      Each
      party hereby acknowledges and agrees that Seller has authorized Counterparty
      to
      disclose this Transaction and any related hedging transaction between the
      parties if and to the extent that Counterparty reasonably determines
      (after consultation with Seller) that such disclosure is required by law or
      by
      the rules of the NASDAQ Global Market or
      any
      securities exchange. Notwithstanding the foregoing, effective from the date
      of
      commencement of discussions concerning the Transaction, Counterparty and each
      of
      its employees, representatives, or other agents may disclose to any and all
      persons, without limitation of any kind, the tax treatment and tax structure
      of
      the Transaction and all materials of any kind (including opinions or other
      tax
      analyses) that are provided to Counterparty relating to such tax treatment
      and
      tax structure.

     

    Severability.
      If
      any
      term, provision, covenant or condition of this Confirmation, or the application
      thereof to any party
      or
      circumstance, shall be held to be invalid or unenforceable in whole or in part
      for any reason, the remaining terms, provisions, covenants, and conditions
      hereof shall continue in full force and effect as if this Confirmation had
      been
      executed with the invalid or unenforceable provision eliminated, so long as
      this
      Confirmation as so modified continues to express, without material change,
      the
      original intentions of the parties as to the subject matter of this Confirmation
      and the deletion of such portion of this Confirmation will not substantially
      impair the respective benefits or expectations of parties to this Agreement;
      provided,
      however, that
      this
      severability provision shall not be applicable
      if any provision of Section
      2,
      5,
      6
      or
13
      of the
      Agreement (or any definition or provision in Section
      14 to
      the
      extent that it relates to, or is used in or in connection with any such Section)
      shall be so held to be invalid or unenforceable.

     

     

    Global
      Deal ID: 311 7730

     

    
      
        
        

      

      
        -
          17
          -

        
          

        

      

      
        
        

      

    

     

    Affected
      Parties. For
      purposes of Section
      6(e) of
      the
      Agreement, each party shall be deemed to be an Affected Party in connection
      with
      Illegality and any Tax Event.

     

    [Signatures
      follow on separate page]

     

     

    Global
      Deal ID: 311 7730

    
      
        
        

      

      
        -
          18
          -

        
          

        

      

      
        
        

      

    

     

    Execution
      Copy

    
Please
      confirm that the foregoing correctly sets forth the terms of our agreement
      by
      executing the copy of this Confirmation enclosed for that purpose and returning
      it to us.

     

    Very
      truly yours,

    LEHMAN
      BROTHERS OTC DERIVATIVES INC.

    

    By:
      /s/ Anatoly
      Kozlov                                              

    Name:
      Anatoly Kozlov

    Title:
      Authorized Signatory

     

    Confirmed
      as of the date first above written: 

    ICONIX
      BRAND GROUP, INC.

    

    By:
      /s/ Neil
      Cole                                                    

    Name:
      Neil Cole

    Title:
      Chairman, President and CEO

     

    Acknowledged
      and agreed as to matters to the Agent:

     

    LEHMAN
      BROTHERS INC., 

     

    Solely
      in
      its capacity as Agent hereunder

     

    By:
      /s/
      illegible                                                       

    Name:
      

    Title:
      Authorized Signatory

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Execution
      Copy

     

     

    EXHIBIT
      A

    GUARANTEE
      OF LEHMAN BROTHERS HOLDINGS INC.

     

    LEHMAN
      BROTHERS OTC DERIVATIVES INC. (“Party A”) and ICONIX
      BRAND GROUP, INC. 
      (“Party
      B”) have entered into a Confirmation, dated as of June 14, 2007 and amended and
      restated as of June 18, 2007, (the “Confirmation”) which evidences a transaction
      entered into between Party A and Party B (the “Transaction”), which Confirmation
      supplements, forms part of, and will be read and construed as one with, the
      ISDA
      Master Agreement referred to therein (collectively referred to as the
“Agreement”). This Guarantee is a Credit Support Document as contemplated in the
      Agreement. For value received, and in consideration of the financial
      accommodation accorded to Party A by Party B under the Agreement, LEHMAN
      BROTHERS HOLDINGS INC., a corporation organized and existing under the laws
      of
      the State of Delaware (“Guarantor”), hereby agrees to the
      following:

     

    (a) Guarantor
      hereby unconditionally guarantees to Party B the due and punctual payment of
      all
      amounts payable by Party A in connection with each Transaction when and as
      Party
      A’s obligations thereunder shall become due and payable in accordance with the
      terms of the Agreement (whether at maturity, by acceleration or otherwise).
      Guarantor hereby agrees, upon written demand by Party B, to pay or cause to
      be
      paid any such amounts punctually when and as the same shall become due and
      payable.

     

    (b) Guarantor
      hereby agrees that its obligations under this Guarantee constitute a guarantee
      of payment when due and not of collection.

     

    (c) Guarantor
      hereby agrees that its obligations under this Guarantee shall be unconditional,
      irrespective of the validity, regularity or enforceability of any obligation
      of
      Party A under the Agreement, the absence of any action to enforce Party A’s
      obligations under the Agreement, any waiver or consent by Party B with respect
      to any provisions thereof, the entry by Party A and Party B into any amendments
      to the Agreement, additional Transactions under the Agreement or any other
      circumstance which might otherwise constitute a legal or equitable discharge
      or
      defense of a guarantor (excluding the defense of payment or statute of
      limitations, neither of which is waived) provided, however, that Guarantor
      shall
      be entitled to exercise any right that Party A could have exercised under the
      Agreement to cure any default in respect of its obligations under the Agreement
      or to setoff, counterclaim or withhold payment with respect to any Event of
      Default or Potential Event of Default, but only to the extent such right is
      provided to Party A under the Agreement. The Guarantor acknowledges that Party
      A
      and Party B may from time to time enter into one or more Transactions pursuant
      to the Agreement and agrees that the obligations of the Guarantor under this
      Guarantee will upon the execution of any such Transaction by Party A and Party
      B
      extend to all such Transactions without the taking of further action by the
      Guarantor.

     

    (d) This
      Guarantee shall remain in full force and effect until receipt by Party B of
      a
      written notice of termination from Guarantor. Termination of this Guarantee
      shall not affect Guarantor’s liability hereunder as to obligations incurred or
      arising out of Transactions entered into prior to the termination
      hereof.

     

    (e) Guarantor
      further agrees that this Guarantee shall continue to be effective or be
      reinstated, as the case may be, if at any time, payment, or any part thereof,
      of
      any obligation or interest thereon is rescinded or must otherwise be restored
      by
      Party B upon an Event of Default as set forth in Section
      5(a)(vii)
      of the
      Master Agreement affecting Party A or Guarantor.

     

    (f) Guarantor
      hereby waives (i) promptness, diligence, presentment, demand of payment,
      protest, order and, except as set forth in paragraph (a) hereof, notice of
      any
      kind in connection with the Agreement and this Guarantee, or (ii) any
      requirement that Party B exhaust any right to take any action against Party
      A or
      any other person prior to or contemporaneously with proceeding to exercise
      any
      right against Guarantor under this Guarantee.

     

    (g) Guarantor
      shall have no right of subrogation with respect to any payments made under
      this
      Guarantee until all obligations of the Guaranteed Party under the Agreement
      are
      paid in full.

     

     

    (h) Guarantor
      represents and warrants (which representations and warranties shall be deemed
      to
      have been made by Guarantor on the date of each Transaction) that:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    i. Guarantor
      is a corporation duly incorporated, validly existing and in good standing under
      the laws of Delaware;

     

    ii. Guarantor
      has the legal capacity and the legal right to execute and deliver this Guarantee
      and to perform Guarantor’s obligations hereunder;

     

    iii. no
      consent or authorization of, filing with, or other act by or in respect of,
      any
      governmental authority and no consent of any other person (including, without
      limitation, any creditor of Guarantor) is required in connection with the
      execution, delivery, performance, validity or enforceability of this
      Guarantee;

     

    iv. this
      Guarantee has been duly executed and delivered by Guarantor and constitutes
      a
      legal, valid and binding obligation of Guarantor enforceable in accordance
      with
      its terms, except as enforceability may be limited by bankruptcy, insolvency,
      reorganization, moratorium or other similar laws; and

     

    v. the
      execution, delivery and performance of this Guarantee will not violate any
      provision of the certificate of incorporation, by laws or other organizational
      documents of Guarantor, or any law, treaty, rule or regulation or determination
      of an arbitrator, a court or other governmental authority, applicable to or
      binding upon Guarantor or any of its property or to which Guarantor or any
      of
      its property is subject. 

     

    (i) Any
      provision of this Guarantee which is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof, and any such prohibition or unenforceability in any
      jurisdiction shall not invalidate or render unenforceable such provision in
      any
      other jurisdiction.

     

    (j) No
      single
      or partial exercise of any right, power or privilege hereunder shall preclude
      any other or further exercise thereof or the exercise of any other right, power
      or privilege, and no waiver by Party B of any right or remedy hereunder on
      any
      one occasion shall be construed as a bar to any right or remedy which Party
      B
      would otherwise have on any future occasion. No failure to exercise, nor any
      delay in exercising, any right, power or privilege hereunder shall operate
      as a
      waiver thereof. The rights and remedies herein provided are cumulative, may
      be
      exercised singly or concurrently and are not exclusive of any other rights
      or
      remedies provided by law.

     

    (k) If
      any
      term, provision, covenant, or condition of this Guarantee, or the application
      thereof to any party or circumstance, shall be held to be illegal, invalid
      or
      unenforceable (in whole or in part) for any reason, the remaining terms,
      provisions, covenants and conditions hereof shall continue in full force and
      effect as if this Guarantee had been executed with the illegal, invalid or
      unenforceable portion eliminated, so long as this Guarantee as so modified
      continues to express, without material change, the original intentions of the
      parties as to the subject matter of this Guarantee and the deletion of such
      portion of this Guarantee will not substantially impair the respective benefits
      or
      expectations of the parties to this Guarantee.

     

    This
      Guarantee shall be governed by and construed in accordance with the laws of
      the
      State of New York without regard to conflicts of laws principles. All
      capitalized terms not defined in this Guarantee, but defined in the Agreement,
      shall have the meanings assigned thereto in the Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, Guarantor has caused this Guarantee to be executed by its
      duly
      authorized officer as of the date of the Agreement.

     

    
      	
              LEHMAN
                BROTHERS HOLDINGS INC.

            
	 
	 
	
              By:
                ______________________________________

            
	
              Name:

            
	
              Title:

            
	
              Date:

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