Document:

EXHIBIT 10.3

JPMorgan Chase Bank, National Association
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England
                                                                    May 8, 2007

To: Chemed Corporation
2600 Chemed Center
255 East Fifth Street
Cincinnati, OH 45202
Attention: Chief Financial Officer
Telephone No.:    (513) 762-6901
Facsimile No.:    (513) 287-6713

Re: Warrants

         The  purpose  of this  letter  agreement  (this  "CONFIRMATION")  is to
confirm the terms and  conditions of the Warrants  issued by Chemed  Corporation
("COMPANY")  to  JPMorgan  Chase  Bank,  National  Association,   London  Branch
("JPMORGAN") on the Trade Date specified below (the "TRANSACTION").  This letter
agreement  constitutes  a  "Confirmation"  as  referred  to in the  ISDA  Master
Agreement   specified  below.  This  Confirmation  shall  replace  any  previous
agreements and serve as the final documentation for this Transaction.

         The  definitions  and  provisions  contained  in the 2002  ISDA  Equity
Derivatives  Definitions  (the  "EQUITY  DEFINITIONS"),   as  published  by  the
International Swaps and Derivatives Association, Inc. ("ISDA"), are incorporated
into this  Confirmation.  In the event of any  inconsistency  between the Equity
Definitions and this Confirmation, this Confirmation shall govern.

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

1.       This  Confirmation  evidences a complete and binding  agreement between
         JPMorgan and Company as to the terms of the  Transaction  to which this
         Confirmation relates.  This Confirmation shall supplement,  form a part
         of, and be subject to an  agreement in the form of the 2002 ISDA Master
         Agreement (the  "AGREEMENT") as if JPMorgan and Company had executed an
         agreement  in such  form  (but  without  any  Schedule  except  for the
         election of the laws of the State of New York as the governing  law) on
         the Trade Date. In the event of any inconsistency between provisions of
         that Agreement and this  Confirmation,  this  Confirmation will prevail
         for the purpose of the Transaction to which this Confirmation  relates.
         The parties hereby agree that no Transaction other than the Transaction
         to which this Confirmation relates shall be governed by the Agreement.

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

              JPMORGAN CHASE BANK, NATIONAL ASSOCIATION ORGANISED
     UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
             MAIN OFFICE 1111 POLARIS PARKWAY, COLUMBUS, OHIO 43271
    REGISTERED AS A BRANCH IN ENGLAND & WALES BRANCH NO. BR000746. REGISTERED
                 BRANCH OFFICE 125 LONDON WALL, LONDON EC2Y 5AJ
          AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY

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<S>                                <C>
General Terms:

        Trade Date:                         May 8, 2007

        Warrants:                           Equity call  warrants,  each giving the holder the right to purchase
                                            one Share at the Strike Price,  subject to the Settlement  Terms set
                                            forth  below.  For the  purposes  of the  Equity  Definitions,  each
                                            reference  to a Warrant  herein shall be deemed to be a reference to
                                            a Call Option.

        Warrant Style:                      European

        Seller:                             Company

        Buyer:                              JPMorgan

        Shares:                             The  capital  stock  of  Company,  par  value  USD  1  per  Share
                                            (Exchange symbol "CHE")

        Number of Warrants:                 1,114,862,  subject to  adjustment as provided  herein;  provided
                                            that the Number of Warrants shall be  automatically  increased as
                                            of the  date  of  exercise  (the  "Greenshoe  Exercise")  by J.P.
                                            Morgan  Securities  Inc.  and  Citigroup  Global  Markets Inc. as
                                            representatives  of the  Initial  Purchasers  (as  defined in the
                                            Purchase Agreement dated as of May 8, 2007 between Company,  J.P.
                                            Morgan  Securities  Inc.  and  Citigroup  Global  Markets Inc. as
                                            representatives  of the Initial  Purchasers  party  thereto  (the
                                            "Purchase Agreement")),  of their option pursuant to Section 1 of
                                            the Purchase  Agreement by the number of  additional  Warrants in
                                            proportion  to the  increase in the number of 1.875%  Convertible
                                            Senior   Notes   due   2014   (the   "Convertible   Notes"),   in
                                            denominations  of USD 1,000  principal  amount issued pursuant to
                                            such  exercise   (such   Convertible   Notes,   the   "Additional
                                            Convertible Notes") (the "Additional Warrants").

        Warrant Entitlement:                One Share per Warrant

        Strike Price:                       USD 105.4400

        Premium:                            USD 12,426,300 (Premium per Warrant: USD 11.1460);  provided that
                                            if the Number of  Warrants is  increased  pursuant to the proviso
                                            to the definition of "Number of Warrants"  above,  there shall be
                                            an  additional  Premium  equal to the  product  of the  number of
                                            Additional  Warrants and the Premium per Warrant (the "Additional
                                            Premium"),  and such Additional Premium shall be paid by JPMorgan
                                            to Company on the Additional Premium Payment Date.

        Premium Payment Date:               May 14, 2007

        Additional Premium Payment Date:    The  closing  date for the  purchase  and sale of the  Additional
                                            Convertible Notes.

        Exchange:                           The New York Stock Exchange

        Related Exchange(s):                All Exchanges

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Procedures for Exercise:

        Expiration Time:                    The Valuation Time

        Expiration Date(s):                 Each  Scheduled  Trading Day during the period from and including
                                            the  First   Expiration  Date  and  to  and  including  the  79th
                                            Scheduled  Trading Day following the First  Expiration Date shall
                                            be an  "Expiration  Date" for a number of  Warrants  equal to the
                                            Daily   Number  of   Warrants  on  such  date;   provided   that,
                                            notwithstanding   anything   to  the   contrary   in  the  Equity
                                            Definitions,   if  any  such  date  is  a  Disrupted   Day,   the
                                            Calculation Agent shall make adjustments,  if applicable,  to the
                                            Daily  Number of  Warrants or shall  reduce such Daily  Number of
                                            Warrants to zero for which such day shall be an  Expiration  Date
                                            and  shall  designate  a  Scheduled  Trading  Day or a number  of
                                            Scheduled  Trading  Days  as  the  Expiration   Date(s)  for  the
                                            remaining  Daily Number of Warrants or a portion  thereof for the
                                            originally  scheduled  Expiration Date; and provided further that
                                            if such Expiration Date has not occurred  pursuant to this clause
                                            as of  the  eighth  Scheduled  Trading  Day  following  the  last
                                            scheduled   Expiration   Date   under   this   Transaction,   the
                                            Calculation  Agent shall have the right to declare such Scheduled
                                            Trading Day to be the final  Expiration  Date and the Calculation
                                            Agent shall  determine its good faith estimate of the fair market
                                            value for the  Shares  as of the  Valuation  Time on that  eighth
                                            Scheduled  Trading  Day or on any  subsequent  Scheduled  Trading
                                            Day, as the Calculation Agent shall determine using  commercially
                                            reasonable means.

        First Expiration Date:              August 15, 2014 (or if such day is not a Scheduled  Trading  Day,
                                            the next  following  Scheduled  Trading  Day),  subject to Market
                                            Disruption Event below.

        Multiple Exercise:                  Applicable

        Minimum Number of Warrants:         1

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

        Maximum Number of Warrants:         All warrants  remaining  unexercised as of the remaining Exercise
                                            Date(s).

        Automatic Exercise:                 Applicable;  and  means  that,  unless  all  Warrants  have  been
                                            previously  exercised  hereunder,  a number of Warrants  for each
                                            Expiration  Date  equal  to the  Daily  Number  of  Warrants  (as
                                            adjusted  pursuant to the terms hereof) for such  Expiration Date
                                            will be  deemed  to be  automatically  exercised;  provided  that
                                            "In-the-Money"  means that the Relevant Price for such Expiration
                                            Date  exceeds  the Strike  Price for such  Expiration  Date;  and
                                            provided  further that all  references  in Section  3.4(b) of the
                                            Equity  Definitions  to  "Physical  Settlement"  shall be read as
                                            references to "Net Share Settlement".

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<S>                                         <C>
        Market Disruption Event:            Section  6.3(a)(ii) of the Equity  Definitions  is hereby amended
                                            by replacing  clause (ii) in its entirety  with "(ii) an Exchange
                                            Disruption,  or" and inserting immediately following clause (iii)
                                            the phrase "; in each case that the Calculation  Agent determines
                                            is material."

Valuation:

                                            Valuation Time:                     Scheduled Closing Time.

                                            Valuation Date:                     Each Exercise Date.

Settlement Terms:

        Settlement Method:                  Net Share Settlement.

        Net Share Settlement:               On  the  relevant  Settlement  Date,  Company  shall  deliver  to
                                            JPMorgan  the  Share   Delivery   Quantity  of  Shares  for  such
                                            Settlement Date to the account  specified  hereto free of payment
                                            through the Clearance System.

        Share Delivery Quantity:            For any  Settlement  Date, a number of Shares,  as  calculated by
                                            the Calculation  Agent,  equal to the Net Share Settlement Amount
                                            for such Settlement  Date divided by the Settlement  Price on the
                                            Valuation Date in respect of such Settlement  Date,  rounded down
                                            to the nearest whole number plus any Fractional Share Amount.

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

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

        Settlement Date(s):                 As   determined  in  reference  to  Section  9.4  of  the  Equity
                                            Definitions, subject to Section 9(m)(i) hereof.

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        Other Applicable Provisions:        The provisions of Sections 9.1(c),  9.8, 9.9, 9.11, 9.12 and 10.5
                                            of the Equity  Definitions  will be  applicable,  except that all
                                            references in such  provisions to  "Physically-settled"  shall be
                                            read as references to "Net Share  Settled."  "Net Share  Settled"
                                            in  relation to any Warrant  means that Net Share  Settlement  is
                                            applicable to that Warrant.

        Representation and Agreement:       Notwithstanding  Section  9.11  of the  Equity  Definitions,  the
                                            parties  acknowledge  that any Shares  delivered  to JPMorgan may
                                            be,  upon  delivery,  subject  to  restrictions  and  limitations
                                            arising  from  Company's  status as issuer  of the  Shares  under
                                            applicable securities laws.

3. Additional Terms applicable to the Transaction:

        Adjustments applicable to the Warrants:

        Method of Adjustment:               Calculation  Agent  Adjustment.  For the  avoidance of doubt,  in
                                            making  any  adjustments  under  the  Equity   Definitions,   the
                                            Calculation  Agent may make  adjustments,  if any,  to any one or
                                            more of the  Strike  Price,  the  Number of  Warrants,  the Daily
                                            Number of Warrants and the Warrant  Entitlement.  Notwithstanding
                                            the  foregoing,  any  cash  dividends  or  distributions  on  the
                                            Shares,  whether  or not  extraordinary,  shall  be  governed  by
                                            Section  9(h) of this  Confirmation  in  lieu  of  Article  10 or
                                            Section 11.2(c) of the Equity Definitions.  The       Calculation
                                            Agent shall promptly  thereafter  notify  JPMorgan and Company of
                                            any such adjustment.

Extraordinary Events applicable to the Transaction:

        New Shares:                         Section  12.1(i) of the Equity  Definitions  is hereby amended by
                                            deleting the text in clause (i) in its entirety and  replacing it
                                            with the phrase "publicly quoted,  traded or listed on any of the
                                            New York Stock Exchange,  the American Stock Exchange, The NASDAQ
                                            Global  Select  Market  or The  NASDAQ  Global  Market  (or their
                                            respective successors)".

Consequence of Merger Events:

        Share-for-Share:                    Modified Calculation Agent Adjustment

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

        Share-for-Combined:                 Cancellation  and  Payment  (Calculation  Agent   Determination);
                                            provided that JPMorgan may elect, in its commercially  reasonable
                                            judgment, Component Adjustment (Calculation Agent Determination).

Consequence of Tender Offers:

        Tender Offer:                       Applicable;  provided  however  that  if  an  event  occurs  that
                                            constitutes  both a Tender  Offer  under  Section  12.1(d) of the
                                            Equity   Definitions  and  Additional   Termination  Event  under
                                            Section 9(j)(ii)(C) of this Confirmation,  JPMorgan may elect, in
                                            its commercially  reasonable judgment,  whether the provisions of
                                            Section  12.3 of the Equity  Definitions  or Section  9(j)(ii)(C)
                                            will apply.

        Share-for-Share:                    Modified Calculation Agent Adjustment

        Share-for-Other:                    Modified Calculation Agent Adjustment

        Share-for-Combined:                 Modified Calculation Agent Adjustment

</TABLE>

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

Additional Disruption Events:

        Change in Law:                      Applicable

        Failure to Deliver:                 Not Applicable

        Insolvency Filing:                  Applicable

        Hedging Disruption:                 Applicable

        Increased Cost of Hedging:          Not Applicable

        Loss of Stock Borrow:               Applicable

        Maximum Stock Loan Rate:            250 bps

        Increased Cost of Stock Borrow:     Applicable

        Initial Stock Loan Rate:            0 bps

        Hedging Party:                      JPMorgan for all applicable Additional
                                            Disruption Events

        Determining Party:                  JPMorgan for all applicable Additional
                                            Disruption Events

        Non-Reliance:                       Applicable

        Agreements and Acknowledgments
        Regarding Hedging Activities:       Applicable

        Additional Acknowledgments:         Applicable

4. Calculation Agent:                       JPMorgan.  The Calculation  Agent shall, upon request by the
                                            Company,  provide a written  explanation of any  calculation
                                            made by it including, where applicable, a description of the
                                            methodology and data applied.
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<PAGE>

5. Account Details:

         (a) Account for payments to Company:

                    JP Morgan Chase Bank
                    ABA# 021000021
                    Acct: Chemed Corporation
                    Acct No.: 94-13065

                    Account for delivery of Shares from Company:

                    To be provided by Company

         (b) Account for payments to JPMorgan:

                    JPMorgan Chase Bank, N.A., New York
                    ABA:  021 000 021
                    Favour: JPMorgan Chase Bank N.A., London
                    A/C:  0010962009
                    CHASUS33

                    Account for delivery of Shares to JPMorgan:

                    DTC 0060

6. Offices:

The Office of Company for the  Transaction  is:  Inapplicable,  Company is not a
Multibranch Party.

The Office of JPMorgan for the Transaction is: London

                    JPMorgan Chase Bank, National Association
                    London Branch
                    P.O. Box 161
                    60 Victoria Embankment
                    London EC4Y 0JP
                    England

7. Notices: For purposes of this Confirmation:

(a)               Address  for  notices or  communications  to  Company:  Chemed
                  Corporation 2600 Chemed Center 255 East Fifth Street
                  Cincinnati, OH 45202
                  Attention: Chief Financial Officer
                  Telephone No.:    (513) 762-6901
                  Facsimile No.:    (513) 287-6713

(b) Address for notices or communications to JPMorgan:

                  JPMorgan notice information to follow:

                  JPMorgan Chase Bank, National Association
                  277 Park Avenue, 11th Floor
                  New York, NY  10172
                  Attention:  Eric Stefanik
                  Title:  Operations Analyst
                  EDG Corporate Marketing
                  Telephone No:  (212) 622-5814
                  Facsimile No:   (212) 622-8534

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8.  Representations and Warranties

(i) Representations and Warranties of Company

The  representations  and  warranties  of Company  set forth in Section 3 of the
Purchase  Agreement are true and correct and are hereby deemed to be repeated to
JPMorgan as if set forth herein.  Company hereby further represents and warrants
to JPMorgan that:

     (a)  Company has all  necessary  corporate  power and authority to execute,
          deliver and perform its  obligations  in respect of this  Transaction;
          such execution,  delivery and performance have been duly authorized by
          all  necessary   corporate   action  on  Company's   part;   and  this
          Confirmation  has been duly and  validly  executed  and  delivered  by
          Company and constitutes its valid and binding obligation,  enforceable
          against  Company in accordance  with its terms,  subject to applicable
          bankruptcy,   insolvency,   fraudulent   conveyance,   reorganization,
          moratorium and similar laws affecting  creditors'  rights and remedies
          generally,  and to general principles of equity,  including principles
          of commercial reasonableness,  good faith and fair dealing (regardless
          of whether  enforcement is sought in a proceeding at law or in equity)
          and except that rights to indemnification  and contribution  hereunder
          may be limited by federal or state  securities  laws or public  policy
          relating thereto.

     (b)  Neither  the  execution  and  delivery  of this  Confirmation  nor the
          incurrence or performance of obligations of Company hereunder will (i)
          conflict   with  or  result  in  a  breach  of  the   certificate   of
          incorporation or by-laws (or any equivalent  documents) of Company, or
          any applicable law or regulation,  or any order,  writ,  injunction or
          decree  of any  court or  governmental  authority  or  agency,  or any
          agreement or instrument to which Company or any of its subsidiaries is
          a party or by which Company or any of its  subsidiaries is bound or to
          which Company or any of its  subsidiaries is subject  (including,  but
          not limited to, any agreements and contracts of Counterparty or any of
          its subsidiaries  filed as exhibits to Company's Annual Report on Form
          10-K for the year ended December 31, 2006,  incorporated  by reference
          in the Offering  Memorandum),  or (ii)  constitute a default under, or
          result  in the  creation  of any lien  under,  any such  agreement  or
          instrument.

     (c)  No consent, approval,  authorization, or order of, or filing with, any
          governmental  agency or body or any court is  required  in  connection
          with  the  execution,  delivery  or  performance  by  Company  of this
          Confirmation,  except  such as have been  obtained or made and such as
          may be required  under the  Securities  Act of 1933,  as amended  (the
          "SECURITIES ACT") or state securities laws.

     (d)  The Shares of Company initially  issuable upon exercise of the Warrant
          by the net share  settlement  method (the "WARRANT  SHARES") have been
          reserved for issuance by all required corporate action of Company. The
          Warrant Shares have been duly authorized  and, when delivered  against
          payment  therefor  (which may include Net Share  Settlement in lieu of
          cash)  and  otherwise  as  contemplated  by the  terms of the  Warrant
          following the exercise of the Warrant in accordance with the terms and
          conditions  of the Warrant,  will be validly  issued,  fully-paid  and
          non-assessable,  and the  issuance of the  Warrant  Shares will not be
          subject to any preemptive or similar rights.

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     (e)  Company is an "eligible contract participant" (as such term is defined
          in Section  1a(12) of the  Commodity  Exchange  Act,  as amended  (the
          "CEA")) because one or more of the following is true:

                  Company  is  a   corporation,   partnership,   proprietorship,
                  organization, trust or other entity and:

                  (A)      Company has total assets in excess of USD 10,000,000;

                  (B)      the obligations of Company  hereunder are guaranteed,
                           or  otherwise  supported  by a letter  of  credit  or
                           keepwell, support or other agreement, by an entity of
                           the type  described in Section  1a(12)(A)(i)  through
                           (iv), 1a(12)(A)(v)(I), 1a(12)(A)(vii) or 1a(12)(C) of
                           the CEA; or

                  (C)      Company  has a net worth in  excess of USD  1,000,000
                           and has entered  into this  Agreement  in  connection
                           with the conduct of  Company's  business or to manage
                           the risk  associated with an asset or liability owned
                           or  incurred  or  reasonably  likely  to be  owned or
                           incurred  by  Company  in the  conduct  of  Company's
                           business.

     (f)  Company  and each of its  controlled  affiliates  is not,  on the date
          hereof,  in possession  of any material  non-public  information  with
          respect to Company.

(ii) Additional representations and warranties

     (a)  JPMorgan  represents that it is an "eligible contract  participant" as
          defined in Section 1a(12) of the CEA.

     (b)  Each of JPMorgan and Company  acknowledges  that the offer and sale of
          the Transaction to it is intended to be exempt from registration under
          the Securities, by virtue of Section 4(2) thereof.

9. Other Provisions:

     (A)  OPINIONS. Company shall deliver an opinion of counsel, dated as of the
          Trade  Date,  to  JPMorgan,  with  respect to the matters set forth in
          Sections 8(i)(a) through (d) of this Confirmation.

     (B)  RESERVED

     (C)  REPURCHASE NOTICES. Company shall, on any day on which Company effects
          any  repurchase of Shares,  promptly give JPMorgan a written notice of
          such repurchase (a "REPURCHASE  NOTICE") on such day if following such
          repurchase,  the number of outstanding  Shares on such day, subject to
          any adjustments  provided herein,  is (i) less than 21 million (in the
          case of the  first  such  notice)  or (ii)  thereafter  more than 1.60
          million  less than the number of Shares  included  in the  immediately
          preceding  Repurchase  Notice.  Company  agrees to indemnify  and hold
          harmless  JPMorgan and its affiliates and their  respective  officers,
          directors,  employees,  affiliates,  advisors,  agents and controlling
          persons (each, an  "INDEMNIFIED  PERSON") from and against any and all
          losses (including losses relating to JPMorgan's  hedging activities as
          a consequence  of becoming,  or of the risk of becoming,  a Section 16
          "insider",  including without limitation, any forbearance from hedging
          activities  or  cessation  of  hedging  activities  and any  losses in
          connection  therewith  with  respect  to  this  Transaction),  claims,
          damages,  judgments,  liabilities and expenses  (including  reasonable
          attorney's  fees),  joint  or  several,  which an  Indemnified  Person
          actually may become  subject to, as a result of  Company's  failure to
          provide JPMorgan with a Repurchase Notice on the day and in the manner
          specified in this  paragraph,  and to reimburse,  within 30 days, upon
          written request,  each of such Indemnified  Persons for any reasonable
          legal or other  expenses  incurred in connection  with  investigating,
          preparing  for,  providing  testimony or other  evidence in connection
          with  or  defending  any  of  the  foregoing.  If  any  suit,  action,

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<PAGE>

          proceeding  (including any governmental or regulatory  investigation),
          claim or demand shall be brought or asserted  against the  Indemnified
          Person,  such  Indemnified  Person shall  promptly  notify  Company in
          writing,  and Company,  upon request of the Indemnified Person,  shall
          retain counsel  reasonably  satisfactory to the Indemnified  Person to
          represent the Indemnified  Person and any others Company may designate
          in such proceeding and shall pay the fees and expenses of such counsel
          related  to such  proceeding.  Company  shall  not be  liable  for any
          settlement of any proceeding effected without its written consent, but
          if settled with such  consent or if there be a final  judgment for the
          plaintiff, Company agrees to indemnify any Indemnified Person from and
          against  any  loss  or  liability  by  reason  of such  settlement  or
          judgment.  Company shall not, without the prior written consent of the
          Indemnified Person, effect any settlement of any pending or threatened
          proceeding in respect of which any Indemnified Person is or could have
          been a party and  indemnity  could have been sought  hereunder by such
          Indemnified   Person,   unless  such   settlement   (x)   includes  an
          unconditional   release  of  such  Indemnified  Person,  in  form  and
          substance reasonably satisfactory to such Indemnified Person, from all
          liability on claims that are the subject matter of such proceeding and
          (y) does not include any  statement  as to or any  admission of fault,
          culpability  or a failure  to act by or on  behalf of any  Indemnified
          Person.  If the  indemnification  provided  for in this  paragraph  is
          unavailable to an Indemnified Person or insufficient in respect of any
          losses,  claims,  damages or  liabilities  referred to  therein,  then
          Company under such paragraph, in lieu of indemnifying such Indemnified
          Person  thereunder,  shall contribute to the amount paid or payable by
          such Indemnified Person as a result of such losses, claims, damages or
          liabilities.  The  remedies  provided  for in this  paragraph  are not
          exclusive  and  shall  not limit  any  rights  or  remedies  which may
          otherwise be available to any Indemnified  Person at law or in equity.
          The indemnity and contribution  agreements contained in this paragraph
          shall remain operative and in full force and effect  regardless of the
          termination of this Transaction.

     (D)  REGULATION  M.  Company  is  not  on  the  date  hereof  engaged  in a
          distribution,  as  such  term  is  used  in  Regulation  M  under  the
          Securities  Exchange Act of 1934, as amended (the "EXCHANGE  ACT"), of
          any  securities  of  Company,  other than a  distribution  meeting the
          requirements  of the  exception  set  forth  in Rules  101(b)(10)  and
          102(b)(7)  of  Regulation  M.  Company  shall  not,  until the  second
          Scheduled Trading Day immediately  following the Trade Date, engage in
          any such distribution.

     (E)  NO  MANIPULATION.  Company is not entering  into this  Transaction  to
          create  actual or  apparent  trading  activity  in the  Shares (or any
          security  convertible into or exchangeable for the Shares) or to raise
          or depress  or  otherwise  manipulate  the price of the Shares (or any
          security convertible into or exchangeable for the Shares) or otherwise
          in violation of the Exchange Act.

     (F)  TRANSFER OR ASSIGNMENT.  Company may not transfer any of its rights or
          obligations  under this Transaction  without the prior written consent
          of JPMorgan.  JPMorgan may,  without  Company's  consent,  transfer or
          assign  all or any  part  of its  rights  or  obligations  under  this
          Transaction  to any  third  party.  If after  JPMorgan's  commercially
          reasonable  efforts,  JPMorgan  is unable to effect such a transfer or
          assignment  on pricing  terms  reasonably  acceptable  to JPMorgan and
          within a time period reasonably acceptable to JPMorgan of a sufficient
          number of Warrants  to reduce (i)  JPMorgan's  "beneficial  ownership"
          (within  the  meaning  of  Section  13 of the  Exchange  Act and rules
          promulgated  thereunder)  to 7.5% of Company's  outstanding  Shares or
          less or (ii) the  quotient  of (x) the  product  of (a) the  Number of
          Warrants and (b) the Warrant  Entitlement divided by (y) the number of
          Company's outstanding Shares (such quotient expressed as a percentage,
          the  "WARRANT  EQUITY  PERCENTAGE")  to 14.5% or  less,  JPMorgan  may
          designate any Exchange  Business Day as an Early Termination Date with
          respect to a portion (the "TERMINATED  PORTION") of this  Transaction,
          such  that  (i) its  "beneficial  ownership"  following  such  partial
          termination  will be equal to or less  than  7.5% or (ii) the  Warrant
          Equity Percentage  following such partial termination will be equal to
          or less than 14.5%.  In the event that JPMorgan 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
          Warrants  equal to the Terminated  Portion,  (ii) Company shall be the
          sole Affected Party with respect to such partial termination and (iii)
          such Transaction  shall be the only Terminated  Transaction  (and, for
          the avoidance of doubt,  the  provisions of paragraph 9(l) shall apply
          to any amount that is payable by JPMorgan to Company  pursuant to this
          sentence). Notwithstanding any other provision in this Confirmation to
          the contrary requiring or allowing JPMorgan to purchase, sell, receive
          or deliver any Shares or other securities to or from Company, JPMorgan
          may designate  any of its  affiliates  to purchase,  sell,  receive or
          deliver  such  Shares or other  securities  and  otherwise  to perform
          JPMorgan's  obligations  in respect of this  Transaction  and any such
          designee may assume such obligations.  JPMorgan shall be discharged of
          its obligations to Company to the extent of any such performance.

                                       10
<PAGE>

     (G)  EARLY  UNWIND.  In the event the sale of  Convertible  Notes  (or,  in
          respect of the Greenshoe Exercise,  the Additional  Convertible Notes)
          is not consummated  with the initial  purchasers for any reason by the
          close of  business  in New York on May 14, 2007 (or, in respect of the
          Greenshoe Exercise,  the third Clearance System Business Day following
          the date of the Greenshoe  Exercise (the  "ADDITIONAL  CLOSING DATE"))
          (or such later date as agreed  upon by the  parties)  (May 14, 2007 or
          such later  date,  if any,  as agreed upon being or, in respect of the
          Greenshoe  Exercise,  the  Additional  Closing Date, the "EARLY UNWIND
          Date"),  this Transaction  (or, in respect of the Greenshoe  Exercise,
          the Additional  Warrants)  shall  automatically  terminate (the "EARLY
          UNWIND"),  on the Early  Unwind Date and (i) the  Transaction  (or, in
          respect of the Greenshoe Exercise, the Additional Warrants) and all of
          the  respective  rights and  obligations of JPMorgan and Company under
          the  Transaction  (or,  in  respect  of the  Greenshoe  Exercise,  the
          Additional  Warrants)  shall be cancelled and terminated and (ii) each
          party shall be  released  and  discharged  by the other party from and
          agrees not to make any claim  against the other party with  respect to
          any  obligations  or liabilities of the other party arising out of and
          to be performed in connection with the Transaction  (or, in respect of
          the Greenshoe  Exercise,  the Additional  Warrants) either prior to or
          after the Early Unwind Date; PROVIDED that Company, unless the sale of
          the  Convertible  Notes  or  the  Additional   Convertible  Notes,  as
          applicable,  is not  consummated  due  to a  breach  of  the  Purchase
          Agreement by the Initial  Purchasers,  shall purchase from JPMorgan on
          the Early Unwind Date all Shares  purchased by JPMorgan or one or more
          of its affiliates and shall,  notwithstanding anything to the contrary
          in the Equity  Definitions,  reimburse  JPMorgan for any  commercially
          reasonable costs or expenses (including market losses) relating to the
          unwinding of its hedging activities in connection with the Transaction
          (or, in respect of the Greenshoe  Exercise,  the Additional  Warrants)
          (including  any loss or cost incurred as a result of its  terminating,
          liquidating,  obtaining or reestablishing any hedge or related trading
          position). The amount of any such reimbursement shall be determined by
          JPMorgan  in its sole good faith  discretion.  JPMorgan  shall  notify
          Company  of  such  amount  and  Company   shall  pay  such  amount  in
          immediately  available  funds on the Early Unwind  Date.  JPMorgan and
          Company  represent and  acknowledge to the other that,  subject to the
          proviso  included  in  this  Section,   upon  an  Early  Unwind,   all
          obligations with respect to the Transaction  shall be deemed fully and
          finally discharged.

     (H)  DIVIDENDS.  If at any time  during the period from but  excluding  the
          Trade Date, to and including the  Expiration  Date, (i) an ex-dividend
          date  for a cash  dividend  occurs  with  respect  to the  Shares  (an
          "EX-DIVIDEND  DATE"),  and that  dividend  differs  from  the  Regular
          Dividend  on a per Share  basis or (ii) if no  Ex-Dividend  Date for a
          cash  dividend  occurs  with  respect to the  Shares in any  quarterly
          dividend period of Company, then the Calculation Agent will adjust any
          of the  Strike  Price,  Number  of  Warrants  and/or  Daily  Number of
          Warrants to preserve  the fair value of the Options to JPMorgan  after
          taking into account such dividend or lack thereof.  "REGULAR DIVIDEND"
          shall  mean for any  calendar  quarter,  USD 0.06 for the  first  cash
          dividend or distribution on the Shares for which the Ex-Dividend  Date
          falls  within  such  calendar  quarter,  and zero  for any  subsequent
          dividend or distribution on the Shares for which the Ex-Dividend  Date
          falls within the same calendar quarter.

     (I)  ROLE OF AGENT. Each party agrees and acknowledges that (i) J.P. Morgan
          Securities Inc., an affiliate of JPMorgan ("JPMSI"),  has acted solely
          as agent and not as  principal  with respect to this  Transaction  and
          (ii)  JPMSI  has no  obligation  or  liability,  by  way of  guaranty,
          endorsement or otherwise, in any manner in respect of this Transaction
          (including, if applicable, in respect of the settlement thereof). Each
          party agrees it will look solely to the other party (or any  guarantor
          in respect thereof) for performance of such other party's  obligations
          under this Transaction.

                                       11
<PAGE>

     (J)  ADDITIONAL PROVISIONS.

          (i)  Amendments to the Equity Definitions:

               (A)  Section 11.2(a) of the Equity  Definitions is hereby amended
                    by  deleting  the  words  "diluting  or  concentrative"  and
                    replacing them with the words "material".

               (B)  Section 11.2(c) of the Equity  Definitions is hereby amended
                    by (x) replacing the words "diluting or concentrative"  with
                    "an"  and  (y)  deleting  the  phrase   "(provided  that  no
                    adjustments  will be made to account  solely for  changes in
                    volatility, expected dividends, stock loan rate or liquidity
                    relative to the relevant  Shares)" and replacing it with the
                    phrase "(and, for the avoidance of doubt, adjustments may be
                    made to account solely for changes in  volatility,  expected
                    dividends,  stock  loan rate or  liquidity  relative  to the
                    relevant Shares)."

               (C)  Section  11.2(e)(vii)  of the Equity  Definitions  is hereby
                    amended by deleting the words  "diluting  or  concentrative"
                    and replacing them with the word "material";  and adding the
                    phrase "or Warrants" at the end of the sentence.

               (D)  Section  12.6(a)(ii)  of the  Equity  Definitions  is hereby
                    amended by (1)  deleting  from the fourth  line  thereof the
                    word "or" after the word  "official"  and  inserting a comma
                    therefor,  and (2)  deleting  the  semi-colon  at the end of
                    subsection  (B) thereof and inserting  the  following  words
                    therefor "or (C) at JPMorgan's option, the occurrence of any
                    of the events specified in Section 5(a)(vii) (1) through (9)
                    of the ISDA Master Agreement with respect to that Issuer."

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

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

                                (y) deleting the phrase "neither the Non-Hedging
                                Party nor the Lending  Party lends Shares in the
                                amount  of  the   Hedging   Shares  or"  in  the
                                penultimate sentence.

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

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

                                (y) (1) deleting subsection (C) in its entirety,
                                (2) deleting the word "or" immediately preceding
                                subsection   (C)  and  (3)  deleting  the  final
                                sentence in its entirety  and  replacing it with
                                the sentence "The Hedging  Party will  determine
                                the Cancellation  Amount payable by one party to
                                the other."

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

                    (A)  Consummation     of    (A)    any     recapitalization,
                         reclassification  or change of the Shares  (other  than
                         changes resulting from a subdivision or combination) as
                         a result of which the Shares would be  converted  into,
                         or  exchanged  for,  stock,  other  securities,   other
                         property  or  assets or (B) any  consolidation  with or
                         merger  of the  Company  with  or into  another  person
                         pursuant to which Shares will be  converted  into cash,
                         securities  or  other   property  or  any   conveyance,
                         transfer  or  lease  of  all  or  substantially  all of
                         Company's  properties  and assets to any  person  other
                         than one of its subsidiaries; PROVIDED, HOWEVER, that a
                         transaction  where the  holders of more than 50% of all
                         classes  of common  equity of the  Company  immediately
                         prior to such transaction own,  directly or indirectly,
                         more than 50% of all  classes  of common  equity of the
                         continuing  or  surviving   corporation  or  transferee
                         immediately after such event shall not be an Additional
                         Termination Event.

                                       12
<PAGE>

                    (B)  There is a default by Company or any  subsidiary in the
                         payment of the  principal or interest on any  mortgage,
                         agreement or other  instrument under which there may be
                         outstanding,  or by  which  there  may  be  secured  or
                         evidenced any indebtedness for money borrowed in excess
                         of $20 million in the  aggregate of Company  and/or any
                         subsidiary,  whether  such  indebtedness  now exists or
                         shall   hereafter   be   created   resulting   in  such
                         indebtedness   becoming  or  being   declared  due  and
                         payable.

                    (C)  Any  "person" or "group"  within the meaning of Section
                         13(d) of the Exchange  Act other than the Company,  any
                         of its  subsidiaries  or its  employee  benefit  plans,
                         files a  Schedule  TO or any  schedule,  form or report
                         under the Exchange Act  disclosing  that such person or
                         group  has  become  the  direct  or  indirect  ultimate
                         "beneficial  owner", as defined in Rule 13d-3 under the
                         Exchange  Act,  of the  capital  stock  of the  Company
                         representing  more than 50% of the voting power of such
                         capital stock.

                    (D)  JPMorgan,   despite   using   commercially   reasonable
                         efforts, is unable or reasonably  determines that it is
                         impractical  or  illegal,   to  hedge  its  obligations
                         pursuant  to  this  Transaction  in the  public  market
                         without  registration  under the Securities Act or as a
                         result  of any  legal,  regulatory  or  self-regulatory
                         requirements   or  related   policies  and   procedures
                         (whether   or  not  such   requirements,   policies  or
                         procedures are imposed by law or have been  voluntarily
                         adopted by JPMorgan).

                         Notwithstanding  the forgoing,  a transaction set forth
                         in  clauses  (A) or (C) above  will not  constitute  an
                         Additional    Termination   Event   if   100%   of  the
                         consideration,  excluding cash  payments for fractional
                         shares,  in such transaction or  transactions  consists
                         of  shares  of  capital  stock   listed  on a  national
                         securities  exchange  or quoted  on The  NASDAQ  Global
                         Market or The NASDAQ  Global  Select Market or  will be
                         so listed  or  quoted  when   issued  or  exchanged  in
                         connection with such transaction or transactions.

               (K)  NO  COLLATERAL OR SETOFF.  Notwithstanding  any provision of
                    the Agreement or any other agreement  between the parties to
                    the contrary,  the obligations of Company  hereunder are not
                    secured   by  any   collateral.   Obligations   under   this
                    Transaction  shall  not be set off by  Company  against  any
                    other obligations of the parties,  whether arising under the
                    Agreement,  this  Confirmation,  under any  other  agreement
                    between  the  parties   hereto,   by  operation  of  law  or
                    otherwise.  Any provision in the  Agreement  with respect to
                    the  satisfaction  of Company's  payment  obligations to the
                    extent of JPMorgan's  payment  obligations to Company in the
                    same  currency  and  in  the  same  Transaction  (including,
                    without  limitation Section 2(c) thereof) shall not apply to
                    Company and, for the avoidance of doubt, Company shall fully
                    satisfy such payment obligations notwithstanding any payment
                    obligation  to Company by JPMorgan in the same  currency and
                    in the same  Transaction.  In calculating  any amounts under
                    Section 6(e) of the Agreement,  notwithstanding  anything to
                    the contrary in the Agreement, (1) separate amounts shall be
                    calculated as set forth in such Section 6(e) with respect to
                    (a) this Transaction and (b) all other Transactions, and (2)
                    such separate  amounts shall be payable  pursuant to Section
                    6(d)(ii) of the Agreement.

               (L)  ALTERNATIVE  CALCULATIONS  AND PAYMENT ON EARLY  TERMINATION
                    AND ON CERTAIN  EXTRAORDINARY EVENTS. If, in respect of this
                    Transaction,  an amount is payable  by Company to  JPMorgan,
                    (i)  pursuant to Section  12.7 or Section 12.9 of the Equity
                    Definitions   (except   in  the  event  of  an   Insolvency,
                    Nationalization,  Tender  Offer or Merger Event in which the
                    consideration  or  proceeds  to be paid to holders of shares
                    consists  solely  of  cash)  or  (ii)  pursuant  to  Section
                    6(d)(ii) of the  Agreement  (except in the event of an Event
                    of Default in which  Company  is the  Defaulting  Party or a
                    Termination  Event in which  Company is the Affected  Party,
                    other than an Event of Default of the type  described in (x)
                    Section  5(a)(iii),  (v),  (vi),  (vii)  or  (viii)  of  the
                    Agreement or (y) a Termination  Event of the type  described

                                       13
<PAGE>

                    in Section  5(b) of the  Agreement,  in the case of both (x)
                    and (y), resulting from an event or events outside Company's
                    control) (a "PAYMENT  OBLIGATION"),  Company  shall have the
                    right, in its sole  discretion,  to satisfy any such Payment
                    Obligation by the Share Termination  Alternative (as defined
                    below) by giving irrevocable  telephonic notice to JPMorgan,
                    confirmed in writing  within one  Scheduled  Trading Day, no
                    later  than  12:00  p.m.  New York  local time on the Merger
                    Date, Tender Offer Date, Announcement Date (in the case of a
                    Nationalization, Insolvency or Delisting), Early Termination
                    Date or date of cancellation,  as applicable;  PROVIDED that
                    if Company  does not  validly  elect to satisfy  its Payment
                    Obligation by the Share  Termination  Alternative,  JPMorgan
                    shall  have the right to  require  Company  to  satisfy  its
                    Payment  Obligation  by the Share  Termination  Alternative.
                    Notwithstanding the foregoing, Company's or JPMorgan's right
                    to elect  satisfaction of a Payment  Obligation in the Share
                    Termination  Alternative  as set forth in this clause  shall
                    only  apply to  Transactions  under this  Confirmation  and,
                    notwithstanding  anything to the contrary in the  Agreement,
                    (1) separate amounts shall be calculated with respect to (a)
                    Transactions  hereunder and (b) all other Transactions under
                    the  Agreement,  and (2)  such  separate  amounts  shall  be
                    payable  pursuant  to  Section  6(d)(ii)  of the  Agreement,
                    subject  to,  in the case of  clause  (a),  Company's  Share
                    Termination Alternative right hereunder.
<TABLE>

<S>                                                        <C>
                  Share Termination Alternative:              If   applicable,    Company   shall
                                                              deliver  to   JPMorgan   the  Share
                                                              Termination  Delivery  Property  on
                                                              the date  (the  "SHARE  TERMINATION
                                                              PAYMENT   DATE")   on   which   the
                                                              Payment  Obligation would otherwise
                                                              be due  pursuant to Section 12.7 or
                                                              Section    12.9   of   the   Equity
                                                              Definitions  or  Section   6(d)(ii)
                                                              and 6(e) of the Agreement,  subject
                                                              to  paragraph   (m)(i)  below,   in
                                                              satisfaction,  subject to paragraph
                                                              (m)(ii)   below,   of  the  Payment
                                                              Obligation     in    the     manner
                                                              reasonably  requested  by  JPMorgan
                                                              free of payment.

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

                  Share Termination Unit Price:               The value to  JPMorgan  of property
                                                              contained in one Share  Termination
                                                              Delivery  Unit  on  the  date  such
                                                              Share  Termination  Delivery  Units
                                                              are  to  be   delivered   as  Share
                                                              Termination  Delivery Property,  as
                                                              determined   by   the   Calculation
                                                              Agent   in   its    discretion   by
                                                              commercially    reasonable   means.
                                                              The Calculation  Agent shall notify
                                                              Company of such  Share  Termination
                                                              Unit   Price   at   the   time   of
                                                              notification    of   the    Payment
                                                              Obligation.   In  the   case  of  a
                                                              Private    Placement    of    Share
                                                              Termination   Delivery  Units  that
                                                              are  Restricted  Shares (as defined
                                                              below),  as set forth in  paragraph

</TABLE>

                                       14
<PAGE>

<TABLE>
<S>                                                           <C>
                                                              (m)(i)     below,     the     Share
                                                              Termination  Unit  Price  shall  be
                                                              determined by the discounted  price
                                                              applicable     to    such     Share
                                                              Termination   Delivery   Units.  In
                                                              the   case   of   a    Registration
                                                              Settlement  of  Share   Termination
                                                              Delivery  Units that are Restricted
                                                              Shares  (as  defined  below) as set
                                                              forth in paragraph  (m)(ii)  below,
                                                              the Share  Termination  Unit  Price
                                                              shall  be the  Settlement  Price on
                                                              the Merger Date,  the  Announcement
                                                              Date    (in    the    case   of   a
                                                              Nationalization,    Insolvency   or
                                                              Delisting)     or     the     Early
                                                              Termination Date, as applicable.

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

                  Failure to Deliver:                         Inapplicable

                  Other applicable provisions:                If  Share  Termination  Alternative
                                                              is  applicable,  the  provisions of
                                                              Sections 9.8, 9.9,  9.11,  9.12 and
                                                              10.5  (as  modified  above)  of the
                                                              Equity    Definitions    will    be
                                                              applicable,    except    that   all
                                                              references  in such  provisions  to
                                                              "Physically-settled"  shall be read
                                                              as     references     to     "Share
                                                              Termination    Settled"   and   all
                                                              references  to  "Shares"  shall  be
                                                              read  as   references   to   "Share
                                                              Termination     Delivery    Units".
                                                              "Share   Termination   Settled"  in
                                                              relation to this Transaction  means
                                                              that Share Termination  Alternative
                                                              is applicable to this Transaction.
</TABLE>

               (M)  REGISTRATION/PRIVATE   PLACEMENT  PROCEDURES.   If,  in  the
                    reasonable  opinion of JPMorgan,  following  any delivery of
                    Shares or Share  Termination  Delivery  Property to JPMorgan
                    hereunder,   such  Shares  or  Share  Termination   Delivery
                    Property  would be in the hands of  JPMorgan  subject to any
                    applicable  restrictions with respect to any registration or
                    qualification requirement or prospectus delivery requirement
                    for such  Shares  or  Share  Termination  Delivery  Property
                    pursuant to any applicable  federal or state  securities law
                    (including, without limitation, any such requirement arising
                    under  Section 5 of the  Securities  Act as a result of such
                    Shares  or  Share   Termination   Delivery   Property  being
                    "restricted securities", as such term is defined in Rule 144
                    under the Securities Act, or as a result of the sale of such
                    Shares or Share Termination  Delivery Property being subject
                    to paragraph (c) of Rule 145 under the Securities Act) (such
                    Shares or Share Termination  Delivery Property,  "RESTRICTED
                    SHARES"),  then delivery of such Restricted  Shares shall be
                    effected  pursuant to either clause (i) or (ii) below at the
                    election of  Company,  unless  JPMorgan  waives the need for
                    registration/private  placement  procedures set forth in (i)
                    and (ii) below.  Notwithstanding  the  foregoing,  solely in
                    respect of any Daily Number of Warrants  exercised or deemed
                    exercised on any Expiration Date, Company shall elect, prior
                    to the first  Settlement Date for the first Expiration Date,
                    a Private  Placement  Settlement or Registration  Settlement
                    for  all  deliveries  of  Restricted  Shares  for  all  such
                    Expiration  Dates which  election shall be applicable to all
                    Settlement  Dates for such  Warrants and the  procedures  in
                    clause  (i) or clause  (ii) below  shall  apply for all such
                    delivered Restricted Shares on an aggregate basis commencing
                    after  the  final  Settlement  Date for such  Warrants.  The
                    Calculation  Agent  shall  make  reasonable  adjustments  to
                    settlement terms and provisions  under this  Confirmation to
                    reflect  a  single   Private   Placement   or   Registration
                    Settlement for such aggregate  Restricted  Shares  delivered
                    hereunder.
                                       15
<PAGE>

                    (i)  If Company elects to settle the Transaction pursuant to
                         this  clause (i) (a  "PRIVATE  PLACEMENT  SETTLEMENT"),
                         then delivery of Restricted  Shares by Company shall be
                         effected in customary private placement procedures with
                         respect to such Restricted Shares reasonably acceptable
                         to  JPMorgan;  PROVIDED  that  Company  may not elect a
                         Private  Placement  Settlement  if,  on the date of its
                         election,  it has  taken,  or caused  to be taken,  any
                         action that would make unavailable either the exemption
                         pursuant to Section 4(2) of the  Securities Act for the
                         sale  by  Company  to   JPMorgan   (or  any   affiliate
                         designated by JPMorgan) of the Restricted Shares or the
                         exemption  pursuant to Section  4(1) or Section 4(3) of
                         the Securities Act for resales of the Restricted Shares
                         by JPMorgan (or any such  affiliate of  JPMorgan).  The
                         Private Placement  Settlement of such Restricted Shares
                         shall  include  customary  representations,  covenants,
                         blue  sky  and  other   governmental   filings   and/or
                         registrations,  indemnities to JPMorgan,  due diligence
                         rights  (for  JPMorgan or any  designated  buyer of the
                         Restricted   Shares   by   JPMorgan),    opinions   and
                         certificates,   and  such  other  documentation  as  is
                         customary  for  private   placement   agreements,   all
                         reasonably  acceptable  to  JPMorgan.  In the case of a
                         Private Placement Settlement,  JPMorgan shall determine
                         the appropriate  discount to the Share Termination Unit
                         Price (in the case of settlement  of Share  Termination
                         Delivery  Units pursuant to paragraph (l) above) or any
                         Settlement  Price (in the case of  settlement of Shares
                         pursuant  to  Section  2  above)   applicable  to  such
                         Restricted  Shares in a commercially  reasonable manner
                         and appropriately  adjust the number of such Restricted
                         Shares to be delivered to JPMorgan hereunder;  PROVIDED
                         that in no event  shall  such  number be  greater  than
                         3,700,000 (the "MAXIMUM AMOUNT").  Notwithstanding  the
                         Agreement or this Confirmation, the date of delivery of
                         such Restricted  Shares shall be the Exchange  Business
                         Day  following  notice by JPMorgan to Company,  of such
                         applicable discount and the number of Restricted Shares
                         to be  delivered  pursuant to this clause (i).  For the
                         avoidance of doubt, delivery of Restricted Shares shall
                         be due as set forth in the previous sentence and not be
                         due on the Share Termination  Payment Date (in the case
                         of  settlement  of  Share  Termination  Delivery  Units
                         pursuant to paragraph  (l) above) or on the  Settlement
                         Date  for  such  Restricted  Shares  (in  the  case  of
                         settlement in Shares pursuant to Section 2 above).

                         In the event Company shall not have  delivered the full
                         number of Restricted  Shares otherwise  applicable as a
                         result of the  proviso  above  relating  to the Maximum
                         Amount (such deficit, the "DEFICIT RESTRICTED SHARES"),
                         Company shall be continually obligated to deliver, from
                         time  to  time   until  the  full   number  of  Deficit
                         Restricted Shares have been delivered  pursuant to this
                         paragraph,  Restricted  Shares when, and to the extent,
                         that (i) Shares are repurchased,  acquired or otherwise
                         received  by Company or any of its  subsidiaries  after
                         the Trade Date  (whether or not in  exchange  for cash,
                         fair value or any other consideration), (ii) authorized
                         and unissued Shares reserved for issuance in respect of
                         other  transactions  prior to such date which  prior to
                         the  relevant  date  become no longer so  reserved  and
                         (iii)  Company  additionally  authorizes  any  unissued
                         Shares that are not  reserved  for other  transactions.
                         Company  shall  immediately   notify  JPMorgan  of  the
                         occurrence  of any of the foregoing  events  (including
                         the  number of Shares  subject to clause  (i),  (ii) or
                         (iii) and the corresponding number of Restricted Shares
                         to be delivered) and promptly  deliver such  Restricted
                         Shares thereafter.

                         In the event of a Private Placement Settlement, the Net
                         Share  Settlement  Amount  or the  Payment  Obligation,
                         respectively,  shall  be  deemed  to be the  Net  Share
                         Settlement   Amount   or   the   Payment    Obligation,
                         respectively,  plus an  additional  amount  (determined
                         from  time  to  time by the  Calculation  Agent  in its
                         commercially   reasonable  judgment)   attributable  to
                         interest  that  would  be  earned  on  such  Net  Share
                         Settlement   Amount   or   the   Payment    Obligation,
                         respectively,  (increased  on a daily  basis to reflect
                         the accrual of such  interest  and reduced from time to
                         time by the amount of net proceeds received by JPMorgan
                         as provided herein) at a rate equal to the open Federal
                         Funds Rate plus the Spread  for the  period  from,  and
                         including,  such  Settlement  Date or the date on which
                         the Payment  Obligation is due,  respectively,  to, but
                         excluding, the related date on which all the Restricted
                         Shares have been sold and  calculated  on an Actual/360
                         basis.   The  foregoing   provision  shall  be  without
                         prejudice  to  JPMorgan's  rights  under the  Agreement
                         (including,  without  limitation,   Sections  5  and  6
                         thereof).

                                       16
<PAGE>

                         As used in this Section,  "SPREAD" means,  with respect
                         to  any  Net  Share   Settlement   Amount  or   Payment
                         Obligation,  respectively,  the credit  spread over the
                         applicable  overnight  rate that  would be  imposed  if
                         JPMorgan  were to extend credit to Company in an amount
                         equal  to such  Net  Share  Settlement  Amount,  all as
                         determined   by  the   Calculation   Agent   using  its
                         commercially  reasonable  judgment  as of  the  related
                         Settlement  Date  or the  date  on  which  the  Payment
                         Obligation    is    due,    respectively.    Commercial
                         reasonableness   shall  take  into   consideration  all
                         factors deemed relevant by the Calculation Agent, which
                         are expected to include, among other things, the credit
                         quality of Company (and any relevant affiliates) in the
                         then-prevailing market and the credit spread of similar
                         companies in the relevant  industry and other companies
                         having a substantially similar credit quality.

                    (ii) If Company elects to settle the Transaction pursuant to
                         this clause (ii) (a  "REGISTRATION  SETTLEMENT"),  then
                         Company shall  promptly (but in any event no later than
                         the  beginning  of the Resale  Period) file and use its
                         reasonable  best  efforts to make  effective  under the
                         Securities Act a  registration  statement or supplement
                         or amend an outstanding  registration statement in form
                         and substance reasonably  satisfactory to JPMorgan,  to
                         cover  the   resale  of  such   Restricted   Shares  in
                         accordance   with   customary    resale    registration
                         procedures,     including    covenants,     conditions,
                         representations,     underwriting     discounts     (if
                         applicable), commissions (if applicable),  indemnities,
                         due diligence rights,  opinions and  certificates,  and
                         such other  documentation  as is  customary  for equity
                         resale   underwriting   agreements,    all   reasonably
                         acceptable  to  JPMorgan.  If  JPMorgan,  in  its  sole
                         reasonable  discretion,  is  not  satisfied  with  such
                         procedures   and   documentation    Private   Placement
                         Settlement  shall apply.  If JPMorgan is satisfied with
                         such  procedures and  documentation,  it shall sell the
                         Restricted   Shares   pursuant  to  such   registration
                         statement   during  a  period  (the  "RESALE   PERIOD")
                         commencing  on  the  Exchange  Business  Day  following
                         delivery  of such  Restricted  Shares  (which,  for the
                         avoidance of doubt, shall be (x) any Settlement Date in
                         the case of an exercise of Warrants  prior to the first
                         Expiration  Date  pursuant to Section 2 above,  (y) the
                         Share Termination Payment Date in case of settlement in
                         Share Termination  Delivery Units pursuant to paragraph
                         (l) above or (z) the Settlement  Date in respect of the
                         final Expiration Date for all Daily Number of Warrants)
                         and ending on the earliest of (i) the Exchange Business
                         Day  on  which  JPMorgan  completes  the  sale  of  all
                         Restricted  Shares  or,  in the case of  settlement  of
                         Share  Termination  Delivery Units, a sufficient number
                         of Restricted  Shares so that the realized net proceeds
                         of such sales equals or exceeds the Payment  Obligation
                         (as  defined  above),  (ii) the  date  upon  which  all
                         Restricted   Shares  have  been  sold  or   transferred
                         pursuant  to Rule 144 (or  similar  provisions  then in
                         force)  or  Rule  145(d)(1)  or  (2)  (or  any  similar
                         provision  then in force) under the  Securities Act and
                         (iii) the date upon which all Restricted  Shares may be
                         sold or transferred by a non-affiliate pursuant to Rule
                         144(k) (or any similar provision then in force) or Rule
                         145(d)(3)  (or any  similar  provision  then in  force)
                         under the  Securities  Act. If the  Payment  Obligation
                         exceeds the  realized  net  proceeds  from such resale,
                         Company  shall  transfer to JPMorgan by the open of the
                         regular trading session on the Exchange on the Exchange
                         Trading Day  immediately  following the last day of the
                         Resale   Period   the  amount  of  such   excess   (the
                         "ADDITIONAL  Amount")  in cash or in a number of Shares
                         ("MAKE-WHOLE  SHARES") in an amount that,  based on the
                         Settlement  Price on the last day of the Resale  Period
                         (as if such day was the  "Valuation  Date" for purposes
                         of computing such Settlement Price), has a dollar value
                         equal to the Additional Amount. The Resale Period shall
                         continue to enable the sale of the  Make-whole  Shares.
                         If  Company  elects  to pay the  Additional  Amount  in
                         Shares,    the    requirements   and   provisions   for
                         Registration  Settlement  shall apply.  This  provision
                         shall be  applied  successively  until  the  Additional
                         Amount  is  equal to zero.  In no event  shall  Company
                         deliver a number of Restricted  Shares greater than the
                         Maximum Amount.

                                       17
<PAGE>

                    (iii) Without  limiting  the  generality  of the  foregoing,
                         Company agrees that any Restricted  Shares delivered to
                         JPMorgan,  as purchaser of such Restricted  Shares, (i)
                         may  be  transferred  by and  among  JPMorgan  and  its
                         affiliates  and  Company  shall  effect  such  transfer
                         without any further  action by JPMorgan  and (ii) after
                         the minimum "holding period" within the meaning of Rule
                         144(d) under the  Securities  Act has elapsed after any
                         Settlement  Date for such  Restricted  Shares,  Company
                         shall promptly remove,  or cause the transfer agent for
                         such Restricted Shares to remove, any legends referring
                         to any such  restrictions  or  requirements  from  such
                         Restricted  Shares upon  delivery by JPMorgan  (or such
                         affiliate  of  JPMorgan)  to Company  or such  transfer
                         agent of seller's and broker's  representation  letters
                         customarily  delivered by JPMorgan in  connection  with
                         resales of restricted  securities  pursuant to Rule 144
                         under  the   Securities   Act,   without   any  further
                         requirement  for  the  delivery  of  any   certificate,
                         consent,  agreement,  opinion of counsel, notice or any
                         other  document,  any transfer tax stamps or payment of
                         any other  amount or any other  action by JPMorgan  (or
                         such affiliate of JPMorgan).

                    If the  Private  Placement  Settlement  or the  Registration
                    Settlement shall not be effected as set forth in clauses (i)
                    or (ii), as applicable,  then failure to effect such Private
                    Placement  Settlement or such Registration  Settlement shall
                    constitute an Event of Default with respect to which Company
                    shall be the Defaulting Party.

               (N)  LIMIT ON  BENEFICIAL  OWNERSHIP.  Notwithstanding  any other
                    provisions  hereof,  JPMorgan  may not  exercise any Warrant
                    hereunder  or be  entitled  to take  delivery  of any Shares
                    deliverable  hereunder,  and  Automatic  Exercise  shall not
                    apply with respect to any Warrant  hereunder,  to the extent
                    (but only to the  extent)  that,  after such  receipt of any
                    Shares  upon  the  exercise  of such  Warrant  or  otherwise
                    hereunder, JPMorgan Chase & Co. would directly or indirectly
                    beneficially  own (as such term is defined  for  purposes of
                    Section  13(d) of the Exchange Act) in excess of 8.0% of the
                    outstanding  Shares.  Any purported delivery hereunder shall
                    be void and have no  effect to the  extent  (but only to the
                    extent)  that,  after such  delivery,  JPMorgan  Chase & Co.
                    would directly or indirectly so  beneficially  own in excess
                    of 8.0% of the outstanding  Shares.  If any delivery owed to
                    JPMorgan  hereunder is not made,  in whole or in part,  as a
                    result of this provision,  Company's obligation to make such
                    delivery  shall not be  extinguished  and Company shall make
                    such delivery as promptly as  practicable  after,  but in no
                    event  later than one  Business  Day after,  JPMorgan  gives
                    notice to Company that, after such delivery,  JPMorgan Chase
                    & Co. would not directly or indirectly so  beneficially  own
                    in excess of 8.0% of the outstanding  Shares.  No additional
                    compensation   or  amounts   shall  be  due  JPMorgan  as  a
                    consequence of such delayed settlement.

               (O)  SHARE DELIVERIES.  Company  acknowledges and agrees that, to
                    the  extent  the  holder  of  this  Warrant  is not  then an
                    affiliate  and has not  been an  affiliate  for 90 days  (it
                    being  understood  that  JPMorgan  will not be considered an
                    affiliate  under  this  paragraph  solely  by  reason of its
                    receipt  of  Shares  pursuant  to  this  Transaction),   and
                    otherwise   satisfies   all   holding   period   and   other
                    requirements of Rule 144 of the Securities Act applicable to
                    it, any  delivery  of Shares or Share  Termination  Property
                    hereunder  at any time  after 2 years  from the  Trade  Date
                    shall be  eligible  for  resale  under  Rule  144(k)  of the
                    Securities  Act and Company  agrees to promptly  remove,  or
                    cause  the   transfer   agent  for  such   Shares  or  Share
                    Termination  Property,  to remove,  any legends referring to
                    any restrictions on resale under the Securities Act from the
                    Shares  or  Share  Termination  Property.   Company  further
                    agrees,  for any  delivery  of Shares  or Share  Termination
                    Property  hereunder  at any time after 1 year from the Trade
                    Date but  within 2 years of the  Trade  Date,  to the to the
                    extent the holder of this Warrant then satisfies the holding
                    period and other  requirements of Rule 144 of the Securities
                    Act, to promptly  remove,  or cause the  transfer  agent for
                    such Restricted  Share to remove,  any legends  referring to
                    any such  restrictions or requirements  from such Restricted
                    Shares.  Such  Restricted  Shares will be  de-legended  upon
                    delivery by JPMorgan  (or such  affiliate  of  JPMorgan)  to
                    Company or such  transfer  agent of  customary  seller's and
                    broker's  representation  letters in connection with resales

                                       18
<PAGE>

                    of  restricted  securities  pursuant  to  Rule  144  of  the
                    Securities  Act,  without  any further  requirement  for the
                    delivery of any certificate,  consent, agreement, opinion of
                    counsel,  notice or any other  document,  any  transfer  tax
                    stamps or payment of any other amount or any other action by
                    JPMorgan (or such  affiliate of JPMorgan).  Company  further
                    agrees  that any  delivery  of Shares  or Share  Termination
                    Delivery  Property prior to the date that is 1 year from the
                    Trade Date, may be transferred by and among JPMorgan and its
                    affiliates  and Company shall effect such  transfer  without
                    any further action by JPMorgan.  Notwithstanding anything to
                    the  contrary  herein,  Company  agrees that any delivery of
                    Shares  or  Share  Termination  Delivery  Property  shall be
                    effected by book-entry  transfer  through the  facilities of
                    DTC,  or  any  successor  depositary,  if  at  the  time  of
                    delivery, such class of Shares or class of Share Termination
                    Delivery  Property  is in  book-entry  form  at DTC or  such
                    successor  depositary  and such Shares or Share  Termination
                    Delivery  Property  are  not  "restricted   securities"  for
                    purposes of the Securities Act.  Notwithstanding anything to
                    the contrary  herein,  to the extent the  provisions of Rule
                    144 of the Securities Act or any successor rule are amended,
                    or the applicable  interpretation  thereof by the Securities
                    and Exchange  Commission or any court change after the Trade
                    Date,  the  agreements  of  Company  herein  shall be deemed
                    modified to the extent necessary,  in the opinion of outside
                    counsel  of  Company,   to  comply  with  Rule  144  of  the
                    Securities  Act,  including  Rule 144(k) as in effect at the
                    time of delivery of the relevant Shares or Share Termination
                    Property.

               (P)  GOVERNING LAW. New York law (without  reference to choice of
                    law doctrine).

               (Q)  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.

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

               (S)  MAXIMUM SHARE DELIVERY.  Notwithstanding any other provision
                    of this  Confirmation  or the  Agreement,  in no event  will
                    Company be required to deliver more than the Maximum  Amount
                    of Shares in the  aggregate to JPMorgan in  connection  with
                    this  Transaction,   subject  to  the  provisions  regarding
                    Deficit Restricted Shares

               (T)  RIGHT TO EXTEND. JPMorgan may postpone, in whole or in part,
                    any  Expiration  Date  or any  other  date of  valuation  or
                    delivery  with  respect  to  some  or all  of  the  relevant
                    Warrants  (in which event the  Calculation  Agent shall make
                    appropriate adjustments to the Daily Number of Warrants with
                    respect  to  one  or  more  Expiration  Dates)  if  JPMorgan
                    determines,  in its commercially  reasonable judgment,  that
                    such  extension is reasonably  necessary or  appropriate  to
                    preserve   JPMorgan's   hedging  or  hedge  unwind  activity
                    hereunder in light of existing  liquidity  conditions  or to
                    enable JPMorgan to effect  purchases of Shares in connection
                    with  its  hedging,  hedge  unwind  or  settlement  activity
                    hereunder in a manner that would, if JPMorgan were Issuer or
                    an affiliated  purchaser of Issuer,  be in  compliance  with
                    applicable    legal,     regulatory    or    self-regulatory
                    requirements,   or  with  related  policies  and  procedures
                    applicable to JPMorgan.

               (U)  STATUS OF CLAIMS IN BANKRUPTCY.  JPMorgan  acknowledges  and
                    agrees that this  Confirmation  is not intended to convey to
                    JPMorgan   rights  against   Company  with  respect  to  the
                    Transaction   that  are  senior  to  the  claims  of  common
                    stockholders of Company in any U.S.  bankruptcy  proceedings
                    of Company;  provided  that  nothing  herein  shall limit or
                    shall be deemed to limit JPMorgan's right to pursue remedies
                    in the event of a breach by Company of its  obligations  and
                    agreements  with  respect  to  the  Transaction;   PROVIDED,
                    FURTHER,  that nothing herein shall limit or shall be deemed
                    to limit  JPMorgan's  rights in respect of any  transactions
                    other than the Transaction.

                                       19
<PAGE>

               (V)  SECURITIES  CONTRACT;  SWAP  AGREEMENT.  The parties  hereto
                    intend  for:  (a)  the   Transaction  to  be  a  "securities
                    contract"   and  a  "swap   agreement"  as  defined  in  the
                    Bankruptcy  Code (Title 11 of the United  States  Code) (the
                    "BANKRUPTCY Code"), and the parties hereto to be entitled to
                    the protections afforded by, among other Sections,  Sections
                    362(b)(6),  362(b)(17),  546(e),  546(g), 555 and 560 of the
                    Bankruptcy  Code;  (b) a  party's  right  to  liquidate  the
                    Transaction  and to  exercise  any other  remedies  upon the
                    occurrence of any Event of Default under the Agreement  with
                    respect  to the other  party to  constitute  a  "contractual
                    right" as described  in the  Bankruptcy  Code;  and (c) each
                    payment and delivery of cash,  securities or other  property
                    hereunder to  constitute a "margin  payment" or  "settlement
                    payment" and a "transfer" as defined in the Bankruptcy Code.

                                       [signature page follows]

                                       20

<PAGE>

         Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this  Confirmation  and returning it to EDG  Confirmation
Group,  J.P. Morgan  Securities Inc., 277 Park Avenue,  11th Floor, New York, NY
10172-3401, or by fax to (212) 622 8519.

                       Very truly yours,

                             J.P.  MORGAN  SECURITIES  INC.,  AS
                             AGENT  FOR  JPMORGAN   CHASE  BANK,
                             NATIONAL ASSOCIATION

                             By: /s/ Sudheer Tegulapalle
                             ---------------------------------------
                             Authorized Signatory
                             Name: Sudheer Tegulapalle

         Accepted and confirmed
         as of the Trade Date:

         CHEMED CORPORATION

         By: /s/ David P. Williams
         ----------------------------------------
         Authorized Signatory
         Name: David P. Williams

              JPMORGAN CHASE BANK, NATIONAL ASSOCIATION ORGANISED
     UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
             MAIN OFFICE 1111 POLARIS PARKWAY, COLUMBUS, OHIO 43271
    REGISTERED AS A BRANCH IN ENGLAND & WALES BRANCH NO. BR000746. REGISTERED
                 BRANCH OFFICE 125 LONDON WALL, LONDON EC2Y 5AJ
          AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY

                                       21May 8, 2007

From: Citibank, N.A.
390 Greenwich Street
New York, NY 10013
Equity Derivatives
Telephone: (212) 723-7357
Facsimile: (212) 723-8328

To: Chemed Corporation
2600 Chemed Center
255 East Fifth Street
Cincinnati, OH 45202
Attention: Chief Financial Officer
Telephone No.:    (513) 762-6901
Facsimile No.:    (513) 287-6713

Re: Warrants

     The purpose of this letter  agreement (this  "Confirmation")  is to confirm
the  terms  and  conditions  of  the  Warrants  issued  by  Chemed   Corporation
("Company") to Citibank,  N.A.  ("Citibank")  on the Trade Date specified  below
(the  "Transaction").  This letter  agreement  constitutes a  "Confirmation"  as
referred to in the ISDA Master  Agreement  specified  below.  This  Confirmation
shall replace any previous  agreements and serve as the final  documentation for
this Transaction.

     The  definitions   and  provisions   contained  in  the  2002  ISDA  Equity
Derivatives  Definitions  (the  "Equity  Definitions"),   as  published  by  the
International Swaps and Derivatives Association, Inc. ("ISDA"), are incorporated
into this  Confirmation.  In the event of any  inconsistency  between the Equity
Definitions and this Confirmation, this Confirmation shall govern.

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

1.   This  Confirmation  evidences  a complete  and  binding  agreement  between
     Citibank  and  Company  as to the terms of the  Transaction  to which  this
     Confirmation relates.  This Confirmation shall supplement,  form a part of,
     and be  subject  to an  agreement  in the  form  of the  2002  ISDA  Master
     Agreement  (the  "Agreement")  as if Citibank  and Company had  executed an
     agreement in such form (but without any Schedule except for the election of
     the laws of the State of New York as the governing  law) on the Trade Date.
     In the event of any inconsistency  between provisions of that Agreement and
     this  Confirmation,  this  Confirmation will prevail for the purpose of the
     Transaction to which this  Confirmation  relates.  The parties hereby agree
     that no Transaction  other than the Transaction to which this  Confirmation
     relates shall be governed by the Agreement.

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

<PAGE>

<TABLE>
<CAPTION>
<S>                                              <C>
General Terms:

       Trade Date:                                May 8, 2007

       Warrants:                                  Equity call warrants,  each giving the holder the right to purchase
                                                  one Share at the Strike Price,  subject to the Settlement Terms set
                                                  forth  below.  For the  purposes  of the Equity  Definitions,  each
                                                  reference to a Warrant  herein shall be deemed to be a reference to
                                                  a Call Option.

       Warrant Style:                             European

       Seller:                                    Company

       Buyer:                                     Citibank

       Shares:                                    The  capital  stock  of  Company,  par  value  USD  1  per  Share
                                                  (Exchange symbol "CHE")

       Number of Warrants:                        1,114,862,  subject to  adjustment as provided  herein;  provided
                                                  that the Number of Warrants shall be  automatically  increased as
                                                  of the  date  of  exercise  (the  "Greenshoe  Exercise")  by J.P.
                                                  Morgan  Securities  Inc.  and  Citigroup  Global  Markets Inc. as
                                                  representatives  of the  Initial  Purchasers  (as  defined in the
                                                  Purchase  Agreement  dated  as of May 8,  2007  between  Company,
                                                  J.P.  Morgan  Securities  Inc. and Citigroup  Global Markets Inc.
                                                  as  representatives  of the Initial Purchasers party thereto (the
                                                  "Purchase  Agreement")),  of their  option  pursuant to Section 1
                                                  of the Purchase  Agreement by the number of  additional  Warrants
                                                  in   proportion   to  the   increase  in  the  number  of  1.875%
                                                  Convertible Senior Notes due 2014 (the "Convertible  Notes"),  in
                                                  denominations  of USD 1,000  principal  amount issued pursuant to
                                                  such  exercise   (such   Convertible   Notes,   the   "Additional
                                                  Convertible Notes") (the "Additional Warrants").

       Warrant Entitlement:                       One Share per Warrant

       Strike Price:                              USD 105.4400

       Premium:                                   USD  12,426,300  (Premium per  Warrant:  USD  11.1460);  provided
                                                  that if the  Number of  Warrants  is  increased  pursuant  to the
                                                  proviso to the  definition of "Number of Warrants"  above,  there
                                                  shall  be an  additional  Premium  equal  to the  product  of the
                                                  number of  Additional  Warrants  and the Premium per Warrant (the
                                                  "Additional Premium"),  and such Additional Premium shall be paid
                                                  by Citibank to Company on the Additional Premium Payment Date.

       Premium Payment Date:                      May 14, 2007

       Additional Premium Payment Date:           The  closing  date for the  purchase  and sale of the  Additional
                                                  Convertible Notes.

       Exchange:                                  The New York Stock Exchange

       Related Exchange(s):                       All Exchanges
</TABLE>
                                       2

<PAGE>
<TABLE>
<S>                                               <C>
Procedures for Exercise:

        Expiration Time:                          The Valuation Time

        Expiration Date(s):                       Each  Scheduled  Trading Day during the period from and including
                                                  the  First   Expiration  Date  and  to  and  including  the  79th
                                                  Scheduled  Trading Day following the First  Expiration Date shall
                                                  be an  "Expiration  Date" for a number of  Warrants  equal to the
                                                  Daily   Number  of   Warrants  on  such  date;   provided   that,
                                                  notwithstanding   anything   to  the   contrary   in  the  Equity
                                                  Definitions,   if  any  such  date  is  a  Disrupted   Day,   the
                                                  Calculation Agent shall make adjustments,  if applicable,  to the
                                                  Daily  Number of  Warrants or shall  reduce such Daily  Number of
                                                  Warrants to zero for which such day shall be an  Expiration  Date
                                                  and  shall  designate  a  Scheduled  Trading  Day or a number  of
                                                  Scheduled  Trading  Days  as  the  Expiration   Date(s)  for  the
                                                  remaining  Daily Number of Warrants or a portion  thereof for the
                                                  originally  scheduled  Expiration Date; and provided further that
                                                  if  such  Expiration  Date  has  not  occurred  pursuant  to this
                                                  clause as of the  eighth  Scheduled  Trading  Day  following  the
                                                  last  scheduled  Expiration  Date  under  this  Transaction,  the
                                                  Calculation   Agent   shall  have  the  right  to  declare   such
                                                  Scheduled  Trading  Day to be the final  Expiration  Date and the
                                                  Calculation  Agent  shall  determine  its good faith  estimate of
                                                  the fair  market  value for the Shares as of the  Valuation  Time
                                                  on  that  eighth  Scheduled  Trading  Day  or on  any  subsequent
                                                  Scheduled  Trading Day, as the Calculation  Agent shall determine
                                                  using commercially reasonable means.

       First Expiration Date:                     August 15, 2014 (or if such day is not a Scheduled  Trading  Day,
                                                  the next  following  Scheduled  Trading  Day),  subject to Market
                                                  Disruption Event below.

       Multiple Exercise:                         Applicable

       Minimum Number of Warrants:                1

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

       Automatic Exercise:                        Applicable;  and  means  that,  unless  all  Warrants  have  been
                                                  previously  exercised  hereunder,  a number of Warrants  for each
                                                  Expiration  Date  equal  to the  Daily  Number  of  Warrants  (as
                                                  adjusted  pursuant to the terms hereof) for such  Expiration Date
                                                  will be  deemed  to be  automatically  exercised;  provided  that
                                                  "In-the-Money"  means that the Relevant Price for such Expiration
                                                  Date  exceeds  the Strike  Price for such  Expiration  Date;  and
                                                  provided  further that all  references  in Section  3.4(b) of the
                                                  Equity  Definitions  to  "Physical  Settlement"  shall be read as
                                                  references to "Net Share Settlement".
</TABLE>

                                       3
<PAGE>
<TABLE>
<S>                                               <C>
       Market Disruption Event:                   Section  6.3(a)(ii) of the Equity  Definitions  is hereby amended
                                                  by replacing  clause (ii) in its entirety  with "(ii) an Exchange
                                                  Disruption,   or"  and  inserting  immediately  following  clause
                                                  (iii)  the  phrase "; in each  case  that the  Calculation  Agent
                                                  determines is material."

Valuation:

       Valuation Time:                            Scheduled Closing Time.

       Valuation Date:                            Each Exercise Date.

 Settlement Terms:

       Settlement Method:                         Net Share Settlement.

       Net Share Settlement:                      On  the  relevant  Settlement  Date,  Company  shall  deliver  to
                                                  Citibank  the  Share   Delivery   Quantity  of  Shares  for  such
                                                  Settlement Date to the account  specified  hereto free of payment
                                                  through the Clearance System.

       Share Delivery Quantity:                   For any  Settlement  Date, a number of Shares,  as  calculated by
                                                  the Calculation  Agent,  equal to the Net Share Settlement Amount
                                                  for such Settlement  Date divided by the Settlement  Price on the
                                                  Valuation Date in respect of such Settlement  Date,  rounded down
                                                  to the nearest whole number plus any Fractional Share Amount.

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

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

       Settlement Date(s):                        As   determined  in  reference  to  Section  9.4  of  the  Equity
                                                  Definitions, subject to Section 9(m)(i) hereof.
</TABLE>
                                       4
<PAGE>
<TABLE>
<S>                                               <C>
 Other Applicable Provisions:                     The  provisions  of Sections  9.1(c),  9.8, 9.9,  9.11,  9.12 and
                                                  10.5 of the Equity  Definitions  will be applicable,  except that
                                                  all references in such provisions to  "Physically-settled"  shall
                                                  be  read  as  references  to  "Net  Share  Settled."  "Net  Share
                                                  Settled"  in  relation  to  any  Warrant  means  that  Net  Share
                                                  Settlement is applicable to that Warrant.

Representation and Agreement:                     Notwithstanding  Section  9.11  of the  Equity  Definitions,  the
                                                  parties  acknowledge  that any Shares  delivered  to Citibank may
                                                  be,  upon  delivery,  subject  to  restrictions  and  limitations
                                                  arising  from  Company's  status as issuer  of the  Shares  under
                                                  applicable securities laws.

3. Additional Terms applicable to the Transaction:

   Adjustments applicable to the Warrants:

    Method of Adjustment:                         Calculation  Agent  Adjustment.  For the  avoidance of doubt,  in
                                                  making  any  adjustments  under  the  Equity   Definitions,   the
                                                  Calculation  Agent may make  adjustments,  if any,  to any one or
                                                  more of the  Strike  Price,  the  Number of  Warrants,  the Daily
                                                  Number    of    Warrants    and    the    Warrant    Entitlement.
                                                  Notwithstanding   the   foregoing,    any   cash   dividends   or
                                                  distributions  on  the  Shares,  whether  or  not  extraordinary,
                                                  shall be governed by Section  9(h) of this  Confirmation  in lieu
                                                  of Article 10 or Section 11.2(c) of the Equity Definitions.
                                                  The Calculation  Agent shall promptly  thereafter notify Citibank
                                                  and Company of any such adjustment.

Extraordinary Events applicable to the Transaction:

       New Shares:                                Section  12.1(i) of the Equity  Definitions  is hereby amended by
                                                  deleting  the text in clause (i) in its  entirety  and  replacing
                                                  it with the phrase "publicly  quoted,  traded or listed on any of
                                                  the New York Stock  Exchange,  the American Stock  Exchange,  The
                                                  NASDAQ  Global  Select  Market or The  NASDAQ  Global  Market (or
                                                  their respective successors)".

       Consequence of Merger Events:

              Share-for-Share:                    Modified Calculation Agent Adjustment

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

              Share-for-Combined:                 Cancellation  and  Payment  (Calculation  Agent   Determination);
                                                  provided   that   Citibank   may  elect,   in  its   commercially
                                                  reasonable  judgment,  Component  Adjustment  (Calculation  Agent
                                                  Determination).

       Consequence of Tender Offers:

       Tender Offer:                              Applicable;  provided  however  that  if  an  event  occurs  that
                                                  constitutes  both a Tender  Offer  under  Section  12.1(d) of the
                                                  Equity   Definitions  and  Additional   Termination  Event  under
                                                  Section  9(j)(ii)(C)  of this  Confirmation,  Citibank may elect,
                                                  in its commercially  reasonable judgment,  whether the provisions
                                                  of   Section   12.3  of  the   Equity   Definitions   or  Section
                                                  9(j)(ii)(C) will apply.
</TABLE>

                                       5
<PAGE>
<TABLE>
<S>                                              <C>
              Share-for-Share:                    Modified Calculation Agent Adjustment

              Share-for-Other:                    Modified Calculation Agent Adjustment

              Share-for-Combined:                 Modified Calculation Agent Adjustment

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

       Additional Disruption Events:

              Change in Law:                      Applicable

              Failure to Deliver:                 Not Applicable

              Insolvency Filing:                  Applicable

              Hedging Disruption:                 Applicable

              Increased Cost of Hedging:          Not Applicable

              Loss of Stock Borrow:               Applicable

              Maximum Stock Loan Rate: 250 bps

              Increased Cost of Stock Borrow:     Applicable

                   Initial Stock Loan Rate:       0 bps

       Hedging Party:                             Citibank for all applicable Additional Disruption Events

       Determining Party:                         Citibank for all applicable Additional Disruption Events

       Non-Reliance:                              Applicable

       Agreements and Acknowledgments
       Regarding Hedging Activities:              Applicable

       Additional Acknowledgments:                Applicable

4.  Calculation Agent:                            Citibank.  The  Calculation  Agent  shall,  upon  request  by  the
                                                  Company,  provide a written  explanation of any  calculation  made
                                                  by  it  including,   where   applicable,   a  description  of  the
                                                  methodology and data applied.
</TABLE>
                                       6
<PAGE>

5.  Account Details:

         (a)      Account for payments to Company:

                    JP Morgan Chase Bank
                    ABA# 021000021
                    Acct: Chemed Corporation
                    Acct No.: 94-13065

                    Account for delivery of Shares from Company:

                    To be provided by Company

         (b)        Account for payments to Citibank:

                    Citibank, N.A.
                    ABA #021000089
                    DDA 00167679
                    Ref: Equity Derivatives

                    Account for delivery of Shares to Citibank:

                    DTC 418

6. Offices:

The Office of Company for the  Transaction  is:  Inapplicable,  Company is not a
Multibranch Party.

The Office of Citibank for the Transaction is: 390 Greenwich  Street,  New York,
NY 10013

7. Notices: For purposes of this Confirmation:

(a)      Address for notices or communications to Company:
                  Chemed Corporation
                  2600 Chemed Center
                  255 East Fifth Street
                  Cincinnati, OH 45202
                  Attention: Chief Financial Officer
                  Telephone No.:    (513) 762-6901
                  Facsimile No.:    (513) 287-6713

(b)      Address for notices or communications to Citibank:

                  Citibank notice information to follow:

                  To:               Citibank, N.A.
                                    390 Greenwich Street, 5th Floor
                                    New York, NY 10013

                  Attention:        Equity Derivatives
                  Telephone:        (212) 723-7357
                  Facsimile:        (212) 723-8328

                  To:               Citibank, N.A.
                                    3880 Greenwich Street, 17th Floor
                                    New York, NY 10013

                  Attention:        CIB Legal Group--Derivatives
                  Telephone:        (212) 816-2944
                  Facsimile:        (646) 291-5875

                                       7
<PAGE>

8.  Representations and Warranties

(i) Representations and Warranties of Company

The  representations  and  warranties  of Company  set forth in Section 3 of the
Purchase  Agreement are true and correct and are hereby deemed to be repeated to
Citibank as if set forth herein.  Company hereby further represents and warrants
to Citibank that:

     (a)  Company has all  necessary  corporate  power and authority to execute,
          deliver and perform its  obligations  in respect of this  Transaction;
          such execution,  delivery and performance have been duly authorized by
          all  necessary   corporate   action  on  Company's   part;   and  this
          Confirmation  has been duly and  validly  executed  and  delivered  by
          Company and constitutes its valid and binding obligation,  enforceable
          against  Company in accordance  with its terms,  subject to applicable
          bankruptcy,   insolvency,   fraudulent   conveyance,   reorganization,
          moratorium and similar laws affecting  creditors'  rights and remedies
          generally,  and to general principles of equity,  including principles
          of commercial reasonableness,  good faith and fair dealing (regardless
          of whether  enforcement is sought in a proceeding at law or in equity)
          and except that rights to indemnification  and contribution  hereunder
          may be limited by federal or state  securities  laws or public  policy
          relating thereto.

     (b)  Neither  the  execution  and  delivery  of this  Confirmation  nor the
          incurrence or performance of obligations of Company hereunder will (i)
          conflict   with  or  result  in  a  breach  of  the   certificate   of
          incorporation or by-laws (or any equivalent  documents) of Company, or
          any applicable law or regulation,  or any order,  writ,  injunction or
          decree  of any  court or  governmental  authority  or  agency,  or any
          agreement or instrument to which Company or any of its subsidiaries is
          a party or by which Company or any of its  subsidiaries is bound or to
          which Company or any of its  subsidiaries is subject  (including,  but
          not limited to, any agreements and contracts of Counterparty or any of
          its subsidiaries  filed as exhibits to Company's Annual Report on Form
          10-K for the year ended December 31, 2006,  incorporated  by reference
          in the Offering  Memorandum),  or (ii)  constitute a default under, or
          result  in the  creation  of any lien  under,  any such  agreement  or
          instrument.

     (c)  No consent, approval,  authorization, or order of, or filing with, any
          governmental  agency or body or any court is  required  in  connection
          with  the  execution,  delivery  or  performance  by  Company  of this
          Confirmation,  except  such as have been  obtained or made and such as
          may be required  under the  Securities  Act of 1933,  as amended  (the
          "Securities Act") or state securities laws.

     (d)  The Shares of Company initially  issuable upon exercise of the Warrant
          by the net share  settlement  method (the "Warrant  Shares") have been
          reserved for issuance by all required corporate action of Company. The
          Warrant Shares have been duly authorized  and, when delivered  against
          payment  therefor  (which may include Net Share  Settlement in lieu of
          cash)  and  otherwise  as  contemplated  by the  terms of the  Warrant
          following the exercise of the Warrant in accordance with the terms and
          conditions  of the Warrant,  will be validly  issued,  fully-paid  and
          non-assessable,  and the  issuance of the  Warrant  Shares will not be
          subject to any preemptive or similar rights.

     (e)  Company is an "eligible contract participant" (as such term is defined
          in Section  1a(12) of the  Commodity  Exchange  Act,  as amended  (the
          "CEA")) because one or more of the following is true:
<PAGE>

Company is a corporation,  partnership,  proprietorship,  organization, trust or
other entity and:

          (A)  Company has total assets in excess of USD 10,000,000;

          (B)  the obligations of Company hereunder are guaranteed, or otherwise
               supported  by a letter of credit or  keepwell,  support  or other
               agreement,  by  an  entity  of  the  type  described  in  Section
               1a(12)(A)(i)  through (iv),  1a(12)(A)(v)(I),  1a(12)(A)(vii)  or
               1a(12)(C) of the CEA; or

          (C)  Company  has a net  worth  in  excess  of USD  1,000,000  and has
               entered  into this  Agreement in  connection  with the conduct of
               Company's business or to manage the risk associated with an asset
               or liability  owned or incurred or reasonably  likely to be owned
               or incurred by Company in the conduct of Company's business.

     (f)  Company  and each of its  controlled  affiliates  is not,  on the date
          hereof,  in possession  of any material  non-public  information  with
          respect to Company.

(ii) Additional representations and warranties

     (a)  Citibank  represents that it is an "eligible contract  participant" as
          defined in Section 1a(12) of the CEA.

     (b)  Each of Citibank and Company  acknowledges  that the offer and sale of
          the Transaction to it is intended to be exempt from registration under
          the Securities, by virtue of Section 4(2) thereof.

9. Other Provisions:

     (a)  Opinions. Company shall deliver an opinion of counsel, dated as of the
          Trade  Date,  to  Citibank,  with  respect to the matters set forth in
          Sections 8(i)(a) through (d) of this Confirmation.

     (b)  Reserved

     (c)  Repurchase Notices. Company shall, on any day on which Company effects
          any  repurchase of Shares,  promptly give Citibank a written notice of
          such repurchase (a "Repurchase  Notice") on such day if following such
          repurchase,  the number of outstanding  Shares on such day, subject to
          any adjustments  provided herein,  is (i) less than 21 million (in the
          case of the  first  such  notice)  or (ii)  thereafter  more than 1.60
          million  less than the number of Shares  included  in the  immediately
          preceding  Repurchase  Notice.  Company  agrees to indemnify  and hold
          harmless  Citibank and its affiliates and their  respective  officers,
          directors,  employees,  affiliates,  advisors,  agents and controlling
          persons (each, an  "Indemnified  Person") from and against any and all
          losses (including losses relating to Citibank's  hedging activities as
          a consequence  of becoming,  or of the risk of becoming,  a Section 16
          "insider",  including without limitation, any forbearance from hedging
          activities  or  cessation  of  hedging  activities  and any  losses in
          connection  therewith  with  respect  to  this  Transaction),  claims,
          damages,  judgments,  liabilities and expenses  (including  reasonable
          attorney's  fees),  joint  or  several,  which an  Indemnified  Person
          actually may become  subject to, as a result of  Company"s  failure to
          provide Citibank with a Repurchase Notice on the day and in the manner
          specified in this  paragraph,  and to reimburse,  within 30 days, upon
          written request,  each of such Indemnified  Persons for any reasonable
          legal or other  expenses  incurred in connection  with  investigating,
          preparing  for,  providing  testimony or other  evidence in connection
          with  or  defending  any  of  the  foregoing.  If  any  suit,  action,
          proceeding  (including any governmental or regulatory  investigation),
          claim or demand shall be brought or asserted  against the  Indemnified
          Person,  such  Indemnified  Person shall  promptly  notify  Company in
          writing,  and Company,  upon request of the Indemnified Person,  shall
          retain counsel  reasonably  satisfactory to the Indemnified  Person to
          represent the Indemnified  Person and any others Company may designate
          in such proceeding and shall pay the fees and expenses of such counsel
          related  to such  proceeding.  Company  shall  not be  liable  for any
          settlement of any proceeding effected without its written consent, but
          if settled with such  consent or if there be a final  judgment for the
          plaintiff, Company agrees to indemnify any Indemnified Person from and
          against  any  loss  or  liability  by  reason  of such  settlement  or
          judgment.  Company shall not, without the prior written consent of the
          Indemnified Person, effect any settlement of any pending or threatened
          proceeding in respect of which any Indemnified Person is or could have
          been a party and  indemnity  could have been sought  hereunder by such
          Indemnified   Person,   unless  such   settlement   (x)   includes  an
          unconditional   release  of  such  Indemnified  Person,  in  form  and
          substance reasonably satisfactory to such Indemnified Person, from all
          liability on claims that are the subject matter of such proceeding and
          (y) does not include any  statement  as to or any  admission of fault,
          culpability  or a failure  to act by or on  behalf of any  Indemnified
          Person.  If the  indemnification  provided  for in this  paragraph  is
          unavailable to an Indemnified Person or insufficient in respect of any
          losses,  claims,  damages or  liabilities  referred to  therein,  then
          Company under such paragraph, in lieu of indemnifying such Indemnified
          Person  thereunder,  shall contribute to the amount paid or payable by
          such Indemnified Person as a result of such losses, claims, damages or
          liabilities.  The  remedies  provided  for in this  paragraph  are not
          exclusive  and  shall  not limit  any  rights  or  remedies  which may
          otherwise be available to any Indemnified  Person at law or in equity.
          The indemnity and contribution  agreements contained in this paragraph
          shall remain operative and in full force and effect  regardless of the
          termination of this Transaction.

                                       9
<PAGE>

     (d)  Regulation  M.  Company  is  not  on  the  date  hereof  engaged  in a
          distribution,  as  such  term  is  used  in  Regulation  M  under  the
          Securities  Exchange Act of 1934, as amended (the "Exchange  Act"), of
          any  securities  of  Company,  other than a  distribution  meeting the
          requirements  of the  exception  set  forth  in Rules  101(b)(10)  and
          102(b)(7)  of  Regulation  M.  Company  shall  not,  until the  second
          Scheduled Trading Day immediately  following the Trade Date, engage in
          any such distribution.

     (e)  No  Manipulation.  Company is not entering  into this  Transaction  to
          create  actual or  apparent  trading  activity  in the  Shares (or any
          security  convertible into or exchangeable for the Shares) or to raise
          or depress  or  otherwise  manipulate  the price of the Shares (or any
          security convertible into or exchangeable for the Shares) or otherwise
          in violation of the Exchange Act.

     (f)  Transfer or Assignment.  Company may not transfer any of its rights or
          obligations  under this Transaction  without the prior written consent
          of Citibank.  Citibank may,  without  Company's  consent,  transfer or
          assign  all or any  part  of its  rights  or  obligations  under  this
          Transaction  to any  third  party.  If after  Citibank's  commercially
          reasonable  efforts,  Citibank  is unable to effect such a transfer or
          assignment  on pricing  terms  reasonably  acceptable  to Citibank and
          within a time period reasonably acceptable to Citibank of a sufficient
          number of Warrants  to reduce (i)  Citibank's  "beneficial  ownership"
          (within  the  meaning  of  Section  13 of the  Exchange  Act and rules
          promulgated  thereunder)  to 7.5% of Company's  outstanding  Shares or
          less or (ii) the  quotient  of (x) the  product  of (a) the  Number of
          Warrants and (b) the Warrant  Entitlement divided by (y) the number of
          Company's outstanding Shares (such quotient expressed as a percentage,
          the  "Warrant  Equity  Percentage")  to 14.5% or  less,  Citibank  may
          designate any Exchange  Business Day as an Early Termination Date with
          respect to a portion (the "Terminated  Portion") of this  Transaction,
          such  that  (i) its  "beneficial  ownership"  following  such  partial
          termination  will be equal to or less  than  7.5% or (ii) the  Warrant
          Equity Percentage  following such partial termination will be equal to
          or less than 14.5%.  In the event that Citibank 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
          Warrants  equal to the Terminated  Portion,  (ii) Company shall be the
          sole Affected Party with respect to such partial termination and (iii)
          such Transaction  shall be the only Terminated  Transaction  (and, for
          the avoidance of doubt,  the  provisions of paragraph 9(l) shall apply
          to any amount that is payable by Citibank to Company  pursuant to this
          sentence). Notwithstanding any other provision in this Confirmation to
          the contrary requiring or allowing Citibank to purchase, sell, receive
          or deliver any Shares or other securities to or from Company, Citibank
          may designate  any of its  affiliates  to purchase,  sell,  receive or
          deliver  such  Shares or other  securities  and  otherwise  to perform
          Citibank's  obligations  in respect of this  Transaction  and any such
          designee may assume such obligations.  Citibank shall be discharged of
          its obligations to Company to the extent of any such performance.

                                       10
<PAGE>

     (g)  Early  Unwind.  In the event the sale of  Convertible  Notes  (or,  in
          respect of the Greenshoe Exercise,  the Additional  Convertible Notes)
          is not consummated  with the initial  purchasers for any reason by the
          close of  business  in New York on May 14, 2007 (or, in respect of the
          Greenshoe Exercise,  the third Clearance System Business Day following
          the date of the Greenshoe  Exercise (the  "Additional  Closing Date"))
          (or such later date as agreed  upon by the  parties)  (May 14, 2007 or
          such later  date,  if any,  as agreed upon being or, in respect of the
          Greenshoe  Exercise,  the  Additional  Closing Date, the "Early Unwind
          Date"),  this Transaction  (or, in respect of the Greenshoe  Exercise,
          the Additional  Warrants)  shall  automatically  terminate (the "Early
          Unwind"),  on the Early  Unwind Date and (i) the  Transaction  (or, in
          respect of the Greenshoe Exercise, the Additional Warrants) and all of
          the  respective  rights and  obligations of Citibank and Company under
          the  Transaction  (or,  in  respect  of the  Greenshoe  Exercise,  the
          Additional  Warrants)  shall be cancelled and terminated and (ii) each
          party shall be  released  and  discharged  by the other party from and
          agrees not to make any claim  against the other party with  respect to
          any  obligations  or liabilities of the other party arising out of and
          to be performed in connection with the Transaction  (or, in respect of
          the Greenshoe  Exercise,  the Additional  Warrants) either prior to or
          after the Early Unwind Date; provided that Company, unless the sale of
          the  Convertible  Notes  or  the  Additional   Convertible  Notes,  as
          applicable,  is not  consummated  due  to a  breach  of  the  Purchase
          Agreement by the Initial  Purchasers,  shall purchase from Citibank on
          the Early Unwind Date all Shares  purchased by Citibank or one or more
          of its affiliates and shall,  notwithstanding anything to the contrary
          in the Equity  Definitions,  reimburse  Citibank for any  commercially
          reasonable costs or expenses (including market losses) relating to the
          unwinding of its hedging activities in connection with the Transaction
          (or, in respect of the Greenshoe  Exercise,  the Additional  Warrants)
          (including  any loss or cost incurred as a result of its  terminating,
          liquidating,  obtaining or reestablishing any hedge or related trading
          position). The amount of any such reimbursement shall be determined by
          Citibank  in its sole good faith  discretion.  Citibank  shall  notify
          Company  of  such  amount  and  Company   shall  pay  such  amount  in
          immediately  available  funds on the Early Unwind  Date.  Citibank and
          Company  represent and  acknowledge to the other that,  subject to the
          proviso  included  in  this  Section,   upon  an  Early  Unwind,   all
          obligations with respect to the Transaction  shall be deemed fully and
          finally discharged.

     (h)  Dividends.  If at any time  during the period from but  excluding  the
          Trade Date, to and including the  Expiration  Date, (i) an ex-dividend
          date  for a cash  dividend  occurs  with  respect  to the  Shares  (an
          "Ex-Dividend  Date"),  and that  dividend  differs  from  the  Regular
          Dividend  on a per Share  basis or (ii) if no  Ex-Dividend  Date for a
          cash  dividend  occurs  with  respect to the  Shares in any  quarterly
          dividend period of Company, then the Calculation Agent will adjust any
          of the  Strike  Price,  Number  of  Warrants  and/or  Daily  Number of
          Warrants to preserve  the fair value of the Options to Citibank  after
          taking into account such dividend or lack thereof.  "Regular Dividend"
          shall  mean for any  calendar  quarter,  USD 0.06 for the  first  cash
          dividend or distribution on the Shares for which the Ex-Dividend  Date
          falls  within  such  calendar  quarter,  and zero  for any  subsequent
          dividend or distribution on the Shares for which the Ex-Dividend  Date
          falls within the same calendar quarter.

     (i)  Reserved

     (j)  Additional Provisions.

          (i)  Amendments to the Equity Definitions:

               (A)  Section 11.2(a) of the Equity  Definitions is hereby amended
                    by  deleting  the  words  "diluting  or  concentrative"  and
                    replacing them with the words "material".

               (B)  Section 11.2(c) of the Equity  Definitions is hereby amended
                    by (x) replacing the words "diluting or concentrative"  with
                    "an"  and  (y)  deleting  the  phrase   "(provided  that  no
                    adjustments  will be made to account  solely for  changes in
                    volatility, expected dividends, stock loan rate or liquidity
                    relative to the relevant  Shares)" and replacing it with the
                    phrase "(and, for the avoidance of doubt, adjustments may be
                    made to account solely for changes in  volatility,  expected
                    dividends,  stock  loan rate or  liquidity  relative  to the
                    relevant Shares)."

                                       11
<PAGE>

               (C)  Section  11.2(e)(vii)  of the Equity  Definitions  is hereby
                    amended by deleting the words  "diluting  or  concentrative"
                    and replacing them with the word "material";  and adding the
                    phrase "or Warrants" at the end of the sentence.

               (D)  Section  12.6(a)(ii)  of the  Equity  Definitions  is hereby
                    amended by (1)  deleting  from the fourth  line  thereof the
                    word "or" after the word  "official"  and  inserting a comma
                    therefor,  and (2)  deleting  the  semi-colon  at the end of
                    subsection  (B) thereof and inserting  the  following  words
                    therefor "or (C) at Citibank's option, the occurrence of any
                    of the events specified in Section 5(a)(vii) (1) through (9)
                    of the ISDA Master Agreement with respect to that Issuer."

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

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

                    (y)  deleting the phrase "neither the Non-Hedging  Party nor
                         the  Lending  Party  lends  Shares in the amount of the
                         Hedging Shares or" in the penultimate sentence.

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

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

                    (y)  (1)  deleting  subsection  (C)  in  its  entirety,  (2)
                         deleting the word "or" immediately preceding subsection
                         (C) and (3) deleting the final sentence in its entirety
                         and  replacing it with the sentence  "The Hedging Party
                         will determine the  Cancellation  Amount payable by one
                         party to the other."

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

          (A)  Consummation  of (A) any  recapitalization,  reclassification  or
               change  of  the  Shares  (other  than  changes  resulting  from a
               subdivision or combination) as a result of which the Shares would
               be converted  into, or exchanged for,  stock,  other  securities,
               other property or assets or (B) any consolidation  with or merger
               of the  Company  with or into  another  person  pursuant to which
               Shares will be converted into cash,  securities or other property
               or any conveyance,  transfer or lease of all or substantially all
               of Company's  properties  and assets to any person other than one
               of its subsidiaries;  provided, however, that a transaction where
               the holders of more than 50% of all  classes of common  equity of
               the Company  immediately  prior to such transaction own, directly
               or  indirectly,  more than 50% of all classes of common equity of
               the continuing or surviving corporation or transferee immediately
               after such event shall not be an Additional Termination Event.

          (B)  There is a default by Company or any subsidiary in the payment of
               the  principal  or interest on any  mortgage,  agreement or other
               instrument  under  which  there may be  outstanding,  or by which
               there may be  secured or  evidenced  any  indebtedness  for money
               borrowed  in excess of $20  million in the  aggregate  of Company
               and/or any subsidiary,  whether such  indebtedness  now exists or
               shall  hereafter  be  created   resulting  in  such  indebtedness
               becoming or being declared due and payable.

                                       12
<PAGE>

          (C)  Any  "person" or "group"  within the meaning of Section  13(d) of
               the Exchange Act other than the Company,  any of its subsidiaries
               or  its  employee  benefit  plans,  files  a  Schedule  TO or any
               schedule,  form or report under the Exchange Act disclosing  that
               such person or group has become the direct or  indirect  ultimate
               "beneficial  owner",  as defined in Rule 13d-3 under the Exchange
               Act, of the capital stock of the Company  representing  more than
               50% of the voting power of such capital stock.

          (D)  Citibank,  despite  using  commercially  reasonable  efforts,  is
               unable  or  reasonably  determines  that  it  is  impractical  or
               illegal, to hedge its obligations pursuant to this Transaction in
               the public market without  registration  under the Securities Act
               or as a  result  of  any  legal,  regulatory  or  self-regulatory
               requirements or related  policies and procedures  (whether or not
               such  requirements,  policies or procedures are imposed by law or
               have been voluntarily adopted by Citibank).

               Notwithstanding the forgoing,  a transaction set forth in clauses
               (A) or (C) above will not  constitute an  Additional  Termination
               Event if 100% of the  consideration,  excluding cash payments for
               fractional  shares, in such transaction or transactions  consists
               of shares  of  capital  stock  listed  on a  national  securities
               exchange  or quoted on The  NASDAQ  Global  Market or The  NASDAQ
               Global  Select  Market or will be so listed or quoted when issued
               or exchanged in connection with such transaction or transactions.

     (k)  No  Collateral  or  Setoff.   Notwithstanding  any  provision  of  the
          Agreement or any other agreement  between the parties to the contrary,
          the   obligations  of  Company   hereunder  are  not  secured  by  any
          collateral. Obligations under this Transaction shall not be set off by
          Company against any other obligations of the parties,  whether arising
          under the  Agreement,  this  Confirmation,  under any other  agreement
          between the parties  hereto,  by  operation of law or  otherwise.  Any
          provision  in  the  Agreement  with  respect  to the  satisfaction  of
          Company's  payment  obligations  to the extent of  Citibank's  payment
          obligations   to  Company  in  the  same  currency  and  in  the  same
          Transaction (including, without limitation Section 2(c) thereof) shall
          not apply to Company and, for the  avoidance of doubt,  Company  shall
          fully  satisfy such payment  obligations  notwithstanding  any payment
          obligation to Company by Citibank in the same currency and in the same
          Transaction.  In  calculating  any amounts  under  Section 6(e) of the
          Agreement,  notwithstanding anything to the contrary in the Agreement,
          (1) separate  amounts shall be calculated as set forth in such Section
          6(e)  with  respect  to  (a)  this   Transaction  and  (b)  all  other
          Transactions,  and (2) such separate amounts shall be payable pursuant
          to Section 6(d)(ii) of the Agreement.

     (l)  Alternative  Calculations  and  Payment  on Early  Termination  and on
          Certain Extraordinary  Events. If, in respect of this Transaction,  an
          amount is payable by Company to Citibank, (i) pursuant to Section 12.7
          or Section 12.9 of the Equity  Definitions  (except in the event of an
          Insolvency, Nationalization, Tender Offer or Merger Event in which the
          consideration  or  proceeds  to be paid to holders of shares  consists
          solely of cash) or (ii) pursuant to Section  6(d)(ii) of the Agreement
          (except in the event of an Event of  Default  in which  Company is the
          Defaulting  Party  or a  Termination  Event in  which  Company  is the
          Affected  Party,  other than an Event of Default of the type described
          in (x) Section 5(a)(iii),  (v), (vi), (vii) or (viii) of the Agreement
          or (y) a  Termination  Event of the type  described in Section 5(b) of
          the  Agreement,  in the case of both (x) and  (y),  resulting  from an
          event or events outside Company's  control) (a "Payment  Obligation"),
          Company shall have the right, in its sole  discretion,  to satisfy any
          such  Payment  Obligation  by the Share  Termination  Alternative  (as
          defined below) by giving  irrevocable  telephonic  notice to Citibank,
          confirmed in writing  within one Scheduled  Trading Day, no later than
          12:00 p.m. New York local time on the Merger Date,  Tender Offer Date,
          Announcement  Date (in the case of a  Nationalization,  Insolvency  or
          Delisting),  Early  Termination  Date  or  date  of  cancellation,  as
          applicable; provided that if Company does not validly elect to satisfy
          its Payment Obligation by the Share Termination Alternative,  Citibank
          shall  have the  right to  require  Company  to  satisfy  its  Payment
          Obligation by the Share Termination  Alternative.  Notwithstanding the
          foregoing,  Company's or Citibank's  right to elect  satisfaction of a
          Payment  Obligation in the Share Termination  Alternative as set forth
          in  this  clause   shall  only  apply  to   Transactions   under  this
          Confirmation  and,  notwithstanding  anything  to the  contrary in the
          Agreement,  (1) separate  amounts shall be calculated  with respect to
          (a) Transactions  hereunder and (b) all other  Transactions  under the
          Agreement,  and (2) such separate amounts shall be payable pursuant to
          Section  6(d)(ii) of the Agreement,  subject to, in the case of clause
          (a), Company's Share Termination Alternative right hereunder.

                                       13
<PAGE>
<TABLE>
<S>                                                          <C>
                  Share Termination Alternative:              If  applicable,  Company  shall  deliver to  Citibank
                                                              the Share  Termination  Delivery Property on the date
                                                              (the "Share  Termination  Payment Date") on which the
                                                              Payment  Obligation  would  otherwise be due pursuant
                                                              to  Section  12.7  or  Section  12.9  of  the  Equity
                                                              Definitions  or  Section  6(d)(ii)  and  6(e)  of the
                                                              Agreement,  subject to  paragraph  (m)(i)  below,  in
                                                              satisfaction,  subject to  paragraph  (m)(ii)  below,
                                                              of the Payment  Obligation  in the manner  reasonably
                                                              requested by Citibank free of payment.

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

                  Share Termination Unit Price:               The value to Citibank of  property  contained  in one
                                                              Share  Termination  Delivery  Unit on the  date  such
                                                              Share   Termination   Delivery   Units   are   to  be
                                                              delivered  as Share  Termination  Delivery  Property,
                                                              as  determined  by  the  Calculation   Agent  in  its
                                                              discretion  by  commercially  reasonable  means.  The
                                                              Calculation   Agent  shall  notify  Company  of  such
                                                              Share   Termination   Unit   Price  at  the  time  of
                                                              notification  of  the  Payment  Obligation.   In  the
                                                              case of a  Private  Placement  of  Share  Termination
                                                              Delivery  Units  that  are   Restricted   Shares  (as
                                                              defined  below),  as set  forth in  paragraph  (m)(i)
                                                              below,  the Share  Termination  Unit  Price  shall be
                                                              determined  by the  discounted  price  applicable  to
                                                              such Share  Termination  Delivery  Units. In the case
                                                              of a  Registration  Settlement  of Share  Termination
                                                              Delivery  Units  that  are   Restricted   Shares  (as
                                                              defined  below)  as set  forth in  paragraph  (m)(ii)
                                                              below,  the Share  Termination  Unit  Price  shall be
                                                              the   Settlement   Price  on  the  Merger  Date,  the
                                                              Announcement    Date    (in    the    case    of    a
                                                              Nationalization,  Insolvency  or  Delisting)  or  the
                                                              Early Termination Date, as applicable.

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

</TABLE>

                                       14

<PAGE>
<TABLE>
<S>                                                           <C>
                  Failure to Deliver:                         Inapplicable

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

</TABLE>

     (m)  Registration/Private  Placement  Procedures.  If,  in  the  reasonable
          opinion  of  Citibank,  following  any  delivery  of  Shares  or Share
          Termination  Delivery Property to Citibank  hereunder,  such Shares or
          Share Termination  Delivery Property would be in the hands of Citibank
          subject  to  any   applicable   restrictions   with   respect  to  any
          registration  or  qualification  requirement  or  prospectus  delivery
          requirement  for such Shares or Share  Termination  Delivery  Property
          pursuant to any applicable federal or state securities law (including,
          without  limitation,  any such requirement  arising under Section 5 of
          the  Securities  Act as a result of such  Shares or Share  Termination
          Delivery  Property  being  "restricted  securities",  as such  term is
          defined in Rule 144 under the  Securities  Act,  or as a result of the
          sale of such  Shares  or Share  Termination  Delivery  Property  being
          subject to paragraph (c) of Rule 145 under the  Securities  Act) (such
          Shares or Share Termination Delivery Property,  "Restricted  Shares"),
          then delivery of such Restricted  Shares shall be effected pursuant to
          either  clause (i) or (ii) below at the  election of  Company,  unless
          Citibank waives the need for registration/private placement procedures
          set forth in (i) and (ii) below. Notwithstanding the foregoing, solely
          in  respect  of any  Daily  Number  of  Warrants  exercised  or deemed
          exercised on any Expiration  Date,  Company shall elect,  prior to the
          first  Settlement  Date  for the  first  Expiration  Date,  a  Private
          Placement Settlement or Registration  Settlement for all deliveries of
          Restricted  Shares for all such Expiration  Dates which election shall
          be  applicable  to all  Settlement  Dates  for such  Warrants  and the
          procedures in clause (i) or clause (ii) below shall apply for all such
          delivered Restricted Shares on an aggregate basis commencing after the
          final Settlement Date for such Warrants.  The Calculation  Agent shall
          make reasonable  adjustments to settlement  terms and provisions under
          this   Confirmation   to  reflect  a  single   Private   Placement  or
          Registration Settlement for such aggregate Restricted Shares delivered
          hereunder.

          (i)  If Company  elects to settle  the  Transaction  pursuant  to this
               clause (i) (a "Private Placement  Settlement"),  then delivery of
               Restricted  Shares by  Company  shall be  effected  in  customary
               private  placement  procedures  with  respect to such  Restricted
               Shares reasonably  acceptable to Citibank;  provided that Company
               may not elect a Private  Placement  Settlement if, on the date of
               its  election,  it has taken,  or caused to be taken,  any action
               that would make  unavailable  either the  exemption  pursuant  to
               Section  4(2) of the  Securities  Act for the sale by  Company to
               Citibank  (or  any  affiliate  designated  by  Citibank)  of  the

                                       15
<PAGE>

               Restricted  Shares or the  exemption  pursuant to Section 4(1) or
               Section 4(3) of the  Securities Act for resales of the Restricted
               Shares by  Citibank  (or any such  affiliate  of  Citibank).  The
               Private  Placement  Settlement  of such  Restricted  Shares shall
               include customary representations,  covenants, blue sky and other
               governmental   filings  and/or   registrations,   indemnities  to
               Citibank,  due diligence  rights (for Citibank or any  designated
               buyer  of  the  Restricted  Shares  by  Citibank),  opinions  and
               certificates,  and such other  documentation  as is customary for
               private  placement  agreements,   all  reasonably  acceptable  to
               Citibank. In the case of a Private Placement Settlement, Citibank
               shall determine the appropriate discount to the Share Termination
               Unit  Price  (in the  case of  settlement  of  Share  Termination
               Delivery Units pursuant to paragraph (l) above) or any Settlement
               Price (in the case of settlement of Shares  pursuant to Section 2
               above)  applicable to such  Restricted  Shares in a  commercially
               reasonable  manner  and  appropriately  adjust the number of such
               Restricted Shares to be delivered to Citibank hereunder; provided
               that in no event shall such number be greater than 3,700,000 (the
               "Maximum   Amount").   Notwithstanding   the  Agreement  or  this
               Confirmation,  the date of  delivery  of such  Restricted  Shares
               shall be the Exchange  Business Day following  notice by Citibank
               to  Company,  of  such  applicable  discount  and the  number  of
               Restricted  Shares to be  delivered  pursuant to this clause (i).
               For the avoidance of doubt,  delivery of Restricted  Shares shall
               be due as set forth in the  previous  sentence  and not be due on
               the Share Termination  Payment Date (in the case of settlement of
               Share Termination Delivery Units pursuant to paragraph (l) above)
               or on the Settlement Date for such Restricted Shares (in the case
               of settlement in Shares pursuant to Section 2 above).

               In the event Company shall not have  delivered the full number of
               Restricted Shares otherwise applicable as a result of the proviso
               above relating to the Maximum Amount (such deficit,  the "Deficit
               Restricted  Shares"),  Company shall be continually  obligated to
               deliver,  from  time to time  until the full  number  of  Deficit
               Restricted Shares have been delivered pursuant to this paragraph,
               Restricted  Shares when,  and to the extent,  that (i) Shares are
               repurchased,  acquired or otherwise received by Company or any of
               its subsidiaries after the Trade Date (whether or not in exchange
               for cash, fair value or any other consideration), (ii) authorized
               and  unissued  Shares  reserved  for issuance in respect of other
               transactions  prior to such date which prior to the relevant date
               become no  longer so  reserved  and  (iii)  Company  additionally
               authorizes  any  unissued  Shares that are not reserved for other
               transactions.  Company shall  immediately  notify Citibank of the
               occurrence of any of the foregoing  events  (including the number
               of  Shares   subject  to  clause  (i),  (ii)  or  (iii)  and  the
               corresponding  number of Restricted  Shares to be delivered)  and
               promptly deliver such Restricted Shares thereafter.

               In the event of a  Private  Placement  Settlement,  the Net Share
               Settlement Amount or the Payment Obligation,  respectively, shall
               be deemed to be the Net Share  Settlement  Amount or the  Payment
               Obligation,  respectively,  plus an additional amount (determined
               from time to time by the  Calculation  Agent in its  commercially
               reasonable  judgment)  attributable  to  interest  that  would be
               earned  on  such  Net  Share  Settlement  Amount  or the  Payment
               Obligation, respectively,  (increased on a daily basis to reflect
               the accrual of such interest and reduced from time to time by the
               amount of net proceeds  received by Citibank as provided  herein)
               at a rate  equal to the open  Federal  Funds Rate plus the Spread
               for the period from, and including,  such  Settlement Date or the
               date on which the Payment  Obligation is due,  respectively,  to,
               but  excluding,  the  related  date on which  all the  Restricted
               Shares have been sold and calculated on an Actual/360  basis. The
               foregoing  provision  shall be without  prejudice  to  Citibank's
               rights  under  the  Agreement  (including,   without  limitation,
               Sections 5 and 6 thereof).

               As used in this Section,  "Spread" means, with respect to any Net
               Share Settlement Amount or Payment Obligation,  respectively, the
               credit spread over the  applicable  overnight  rate that would be
               imposed if Citibank were to extend credit to Company in an amount
               equal to such Net Share Settlement  Amount,  all as determined by
               the Calculation Agent using its commercially  reasonable judgment
               as of the  related  Settlement  Date  or the  date on  which  the
               Payment    Obligation    is   due,    respectively.    Commercial
               reasonableness  shall take into  consideration all factors deemed
               relevant by the Calculation Agent, which are expected to include,
               among  other  things,  the credit  quality  of  Company  (and any
               relevant affiliates) in the then-prevailing market and the credit
               spread of similar  companies in the  relevant  industry and other
               companies having a substantially similar credit quality.

                                       16
<PAGE>

               (ii) If Company elects to settle the Transaction pursuant to this
                    clause  (ii) (a  "Registration  Settlement"),  then  Company
                    shall promptly (but in any event no later than the beginning
                    of the  Resale  Period)  file  and use its  reasonable  best
                    efforts  to  make  effective  under  the  Securities  Act  a
                    registration statement or supplement or amend an outstanding
                    registration  statement  in form  and  substance  reasonably
                    satisfactory  to  Citibank,  to  cover  the  resale  of such
                    Restricted   Shares  in  accordance  with  customary  resale
                    registration  procedures,  including covenants,  conditions,
                    representations,  underwriting  discounts  (if  applicable),
                    commissions  (if  applicable),  indemnities,  due  diligence
                    rights,   opinions   and   certificates,   and  such   other
                    documentation as is customary for equity resale underwriting
                    agreements,   all  reasonably  acceptable  to  Citibank.  If
                    Citibank,  in  its  sole  reasonable   discretion,   is  not
                    satisfied  with such  procedures and  documentation  Private
                    Placement  Settlement  shall apply. If Citibank is satisfied
                    with such  procedures and  documentation,  it shall sell the
                    Restricted  Shares pursuant to such  registration  statement
                    during a period  (the  "Resale  Period")  commencing  on the
                    Exchange Business Day following  delivery of such Restricted
                    Shares (which,  for the avoidance of doubt, shall be (x) any
                    Settlement Date in the case of an exercise of Warrants prior
                    to the first  Expiration  Date  pursuant to Section 2 above,
                    (y) the Share Termination Payment Date in case of settlement
                    in Share  Termination  Delivery  Units pursuant to paragraph
                    (l) above or (z) the Settlement Date in respect of the final
                    Expiration Date for all Daily Number of Warrants) and ending
                    on the  earliest of (i) the  Exchange  Business Day on which
                    Citibank  completes the sale of all Restricted Shares or, in
                    the case of settlement of Share Termination  Delivery Units,
                    a  sufficient  number  of  Restricted  Shares  so  that  the
                    realized  net  proceeds of such sales  equals or exceeds the
                    Payment  Obligation (as defined  above),  (ii) the date upon
                    which all  Restricted  Shares have been sold or  transferred
                    pursuant to Rule 144 (or similar  provisions  then in force)
                    or Rule  145(d)(1) or (2) (or any similar  provision then in
                    force)  under  the  Securities  Act and  (iii) the date upon
                    which all Restricted  Shares may be sold or transferred by a
                    non-affiliate  pursuant  to  Rule  144(k)  (or  any  similar
                    provision  then in force) or Rule  145(d)(3) (or any similar
                    provision  then in force) under the  Securities  Act. If the
                    Payment  Obligation  exceeds the realized net proceeds  from
                    such resale,  Company shall transfer to Citibank by the open
                    of  the  regular  trading  session  on the  Exchange  on the
                    Exchange  Trading Day immediately  following the last day of
                    the Resale Period the amount of such excess (the "Additional
                    Amount")  in  cash or in a  number  of  Shares  ("Make-whole
                    Shares") in an amount that, based on the Settlement Price on
                    the last day of the  Resale  Period  (as if such day was the
                    "Valuation  Date" for purposes of computing such  Settlement
                    Price),  has a dollar value equal to the Additional  Amount.
                    The Resale  Period shall  continue to enable the sale of the
                    Make-whole  Shares.  If Company elects to pay the Additional
                    Amount  in  Shares,  the  requirements  and  provisions  for
                    Registration Settlement shall apply. This provision shall be
                    applied successively until the Additional Amount is equal to
                    zero.  In  no  event  shall  Company  deliver  a  number  of
                    Restricted Shares greater than the Maximum Amount.

               (iii) Without  limiting the generality of the foregoing,  Company
                    agrees that any Restricted Shares delivered to Citibank,  as
                    purchaser of such Restricted  Shares, (i) may be transferred
                    by and among  Citibank and its  affiliates and Company shall
                    effect such transfer  without any further action by Citibank
                    and (ii)  after the  minimum  "holding  period"  within  the
                    meaning of Rule 144(d) under the  Securities Act has elapsed
                    after  any  Settlement  Date  for  such  Restricted  Shares,
                    Company shall promptly  remove,  or cause the transfer agent
                    for such Restricted Shares to remove,  any legends referring
                    to  any  such   restrictions  or   requirements   from  such
                    Restricted   Shares  upon  delivery  by  Citibank  (or  such
                    affiliate of Citibank) to Company or such transfer  agent of
                    seller's and  broker's  representation  letters  customarily
                    delivered  by  Citibank  in   connection   with  resales  of
                    restricted   securities  pursuant  to  Rule  144  under  the
                    Securities  Act,  without  any further  requirement  for the
                    delivery of any certificate,  consent, agreement, opinion of
                    counsel,  notice or any other  document,  any  transfer  tax
                    stamps or payment of any other amount or any other action by
                    Citibank (or such affiliate of Citibank).

                                       17
<PAGE>

               If  the  Private   Placement   Settlement  or  the   Registration
               Settlement  shall not be  effected as set forth in clauses (i) or
               (ii),  as  applicable,   then  failure  to  effect  such  Private
               Placement  Settlement  or  such  Registration   Settlement  shall
               constitute  an Event of Default  with  respect  to which  Company
               shall be the Defaulting Party.

     (n)  Limit  on  Beneficial  Ownership.   Notwithstanding  anything  to  the
          contrary  in the  Agreement  or this  Confirmation,  in no event shall
          Citibank be entitled  to receive,  or shall be deemed to receive,  any
          Shares  if,  upon  such  receipt  of  such  Shares,   the  "beneficial
          ownership"  (within the meaning of Section 13 of the  Exchange Act and
          the rules promulgated  thereunder) of Shares by Citibank or any entity
          that directly or indirectly controls Citibank (collectively, "Citibank
          Group")  would  be  equal  to or  greater  than  4.5%  or  more of the
          outstanding  Shares. If any delivery owed to Citibank hereunder is not
          made,  in whole or in part, as a result of this  provision,  Company's
          obligation to make such delivery shall not be extinguished and Company
          shall make such delivery as promptly as practicable  after,  but in no
          event  later than one  Exchange  Business  Day after,  Citibank  gives
          notice to Issuer that such delivery would not result in Citibank Group
          directly or indirectly so beneficially owning in excess of 4.5% of the
          outstanding Shares. No additional compensation or amounts shall be due
          Citibank as a consequence of such delayed settlement.

     (o)  Share Deliveries.  Company acknowledges and agrees that, to the extent
          the holder of this Warrant is not then an  affiliate  and has not been
          an affiliate for 90 days (it being  understood  that Citibank will not
          be considered an affiliate  under this  paragraph  solely by reason of
          its receipt of Shares  pursuant to this  Transaction),  and  otherwise
          satisfies all holding period and other requirements of Rule 144 of the
          Securities  Act  applicable  to it,  any  delivery  of Shares or Share
          Termination  Property  hereunder  at any time  after 2 years  from the
          Trade  Date shall be  eligible  for  resale  under Rule  144(k) of the
          Securities  Act and Company  agrees to promptly  remove,  or cause the
          transfer  agent for such  Shares  or Share  Termination  Property,  to
          remove,  any legends referring to any restrictions on resale under the
          Securities Act from the Shares or Share Termination Property.  Company
          further  agrees,  for any  delivery  of  Shares  or Share  Termination
          Property  hereunder  at any time  after 1 year from the Trade Date but
          within 2 years of the Trade  Date,  to the to the extent the holder of
          this Warrant then satisfies the holding period and other  requirements
          of Rule 144 of the Securities  Act, to promptly  remove,  or cause the
          transfer  agent  for such  Restricted  Share to  remove,  any  legends
          referring  to  any  such   restrictions  or  requirements   from  such
          Restricted  Shares.  Such Restricted  Shares will be de-legended  upon
          delivery by Citibank  (or such  affiliate  of  Citibank) to Company or
          such transfer agent of customary seller's and broker's  representation
          letters in connection with resales of restricted  securities  pursuant
          to Rule 144 of the Securities Act, without any further requirement for
          the  delivery  of any  certificate,  consent,  agreement,  opinion  of
          counsel,  notice or any other  document,  any  transfer  tax stamps or
          payment of any other  amount or any other  action by Citibank (or such
          affiliate of Citibank).  Company  further  agrees that any delivery of
          Shares or Share  Termination  Delivery Property prior to the date that
          is 1 year  from  the  Trade  Date,  may be  transferred  by and  among
          Citibank and its  affiliates  and Company  shall effect such  transfer
          without any further  action by Citibank.  Notwithstanding  anything to
          the  contrary  herein,  Company  agrees that any delivery of Shares or
          Share  Termination  Delivery  Property shall be effected by book-entry
          transfer  through the facilities of DTC, or any successor  depositary,
          if at the time of  delivery,  such  class of  Shares or class of Share
          Termination  Delivery  Property is in  book-entry  form at DTC or such
          successor  depositary  and such Shares or Share  Termination  Delivery
          Property  are  not   "restricted   securities"  for  purposes  of  the
          Securities Act.  Notwithstanding  anything to the contrary herein,  to
          the extent the  provisions  of Rule 144 of the  Securities  Act or any
          successor rule are amended, or the applicable  interpretation  thereof
          by the  Securities  and Exchange  Commission or any court change after
          the Trade  Date,  the  agreements  of Company  herein  shall be deemed
          modified to the extent necessary, in the opinion of outside counsel of
          Company, to comply with Rule 144 of the Securities Act, including Rule
          144(k) as in effect at the time of delivery of the relevant  Shares or
          Share Termination Property.

                                       18
<PAGE>

     (p)  Governing  Law.  New York law  (without  reference  to  choice  of law
          doctrine).

     (q)  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.

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

     (s)  Maximum Share  Delivery.  Notwithstanding  any other provision of this
          Confirmation or the Agreement, in no event will Company be required to
          deliver  more than the Maximum  Amount of Shares in the  aggregate  to
          Citibank  in  connection  with  this   Transaction,   subject  to  the
          provisions regarding Deficit Restricted Shares

     (t)  Right to  Extend.  Citibank  may  postpone,  in whole or in part,  any
          Expiration  Date or any  other  date of  valuation  or  delivery  with
          respect to some or all of the  relevant  Warrants  (in which event the
          Calculation  Agent  shall make  appropriate  adjustments  to the Daily
          Number of Warrants  with respect to one or more  Expiration  Dates) if
          Citibank determines,  in its commercially  reasonable  judgment,  that
          such  extension is  reasonably  necessary or  appropriate  to preserve
          Citibank's  hedging or hedge  unwind  activity  hereunder  in light of
          existing  liquidity   conditions  or  to  enable  Citibank  to  effect
          purchases of Shares in  connection  with its hedging,  hedge unwind or
          settlement activity hereunder in a manner that would, if Citibank were
          Issuer or an affiliated  purchaser of Issuer,  be in  compliance  with
          applicable legal, regulatory or self-regulatory  requirements, or with
          related policies and procedures applicable to Citibank.

     (u)  Status of Claims in Bankruptcy.  Citibank acknowledges and agrees that
          this Confirmation is not intended to convey to Citibank rights against
          Company with respect to the Transaction  that are senior to the claims
          of common stockholders of Company in any U.S.  bankruptcy  proceedings
          of  Company;  provided  that  nothing  herein  shall limit or shall be
          deemed to limit  Citibank's right to pursue remedies in the event of a
          breach by Company of its  obligations  and agreements  with respect to
          the Transaction; provided, further, that nothing herein shall limit or
          shall  be  deemed  to  limit  Citibank's  rights  in  respect  of  any
          transactions other than the Transaction.

     (v)  Securities  Contract;  Swap Agreement.  The parties hereto intend for:
          (a)  the  Transaction  to  be a  "securities  contract"  and  a  "swap
          agreement" as defined in the  Bankruptcy  Code (Title 11 of the United
          States Code) (the  "Bankruptcy  Code"),  and the parties  hereto to be
          entitled  to  the  protections  afforded  by,  among  other  Sections,
          Sections  362(b)(6),  362(b)(17),  546(e),  546(g), 555 and 560 of the
          Bankruptcy  Code; (b) a party's right to liquidate the Transaction and
          to exercise any other  remedies  upon the  occurrence  of any Event of
          Default  under  the  Agreement  with  respect  to the  other  party to
          constitute a "contractual  right" as described in the Bankruptcy Code;
          and (c)  each  payment  and  delivery  of  cash,  securities  or other
          property  hereunder to  constitute a "margin  payment" or  "settlement
          payment" and a "transfer" as defined in the Bankruptcy Code.

                            [signature page follows]

                                       19
<PAGE>

     Please  confirm that the  foregoing  correctly  sets forth the terms of our
agreement by  executing  this  Confirmation  and  returning an executed  copy to
Equity  Derivatives,  Citibank,  N.A., 390 Greenwich Street,  New York, New York
10013, Facsimile No. (212) 723-8328.

                                   Very truly yours,

                                    CITIBANK, N.A.

                                    /s/ William Ortner
                                    ---------------------
                                    Authorized Signatory

         Accepted and confirmed
         as of the Trade Date:

         CHEMED CORPORATION

         By: /s/ David P. Williams
         ------------------------------------------
         Authorized Signatory
         Name: David P. Williams

                                       20

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