Document:

Exhibit
10.3

 

 

August
3, 2006

Stephen
C. Costalas, Esq.

	
  Re:

  	
   

  	
  Amendment to Severance Agreement dated December 2,
  2004 and amended November 3, 2005 

  between Pharmacopeia Drug Discovery, Inc. (“Pharmacopeia”) and Stephen C.
  Costalas 

  (the “Agreement”)

  

Dear Mr. Costalas:

Reference
is made to the Agreement.

In
consideration of your continued employment by Pharmacopeia, Pharmacopeia and
you hereby agree to amend and restate Section 3(a) (Taxes—General) of the
Agreement in its entirety as follows:

Section 3(a)

“3.  TAXES. 
(a)  General.  Employee will be responsible for the payment
of any tax liability incurred as a result of this Agreement.  The Company may withhold tax on any payments
or benefits provided to Employee as required by law or regulation.  Notwithstanding anything herein to the
contrary, if any payments due under this Agreement would subject the Employee
to any tax imposed under Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”) if such payments were made at the time otherwise
provided herein, then the payments that cause such taxation shall be payable in
a single lump sum on the first day which is at least six months after the date
of the Employee’s “separation of service” as set forth in Code Section 409A
and the regulations issued thereunder.”

[The
remainder of this page intentionally left blank.]

 

 

If
you are in agreement with the terms of this letter agreement please sign below
and return one copy to my attention.

	
  Very
  truly yours,

  
	
   

  
	
  /s/ Leslie J. Browne, Ph.D.

  
	
   

  
	
  Leslie J. Browne, Ph.D.

  
	
  President and Chief Executive Officer

  
	
   

  
	
   

  
	
  ACKNOWLEDGED, AGREED AND

  
	
  ACCEPTED THIS 3RD DAY OF

  
	
  AUGUST, 2006

  
	
   

  
	
   

  
	
  /s/ Stephen C. Costalas

  	
   

  
	
  Stephen C. Costalas

  
	
  Executive Vice President and

  
	
  General CounselExhibit 10.4

 

 

August
3, 2006

David
M. Floyd, Ph.D.

	
  Re:

  	
   

  	
  Amendment to Severance Agreement dated
  December 2, 2004 and amended November 3, 2005 

  between Pharmacopeia Drug Discovery, Inc. (“Pharmacopeia”) and David M. Floyd
  

  (the “Agreement”)

  

Dear Dr. Floyd:

Reference
is made to the Agreement.

In
consideration of your continued employment by Pharmacopeia, Pharmacopeia and
you hereby agree to amend and restate Section 3(a)  (Taxes—General) of the Agreement in its
entirety as follows:

Section 3(a)

“3.  TAXES. 
(a)  General.  Employee will be responsible for the payment
of any tax liability incurred as a result of this Agreement.  The Company may withhold tax on any payments
or benefits provided to Employee as required by law or regulation.  Notwithstanding anything herein to the
contrary, if any payments due under this Agreement would subject the Employee
to any tax imposed under Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”) if such payments were made at the time otherwise
provided herein, then the payments that cause such taxation shall be payable in
a single lump sum on the first day which is at least six months after the date
of the Employee’s “separation of service” as set forth in Code Section 409A
and the regulations issued thereunder.”

[The
remainder of this page intentionally left blank.]

 

 

If
you are in agreement with the terms of this letter agreement please sign below
and return one copy to my attention.

	
  Very truly yours,

  
	
   

  
	
  /s/ Leslie J. Browne, Ph.D.

  
	
   

  
	
  Leslie J. Browne, Ph.D.

  
	
  President and Chief Executive Officer

  
	
   

  
	
   

  
	
  ACKNOWLEDGED, AGREED AND

  
	
  ACCEPTED THIS 3RD DAY OF

  
	
  AUGUST, 2006

  
	
   

  
	
   

  
	
  /s/ David M. Floyd

  	
   

  
	
  David M. Floyd

  
	
  Executive Vice President and

  
	
  Chief Scientific OfficerExhibit
10.5

 

 

August
3, 2006

Brian
M. Posner

	
  Re:

  	
   

  	
  Amendment to Severance Agreement dated May 4,
  2006 between Pharmacopeia Drug Discovery, Inc. 

  (“Pharmacopeia”) and Brian M. Posner (the “Agreement”)

  

Dear Mr. Posner:

Reference
is made to the Agreement.

In
consideration of your continued employment by Pharmacopeia, Pharmacopeia and
you hereby agree to amend and restate Section 1(g)(ii)(A) (Termination and
Effect of Termination—Change in Control Termination—Stock Options) of the
Agreement in its entirety as follows:

Section 1(g)(ii)(A)

[1(g)(ii)] “(A)(i) notwithstanding anything to the
contrary contained in the 2004 Plan or any other stock option or incentive
compensation plan of the Company, any unvested stock options or other incentive
securities which were granted to Employee prior to the term of this Agreement
under the 2004 Plan or any such other stock option or incentive compensation
plan shall immediately vest on the date of such termination of Employee’s
employment, the expiration date of the exercise period for such options or
other securities shall be the earlier of 
(1) the later of (A) December 31 of the year of such
termination of the Employee’s employment, or (B) two-and-one-half (2.5)
months following the date of such termination of Employee’s employment, and
(2) the expiration of the term of the option, and the Company shall take
all actions necessary or advisable to give effect to this Section 1(g)(ii)(A);
and

(ii) notwithstanding anything to the contrary
contained in the 2004 Plan or any other stock option or incentive compensation
plan of the Company, any unvested stock options or other incentive securities
which are granted to Employee during the term of this Agreement under the 2004
Plan or any such other stock option or incentive compensation plan shall
immediately vest on the date of such termination of Employee’s employment, the
expiration date of the exercise period for such options or other securities
shall be the earlier of (1) one (1) year following the date of
termination or (2) the expiration of the term of the option, 

 

 

and the Company shall take all actions necessary or
advisable to give effect to this Section 1(g)(ii)(A); and”

If
you are in agreement with the terms of this letter agreement please sign below
and return one copy to my attention.

	
  Very truly yours,

  
	
   

  
	
  /s/ Leslie J. Browne, Ph.D.

  
	
   

  
	
  Leslie J. Browne, Ph.D.

  
	
  President and Chief Executive Officer

  
	
   

  
	
   

  
	
  ACKNOWLEDGED, AGREED AND

  
	
  ACCEPTED THIS 3RD DAY OF

  
	
  AUGUST, 2006

  
	
   

  
	
   

  
	
   

  
	
  /s/ Brian M. Posner

  	
   

  
	
  Brian M. Posner

  
	
  Executive Vice President and

  
	
  Chief Financial OfficerExhibit 10.19

GOLDMAN SACHS & CO. |
85 BROAD STREET | NEW YORK, NEW YORK 10004 | TEL:  212-902-1000

Opening Transaction

	
  To:

  	
   

  	
  E.I. du Pont de Nemours and Company

  1007 Market Street

  Wilmington, Delaware 19898

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Goldman, Sachs & Co.

  
	
   

  	
   

  	
   

  
	
  Subject:

  	
   

  	
  Accelerated Share Repurchase Transaction - VWAP
  Pricing

  
	
   

  	
   

  	
   

  
	
  Ref. No:

  	
   

  	
  As provided in each Supplemental Confirmation

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  October 24, 2005

  
	
   

  	
   

  	
   

  

This master confirmation
(“Master Confirmation”) dated as of October 24, 2005, is intended to supplement
the terms and provisions of certain Transactions (each, a “Transaction”)
entered into from time to time between Goldman, Sachs & Co. (“GS&Co.”)
and E.I. du Pont de Nemours and Company (“Counterparty”).  This Master Confirmation, taken alone, is
neither a commitment by either party to enter into any Transaction nor evidence
of a Transaction.  The terms of any
particular Transaction shall be set forth in a Supplemental Confirmation in the
form of Annex A hereto which references this Master Confirmation, in which
event the terms and provisions of this Master Confirmation shall be deemed to
be incorporated into and made a part of each such Supplemental
Confirmation.  This Master Confirmation
and each Supplemental Confirmation together shall constitute a “Confirmation”
as referred to in the Agreement specified below.

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., are incorporated into this Master Confirmation.  This Master Confirmation and each
Supplemental Confirmation evidences a complete binding agreement between the
Counterparty and GS&Co. as to the terms of each Transaction to which this
Master Confirmation and the related Supplemental Confirmation relates.

All provisions contained
in or incorporated by reference in the form of the 1992 ISDA Master Agreement
(Multi-Currency Cross Border) (the “ISDA Form” or the “Agreement”) will govern
this Master Confirmation and each Supplemental Confirmation except as expressly
modified below.  This Master Confirmation
and each Supplemental Confirmation, together with all other documents referring
to the Agreement confirming Transactions entered into between GS&Co. and
Counterparty (notwithstanding anything to the contrary in a Confirmation),
shall supplement, form a part of, and be subject to the ISDA Form as if
GS&Co. and Counterparty had executed the Agreement (but without any
Schedule except for (i) the election of Loss and Second Method, New York law
(without regard to the conflicts of law principles) as the governing law and US
Dollars (“USD”) as the Termination Currency, (ii) the election that
subparagraph (ii) of Section 2(c) will not apply to Transactions and (iii) the
replacement of the word “third” in the last line of Section 5(a)(i) with the
word “first”.

All provisions contained
in the Agreement shall govern this Master Confirmation and the related
Supplemental Confirmation relating to a Transaction except as expressly
modified below or in the related Supplemental Confirmation.  With respect to any relevant Transaction, the
Agreement, this Master Confirmation and the related Supplemental Confirmation
shall represent the entire agreement and understanding of the parties with
respect to the subject matter and terms of such Transaction and shall supersede
all prior or contemporaneous written or oral communications with respect
thereto.

If, in relation to any
Transaction to which this Master Confirmation and related Supplemental
Confirmation relate, there is any inconsistency between the Agreement, this
Master Confirmation, any Supplemental Confirmation and the Equity Definitions
that are incorporated into any Supplemental Confirmation, the following 

 

will prevail for purposes
of such Transaction in the order of precedence indicated: (i) such Supplemental
Confirmation; (ii) this Master Confirmation; (iii) the Agreement; and (iv) the
Equity Definitions.

1.             Each Transaction constitutes a Share Forward Transaction
for the purposes of the Equity Definitions. 
Set forth below are the terms and conditions which, together with the
terms and conditions set forth in each Supplemental Confirmation (in respect of
each relevant Transaction), shall govern each such Transaction.

General Terms:

	
  Trade Date:

  	
   

  	
  For each Transaction, as set forth in the
  Supplemental Confirmation.

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
   

  	
  Counterparty

  
	
   

  	
   

  	
   

  
	
  Buyer:

  	
   

  	
  GS&Co.

  
	
   

  	
   

  	
   

  
	
  Shares:

  	
   

  	
  Common Stock ($.30 par value) of Counterparty
  (Ticker: DD)

  
	
   

  	
   

  	
   

  
	
  Number of Shares:

  	
   

  	
  For each Transaction, as set forth in the
  Supplemental Confirmation.

  
	
   

  	
   

  	
   

  
	
  Forward Price:

  	
   

  	
  For each Transaction, as set forth in the
  Supplemental Confirmation.

  
	
   

  	
   

  	
   

  
	
  Prepayment:

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
   

  
	
  Variable Obligation:

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
   

  
	
  Exchange:

  	
   

  	
  New York Stock Exchange

  
	
   

  	
   

  	
   

  
	
  Related Exchange(s):

  	
   

  	
  All Exchanges

  
	
   

  	
   

  	
   

  
	
  Market Disruption Event:

  	
   

  	
  The definition of “Market Disruption Event” in
  Section 6.3(a) of the Equity Definitions is hereby amended by inserting the
  words “at any time on any Scheduled Trading Day during the Valuation Period
  or” after the word “material,” in the third line thereof.

  
	
   

  	
   

  	
   

  
	
  Counterparty Additional Payment Amount:

  	
   

  	
  For each Transaction, as set forth in the
  Supplemental Confirmation Counterparty shall pay the Counterparty Additional
  Payment Amount to GS&Co. on the third Exchange Business Day following the
  Trade Date.

  
	
   

  	
   

  	
   

  
	
  Valuation:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Valuation Period:

  	
   

  	
  Each Scheduled Trading Day during the period
  commencing on and including the third succeeding Scheduled Trading Day
  following the Trade Date, to and including the Valuation Date (but excluding
  any day(s) on which the Valuation Period is suspended in accordance with
  Section 6 herein and including any day(s) by which the Valuation Period is
  extended pursuant to the provision below).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notwithstanding anything to the contrary in the
  Equity Definitions, to the extent that any Scheduled Trading Day in the
  Valuation Period is a Disrupted Day, the Valuation Date 

  

 

 2
 

 

 

	
  

  	
   

  	
   

  
	
   

  	
   

  	
  shall be postponed and the Calculation Agent in its
  sole discretion shall extend the Valuation Period and make adjustments to the
  weighting of each Relevant Price for purposes of determining the Settlement
  Price, with such adjustments based on, among other factors, the duration of
  any Market Disruption Event and the volume, historical trading patterns and
  price of the Shares. To the extent that there are 9 consecutive Disrupted
  Days during the Valuation Period, then notwithstanding the occurrence of a
  Disrupted Day, the Calculation Agent shall have the option in its sole
  discretion to either determine the Relevant Price using its good faith and
  commercially reasonable estimate of the value for the Share on such 9th consecutive day or elect to further extend
  the Valuation Period as it deems necessary.

  
	
   

  	
   

  	
   

  
	
  Valuation Date:

  	
   

  	
  For each Transaction, as set forth in the
  Supplemental Confirmation (as the same may be postponed in accordance with
  the provisions of “Valuation Period” and Section 6 herein).

  
	
   

  	
   

  	
   

  
	
  Settlement
  Terms:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Settlement Currency:

  	
   

  	
  USD (all amounts shall be converted to the
  Settlement Currency in good faith and in a commercially reasonable manner by
  the Calculation Agent).

  
	
   

  	
   

  	
   

  
	
  Settlement Method Election:

  	
   

  	
  Applicable; provided that Section 7.1 of the
  Equity Definitions is hereby amended by deleting the word “Physical” in the
  sixth line thereof and replacing it with the words “Net Share” and deleting
  the word “Physical” in the last line thereof and replacing it with word
  “Cash”.

  
	
   

  	
   

  	
   

  
	
  Electing Party:

  	
   

  	
  Counterparty

  
	
   

  	
   

  	
   

  
	
  Settlement Method Election Date:

  	
   

  	
  5 Scheduled Trading Days prior to the Valuation
  Date.

  
	
   

  	
   

  	
   

  
	
  Default Settlement Method:

  	
   

  	
  Cash Settlement

  
	
   

  	
   

  	
   

  
	
  Forward Cash Settlement Amount:

  	
   

  	
  An amount in the Settlement Currency equal to the
  product of (a) the Number of Shares multiplied by (b) an amount equal to
  (i) the Settlement Price minus (ii) the Forward Price.

  
	
   

  	
   

  	
   

  
	
  Settlement Price:

  	
   

  	
  The arithmetic mean of the Relevant Prices of the
  Shares for each Exchange Business Day in the Valuation Period.

  
	
   

  	
   

  	
   

  
	
  Relevant Price:

  	
   

  	
  The New York 10b-18 Volume Weighted Average Price
  per share of the Shares for the regular trading session (including any
  extensions thereof) of the Exchange on the related Exchange Business Day
  (without regard to pre-open or after hours trading outside of such regular
  trading session) as published by Bloomberg at 4:15 p.m. New York time on
  such date.

  

 

 3
 

 

 

	
  

  	
   

  	
   

  
	
  Cash Settlement Payment Date:

  	
   

  	
  3 Currency Business Days after the Valuation Date.

  
	
   

  	
   

  	
   

  
	
  Counterparty’s
  Contact Details for Purpose of Giving Notice:

  	
   

  	
   

  
	
   

  	
   

  	
  Karen K. Meneely

  
	
   

  	
   

  	
  E.I. duPont de
  Nemours & Company

  
	
   

  	
   

  	
  1007 Market
  Street

  
	
   

  	
   

  	
  Wilmington DE
  19898

  
	
   

  	
   

  	
  Telephone No.: 

  	
  (302) 774-0564

  
	
   

  	
   

  	
  Facsimile No.: 

  	
  (302) 773-1536

  
	
   

  	
   

  	
   

  
	
  GS&Co.’s
  Contact Details for Purpose of Giving Notice:

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone No.: 

  	
  (212) 902-8996

  
	
   

  	
   

  	
  Facsimile No.: 

  	
  (212) 902-0112

  
	
   

  	
   

  	
  Attention:
  Equity Operations: Options and Derivatives

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
  Tracey McCabe

  
	
   

  	
   

  	
  Equity Capital
  Markets

  
	
   

  	
   

  	
  One New York
  Plaza

  
	
   

  	
   

  	
  New York, NY
  10004

  
	
   

  	
   

  	
  Telephone No.: 

  	
  (212) 357-0428

  
	
   

  	
   

  	
  Facsimile No.: 

  	
  (212) 346-3787

  
	
   

  	
   

  	
   

  
	
  Counterparty Net
  Share Settlement:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Counterparty Net
  Share 

  Settlement Procedures:

  	
   

  	
  Counterparty Net Share Settlement shall be made in
  accordance with the procedures attached hereto as Annex B.

  
	
   

  	
   

  	
   

  
	
  Net Share Settlement Price:

  	
   

  	
  (a) in respect of any Share for which the Exchange
  is an auction or “open outcry” exchange that has a price as of the Valuation
  Time at which any trade can be submitted for execution, the Net Share
  Settlement Price shall be the price per Share as of the Valuation Time on the
  Net Share Valuation Date as reported in the official real-time price
  dissemination mechanism for such Exchange, (b) in respect of any Share for
  which the Exchange is a dealer exchange or dealer quotation system, the Net
  Share Settlement Price shall be the mid-point of the highest bid and lowest
  ask prices quoted as of the Valuation Time on the Net Share Valuation Date
  (or the last such prices quoted immediately before the Valuation Time)
  without regard to quotations that “lock” or “cross” the dealer exchange or
  dealer quotation system. In all cases the Net Share Settlement Price shall be
  reduced by the per Share amount of the underwriting discount and/or
  commissions agreed to pursuant to the equity underwriting agreement
  contemplated by the Net Share Settlement Procedures and (c) notwithstanding
  anything to the contrary in (b) above, where NASDAQ is the Exchange, the Net
  Share Settlement Price will be the NASDAQ Official Closing Price (NOCP) as of
  the Valuation Time on the Net Share Valuation Date as reported in the
  official price determination mechanism for the Exchange.

  

 

 4
 

 

 

	
  

  	
   

  	
   

  
	
  Valuation Time:

  	
   

  	
  As provided in Section 6.1 of the Equity Definitions;
  provided that Section 6.1 of the Equity Definitions is hereby amended by
  inserting the words “Net Share Valuation Date,” before the words “Valuation
  Date” in the first and third lines thereof.

  
	
   

  	
   

  	
   

  
	
  Net Share Valuation Date:

  	
   

  	
  The Exchange Business Day immediately following the
  Valuation Date.

  
	
   

  	
   

  	
   

  
	
  Net Share Settlement Date:

  	
   

  	
  The third Exchange Business Day immediately
  following the Valuation Date.

  
	
   

  	
   

  	
   

  
	
  Reserved Shares:

  	
   

  	
  For each Transaction, as set forth in the
  Supplemental Confirmation.

  
	
   

  	
   

  	
   

  
	
  GS&Co. Net
  Share Settlement:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GS&Co. Net Share Settlement Procedures:

  	
   

  	
  In the event that GS&Co. owes the Forward Cash
  Settlement Amount, settlement shall be made by delivery of the number of
  Shares equal in value to the Forward Cash Settlement Amount, with such value
  based on the Relevant Price per share further described below. In such event,
  on each succeeding Exchange Business Day after the Net Share Valuation Date,
  GS&Co. shall use good faith, commercially reasonable efforts to purchase
  up to the maximum amount of Shares each day in accordance with the provisions
  of Rule 10b-18 (2), (3) and (4), subject to any delays between the execution
  and reporting of a trade of the Shares on the Exchange and other
  circumstances beyond its reasonable control, until the sum of the products of
  the number of Shares purchased by GS&Co. multiplied by the price at which
  GS&Co. executes such purchases on the respective date of purchase equals
  the Forward Cash Settlement Amount. GS&Co. shall deliver all Shares
  purchased pursuant to this paragraph free of any contractual or other
  restriction in good transferable form on the third Exchange Business Day
  following the day on which GS&Co. completes all such purchases; or, if
  Counterparty so elects prior to the Net Share Valuation Date, GS&Co. will
  deliver all shares that are purchased on each succeeding Exchange Business
  Day after the Net Share Valuation Date on the third Exchange Business Day
  following the day of such purchase.

  
	
   

  	
   

  	
   

  
	
  Share
  Adjustments:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Method of Adjustment:

  	
   

  	
  Calculation Agent Adjustment

  
	
   

  	
   

  	
   

  
	
  Extraordinary
  Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Consequences of
  Merger Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)  Share-for-Share:

  	
   

  	
  Modified Calculation Agent Adjustment

  
	
   

  	
   

  	
   

  
	
  (b)  Share-for-Other:

  	
   

  	
  Cancellation and Payment on that portion of the
  Other Consideration that consists of cash; Modified Calculation Agent
  Adjustment on the remainder of the Other Consideration (subject to Section
  8(b) herein).

  

 

 5
 

 

 

	
  

  	
   

  	
   

  
	
  (c)  Share-for-Combined:

  	
   

  	
  Component Adjustment

  
	
   

  	
   

  	
   

  
	
  Determining Party:

  	
   

  	
  GS&Co.

  
	
   

  	
   

  	
   

  
	
  Tender Offer:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Consequences of
  Tender Offers:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)  Share-for-Share:

  	
   

  	
  Modified Calculation Agent Adjustment

  
	
   

  	
   

  	
   

  
	
  (b)  Share-for-Other:

  	
   

  	
  Cancellation and Payment on that portion of the
  Other Consideration that consists of cash; Modified Calculation Agent
  Adjustment on the remainder of the Other Consideration (subject to Section
  8(b) herein).

  
	
   

  	
   

  	
   

  
	
  (c)  Share-for-Combined:

  	
   

  	
  Component Adjustment

  
	
   

  	
   

  	
   

  
	
  Determining Party:

  	
   

  	
  GS&Co.

  
	
   

  	
   

  	
   

  
	
  Nationalization,
  Insolvency or Delisting:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Additional
  Disruption Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)  Change in
  Law:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (b)  Failure
  to Deliver:

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
   

  
	
  (c)  Insolvency
  Filing:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (d)  Loss of
  Stock Borrow:

  	
   

  	
  Applicable; furthermore Sections 12.9(a)(vii) and
  12.9(b)(iv) of the Equity Definitions are amended by deleting the words “at a
  rate equal to or less than the Maximum Stock Loan Rate” and replacing them
  with “at a rate of return equal to or greater than zero”.

  
	
   

  	
   

  	
   

  
	
  Hedging Party:

  	
   

  	
  GS&Co.

  
	
   

  	
   

  	
   

  
	
  Determining Party:

  	
   

  	
  GS&Co.

  
	
   

  	
   

  	
   

  
	
  Non-Reliance:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Agreements and
  Acknowledgements Regarding Hedging Activities:

  	
   

  	
  Applicable

  

 

 6
 

 

 

	
  

  	
   

  	
   

  
	
  Additional
  Acknowledgements:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Net Share
  Settlement following Extraordinary Event:

  	
   

  	
  Counterparty shall have the right, in its sole
  discretion, to make any payment required to be made by it pursuant to
  Sections 12.7 or 12.9 of the Equity Definitions (except with respect to
  any portion of the consideration for the Shares consisting of cash in the
  event of a Merger Event or Tender Offer), or to cause GS&Co. to make any
  payment required by such sections, following the occurrence of an
  Extraordinary Event by electing to net share settle the Transactions under
  this Master Confirmation in accordance with the terms, and subject to the
  conditions, for Net Share Settlement or GS&Co. Net Share Settlement, as
  applicable, herein by giving written notice to GS&Co. of such election on
  the day that the notice fixing the date that the Transactions are terminated
  or cancelled, as the case may be (the “Cancellation Date”), pursuant to the
  applicable provisions of Section 12 of the Equity Definitions is effective.
  If Counterparty elects net share settlement: (a) the Net Share Valuation
  Date shall be the date specified in the notice fixing the date that the
  Transactions are terminated or cancelled, as the case may be; provided that
  the Net Share Valuation Date shall be either the Exchange Business Day that
  such notice is effective or the first Exchange Business Day immediately
  following the Exchange Business Day that such notice is effective, (b) the
  Net Share Settlement Date shall be deemed to be the Exchange Business Day
  immediately following the Cancellation Date and (c) all references to the
  Forward Cash Settlement Amount in Annex B hereto shall be deemed to be
  references to the Cancellation Amount.

  
	
   

  	
   

  	
   

  
	
  Net Share
  Settlement Upon Early Termination:

  	
   

  	
  Counterparty shall have the right, in its sole
  discretion, to make any payment required to be made by it (the “Early
  Termination Amount”) pursuant to Sections 6(d) and 6(e) of the
  Agreement, or to cause GS&Co. to make any payment required by such
  sections, following the occurrence of an Early Termination Date in respect of
  the Agreement by electing to net share settle all the Transactions under this
  Master Confirmation in accordance with the terms, and subject to the
  conditions, for Counterparty Net Share Settlement or GS&Co. Net Share
  Settlement, as applicable, herein by giving written notice to GS&Co. of
  such election on the day that the notice fixing an Early Termination Date is
  effective. If Counterparty elects net share settlement: (a) the Net
  Share Valuation Date shall be the date specified in the notice fixing an
  Early Termination Date; provided that the Net Share Valuation Date shall be
  either the Exchange Business Day that such notice is effective or the first
  Exchange Business Day immediately following the Exchange Business Day that
  such notice is effective, (b) the Net Share Settlement Date shall be deemed
  to be the Exchange Business Day immediately following the Early Termination
  Date and (c) all references to Forward Cash Settlement Amount in Annex B
  hereto shall be deemed references to the Early Termination Amount.

  

 

 7
 

 

 

	
  

  	
   

  	
   

  
	
  Transfer:

  	
   

  	
  Notwithstanding anything to the contrary in the
  Agreement, GS&Co. may assign, transfer and set over all rights, title and
  interest, powers, privileges and remedies of GS&Co. under any
  Transaction, in whole to an affiliate of GS&Co. that is guaranteed by The
  Goldman Sachs Group, Inc. without the consent of Counterparty.

  
	
   

  	
   

  	
   

  
	
  GS&Co.
  Payment Instructions:

  	
   

  	
  Chase Manhattan Bank New York

  
	
   

  	
   

  	
  For A/C Goldman,
  Sachs & Co.

  
	
   

  	
   

  	
  A/C #
  930-1-011483

  
	
   

  	
   

  	
  ABA:  021-000021

  
	
   

  	
   

  	
   

  
	
  Counterparty
  Payment Instructions:

  	
   

  	
  To be provided by Counterparty

  
	
   

  	
   

  	
   

  

2.             Calculation Agent:               GS&Co.

3.             Representations,
Warranties and Covenants of GS&Co. and Counterparty.

(a)           Each
party represents and warrants that it (i) is an “eligible contract participant”,
as defined in the U.S. Commodity Exchange Act, as amended and (ii)
is entering into each Transaction hereunder as principal (and not as agent or
in any other capacity, fiduciary or otherwise) and not for the benefit of any third party.

(b)           Each party
acknowledges that the offer and sale of each Transaction to it is intended to
be exempt from registration under the Securities Act of 1933, as amended (the “Securities
Act”), by virtue of Section 4(2) thereof and the provisions of Regulation D
promulgated thereunder (“Regulation D”). 
Accordingly, each party represents and warrants to the other that (i) it
has the financial ability to bear the economic risk of its investment in each
Transaction and is able to bear a total loss of its investment, (ii) it is
an “accredited investor” as that term is defined under Regulation D, (iii) it
will purchase each Transaction for investment and not with a view to the
distribution or resale thereof, and (iv) the disposition of each Transaction is
restricted under this Master Confirmation and each Supplemental Confirmation,
the Securities Act and state securities laws.

4.             Additional Representations, Warranties and Covenants
of GS&Co.

GS&Co.
hereby represents, warrants and covenants to Counterparty that:

(a)           during all relevant times beginning on the third
succeeding Scheduled Trading Day following the Trade Date through and including
the Valuation Date, to the extent that it purchases any Shares in connection
with its Hedge Positions, it shall use good faith, commercially reasonable
efforts to comply with the provisions of Rule 10b-18(b)(2), (3) and (4) of the
Exchange Act as if those sections applied to GS&Co., taking into
account any applicable Securities and Exchange Commission no-action letters as
appropriate and subject to any delays between the execution and reporting of a
trade of the Shares on the Exchange and other circumstances beyond its
reasonable control; and

(b)           it shall purchase an
amount of Shares no greater than the Daily Reference Shares (as specified in
the related Supplemental Confirmation) on each Exchange Business Day during the
Valuation Period.

5.             Additional Representations, Warranties and Covenants
of Counterparty.

As of (i) the date hereof
and (ii) the Trade Date,
Counterparty represents, warrants and covenants to GS&Co. that:

(a)           the purchase or
writing of each Transaction will not violate Rule 13e-1 or Rule 13e-4
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”);

 

 8

 

(b)           is not entering into
any Transaction on the basis of, and is not aware of, any material non-public
information with respect to the Shares or in anticipation of, in connection
with, or to facilitate, a distribution of its securities, a self tender offer
or a third-party tender offer;

(c)           Counterparty is in
compliance with its reporting obligations under the Exchange Act and its most
recent Annual Report on Form 10-K, together with all reports subsequently filed
by it pursuant to the Exchange Act, taken together and as amended and
supplemented to the date of this representation, do not, as of their respective
filing dates, contain any untrue statement of a material fact or omit any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading;

(d)           With respect to the
first Transaction under this Master Confirmation, the Counterparty’s Board of
Directors has approved the Transaction and Counterparty shall disclose such
Transaction program to the public on or prior to the morning after the Trade
Date and with respect to other Transactions, such Transactions are being
entered into pursuant to publicly disclosed Share buy-back programs and
Counterparty’s Board of Directors has approved such programs;

(e)           notwithstanding the
generality of Section 13.1 of the Equity Definitions, GS&Co. is not making
any representations or warranties with respect to the treatment of any
Transaction under FASB Statements 149 or 150, EITF 00-19 (or any successor
issue statements) or under FASB’s Liabilities & Equity Project;

(f)            it will not take
any action or refrain from taking any action that would limit or in any way
adversely affect GS&Co.’s rights under the Agreement;

(g)           it
has not, and during any Valuation Period (as extended pursuant to the
provisions of Section 6 and “Valuation Period” herein) will not, enter into
agreements similar to the Transactions described herein where the valuation
period in such other transaction will overlap at any time (including as a
result of extensions in such valuation period as provided in the relevant
agreements) with any Valuation Period (as extended pursuant to the provisions
of Section 6 and “Valuation Period” herein) under this Master Confirmation.  In the event that the valuation period in any
other similar transaction overlaps with any Valuation Period under this Master
Confirmation as a result of any extension made pursuant to the provisions of
Section 6 and “Valuation Period” herein, Counterparty shall promptly amend such
transaction to avoid any such overlap;

(h)           during
the Valuation Period (as extended or suspended pursuant to the
provisions of Section 6 and “Valuation Period” herein) the Shares or securities that are convertible into, or exchangeable or
exercisable for Shares are not subject to a “restricted period” as such term is
defined in Regulation M promulgated under the Exchange Act (“Regulation M”),
provided that to the extent Counterparty has notified GS&Co. of such event
pursuant to Section 6(a), GS&Co. shall not have the right to declare an
Event of Default under the Agreement for such event; and

(i)            it
shall report each Transaction as required under Regulation S-K and/or
Regulation S-B under the Exchange Act, as applicable.

6.             Suspension of Valuation Period

(a)           If Counterparty
concludes that it will be engaged in a distribution of the Shares for purposes
of Regulation M, Counterparty agrees that it will, on one Scheduled Trading Day’s
written notice, direct GS&Co. not to purchase Shares in connection with
hedging any Transaction during the “restricted period” (as defined in
Regulation M).  If on any Scheduled
Trading Day Counterparty delivers written notice (and confirms by telephone) by
8:30 a.m. New York Time (the “Notification Time”) then such notice shall be
effective to suspend the Valuation Period 
as of such Notification Time.  In
the event that Counterparty delivers notice and/or confirms by telephone after
the Notification Time, then the Valuation Period shall be suspended effective
as of 8:30 a.m. New York Time on the following Scheduled Trading Day or as
otherwise required by law or agreed between Counterparty and GS&Co.  The Valuation Period shall be suspended and
the Valuation Date extended for each Scheduled Trading Day in such restricted
period.

 9
 

 

(b)           In the event that
GS&Co. concludes, in its sole discretion, that it is appropriate with
respect to 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 GS&Co.),
for it to refrain from purchasing Shares on any Scheduled Trading Day during
the Valuation Period,
GS&Co. may by written notice to Counterparty elect to suspend the Valuation
Period  for such number of Scheduled Trading
Days as is specified in the notice.  The
notice shall not specify, and GS&Co. shall not otherwise communicate to
Counterparty, the reason for GS&Co.’s election to suspend the Valuation
Period.  The Valuation Period shall be
suspended and the Valuation Date extended for each Scheduled Trading Day
occurring during any such suspension.

(c)           On one occasion and
upon written notice to GS&Co. prior to 8:30 a.m. New York time on any
Scheduled Trading Day during the Valuation Period, Counterparty may elect to
suspend the Valuation Period for such number of Scheduled Trading Days as is
specified in the notice up to a maximum of 60 calendar days.  The notice shall not specify, and
Counterparty shall not otherwise communicate to GS&Co., the reason for
Counterparty’s election to suspend the Valuation Period.  The Valuation Period shall be suspended and
the Valuation Date extended for each Scheduled Trading Day occurring during any
such suspension.

(d)           In
the event that the Valuation Period is suspended pursuant to Sections 5(a),(b)
or (c) above during the regular trading session on the Exchange then the
Calculation Agent in its sole discretion shall, in calculating the Forward Cash
Settlement Amount, extend the Valuation Period and make adjustments to
the weighting of each Relevant Price for purposes of determining the Settlement
Price, with such adjustments based on, among other factors, the duration of any
such suspension and the volume, historical trading patterns and price of the
Shares.

7.             Counterparty Purchases.  Counterparty represents, warrants and
covenants to GS&Co. that for each Transaction:

(a)           Counterparty (or any
“affiliated purchaser” as defined in Rule 10b-18 under the Exchange Act (“Rule 10b-18”)) shall not, without
the prior written consent of GS&Co., purchase any Shares, listed contracts
on the Shares or securities that are convertible into, or exchangeable or
exercisable for Shares (including, without limitation, any Rule 10b-18
purchases of blocks (as defined in Rule 10b-18)) during any Valuation
Period  (as extended pursuant to the
provisions of Section 6 and “Valuation Period” herein), other than purchases
made during a suspension of the Valuation Period pursuant to Section 6(c) above
in connection with a Tender Offer solicited by Counterparty.  During this time, any such purchases by
Counterparty shall be made through GS&Co., or if not through GS&Co.,
with the prior written consent of GS&Co., and in compliance with
Rule 10b-18 or otherwise in a manner that Counterparty and GS&Co.
believe is in compliance with applicable requirements.  Any such purchase by Counterparty shall be
disregarded for purposes of determining the Forward Cash Settlement Amount.  To the extent that Counterparty makes any
such purchase other than through GS&Co., or other than in connection with
any Transaction, Counterparty hereby represents and warrants to GS&Co. that
(a) it will not take other action that would or could cause GS&Co.’s
purchases of the Shares during the Valuation Period not to comply with Rule
10b-18 and (b) any such purchases will not otherwise constitute a violation of
Section 9(a) or Rule 10(b) of the Exchange Act. 
This subparagraph (a) shall not restrict any purchases by Counterparty
of Shares effected during any suspension of any Valuation Period in accordance
with Section 6 herein and any purchases during such suspension shall be
disregarded in calculating the Forward Cash Settlement Amount; and

(b)           Counterparty is entering into this Master
Confirmation and each Transaction hereunder in good faith and not as part of a
plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act
(“Rule 10b5-1”).  It is the intent
of the parties that each Transaction entered into under this Master
Confirmation comply with the requirements of Rule 10b5-1(c)(1)(i)(A) and (B)
and each Transaction entered into under this Master Confirmation shall be
interpreted to comply with the requirements of Rule 10b5-1(c).  Counterparty will not seek to control or
influence GS&Co. to make “purchases or sales” (within the meaning of
Rule 10b5-1(c)(1)(i)(B)(3)) under any Transaction entered into under this
Master Confirmation, including, without limitation, GS&Co.’s decision to
enter into any hedging transactions. 
Counterparty represents and warrants that it has consulted with its own
advisors as to the legal aspects of its adoption and implementation of this
Master Confirmation and each Supplemental Confirmation under Rule 10b5-1.

 10
 

 

8.             Additional Termination Events.  Additional Termination Event will apply.  The following will constitute Additional
Termination Events, in each case with Counterparty as the sole Affected Party:

(a)           Notwithstanding
anything to the contrary in the Equity Definitions, the occurrence of a
Nationalization, Insolvency or a Delisting (in each case effective on the
Announcement Date as determined by the Calculation Agent);

(b)           Notwithstanding
anything to the contrary in the Equity Definitions, the occurrence of a Merger
Event (effective on the Merger Date) or a Tender Offer (effective on the Tender
Offer Date) in respect of which any Other Consideration received for the Shares
does not consist of cash.  For the
avoidance of doubt, in the event that any portion of the consideration received
for the Shares consists of cash or New Shares, this Additional Termination
Event shall only apply with respect to all or any Transaction(s) (or portions
thereof) remaining after giving effect to the provisions in “Consequences of
Merger Events” or “Consequences of Tender Offers”, as the case may be, above;
or

(c)           Notwithstanding
anything to the contrary in the Equity Definitions, a day which is five
Business Days prior the related record date for any Extraordinary Dividend
declared by the Issuer.  Notwithstanding
anything in the Agreement, any subsequent notice of an Early Termination Date
under 6(b)(i) of the Agreement for an Additional Termination Event declared
pursuant to this Section 8(c) shall designate the date of the occurrence of
this Additional Termination Event as the Early Termination Date and any
valuations made pursuant to 6(e) of the Agreement shall be made as of such
date.

9.             Automatic Termination Provisions.  Notwithstanding anything to the contrary in
Section 6 of the Agreement:

(a)    
An Additional Termination Event with Counterparty as the sole Affected
Party will automatically occur without any notice or action by GS&Co. or
Counterparty if the price of the Shares on the Exchange at any time falls below
the Termination Price (as specified in the related Supplemental Confirmation)
provided that (for the avoidance of doubt only) such Additional Termination
Event shall be an Additional Termination Event only with respect to the
Transaction documented in such related Supplemental Confirmation.  The Exchange Business Day that the price of
the Shares on the Exchange at any time falls below the Termination Price will
be the “Early Termination Date” for purposes of the Agreement.

(b)          Notwithstanding anything to the contrary
in Section 6(d) of the Agreement, following the occurrence of such an
Additional Termination Event, GS&Co. will notify Counterparty of the amount
owing under Section 6(e) of the Agreement within a commercially reasonable time
period (with such period based upon the amount of time, determined by
GS&Co. (or any of its Affiliates) in its sole discretion, that it would
take to unwind any of its Hedge Position(s) related to the Transaction in a
commercially reasonable manner based on relevant market indicia).  For purposes of the “Net Share Settlement
Upon Early Termination” provisions herein, (i) the date that such notice is
effective (the “Notice Date”) shall constitute the “Net Share Valuation Date”,
(ii) the Exchange Business Day immediately following the Notice Date shall be
the Net Share Settlement Date and (iii) all references to the Forward Cash
Settlement Amount in Annex B hereto shall be deemed to be the Early Termination
Amount.

10.          Special Provisions for Merger Events.  Notwithstanding anything to the contrary
herein or in the Equity Definitions, to the extent that an Announcement Date
for a potential Merger Transaction occurs during any Valuation Period:

(a)           Promptly after
request from GS&Co., Counterparty shall provide GS&Co. with written
notice specifying (i) Counterparty’s average daily Rule 10b-18 Purchases (as
defined in Rule 10b-18) during the three full calendar months immediately
preceding the Announcement Date that were not effected through GS&Co. or
its affiliates and (ii) the number of Shares purchased pursuant to the proviso
in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months
preceding the Announcement Date.  Such
written notice shall be deemed to be a certification by Counterparty to
GS&Co. that such information is true and correct.  Counterparty understands that GS&Co. will
use this information in calculating the trading volume for purposes of Rule
10b-18; and

 11
 

 

(b)           GS&Co. in its
sole discretion may (i) make adjustments to the terms of any Transaction,
including, without limitation, the Valuation Date, the Counterparty Additional
Payment Amount and the Number of Shares to account for the number of Shares
that could be purchased on each day during the Valuation Period in compliance
with Rule 10b-18 following the Announcement Date or (ii) treat the occurrence
of the Announcement Date as an Additional Termination Event with Counterparty
as the sole Affected Party.

“Merger Transaction” means any merger, acquisition or similar
transaction involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv)
under the Exchange Act.

11.           Special Calculation and Settlement
Following Early Termination and Extraordinary Events.  Notwithstanding anything to the contrary in
this Master Confirmation or any Supplemental Confirmation hereunder, in the
event that an Extraordinary Event under Article 12 of the Equity Definitions
occurs or an Early Termination Date occurs or is designated with respect to any
Transaction (each an “Affected Transaction”), then:

(a)           GS&Co.and
Counterparty may agree to have Counterparty deliver the Number of Early
Settlement Shares to GS&Co. on the date that notice designating such event
is effective and either GS&Co. shall pay to Counterparty the Special
Termination Amount, if positive, or Counterparty shall pay to GS&Co. the
absolute value of the Special Termination Amount, if negative.  To the extent that Counterparty elects to
deliver Shares to GS&Co. accompanied by an effective Registration Statement
(satisfactory to GS&Co. in its sole discretion) covering such Shares,
Counterparty must be in compliance with the conditions specified in (iii)
though (ix) in Annex B hereto at the time of such delivery.  If Counterparty elects to deliver
Unregistered Shares (as defined in Annex B) to GS&Co., Counterparty and
GS&Co. will negotiate in good faith on acceptable procedures and
documentation relating to the sale of such Unregistered Shares.  Counterparty and GS&Co. agree that the
payment of the Special Termination Amount and the delivery of the Number of
Early Settlement Shares satisfies in full any obligation of a party to make any
payments pursuant to Section 6(e) of the Agreement or Article 12 of the Equity
Definitions, as the case may be.

“Number of Early
Settlement Shares” means with respect to each Affected Transaction under this
Master Confirmation and for any date of determination, a number of Shares equal
to (i) the related Number of Shares minus (ii) the product of (y) the related
Number of Shares multiplied by the quotient of (a) the number of Exchange
Business Days that have actually occurred in the Valuation Period prior to such
date of determination divided by (b) the number of Scheduled Trading Days in
the Valuation Period as of the Trade Date.

12.           “Special Termination Amount” means
the sum of (a) the product of (i) the Number of Early Settlement Shares
multiplied by (ii) a per Share price (the “Early Termination Price”) determined
by GS&Co. in a good faith and commercially reasonable manner based on
relevant market indicia, including GS&Co.’s funding costs associated with
Early Settlement Shares and costs incurred or estimated to be incurred by
GS&Co. in connection with the purchase and sale of Shares in order to close
out GS&Co.’s or any of its Affiliates’ Hedge Positions with respect to each
Affected Transaction and, in the event that Counterparty delivers Unregistered
Shares to GS&Co., whether GS&Co. and Counterparty have agreed on
acceptable procedures and documentation relating to such Unregistered Shares as
described above and (b) any amount owing under Section 6(e) of the Agreement or
pursuant to Article 12 of the Equity Definitions, as the case may be, (in each
case without duplicating any amounts calculated under clause (a) above) by
GS&Co. to Counterparty (expressed as a positive number) or by Counterparty
to GS&Co. (expressed as a negative number). 
For the avoidance of doubt, clause (b) above includes amounts due in
respect of the portion of the Transaction equal to the Number of Shares minus
the Number of Early Settlement Shares;

(a)           GS&Co.and
Counterparty may agree to permit GS&Co. to accelerate the Valuation Date in
its good faith commercially reasonable discretion and make adjustments to the
number of Daily Reference Shares and the weighting of each Relevant Price for
purposes of determining the Settlement Price, with such adjustments based on,
among other things, the shortened duration of the Valuation Period and the
Number of Early Settlement Shares then outstanding as of such date of
determination; or

(b)           Counterparty may
request that GS&Co. submit to Counterparty a proposed risk offer price per
Share for the Number of Early Settlement Shares as of the date of such
request.  In the event Counterparty
agrees with the terms of such proposed risk offer price, GS&Co. shall
determine the amount due upon the 

 12
 

 

occurrence or
designation of an Early Termination Date or upon the occurrence of an event
under Article 12 of the Equity Definitions in accordance with the method set
forth in “Special Termination Amount” herein; provided that for purposes of
such calculation, the “Early Termination Price” shall equal (i) the proposed
risk offer price accepted by Counterparty minus (ii) the Forward Price.

To the extent GS&Co. and Counterparty are unable to agree on such
method of determination with respect to an Affected Transaction pursuant to
clauses (a), (b), or (c) above, GS&Co. and Counterparty agree to use
Section 6(e) of the Agreement or Article 12 of the Equity Definitions as the
method for calculating any amounts owed by either party in the event an Early
Termination Date occurs or is designated or an Extraordinary Event under
Article 12 of the Equity Definitions occurs.

13.   Acknowledgments.  The parties hereto intend for:

(a)           Each
Transaction to be a “securities contract” as defined in Section 741(7) of the
U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”),
a “swap agreement” as defined in Section 101(53B) of the Bankruptcy Code, or a “forward
contract” as defined in Section 101(25) of 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), 555, 556, and 560 of the Bankruptcy Code;

(b)           A
party’s right to liquidate or terminate any Transaction, net out or offset
termination values of payment amounts, and to exercise any other remedies upon
the occurrence of any Event of Default under the Agreement with respect to the
other party to constitute a “contractual right” (as defined in the Bankruptcy
Code);

(c)           Any
cash, securities or other property transferred as performance assurance, credit
support or collateral with respect to each Transaction to constitute “margin
payments” (as defined in the Bankruptcy Code); and

(d)           All payments for,
under or in connection with each Transaction, all payments for the Shares and
the transfer of such Shares to constitute “settlement payments” and “transfers”
(as defined in the Bankruptcy Code).

14.           Calculations on Early Termination
and Set-Off.

(a)           Notwithstanding
anything to the contrary in the Agreement (including the amendment pursuant to
Section 13(b) below) or the Equity Definitions, the calculation of any
Settlement Amounts, Unpaid Amounts and amounts owed in respect of cancelled
Transactions under Article 12 of the Equity Definitions shall be calculated
separately for (A) all Terminated Transactions (it being understood that
such term for the purposes of this paragraph includes cancelled Transactions
under Article 12 of the Equity Definitions) in the Shares of the Issuer that
qualify as equity under applicable accounting rules (collectively, the “Equity
Shares”) as determined by the Calculation Agent and (B) all other
Terminated Transactions under the Agreement including, without limitation,
Transactions in Shares other than those of the Issuer (collectively, the “Other
Shares”) and the netting and set-off provisions of the Agreement shall only
operate to provide netting and set-off (i) among Terminated Transactions
in the Equity Shares and (ii) among Terminated Transactions in the Other
Shares.  In no event shall the netting
and set-off provisions of the Agreement operate to permit netting and set-off
between Terminated Transactions in the Equity Shares and Terminated
Transactions in the Other Shares.

(b)           The parties agree to
amend Section 6 of the Agreement by adding a new Section 6(f) thereto as
follows:

“(f)  Upon the occurrence of an Event of Default or
Termination Event with respect to a party who is the Defaulting Party or the
Affected Party (“X”), the other party (“Y”) will have the right (but not be
obliged) without prior notice to X or any other person to set-off or apply any
obligation of X owed to Y (whether or not matured or contingent and whether or
not arising under the Agreement, and regardless of the currency, place of
payment or booking office 

 13
 

 

of the obligation) against
any obligation of Y owed to X (whether or not matured or contingent and whether
or not arising under the Agreement, and regardless of the currency, place of
payment or booking office of the obligation). 
Y will give notice to the other party of any set-off effected under this
Section 6(f).

Amounts (or the relevant
portion of such amounts) subject to set-off may be converted by Y into the
Termination Currency at the rate of exchange at which such party would be able,
acting in a reasonable manner and in good faith, to purchase the relevant
amount of such currency.  If any
obligation is unascertained, Y may in good faith estimate that obligation and
set-off in respect of the estimate, subject to the relevant party accounting to
the other when the obligation is ascertained. 
Nothing in this Section 6(f) shall be effective to create a charge or
other security interest.  This Section
6(f) shall be without prejudice and in addition to any right of set-off,
combination of accounts, lien or other right to which any party is at any time
otherwise entitled (whether by operation of law, contract or otherwise).”

15.           Payment Date Upon Early
Termination.  Notwithstanding
anything to the contrary in Section 6(d)(ii) of the Agreement, all amounts
calculated as being due in respect of an Early Termination Date under Section
6(e) of the Agreement will be payable on the day that notice of the amount
payable is effective (subject to any extension as a result of Counterparty’s
election to have either party net share settle any payment due by such party
pursuant “Net Share Settlement Upon Early Termination” herein).

16.           Governing Law.  The Agreement, this Master Confirmation and
each Supplemental Confirmation and all matters arising in connection with the
Agreement, this Master Confirmation and each Supplemental Confirmation shall be
governed by, and construed and enforced in accordance with, the law of the
State of New York without reference to its choice of law doctrine.

17.           Offices.

(a)           The Office of
GS&Co. for each Transaction is:  One
New York Plaza, New York, New York 10004.

(b)           The Office of
Counterparty for each Transaction is: 
E.I. du Pont de Nemours and Company, 1007 Market Street, Wilmington,
Delaware 19898.

18.            Arbitration.

(a)           All parties to this
Confirmation are giving up the right to sue each other in court, including the
right to a trial by jury, except as provided by the rules of the arbitration
forum in which a claim is filed.

(b)           Arbitration awards
are generally final and binding; a party’s ability to have a court reverse or
modify an arbitration award is very limited.

(c)           The ability of the
parties to obtain documents, witness statements and other discovery is
generally more limited in arbitration than in court proceedings.

(d)           The arbitrators do
not have to explain the reason(s) for their award.

(e)           The panel of
arbitrators will typically include a minority of arbitrators who were or are
affiliated with the securities industry, unless Counterparty is a member of the
organization sponsoring the arbitration facility, in which case all arbitrators
may be affiliated with the securities industry.

 14
 

 

(f)            The rules of some
arbitration forums may impose time limits for bringing a claim in
arbitration.  In some cases, a claim that
is ineligible for arbitration may be brought in court.

(g)           The rules of the
arbitration forum in which the claim is filed, and any amendments thereto,
shall be incorporated into this Confirmation.

(h)           Counterparty agrees
that any and all controversies that may arise between Counterparty and GS &
Co., including, but not limited to, those arising out of or relating to the
Agreement or any Transaction hereunder, shall be determined by arbitration
conducted before The New York Stock Exchange, Inc. (“NYSE”) or NASD Dispute
Resolution (“NASD-DR”), or, if the NYSE and NASD-DR decline to hear the matter,
before the American Arbitration Association, in accordance with their
arbitration rules then in force.  The
award of the arbitrator shall be final, and judgment upon the award rendered
may be entered in any court, state or federal, having jurisdiction.

(i)            No person shall
bring a putative or certified class action to arbitration, nor seek to enforce
any pre-dispute arbitration agreement against any person who has initiated in
court a putative class action or who is a member of a putative class who has
not opted out of the class with respect to any claims encompassed by the
putative class action until: (i) the class certification is denied; (ii) the
class is decertified; or (iii) Counterparty is excluded from the class by the
court.

(j)            Such forbearance to
enforce an agreement to arbitrate shall not constitute a waiver of any rights
under this Confirmation except to the extent stated herein.

19.   Counterparty hereby agrees (a) to check
this Master Confirmation carefully and immediately upon receipt so that errors
or discrepancies can be promptly identified and rectified and (b) to
confirm that the foregoing (in the exact form provided by GS&Co.) correctly
sets forth the terms of the agreement between GS&Co. and Counterparty with
respect to any Transaction, by manually signing this Master Confirmation or
this page hereof as evidence of agreement to such terms and providing the other
information requested herein and immediately returning an executed copy to
Equity Derivatives Documentation Department, facsimile No. 212-428-1980/83.

	
   

  	
   

  	
   

  	
   

  	
  Yours sincerely,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  GOLDMAN, SACHS & CO.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Sharon Siebold

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Agreed and Accepted By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.I. DU PONT DE NEMOURS AND COMPANY

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ John P. Jessup

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name: John P. Jessup

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title: Vice President & Treasurer

  	
   

  	
   

  	
   

  	
   

  	
   

  
									

 

 15

 

 

ANNEX A

SUPPLEMENTAL CONFIRMATION 

	
  To:

  	
   

  	
  E.I. du Pont de Nemours and Company

  1007 Market Street

  Wilmington, Delaware 19898

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Goldman, Sachs & Co.

  
	
   

  	
   

  	
   

  
	
  Subject:

  	
   

  	
  Accelerated Share Repurchase Transaction — VWAP
  Pricing

  
	
   

  	
   

  	
   

  
	
  Ref. No:

  	
   

  	
  EN51KV000000000

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  October 24, 2005

  

 

The purpose of this
Supplemental Confirmation is to confirm the terms and conditions of the
Transaction entered into between Goldman, Sachs & Co. (“GS&Co.”) and
E.I. du Pont de Nemours and Company (“Counterparty”) (together, the “Contracting
Parties”) on the Trade Date specified below. 
This Supplemental Confirmation is a binding contract between GS&Co.
and Counterparty as of the relevant Trade Date for the Transaction referenced
below.

The definitions and
provisions contained in the Master Confirmation specified below are
incorporated into this Supplemental Confirmation.  In the event of any inconsistency between
those definitions and provisions and this Supplemental Confirmation, this
Supplemental Confirmation will govern.

1.             This Supplemental Confirmation supplements, forms part
of, and is subject to the Master Confirmation dated as of October
24, 2005 (the “Master Confirmation”) between the Contracting Parties, as
amended and supplemented from time to time. 
All provisions contained in the Master Confirmation govern this
Supplemental Confirmation except as expressly modified below.

2.             The terms of the Transaction to which this Supplemental
Confirmation relates are as follows:

	
  Trade Date:

  	
   

  	
  October 24, 2005. In a related transaction
  Counterparty agreed to purchase a number of Shares equal to the Number of
  Shares from GS&Co. on the Trade Date at the Forward Price per Share.

  
	
   

  	
   

  	
   

  
	
  Forward Price:

  	
   

  	
  USD 39.62 per Share

  
	
   

  	
   

  	
   

  
	
  Valuation Date:

  	
   

  	
  July 27, 2006

  
	
   

  	
   

  	
   

  
	
  Number of Shares:

  	
   

  	
  75,719,334 Shares

  
	
   

  	
   

  	
   

  
	
  Daily Reference Shares:

  	
   

  	
  Initially 402,763; as may be adjusted pursuant to
  the terms of the Master Confirmation.

  
	
   

  	
   

  	
   

  
	
  Termination Price:

  	
   

  	
  $10 per Share

  
	
   

  	
   

  	
   

  
	
  Reserved Shares:

  	
   

  	
  75,000,000 Shares

  
	
   

  	
   

  	
   

  
	
  Counterparty Additional Payment Amount:

  	
   

  	
  USD 25,485,340.21

  

3.             Counterparty represents and warrants to GS&Co. that
neither it (nor any “affiliated purchaser” as defined in Rule 10b-18 under the
Exchange Act) have made any purchases of blocks pursuant to the proviso in Rule
10b-18(b)(4) under the Exchange Act during the four full calendar weeks
immediately preceding the Trade Date.

 A-1
 

 

 

Counterparty
hereby agrees (a) to check this Supplemental Confirmation carefully and
immediately upon receipt so that errors or discrepancies can be promptly
identified and rectified and (b) to confirm that the foregoing (in the
exact form provided by GS&Co.) correctly sets forth the terms of the
agreement between GS&Co. and Counterparty with respect to this Transaction,
by manually signing this Supplemental Confirmation or this page hereof as
evidence of agreement to such terms and providing the other information
requested herein and immediately returning an executed copy to Equity
Derivatives Documentation Department, facsimile No. 212-428-1980/83.

	
  

  	
   

  	
  Yours sincerely,

  GOLDMAN, SACHS & CO.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Sharon Siebold

  
	
   

  	
   

  	
   

  	
   

  	
  Authorized Signatory

  
						

 

	
  Agreed and Accepted

  By: E.I. DU PONT DE NEMOURS
  AND COMPANY

  	
   

  
	
   

  
	
   

  
	
  By:

  	
   

  	
  /s/ John P. Jessup

  	
   

  
	
   

  	
   

  	
  Name: John P. Jessup

  	
   

  
	
   

  	
   

  	
  Title: Vice President & Treasurer

  	
   

  

 

 A-2

 

ANNEX B

NET SHARE SETTLEMENT PROCEDURES

The following Net Share
Settlement Procedures shall apply to the extent that Counterparty elects
Counterparty Net Share Settlement in accordance with the Master Confirmation:

Net Share Settlement
shall be made by delivery of the number of Shares equal in value to the Forward
Cash Settlement Amount (the “Settlement Shares”), with such Shares’ value based
on the Net Share Settlement Price. 
Delivery of such Settlement Shares shall be made free of any contractual
or other restrictions in good transferable form on the Net Share Settlement
Date with Counterparty (i) representing and warranting to GS&Co. at the
time of such delivery that it has good, valid and marketable title or right to
sell and transfer all such Shares to GS&Co. under the terms of the related
Transaction free of any lien charge, claim or other encumbrance and (ii) making
the representations and agreements contained in Section 9.11(ii) through (iv)
of the Equity Definitions to GS&Co. with respect to the Settlement
Shares.  GS&Co. or any affiliate of
GS&Co. designated by GS&Co. (GS&Co. or such affiliate, “GS”) shall
resell the Settlement Shares during a period (the “Resale Period”) commencing
no earlier than the Net Share Valuation Date. 
The Resale Period shall end on the Exchange Business Day on which GS
completes the sale of all Settlement Shares or a sufficient number of
Settlement Shares so that the realized net proceeds of such sales exceed the
Forward Cash Settlement Amount, provided that such Resale Period shall not
exceed the date that is 6 months after the Net Share Valuation Date.  Notwithstanding the foregoing, if resale by
GS of the Settlement Shares, as determined by GS in its sole discretion
(i) occurs during a distribution for purposes of Regulation M, and if GS
would be subject to the restrictions of Rule 101 of Regulation M in
connection with such distribution, the Resale Period will be postponed or
tolled, as the case may be, until the Exchange Business Day immediately
following the end of any “restricted period” as such term is defined in
Regulation M with respect to such distribution under Regulation M or
(ii) conflicts with any legal, regulatory or self-regulatory requirements
or related policies and procedures applicable to GS (whether or not such
requirements, policies or procedures are imposed by law or have been
voluntarily adopted by GS), the Resale Period will be postponed or tolled, as
the case may be, until such conflict is no longer applicable.  During the Resale Period, if the realized net
proceeds from the resale of the Settlement Shares exceed the Forward Cash
Settlement Amount, GS shall refund such excess in cash to Counterparty by the
close of business on the third Exchange Business Day immediately following the
last day of the Resale Period.  If the
Forward Cash Settlement Amount exceeds the realized net proceeds from such
resale, Counterparty shall transfer to GS by the open of the regular trading
session on the Exchange on the third Scheduled Trading Day immediately
following the last day of the Resale Period the amount of such excess (the “Additional
Amount”) in cash or in the number of Shares (“Make-whole Shares”) in an amount
that, based on the Net Share Settlement Price on the last day of the Resale
Period (as if such day was the “Net Share Valuation Date” for purposes of
computing such Net Share 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 Counterparty elects to pay the Additional
Amount in Shares, the requirements and provisions set forth below shall
apply.  This provision shall be applied
successively until the Additional Amount is equal to zero.

Net Share Settlement of a
Transaction is subject to the following conditions:

Counterparty at its sole
expense shall:

(i)       as promptly as practicable (but in no
event more than five (5) Exchange Business Days immediately following the
Settlement Method Election Date or, in the case of an election of Net Share
Settlement upon the occurrence of an Extraordinary Event or an Early
Termination Date, no more than one Exchange Business Day immediately following
either the Cancellation Date or the Early Termination Date, as the case may be)
elect to file under the Securities Act and, if it so elects, use its best
efforts to make effective, as promptly as practicable, a registration statement
or supplement or amend an outstanding registration statement, in any such case,
in form and substance reasonably satisfactory to GS (the “Registration
Statement”) covering the offering and sale by GS of not less than 150% of the
Shares necessary to fulfill the Net Share Settlement delivery obligation by
Counterparty (determining the number

 B-1
 

 

 

of such Shares to be registered on the basis
of the average of the Settlement Prices on the five (5) Exchange Business
Days prior to the date of such filing, amendment or supplement, as the case may
be);

(ii)      maintain the effectiveness of the
Registration Statement until GS has sold all shares to be delivered by Counterparty
in satisfaction of its Net Share Settlement obligations;

(iii)     have afforded GS and its counsel and other
advisers a reasonable opportunity to conduct a due diligence investigation of
Counterparty customary in scope for transactions in which GS acts as
underwriter of equity securities, and GS shall have been satisfied (with the
approval of its Commitments Committee in accordance with its customary review
process) with the results of such investigation;

(iv)    have negotiated and entered into an agreement
with GS providing for such covenants, conditions, representations and
warranties, underwriting discounts, commissions, indemnities and contribution
rights as are customary for GS equity underwriting agreements, together with
customary certificates and opinions of counsel and letters of independent
auditors of Counterparty to be delivered to GS covering the shares to be
delivered by Counterparty in satisfaction of its Net Share Settlement
obligations;

(v)     have delivered to GS such number of
prospectuses relating thereto as GS shall have reasonably requested and shall
promptly update and provide GS with replacement prospectuses as necessary to
ensure the prospectus does not contain any untrue statement of a material fact
or any omission of a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances in which they
were made, not misleading;

(vi)    reimburse GS for an underwriting counsel
selected by GS (in its sole discretion);

(vii)   have taken all steps necessary for the shares
sold by GS to be listed or quoted on the primary exchange or quotation system
that the Shares are listed or quoted on;

(viii)  have paid all reasonable and actual
out-of-pocket costs and expenses of GS and all reasonable and actual fees and
expenses of GS’s outside counsel and other independent experts in connection
with the foregoing; and

(ix)     take such action as is required to ensure
that GS’s sale of the Shares does not violate, or result in a violation of, the
federal or state securities laws.

In the event that the
Registration Statement is not declared effective by the Securities Exchange
Commission (the “SEC”), any of the conditions specified in (ii) through (ix)
above are not satisfied on or prior to the Valuation Date (or, in the case of
an election of Net Share Settlement upon the occurrence of an Extraordinary
Event or an Early Termination Date, on or prior to the first Exchange Business
Day following either the Cancellation Date or the Early Termination Date, as the
case may be) or Counterparty elects not to deliver a Registration Statement,
then Counterparty may deliver Unregistered Shares (as defined below) to GS in
accordance with the following conditions. 
GS and Counterparty shall agree on acceptable pricing, procedures and
documentation relating to the sale of such Unregistered Shares (including,
without limitation, applicable requirements in (iii) through (ix) above and
insofar as pertaining to private offerings), and such Unregistered Shares shall
be deemed to be the “Settlement Shares” for the purposes of the related
Transaction and the settlement procedure specified in this Annex B shall be
followed except that in the event that the Forward Cash Settlement Amount
exceeds the proceeds from the sale of such Unregistered Shares then for the
purpose of calculating the number of “Make-whole Shares” to be delivered by
Counterparty, GS shall determine the discount to the Net Share Settlement Price
at which it can sell the Unregistered Shares. 
In the event that GS has not sold sufficient Unregistered Shares to
satisfy Counterparty’s obligations to GS contained herein at the time that a
Registration Statement covering the offering and sale by GS of a number of
Shares equal in value to not less than 150% of the amount then owed to GS is
declared effective (based on the Net Share Settlement Price on the Exchange
Business Day (as if such Exchange Business Day were the “Net Share Valuation
Date” for purposes of computing such Net Share Settlement Price) that the
Registration Statement was declared effective), GS shall return all unsold
Unregistered Shares to Counterparty and Counterparty shall deliver

 B-2
 

 

 

such number of Shares
covered by the effective Registration Statement equal to 100% of the amount
then owed to GS based on such Net Share Settlement Price.  Such delivered shares shall be deemed to be
the “Settlement Shares” for the purposes of the related Transaction and the
settlement procedure specified in this Master Confirmation (including the
obligation to deliver any Make-whole Shares, if applicable) shall be
followed.  In all cases GS shall be
entitled to take any and all required actions in the course of its sales of the
Settlement Shares, including without limitation making sales of the
Unregistered Shares only to “Qualified Institutional Buyers” (as such term is
defined under the Securities Act), to ensure that the sales of the Unregistered
Shares and the Settlement Shares covered by the Registration Statement are not
integrated resulting in a violation of the securities laws and Counterparty
agrees to take all actions requested by GS in furtherance thereof.

If GS and Counterparty
cannot agree on acceptable pricing, procedures and documentation relating to
the sales of such Unregistered Shares then the number of Unregistered Shares to
be delivered to GS pursuant to the provisions above shall not be based on the
Net Share Settlement Price but rather GS shall determine the value attributed
to each Unregistered Share in a commercially reasonable manner and based on such
value Counterparty shall deliver a number of Shares equal in value to the
Forward Cash Settlement Amount.  For the
purposes hereof “Unregistered Shares” means Shares that have not been
registered pursuant to an effective registration statement under the Securities
Act or any state securities laws (“Blue Sky Laws”) and that cannot be sold,
transferred, pledged or otherwise disposed of without registration under the
Securities Act or under applicable Blue Sky Laws unless such sale, transfer,
pledge or other disposition is made in a transaction exempt from registration
thereunder.

In the event that
Counterparty delivers Shares pursuant to an election of Net Share Settlement
then Counterparty agrees to indemnify and hold harmless GS, its affiliates and
its assignees and their respective directors, officers, employees, agents and
controlling persons (GS and each such person being an “Indemnified Party”) from
and against any and all losses, claims, damages and liabilities (or actions in
respect thereof), joint or several, to which such Indemnified Party may become
subject, under the Securities Act or otherwise, (i) relating to or arising out
of any of the Transactions contemplated by this Master Confirmation concerning
the Shares or (ii) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, prospectus, Registration
Statement or other written material relating to the Shares delivered to
prospective purchasers, including in each case any amendments or supplements
thereto and including but not limited to any documents deemed to be
incorporated in any such document by reference (the “Offering Materials”), or
arising out of or based upon any omission or alleged omission to state in the
Offering Materials a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that, in the case of this clause (ii),
Counterparty will not be liable to the extent that any loss, claim, damage or
liability arises out of or is based upon any untrue statement or omission or
alleged untrue statement or omission in the Offering Materials made in reliance
upon and in conformity with written information furnished to Counterparty by GS
expressly for use in the Offering Materials, as expressly identified in a
letter to be delivered at the closing of the delivery of Shares by Counterparty
to GS.  The foregoing indemnity
shall exclude losses that GS incurs solely by reason of the proceeds from the
sale of the Capped Number of Shares being less than the Forward Cash Settlement
Amount.  Counterparty will not be liable
under the foregoing indemnification provision to the extent that any loss,
claim, damage, liability or expense is found in a nonappealable judgment by a
court of competent jurisdiction to have resulted from GS’s willful misconduct,
gross negligence or bad faith in performing the services that are subject of
this Master Confirmation.  If for any
reason the foregoing indemnification is unavailable to any Indemnified Party or
insufficient to hold harmless any Indemnified Party, then Counterparty shall
contribute, to the maximum extent permitted by law, to the amount paid or
payable by the Indemnified Party as a result of such loss, claim, damage or
liability.  In addition, Counterparty will reimburse any Indemnified Party for all
expenses (including reasonable counsel fees and expenses) as they are incurred
(after notice to Counterparty) in connection with the investigation of,
preparation for or defense or settlement of any pending or threatened claim or
any action, suit or proceeding arising therefrom, whether or not such
Indemnified Party is a party thereto and whether or not such claim, action,
suit or proceeding is initiated or brought by or on behalf of
Counterparty.  Counterparty also
agrees that no Indemnified Party shall have any liability to Counterparty or
any person asserting claims on behalf of or in right of Counterparty in
connection with or as a result of any matter referred to in the Agreement or
this Master Confirmation except to the extent that any losses, claims, damages,
liabilities or expenses incurred by Counterparty result from the gross
negligence, willful misconduct or bad faith of the Indemnified Party.  This indemnity shall survive the completion
of any Transaction contemplated by this Master Confirmation and any

 B-3
 

 

 

assignment and delegation
of a Transaction made pursuant to this Master Confirmation or the Agreement
shall inure to the benefit of any permitted assignee of GS&Co.

In no event shall the
number of Settlement Shares (including, without duplication, any Unregistered
Shares) and any Make-whole Shares, be greater than the Reserved Shares minus
the amount of any Shares actually delivered under any other Transaction(s)
under this Master Confirmation (the result of such calculation, the “Capped
Number”).  Counterparty represents and
warrants (which shall be deemed to be repeated on each day that a Transaction
is outstanding) that the Capped Number is equal to or less than the number of
Shares determined according to the following formula:

A - B

	
  

  	
  Where

  	
  A = the number of authorized but unissued shares of
  the Issuer that are not reserved for future issuance on the date of the
  determination of the Capped Number; and

  
	
   

  	
   

  	
   

  
	
   

  	
  B = the maximum number of Shares required to be
  delivered to third parties if Counterparty elected Net Share Settlement of
  all transactions in the Shares (other than Transactions in the Shares under
  this Master Confirmation) with all third parties that are then currently
  outstanding and unexercised.

  

 

 

 B-4

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