Document:

Exhibit 4.3

JPMorgan
Chase Bank, National Association

P.O.
Box 161

60
Victoria Embankment

London
EC4Y 0JP

England

	
  

  	
  January 16, 2007

  
	
  To: Headwaters Incorporated

  
	
  10653 South River Front Parkway, Suite 300

  
	
  South Jordan, UT 84095

  
	
  Attention:

  	
  Scott Sorensen

  
	
   

  	
  Chief Financial Officer

  
	
  Telephone No.:

  	
  (801) 984-9427

  
	
  Facsimile No.:

  	
  (801) 984-9410

  
			

 

Re: Call Option
Transaction

The
purpose of this letter agreement (this “Confirmation”)
is to confirm the terms and conditions of the call option transaction entered
into between JPMorgan Chase Bank, National Association, London Branch (“JPMorgan”) and Headwaters Incorporated (“Counterparty”) 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.  Certain defined terms used herein have the
meanings assigned to them in the Offering Memorandum dated January 16, 2007
(the “Offering Memorandum”) relating to the
USD 135,000,000 principal amount of 2.50% Convertible Senior Subordinated Notes due 2014, (the “Convertible Notes” and each USD 1,000 principal amount of
Convertible Notes, a “Convertible Note”)
issued by Counterparty pursuant to an Indenture to be dated January 22, 2007
between Counterparty and Wells Fargo Bank, National Association, as trustee
(the “Indenture”).  In the event of any inconsistency between the
terms defined in the Offering Memorandum, the Indenture and this Confirmation,
this Confirmation shall govern. The parties acknowledge that this Confirmation
is entered into on the date hereof with the understanding that (i) definitions set
forth in the Indenture which are also defined herein by reference to the
Indenture and (ii) sections of the Indenture that are referred to herein will conform
to the descriptions thereof in the Offering Memorandum.  If any such definitions in the Indenture or
any such sections of the Indenture differ from the descriptions thereof in the
Offering Memorandum, the descriptions thereof in the Offering Memorandum will
govern for purposes of this Confirmation.  The parties further acknowledge that the
Indenture section numbers used herein are based on the draft of the Indenture
last reviewed by JPMorgan as of the date of this Confirmation, and if any such
section numbers are changed in the Indenture as executed, the parties will
amend this Confirmation in good faith to preserve the intent of the parties.  For the avoidance of doubt, references to the
Indenture herein are references to the Indenture as in effect on the date of
its execution and if the Indenture is amended following its execution, any such
amendment will be disregarded for purposes of this Confirmation unless the
parties agree otherwise in writing.

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

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

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

	
  General Terms:

  	
   

  
	
   

  	
   

  
	
  Trade Date:

  	
  January 16, 2007

  
	
   

  	
   

  
	
  Option Style:

  	
  “Modified American” as subject to the provisions set
  forth under “Exercise and Valuation” below

  
	
   

  	
   

  
	
  Option Type:

  	
  Call

  
	
   

  	
   

  
	
  Buyer:

  	
  Counterparty

  
	
   

  	
   

  
	
  Seller:

  	
  JPMorgan

  
	
   

  	
   

  
	
  Shares:

  	
  The common stock of Counterparty, par value USD .001
  per Share (Exchange symbol “HW”)

  
	
   

  	
   

  
	
  Number of
  Options:

  	
  135,000; provided
  that the Number of Options shall be automatically increased as of the date of
  exercise by J.P. Morgan Securities Inc., Deutsche Bank Securities Inc. and
  Morgan Stanley & Co. Incorporated, as representatives of the Initial
  Purchasers (as defined in the Purchase Agreement dated as of January 16, 2007
  between Counterparty and J.P. Morgan Securities Inc., Deutsche Bank
  Securities Inc. and Morgan Stanley & Co. Incorporated, as representatives
  of the Initial Purchasers party thereto (the “Purchase Agreement”)), of their option pursuant to Section 2
  of the Purchase Agreement by the number of additional Convertible Notes in
  denominations of USD 1,000 principal amount issued pursuant to such exercise
  (such Convertible Notes, the “Additional Convertible Notes”).  For the avoidance of doubt, the Number of
  Options shall be reduced by any Options exercised by Counterparty.  In no event will the Number of Options be
  less than zero.

  
	
   

  	
   

  
	
  Option
  Entitlement:

  	
  As of any date, a number equal to the Conversion
  Rate as of such date (as defined in the Indenture, but without regard to any
  adjustments to the Conversion Rate pursuant to Section 6.04(i), Section
  6.04(j) or Section 6.06 of the Indenture), for each Convertible Note.

  
	
   

  	
   

  
	
  Strike Price:

  	
  USD 29.4780

  

 

 2
 

 

	
  Premium:

  	
  USD 37,316,700.00 (Premium per Option: USD 276.42); provided that if the Number of Options is increased
  pursuant to the proviso to the definition of “Number of Options” above, there
  shall be an additional Premium equal to the product of the number of Options
  by which the Number of Options is so increased and the Premium per Option
  (the “Additional Premium”), and such
  Additional Premium shall be paid by Counterparty to JPMorgan on the
  Additional Premium Payment Date.

  
	
   

  	
   

  
	
  Premium Payment
  Date:

  	
  January 22, 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

  
	
   

  	
   

  
	
  Procedures for
  Exercise:

  	
   

  
	
   

  	
   

  
	
  Exercise
  Period(s):

  	
  Notwithstanding anything to the contrary in the
  Equity Definitions, an Exercise Period shall occur with respect to an Option
  hereunder only if such Option is an Exercisable Option (as defined below) and
  the Exercise Period shall be, in respect of any Exercisable Option, the
  period commencing on, and including, the relevant Conversion Date and ending
  on, and including, the Scheduled Valid Day immediately preceding the first
  day of the relevant Settlement Averaging Period in respect of such Conversion
  Date; provided that in respect of
  Exercisable Options relating to Convertible Notes tendered for conversion on
  or following December 1, 2013, the final day of the Exercise Period shall be
  the second Scheduled Trading Day immediately preceding the Expiration Date.

  
	
   

  	
   

  
	
  Conversion Date:

  	
  With respect to any conversion of Convertible Notes,
  the date on which the Holder (as such term is defined in the Indenture) of
  such Convertible Notes satisfies all of the requirements for conversion
  thereof as set forth in Section 6.02(b) of the Indenture.

  
	
   

  	
   

  
	
  Exercisable
  Options:

  	
  In respect of each Exercise Period, a number of
  Options equal to the number of Convertible Notes surrendered to Counterparty
  for conversion with respect to such Exercise Period but no greater than the
  Number of Options.

  
	
   

  	
   

  
	
  Expiration Time:

  	
  The Valuation Time

  
	
   

  	
   

  
	
  Expiration Date:

  	
  February 1, 2014, subject to earlier exercise.

  
	
   

  	
   

  
	
  Multiple
  Exercise:

  	
  Applicable, as described under Exercisable Options
  above.

  

 

 3
 

 

	
  Automatic Exercise:

  	
  Applicable; and means that in respect of an Exercise
  Period, a number of Options not previously exercised hereunder equal to the
  number of Exercisable Options shall be deemed to be exercised on the final
  day of such Exercise Period for such Exercisable Options; provided that such Options shall be deemed exercised only
  to the extent that Counterparty has provided a Notice of Exercise to
  JPMorgan.

  
	
   

  	
   

  
	
  Notice of
  Exercise:

  	
  Notwithstanding anything to the contrary in the
  Equity Definitions, in order to exercise any Exercisable Options,
  Counterparty must notify JPMorgan in writing before 5:00 p.m. (New York time)
  on the Scheduled Trading Day prior to the scheduled first day of the
  Settlement Averaging Period for the Exercisable Options being exercised of
  (i) the number of such Options and (ii) the scheduled first day of the
  Settlement Averaging Period and the scheduled Settlement Date; provided that in respect of Exercisable Options relating
  to Convertible Notes tendered for conversion on or following December 1,
  2013, such notice may be given on or prior to the second Scheduled Valid Day
  immediately preceding the Expiration Date and need only specify the number of
  such Exercisable Options.

  
	
   

  	
   

  
	
  Valuation Time:

  	
  At the close of trading of the regular trading
  session on the Exchange; provided that
  if the principal trading session is extended, the Calculation Agent shall
  determine the Valuation Time in its reasonable discretion.

  
	
   

  	
   

  
	
  Market
  Disruption Event:

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

  
	
   

  	
   

  
	
   

  	
  “in respect of a Share, the
  occurrence or existence for more than one half-hour period in the aggregate
  on any scheduled trading day for the Shares of any suspension or limitation
  imposed on trading (by reason of movements in price exceeding limits
  permitted by the New York Stock Exchange or otherwise) in the Shares or in
  any options, contracts or future contracts relating to the Shares, and such
  suspension or limitation occurs or exists at any time before 1:00 p.m. (New
  York City time) on such day.”

  
	
   

  	
   

  
	
  Settlement Terms:

  	
   

  
	
   

  	
   

  
	
  Settlement
  Method:

  	
  Net Share Settlement

  
	
   

  	
   

  
	
  Net Share
  Settlement:

  	
  JPMorgan will deliver to Counterparty, on the
  relevant Settlement Date, a number of Shares equal to the Net Shares in
  respect of any Exercisable Option exercised or deemed exercised hereunder. In
  no event will the Net Shares be less than zero.

  
	
   

  	
   

  
	
  Net Shares:

  	
  In respect of any Exercisable Option exercised or
  deemed exercised, a number of Shares equal to (i) the

  

 

 4
 

 

	
  

  	
  Option Entitlement multiplied
  by (ii) the sum of the quotients, for each Valid Day during the
  Settlement Averaging Period for such Exercisable Option, of (A) the Relevant
  Price on such Valid Day less the
  Strike Price, divided by (B) such Relevant
  Price, divided by (iii) the number of Valid
  Days in the Settlement Averaging Period; provided, however, that if the calculation contained in clause (A)
  above results in a negative number, such number shall be replaced with the
  number “zero”.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
  Valid Day:

  	
  A day on which (i) trading in securities generally
  occurs on the New York Stock Exchange or, if the Shares are not then listed
  on the New York Stock Exchange, on the principal other United States national
  or regional securities exchange on which the Shares are then listed or, if
  the Shares are not then listed on a United States national or regional
  securities exchange, in the principal other market on which the Shares are
  then traded and (ii) there is no Market Disruption Event.

  
	
   

  	
   

  
	
  Scheduled Valid
  Day:

  	
  A day that is scheduled
  to be a Valid Day on the primary United States national securities exchange
  or market on which the Shares are listed or admitted for trading.

  
	
   

  	
   

  
	
  Relevant Price:

  	
  On any Valid Day, the per Share volume-weighted
  average price as displayed under the heading “Bloomberg VWAP” on Bloomberg
  page HW.N <equity> AQR (or its equivalent successor if such page is
  unavailable) in respect of the period from the scheduled opening time of the
  Exchange to the Scheduled Closing Time of the Exchange on such Valid Day (or
  if such volume-weighted average price is unavailable, the market value of one
  Share on such Valid Day, as determined by the Calculation Agent using a
  volume-weighted method).

  
	
   

  	
   

  
	
  Settlement
  Averaging Period:

  	
  For any Exercisable Options relating to the
  conversion of Convertible Notes, (x) if Counterparty has delivered a Notice
  of Exercise to JPMorgan with respect to an Exercisable Option with a
  Conversion Date prior to December 1, 2013, the twenty (20) consecutive Valid
  Days commencing on and including the second Scheduled Valid Day following the
  relevant Conversion Date; or (y) if Counterparty has delivered a Notice of
  Exercise to JPMorgan with respect to such Exercisable Options with respect to
  a Conversion Date occurring on or after December 1, 2013, the twenty (20)
  consecutive Valid Days commencing on and including the twenty second (22nd)
  Scheduled Valid Day prior to the Expiration Date.

  

 

 5
 

 

	
  Settlement Date:

  	
  For any Exercisable Option, the date Shares will be
  delivered with respect to the Convertible Notes related to such Exercisable
  Options, under the terms of the Indenture.

  
	
   

  	
   

  
	
  Settlement
  Currency:

  	
  USD

  
	
   

  	
   

  
	
  Failure to
  Deliver:

  	
  Applicable

  
	
   

  	
   

  
	
  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
  Option means that Net Share Settlement is applicable to that Option.

  
	
   

  	
   

  
	
  Representation
  and Agreement:

  	
  Notwithstanding Section 9.11 of the Equity
  Definitions, the parties acknowledge that any Shares delivered to
  Counterparty shall be, upon delivery, subject to restrictions and limitations
  arising from Counterparty’s status as issuer of the Shares under applicable
  securities laws.

  
	
   

  	
   

  
	
  3. Additional Terms applicable to the Transaction:

  	
   

  
	
   

  	
   

  
	
  Adjustments
  applicable to the Transaction:

  	
   

  
	
   

  	
   

  
	
  Potential
  Adjustment Events:

  	
  Notwithstanding Section 11.2(e) of the Equity
  Definitions, a “Potential Adjustment Event” means an occurrence of any event
  or condition, as set forth in Section 6.04 of the Indenture that would result
  in an adjustment to the Conversion Rate of the Convertible Notes; provided that in no event shall there be any adjustment
  hereunder as a result of an adjustment to the Conversion Rate pursuant to
  Section 6.04(i), Section 6.04(j) or Section 6.06 of the Indenture.

  
	
   

  	
   

  
	
  Method of
  Adjustment:

  	
  Calculation Agent Adjustment, and means that,
  notwithstanding Section 

  11.2(c) of the Equity Definitions, upon any adjustment to the Conversion Rate
  of the Convertible Notes pursuant to the Indenture (other than Section
  6.04(i), Section 6.04(j) or Section 6.06 of the Indenture), the Calculation
  Agent will make a corresponding adjustment to any one or more of the Strike Price,
  Number of Options, the Option Entitlement and any other variable relevant to
  the exercise, settlement or payment for the Transaction.

  
	
   

  	
   

  
	
  Set-Off:

  	
  The provisions of Section 6(f) of the Agreement
  shall not apply to this Transaction.

  
	
   

  	
   

  
	
  Extraordinary Events applicable to the Transaction:

  	
   

  
	
   

  	
   

  
	
  Merger Events:

  	
  Notwithstanding Section 12.1(b) of the Equity
  Definitions, a “Merger Event” means the occurrence of any event or condition
  set forth in clause (2) of “Fundamental Change” definition under Section 1.01
  of the Indenture.

  

 

 6
 

 

	
  Tender Offers:

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

  
	
   

  	
   

  
	
  Consequence of
  Merger Events/

  	
   

  
	
  Tender Offers:

  	
  Notwithstanding Section 12.2 and Section 12.3 of the
  Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer,
  the Calculation Agent shall make a corresponding adjustment in respect of any
  adjustment under the Indenture to any one or more of the nature of the
  Shares, Strike Price, Number of Options, the Option Entitlement and any other
  variable relevant to the exercise, settlement or payment for the Transaction;
  provided, however,
  that such adjustment shall be made without regard to any adjustment to the
  Conversion Rate for the issuance of additional shares as set forth in Section
  6.06 of the Indenture; provided further
  that if, with respect to a Merger Event or a Tender Offer, the consideration
  for the Shares includes (or, at the option of a holder of Shares, may
  include) shares of an entity or person not organized under the laws of the
  United States, any State thereof or the District of Columbia,” Cancellation
  and Payment shall apply.

  
	
   

  	
   

  
	
  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:

  	
  Applicable

  
	
   

  	
   

  
	
   Hedging
  Party:

  	
  For all applicable Additional Disruption Events,
  JPMorgan

  
	
   

  	
   

  
	
   Determining
  Party:

  	
  For all applicable Additional Disruption Events,
  JPMorgan

  
	
   

  	
   

  
	
  Non-Reliance:

  	
  Applicable

  
	
   

  	
   

  
	
  Agreements and Acknowledgements

  	
   

  
	
  Regarding Hedging Activities:

  	
  Applicable

  

 

 7
 

 

	
  Additional Acknowledgments:

  	
  Applicable

  
	
   

  	
   

  
	
  4. Calculation Agent:

  	
  JPMorgan

  

 

5.  Account
Details:

(a)                           Account
for payments to Counterparty:

JPMorgan
Chase Bank 

ABA# 021000021

Acct: Headwaters Incorporated

Acct No.: 641403407

 

Account for delivery of
Shares to Counterparty:  

 

American Stock Transfer – Headwaters Incorporated:
9000994973

 

(b)                                Account for payments to JPMorgan:

JPMorgan Chase
Bank, National Association, New York

ABA: 021 000 021

Favour: JPMorgan
Chase Bank, National Association – London

A/C: 0010962009 CHASUS33

Account for delivery of Shares
from JPMorgan:

DTC
0060

6.
Offices:

The
Office of Counterparty for the Transaction is: 
Inapplicable, Counterparty 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 Counterparty:

Headwaters
Incorporated

10653 South River Front Parkway,
Suite 300

South Jordan, UT 84095

Attention:           Scott Sorensen

Chief Financial Officer

Telephone No.:  (801) 984-9427

Facsimile No.:     (801) 984-9410

 8
 

(b)                                 Address
for notices or communications to JPMorgan:

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

8.  Representations and Warranties of
Counterparty

The
representations and warranties of Counterparty set forth in Section 1 of the
Purchase Agreement are true and correct and are hereby deemed to be repeated to
JPMorgan as if set forth herein. 
Counterparty hereby further represents and warrants to JPMorgan that:

	
  (a)

  	
  Counterparty 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 Counterparty’s part; and this
  Confirmation has been duly and validly executed and delivered by Counterparty
  and constitutes its valid and binding obligation, enforceable against
  Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency,
  fraudulent conveyance, reorganization, moratorium and similar laws affecting
  creditors’ rights and remedies generally, and subject, as to enforceability,
  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 Counterparty
  hereunder will conflict with or result in a breach of the certificate of
  incorporation or by-laws (or any equivalent documents) of Counterparty,
  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 Counterparty or any of its subsidiaries is a party or by
  which Counterparty or any of its subsidiaries is bound or to which
  Counterparty or any of its subsidiaries is subject, or constitute a default
  under, or result in the creation of any lien under, any such agreement or
  instrument, or breach or constitute a default under any agreements and
  contracts of Counterparty and the significant subsidiaries filed as exhibits
  to Counterparty’s Annual Report on Form 10-K for the year ended September 30,
  2006, incorporated by reference in the Offering Memorandum.

  
	
   

  	
   

  
	
  (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 Counterparty 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)

  	
  It 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:

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  (A)

  	
  Counterparty has total assets
  in excess of USD 10,000,000;

  

 

 9
 

 

	
  

  	
  (B)

  	
  the obligations of
  Counterparty 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)

  	
  Counterparty has a net worth in excess of USD
  1,000,000 and has entered into this Agreement in connection with the conduct
  of Counterparty’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
  Counterparty in the conduct of Counterparty’s business.

  
	
   

  	
   

  
	
  (e)

  	
  Each of it and its affiliates is not, on the date
  hereof, in possession of any material non-public information with respect to
  Counterparty.

  
	
   

  	
   

  
	
  9. Other Provisions:

  
	
   

  
	
  (a)

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

  
	
   

  	
   

  
	
  (b)

  	
  Repurchase Notices.  Counterparty shall, on any day on which
  Counterparty 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 as
  determined on such day is (i) less than 40,650,000 (in the case of the first
  such notice) or (ii) thereafter more than 1,500,000 million less than the
  number of Shares included in the immediately preceding Repurchase Notice.  Counterparty 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 may become subject to, as a
  result of Counterparty’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, proceeding (including
  any governmental or regulatory investigation), claim or demand shall be
  brought or asserted against the Indemnified Person as a result of
  Counterparty’s failure to provide JPMorgan with a Repurchase Notice in
  accordance with this paragraph, such Indemnified Person shall promptly notify
  Counterparty in writing, and Counterparty, upon request of the Indemnified
  Person, shall retain counsel reasonably satisfactory to the Indemnified
  Person to represent the Indemnified Person and any others Counterparty may
  designate in such proceeding and shall pay the fees and expenses of such
  counsel related to such proceeding. 
  Counterparty shall not be liable for any settlement of any proceeding contemplated
  by this paragraph that is effected without its written consent, but if
  settled with such consent or if there be a final judgment for the plaintiff,
  Counterparty agrees to indemnify any Indemnified Person from and against any
  loss or liability by reason of such settlement or judgment.  Counterparty shall not, without the prior
  written consent of the Indemnified Person, effect any settlement of any
  pending or threatened proceeding contemplated by this paragraph that is 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 includes an unconditional release of such Indemnified Person
  from all liability on claims that are the subject matter of such

  

 

 10
 

 

	
  

  	
  proceeding on terms reasonably satisfactory to such
  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 Counterparty hereunder, 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 (b) are not exclusive and shall not
  limit any rights or remedies which may otherwise be available to any
  Indemnified Party 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.

  
	
   

  	
   

  
	
  (c)

  	
  Regulation M.  Counterparty 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 Counterparty, other than (i) a
  distribution meeting the requirements of the exception set forth in Rules 101(b)(10)
  and 102(b)(7) of Regulation M and (ii) the distribution of the Convertible
  Notes.  Counterparty shall not, until
  the second Scheduled Trading Day immediately following the Trade Date, engage
  in any such distribution.

  
	
   

  	
   

  
	
  (d)

  	
  No Manipulation.  Counterparty 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.

  
	
   

  	
   

  
	
  (e)

  	
  Board Authorization.  Each of this Transaction and the issuance
  of the Convertible Notes was approved by its board of directors and publicly
  announced, solely for the purposes stated in such board resolution and public
  disclosure and, prior to any exercise of Options hereunder, Counterparty’s
  board of directors will have duly authorized any repurchase of Shares
  pursuant to this Transaction.  Counterparty
  further represents that there is no internal policy, whether written or oral,
  of Counterparty that would prohibit Counterparty from entering into any
  aspect of this Transaction, including, but not limited to, the purchases of
  Shares to be made pursuant hereto.

  
	
   

  	
   

  
	
  (f)

  	
  Early
  Unwind.  In the event
  the sale of Convertible Notes is not consummated with the initial purchasers
  for any reason by the close of business in New York on January 22, 2007 (or
  such later date as agreed upon by the parties) (January 22, 2007 or such
  later date as agreed upon being the “Early Unwind Date”),
  this Transaction shall automatically terminate (the “Early
  Unwind”), on the Early Unwind Date and (i) the Transaction and all
  of the respective rights and obligations of JPMorgan and Counterparty under
  the Transaction 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 either prior to or after the Early Unwind Date; provided that Counterparty shall purchase from JPMorgan on
  the Early Unwind Date all Shares purchased by JPMorgan or one of more of its
  affiliates and reimburse JPMorgan for any actual and reasonable costs or
  expenses (including market losses) relating to the unwinding of its hedging
  activities in connection with the Transaction (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 Counterparty of such
  amount and Counterparty shall pay such amount in immediately available funds
  on the Early Unwind Date.  JPMorgan and
  Counterparty represent and acknowledge to the other that, subject to the
  proviso included in this paragraph, upon an Early Unwind, all obligations with
  respect to the Transaction shall be deemed fully and finally discharged.

  

 

 11
 

 

	
  (g)

  	
  Transfer or Assignment.  Counterparty may not transfer any of its
  rights or obligations under this Transaction without the prior written consent
  of JPMorgan.  JPMorgan may, without
  Counterparty’s consent, transfer or assign all or any part of its rights or
  obligations under the Transaction to any third party with a
  rating for its long term, unsecured and unsubordinated indebtedness equal to
  or better than the lesser of (i) the credit rating of JPMorgan at the time of
  the transfer and (ii) A- by Standard and Poor's Rating Group, Inc. or its
  successor (“S&P”), or A3 by Moody's
  Investor Service, Inc. (“Moody’s”) or,
  if either S&P or Moody's ceases to rate such debt, at least an equivalent
  rating or better by a substitute agency rating mutually agreed by Counterparty
  and JPMorgan. 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 Options 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 Counterparty’s
  outstanding Shares or less or (ii) the quotient of (x) the product of (a) the
  Number of Options and (b) the Option Entitlement divided by (y) the number of
  Counterparty’s outstanding Shares (such quotient expressed as a percentage,
  the “Option 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 Option 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 Options equal to the Terminated Portion,
  (ii) Counterparty shall be the sole Affected Party with respect to such
  partial termination and (iii) such Transaction shall be the only Terminated
  Transaction (and, for the avoidance of doubt, the provisions of Section 9(l)
  shall apply to any amount that is payable by JPMorgan to Counterparty
  pursuant to this sentence as if Counterparty was not the Affected
  Party).  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 Counterparty, 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 Counterparty to the
  extent of any such performance.

  
	
   

  	
   

  
	
  (h)

  	
  Staggered Settlement.  If upon advice of counsel with respect to applicable
  legal and regulatory requirements, including any requirements relating to
  JPMorgan’s hedging activities hereunder, JPMorgan reasonably determines that
  it would not be practicable or advisable to deliver, or to acquire Shares to
  deliver, any or all of the Shares to be delivered by JPMorgan on the Settlement
  Date for the Transaction, JPMorgan may, by notice to Counterparty on or prior
  to any Settlement Date (a “Nominal Settlement Date”),
  elect to deliver the Shares on two or more dates (each, a “Staggered Settlement Date”) as follows:

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  in such notice, JPMorgan will specify to
  Counterparty the related Staggered Settlement Dates (the first of which will
  be such Nominal Settlement Date and the last of which will be no later than
  the twentieth (20th) Exchange Business Day following such Nominal Settlement
  Date) and the number of Shares that it will deliver on each Staggered
  Settlement Date;

  
	
   

  
	
   

  	
  (b)

  	
  the aggregate number of Shares that JPMorgan will
  deliver to Counterparty hereunder on all such Staggered Settlement Dates will
  equal the number of Shares that JPMorgan would otherwise be required to
  deliver on such Nominal Settlement Date; and

  

 12
 

 

	
  

  	
  (c)

  	
  if the Net Share
  Settlement terms set forth above were to apply on the Nominal Settlement
  Date, then the Net Share Settlement terms will apply on each Staggered
  Settlement Date, except that the Net Shares will be allocated among such
  Staggered Settlement Dates as specified by JPMorgan in the notice referred to
  in clause (a) above.

  
	
   

  	
   

  
	
  (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.

  
	
   

  	
   

  
	
  (j)

  	
  Additional Termination
  Events.  Notwithstanding anything to the
  contrary in this Confirmation if an event of default with respect to
  Counterparty shall occur under the terms of the Convertible Notes as set
  forth in Section 7.01 of the Indenture and such event of
  default results in the declaration of any principal and interest immediately
  due and payable pursuant to Section 7.02 of the Indenture, then such event of
  default shall constitute an Additional Termination Event applicable to the
  Transaction and, with respect to such event of default (A) Counterparty shall
  be deemed to be the sole Affected Party and the Transaction shall be the sole
  Affected Transaction and (B) JPMorgan shall be the party entitled to
  designate an Early Termination Date pursuant to Section 6(b) of the
  Agreement.

  
	
   

  	
   

  
	
  (k)

  	
  Amendments to Equity Definitions.  (i) Section 12.6(a)(ii) of the
  Equity Definitions is hereby amended by (1) deleting from the fourth line
  thereof the word “or” after the word “official” and inserting a comma
  therefor, and (2) deleting the semi-colon at the end of subsection (B)
  thereof and inserting the following words therefor “or (C) at 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.”

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
  (l)

  	
  Alternative Calculations and Payment on Early
  Termination and on Certain 
  Extraordinary Events.  If in
  respect of this Transaction, an amount is payable by JPMorgan to Counterparty
  (i) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or
  (ii) pursuant to Section 6(d)(ii) of the Agreement (a “Payment
  Obligation”), Counterparty may request JPMorgan to satisfy any
  such Payment Obligation by the Share Termination Alternative (as defined
  below) (except that Counterparty shall not make such an election in the event
  of a Nationalization, Insolvency, a Merger Event or Tender Offer, in each
  case, in which the consideration to be paid to holders of Shares consists
  solely of cash, or an Event of Default in which Counterparty is the
  Defaulting Party or a Termination Event in which Counterparty is the Affected
  Party, other than an Event of Default of the type described in Section
  5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event
  of the type described in Section 5(b) of the Agreement in each case that
  resulted from an event or events outside Counterparty’s control) and shall
  give irrevocable telephonic notice to JPMorgan, confirmed in writing within
  one Currency Business Day, no later than 12:00 p.m. New York local time on
  the Merger Date, the Announcement Date (in the case of Nationalization,
  Insolvency or Delisting), the Early Termination Date or date of cancellation,
  as applicable; provided that if Counterparty
  does not comply with the requirements for such request set forth in this
  paragraph, JPMorgan shall have the right, in its sole discretion, to satisfy
  its Payment Obligation by the Share Termination Alternative, notwithstanding
  Counterparty’s election to the contrary. 
  In calculating any

  

 

 13
 

 

	
  

  	
  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 Section 6(e) of the Agreement 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, subject to, in the case of clause (a), the Share Termination
  Alternative hereunder.

  
	
   

  	
   

  
	
   

  	
  Share Termination Alternative:

  	
  Applicable and means that JPMorgan shall deliver to
  Counterparty the Share Termination Delivery Property on the date when the
  Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of
  the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as
  applicable (the “Share Termination
  Payment Date”), in satisfaction of the Payment Obligation in the
  manner reasonably requested by Counterparty 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 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 and notified by the Calculation Agent to
  JPMorgan at the time of notification of the Payment Obligation.

  
	
   

  	
   

  	
   

  
	
   

  	
  Share Termination Delivery Unit:

  	
  One Share or, if a Merger Event has occurred and a
  corresponding adjustment to this Transaction has been made, 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 Merger
  Event, as determined by the Calculation Agent.

  
	
   

  	
   

  	
   

  
	
   

  	
  Failure to Deliver:

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
   

  	
  Other applicable provisions:

  	
  If Share Termination Alternative is applicable, the
  provisions of Sections 9.8,

  

 

 14
 

 

	
  

  	
   

  	
  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.

  
	
   

  	
   

  
	
  (m)

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

  
	
   

  	
   

  
	
  (n)

  	
  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 either 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.

  
	
   

  	
   

  
	
  (o)

  	
  Registration.  Counterparty hereby agrees that if, in the
  good faith reasonable judgment of JPMorgan, the Shares  (“Hedge Shares”)
  acquired by JPMorgan for the purpose of hedging its obligations pursuant to
  this Transaction cannot be sold in the public market by JPMorgan without
  registration under the Securities Act, Counterparty shall, at its election,
  either (i) in order to allow JPMorgan to sell the Hedge Shares in a
  registered offering, make available to JPMorgan an effective registration
  statement under the Securities Act and enter into an agreement, in form and
  substance satisfactory to JPMorgan, substantially in the form of an
  underwriting agreement for a registered secondary offering; provided, however,
  that if JPMorgan, in its sole reasonable discretion, is not satisfied with
  access to due diligence materials, the results of its due diligence
  investigation, or the procedures and documentation for the registered
  offering referred to above, then clause (ii) or clause (iii) of this
  paragraph shall apply at the election of Counterparty, (ii) in order to allow
  JPMorgan to sell the Hedge Shares in a private placement, enter into a
  private placement agreement substantially similar to private placement
  purchase agreements customary for private placements of equity securities, in
  form and substance satisfactory to JPMorgan (in which case, the Calculation
  Agent shall make any adjustments to the terms of this Transaction that are
  necessary, in its reasonable judgment, to compensate JPMorgan for any
  discount from the public market price of the Shares incurred on the sale of
  Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from
  JPMorgan at the Reference Price on such Exchange Business Days, and in the
  amounts, requested by JPMorgan.

  
	
   

  	
   

  
	
  (p)

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

  
	
   

  	
   

  
	
  (q)

  	
  Right to Extend.  JPMorgan may delay any Settlement Date or
  any other date of delivery by JPMorgan, with respect to some or all of the
  Options hereunder, if JPMorgan reasonably determines, in its discretion, that
  such extension is reasonably necessary to enable JPMorgan to effect purchases
  of Shares in connection with its hedging activity or settlement activity
  hereunder in a manner that would, if JPMorgan were Counterparty or

  

 

 15
 

 

	
  

  	
  an affiliated purchaser of Counterparty, be in
  compliance with applicable legal and regulatory requirements.

  
	
   

  	
   

  
	
  (r)

  	
  Status
  of Claims in Bankruptcy.  JPMorgan acknowledges and agrees that
  this Confirmation is not intended to convey to JPMorgan rights against Counterparty
  with respect to the Transaction that are senior to the claims of common
  stockholders of Counterparty in any U.S. bankruptcy proceedings of
  Counterparty; 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 Counterparty 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.

  
	
   

  	
   

  
	
  (s)

  	
  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.

  
	
   

  	
   

  
	
  (t)

  	
  Additional
  Provisions. Counterparty covenants and agrees that, as promptly as
  practicable following the public announcement of any consolidation, merger
  and binding share exchange to which Counterparty is a party, or any sale of
  all or substantially all of Counterparty’s assets, in each case pursuant to which
  the Shares will be converted into cash, securities or other property,
  Counterparty shall notify JPMorgan in writing of the types and amounts of
  consideration that holders of Shares have elected to receive upon
  consummation of such transaction or event (the date of such notification, the
  “Consideration Notification Date”); provided that in no event shall the Consideration
  Notification Date be later than the date on which such transaction or event
  is consummated.

  

 

 16

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/SANTOSH
  SREENIVASAN

  	
   

  
	
   

  	
  Authorized Signatory

  
	
   

  	
  Name: Santosh Sreenivasan

  
	
   

  	
   

  
	
   

  	
  Accepted and confirmed

  	
   

  
	
   

  	
  as of the Trade
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Headwaters
  Incorporated

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ KIRK A. BENSON

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  
	
   

  	
  Name: Kirk A.
  Benson

  	
   

  
								

 

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 AuthorityExhibit   4.4

JPMorgan
Chase Bank, National Association

P.O.
Box 161

60
Victoria Embankment

London
EC4Y 0JP

England

January 16, 2007

To:
Headwaters Incorporated

10653
South River Front Parkway, Suite 300

South
Jordan, UT 84095

	
  Attention:

  	
   

  	
  Scott Sorensen

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
  Telephone No.:

  	
   

  	
  (801) 984-9427

  
	
  Facsimile No.:

  	
   

  	
  (801) 984-9410

  

 

Re: Warrants

The
purpose of this letter agreement (this “Confirmation”)
is to confirm the terms and conditions of the Warrants issued by Headwaters
Incorporated(“Company”)
to JPMorganChase 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. 
This Transaction shall be deemed to be a Share Option Transaction within
the meaning set forth in the Equity Definitions.

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

General
Terms:

	
  Trade Date:

  	
   

  	
  January 16, 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:

  	
   

  	
  American

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
   

  	
  Company

  
	
   

  	
   

  	
   

  
	
  Buyer:

  	
   

  	
  JPMorgan

  
	
   

  	
   

  	
   

  
	
  Shares:

  	
   

  	
  The common stock of Company, par value USD .001 per
  Share (Exchange symbol “HW”)

  
	
   

  	
   

  	
   

  
	
  Number of
  Warrants:

  	
   

  	
  4,579,686, subject to adjustment as provided herein; provided
  that the Number of Warrants shall be automatically increased as of the date
  of exercise by J.P. Morgan Securities Inc., Deutsche Bank Securities Inc. and
  Morgan Stanley & Co. Incorporated, as representatives of the Initial
  Purchasers (as defined in the Purchase Agreement dated as of January 16, 2007
  between Company and J.P. Morgan Securities Inc., Deutsche Bank Securities
  Inc. and Morgan Stanley & Co. Incorporated, as representatives of the
  Initial Purchasers party thereto (the “Purchase
  Agreement”)), of their option pursuant to Section 2 of the
  Purchase Agreement by the number of additional 2.50% Convertible Senior Subordinated
  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”).

  
	
   

  	
   

  	
   

  
	
  Warrant
  Entitlement:

  	
   

  	
  One Share per Warrant

  
	
   

  	
   

  	
   

  
	
  Strike Price:

  	
   

  	
  USD 35.00

  
	
   

  	
   

  	
   

  
	
  Premium:

  	
   

  	
  USD 27,334,800.00 (Premium per Warrant: USD 5.9687); 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
  Warrants by which the Number of Warrants is so increased 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:

  	
   

  	
  January 22, 2007

  
	
   

  	
   

  	
   

  
	
  Additional
  Premium Payment Date:

  	
   

  	
  The closing date for the purchase and sale of the
  Additional Convertible Notes.

  
	
   

  	
   

  	
   

  
	
  Exchange:

  	
   

  	
  The New York Stock Exchange

  

 

 2
 

 

	
  Related Exchange(s):

  	
   

  	
  All Exchanges

  
	
   

  	
   

  	
   

  
	
  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 59th
  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:

  	
   

  	
  May 1, 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 

  	 

					

 

 3
 

 

	
  

  	
   

  	
  Definitions to “Physical Settlement” shall be read
  as references to “Net Share Settlement”.

  	 

	
   

  	
   

  	
   

  	 

	
  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; provided
  that if the principal trading session is extended, the Calculation Agent
  shall determine the Valuation Time in its reasonable discretion.

  
	
   

  	
   

  	
   

  
	
  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 HW.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.

  

 

 4
 

 

	
  Settlement Date(s):

  	
   

  	
  As determined in reference to Section 9.4 of the
  Equity Definitions, subject to Section 9(l)(i) hereof.

  
	
   

  	
   

  	
   

  
	
  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.

  	 

	
   

  	
   

  	
   

  	 

	
  Set-Off:

  	
   

  	
  The provisions of Section 6(f) of the Agreement
  shall not apply to this Transaction.

  	 

	
   

  	
   

  	
   

  	 

	
  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).

  	 

						

 

 5
 

 

	
  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

  
	
   

  	
   

  	
   

  
	
  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:

  	
   

  	
  225 basis points

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Increased Cost of Stock Borrow:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Initial Stock Loan Rate:

  	
   

  	
  50 basis points

  
	
   

  	
   

  	
   

  	
   

  
	
  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

  

 

 6
 

 

	
  5. Account Details:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Account for
  payments to Company:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  JPMorgan Chase
  Bank

  	
   

  	
   

  
	
   

  	
  ABA# 021000021

  	
   

  	
   

  
	
   

  	
  Acct: Headwaters
  Incorporated

  	
   

  	
   

  
	
   

  	
  Acct No.: 641403407

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Account for delivery of Shares from Company:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  American Stock
  Transfer – Headwaters Incorporated: 9000994973

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (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:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Headwaters Incorporated

  	
   

  	
   

  
	
   

  	
  10653 South River Front Parkway, Suite 300

  
	
   

  	
  South Jordan, UT 84095

  	
   

  	
   

  
	
   

  	
  Attention: 

  	
  Scott Sorensen

  	
   

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer

  	
   

  	
   

  
	
   

  	
  Telephone No.:

  	
  (801) 984-9427

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
  (801) 984-9410

  	
   

  	
   

  
																			

 

 7
 

 

	
  

  	
  (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

  	
   

  	
   

  
						

 

8.  Representations and Warranties of Company

The
representations and warranties of Company set forth in Section 1 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 subject,
as to enforceability, 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 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, or constitute a
default under, or result in the creation of any lien under, any such agreement
or instrument, or breach or constitute a default under any agreements and
contracts of Company and the significant subsidiaries filed as exhibits to
Company’s Annual Report on Form 10-K for the year ended September 30, 2006, as
updated by any subsequent filings.

(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:

 8

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 affiliates is not, on the date hereof, in possession of any
material non-public information with respect to Company.

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(a) through (d) of this Confirmation.

(b)                                 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
40,650,000 (in the case of the first such notice) or (ii) thereafter more than
1,500,000 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, 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 includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject
matter of such proceeding on terms reasonably satisfactory to such 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, 

 9
 

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.

(c)                                   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.

(d)                                  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.

(e)                                   Board Authorization.  Company represents that it is entering into
the Transaction, solely for the purposes stated in the board resolution
authorizing this Transaction and in its public disclosure.  Company further represents that there is no
internal policy, whether written or oral, of Company that would prohibit
Company from entering into any aspect of this Transaction, including, but not
limited to, the issuance of Shares to be made pursuant hereto.

(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
the Transaction to any third party with a rating for its long term,
unsecured and unsubordinated indebtedness equal to or better than the lesser of
(i) the credit rating of JPMorgan at the time of the transfer and (ii) A- by
Standard and Poor’s Rating Group, Inc. or its successor (“S&P”),
or A3 by Moody’s Investor Service, Inc. (“Moody’s”) or,
if either S&P or Moody’s ceases to rate such debt, at least an equivalent
rating or better by a substitute agency rating mutually agreed by Company and
JPMorgan.  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(k) 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
 

(g)                                  Early Unwind.  In the
event the sale of Convertible Notes is not consummated with the initial
purchasers for any reason by the close of business in New York on January 22, 2007
(or such later date as agreed upon by the parties) (January 22, 2007 or such
later date, if any, as agreed upon being the “Early Unwind
Date”), this Transaction shall automatically terminate (the “Early Unwind”), on the Early Unwind Date and (i) the Transaction
and all of the respective rights and obligations of JPMorgan and Company under
the Transaction 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 either prior to or after the Early Unwind Date; provided that Company 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 actual and reasonable costs or expenses
(including market losses) relating to the unwinding of its hedging activities
in connection with the Transaction (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 and including the Trade Date, to but excluding
the Expiration Date, an ex-dividend date for a cash dividend occurs with
respect to the Shares (an “Ex-Dividend Date”),
and that dividend is greater than the Regular Dividend on a per Share basis
then the Calculation Agent will adjust the Strike Price to preserve the fair
value of the Warrants to JPMorgan after taking into account such dividend.  “Regular Dividend”
shall mean for any calendar quarter, USD zero per share per 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.

(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 

 11
 

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 and 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)                             Company sells all or substantially all of its assets in a transaction
pursuant to which the Shares are converted into cash, securities or other
property.

(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 which
results in the acceleration of maturity of any indebtedness for money borrowed
in excess of $25 million in the aggregate of Company and/or any subsidiary,
whether such indebtedness now exists or shall hereafter be created (but
excluding intercompany indebtedness), unless such failure is cured or such
acceleration is rescinded, stayed or annulled within 10 days after written
notice of default is given to Company

(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
common equity of the Company representing more than 50% of the voting power of
such common equity.

(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).

(k)                                   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 

 12
 

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 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 comply with the requirements to 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 as set
forth in Section 6(e) of the Agreement 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.

	
  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, subject to paragraph (n)(i) below, in satisfaction, subject to
  paragraph (n)(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 (n)(i)
  below, the Share Termination Unit Price shall be determined by the discounted
  price 

  

 

 13
 

 

	
  

  	
   

  	
  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
  (n)(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.

  

 

(l)                                      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 

 14
 

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 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 (m) 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 22,898,430 (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
(m) 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 

 15
 

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).

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 (m) 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 

 16
 

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 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.

(m)                                Limit on Beneficial Ownership.  Notwithstanding any other provisions hereof,
JPMorgan may not exercise any Warrant hereunder, and Automatic Exercise shall not
apply with respect thereto, to the extent (but only to the extent) that, after
such receipt, 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.

(n)                                  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 of
restricted securities pursuant to Rule 144 of the Securities Act, 

 17
 

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.  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.

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

(p)                                  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.

(q)                                  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.

(r)                                     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

(s)                                   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.

(t)                                     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.

 18
 

(u)                                  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.

 19

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/SANTOSH
  SREENIVASAN

  	
   

  	 

	
   

  	
   

  	
  Authorized Signatory

  	 

	
   

  	
   

  	
  Name: Santosh Sreenivasan

  	 

	
   

  	
   

  	 

	
   

  	
  Accepted and confirmed

  	
   

  	 

	
   

  	
  as of the Trade Date:

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  Headwaters Incorporated

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
    /s/ KIRK A. BENSON

  	
   

  	
   

  	
   

  	 

	
   

  	
  Authorized Signatory

  	
   

  	 

	
   

  	
  Name: Kirk A. Benson

  	
   

  	 

											

 

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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