Document:

exv10w5

 

EXHIBIT 10.5

			
	
	 	Bear, Stearns & Co. Inc.

383 Madison Avenue

New York, NY 10179

Tel (212) 272-2000

www.bearstearns.com

December 7, 2006

To: Superior Energy Services, Inc.

1105 Peters Road

Harvey, Louisiana, 70058

Attention: Mr. Robert S. Taylor, Chief Financial Officer

Telephone No.: (504) 210-4105

Facsimile No.: (504) 362-9642

          Re: Warrants

     The purpose of this letter agreement is to confirm the terms and conditions of the Warrants
issued by Superior Energy Services, Inc. (“Company”) to Bear, Stearns International Limited
(“Dealer”) 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 Dealer 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 Dealer and Company had executed
an agreement in such form (but without any Schedule except for (i) the election of the
laws of the State of New York as the governing law, and (ii) the election of US Dollars
(“USD”) as the Termination Currency) 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:

General Terms:

	 	 	 
	     Trade Date:
	 	December 7, 2006

	 	 	 

	     Effective Date:
	 	December 12, 2006; provided that either
Buyer or Seller may cancel all (but not
less than all) the Warrants by notice
to the other party prior to payment of
the Premium on the Effective Date, in
which case

 

 

	 	 	 
	 	 	these Warrants shall never
become effective and neither party
shall have any obligation to the other
party in respect of the Transaction.

	 	 	 

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

	 	 	 

	     Warrant Style:
	 	European

	 	 	 

	     Seller:
	 	Company

	 	 	 

	     Buyer:
	 	Dealer

	 	 	 

	     Shares:
	 	The common stock of Company, par value
USD 0.001 per Share (Exchange symbol
“SPN”)

	 	 	 

	     Number of Warrants:
	 	For each Expiration Date, a number of
Warrants set forth next to such an
Expiration Date on Annex A hereto (the
“Daily Number of Warrants”), subject to
adjustment as provided herein; provided
that if Bear, Stearns & Co. Inc.,
Lehman Brothers Inc. and JP Morgan
Securities, Inc., as the initial
purchasers party to that certain
purchase agreement (the “Purchase
Agreement”) relating to the
exchangeable notes to be issued by
SESI, LLC exercise their right to
purchase additional exchangeable notes
as set forth therein, then, the Number
of Warrants shall be automatically
increased by an aggregate number equal
to the product of (i) the Applicable
Percentage, (ii) the Warrant
Entitlement and (iii) the initial
exchange rate of the exchangeable
notes.

	 	 	 

	     Warrant Entitlement:
	 	One Share per Warrant

	 	 	 

	     Strike Price:
	 	USD 59.4176

	 	 	 

	     Applicable Percentage:
	 	50%

	 	 	 

	     Premium:
	 	USD 30,200,000 (Premium per Warrant USD
6.8820).

	 	 	 

	     Premium Payment Date:
	 	The Effective Date.

	 	 	 

	     Exchange:
	 	New York Stock Exchange

	 	 	 

	     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

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	 	 	including
the 30th 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 such 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:
	 	March 15, 2012 (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

	 	 	 

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

	 	 	 

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

	 	 	 

	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.”

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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 Dealer the
Share Delivery Quantity of Shares for
such Settlement Date to the account
specified herein 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.

4

 

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

	 	 	 

	     Settlement Date(s):
	 	As determined in reference to Section
9.4 of the Equity Definitions, subject
to Section 9(j)(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 the Representation and Agreement
contained in Section 9.11 of the Equity
Definitions shall be modified by
excluding any representations therein
relating to restrictions, obligations,
limitations or requirements under
applicable securities laws as a result
of the fact that Seller is the Issuer
of the Shares and 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.

	 	 	 

	     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

5

 

	 	 	 
	 	 	extraordinary, shall be governed by Section 9(f) of
this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity
Definitions.

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
Dealer may elect, in its commercially reasonable judgment, Component
Adjustment (Calculation Agent Determination).

Consequence of Tender Offers:

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

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	 	 	NASDAQ Global
Market, such exchange or quotation system shall thereafter be deemed to be
the Exchange.

Additional Disruption Events:

	 	 	 
	Change
in Law:
	 	Applicable

	 	 	 

	Failure to Deliver:
	 	Applicable

	 	 	 

	Insolvency
Filing:
	 	Applicable

	 	 	 

	Hedging Disruption:
	 	Applicable

	 	 	 

	Increased Cost of Hedging:
	 	Applicable

	 	 	 

	Loss of Stock Borrow:
	 	Applicable

	 	 	 

	Maximum Stock Loan Rate:
	 	300 basis points

	 	 	 

	Increased Cost of Stock Borrow:
	 	Applicable

	 	 	 

	Initial Stock Loan Rate:
	 	35 basis points

	 	 	 

	Hedging Party:
	 	Dealer for all applicable Additional Disruption Events

	 	 	 

	Determining Party:
	 	Dealer for all applicable Additional Disruption Events

	 	 	 

	Non-Reliance:
	 	Applicable

	 	 	 

	Agreements and Acknowledgments
	 	 

	Regarding Hedging Activities:
	 	Applicable

	 	 	 

	Additional Acknowledgments:
	 	Applicable

	 	 	 
	4. Calculation Agent:

	 	Dealer
	 
	 	 
	5. Account Details:
	 	 
	 
	 	 
	(a) Account for payments to Company:
	 	Whitney National Bank
	 

	 	228 St. Charles Avenue
	 

	 	New Orleans, LA 70130
	 

	 	ABA 065000171
	 
	 	 
	 

	 	For credit to:
	 

	 	SESI, LLC
	 

	 	1105 Peters Road
	 

	 	Harvey, LA 70058
	 

	 	Account 713121440
	 
	 	 
	Account for delivery
of Shares to Company:
	 	To be provided under separate cover by Company.

7

 

	 	 	 
	(b) Account for payments to Dealer:

	 	Citibank
	 

	 	111 Wall Street
	 

	 	New York, NY
	 

	 	ABA # 021000089
	 

	 	A/C Bear Stearns
	 

	 	A/C # 09253186
	 

	 	Sub A/C NZA5
	 

	 	Sub A/C # 351-29171-17
	 
	 	 
	Account for delivery
of Shares to Dealer:

	 	DTC # 352

6. Offices:

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

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

7. Notices: For purposes of this Confirmation:

	 	(a)	 	Address for notices or communications to Company:

Superior Energy Services, Inc.

1105 Peters Road

Harvey, LA 70058

Attention: Mr. Robert S. Taylor, Chief Financial Officer

Telephone No.: (504) 210-4105

Facsimile No.: (504) 362-9624

	 	(b)	 	Address for notices or communications to Dealer:

Bear, Stearns International Limited

One Canada Square

London, England

Attention: Legal Department

With a copy to:

Bear, Stearns & Co. Inc.

383 Madison Avenue

New York, NY 10179

Attention: Michael O’Donovan

Telephone No: (212) 272-9895

Facsimile No: (917) 849-0251

	 	8.	 	Representations and Warranties:

	 	(a)	 	The Company hereby represents and warrants to Dealer that:

	 	(i)	 	The Shares 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.

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	 	 	 	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;
	 
	 	(ii)	 	Company is an “eligible contract participant” (as such term is defined in Section 1a(12) of the
Commodity Exchange Act, as amended (the “CEA”));
	 
	 	(iii)	 	Company and each of its affiliates is not, on the date hereof, in possession of any material non-public
information with respect to Company;
	 
	 	(iv)	 	Without limiting the generality of Section 13.1 of the Equity Definitions, Company acknowledges that
Dealer is not making any representations or warranties with respect to the treatment of the Transaction under
FASB Statements 149 or 150, EITF Issue No. 00-19 (or any successor issue statements) or under FASB’s
Liabilities & Equity Project;
	 
	 	(v)	 	Prior to the Trade Date, Company shall deliver to Dealer a resolution of Company’s board of directors
authorizing the Transaction and such other certificate or certificates as Dealer shall reasonably request;

	 
	 	(vi)	 	Company is not, and after giving effect to the transactions contemplated hereby will not be required
to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as
amended;
	 
	 	(vii)	 	On the Trade Date (A) the assets of Company at their fair valuation exceed the liabilities of Company,
including contingent liabilities, (B) the capital of Company is adequate to conduct the business of Company
and (C) Company has the ability to pay its debts and obligations as such debts mature and does not intend to,
or does not believe that it will, incur debt beyond its ability to pay as such debts mature;

	 
	 	(viii)	 	Company understands that no obligations of Dealer to it hereunder will be entitled to the benefit of
deposit insurance and that such obligations will not be guaranteed by any affiliate of Dealer or any
governmental agency;
	 
	 	(ix)	 	During the period starting on the first Expiration Date and ending on the last Expiration Date (the
“Settlement Period”), the Shares or securities that are convertible into, or exchangeable or exercisable for
Shares, are not, and shall not be, subject to a “restricted period,” as such term is defined in Regulation M
under the Exchange Act (“Regulation M”) and (B) Issuer shall not engage in any “distribution,” as such term
is defined in Regulation M, other than a distribution meeting the requirements of the exceptions set forth in
sections 101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business Day immediately
following the Settlement Period;
	 
	 	(x)	 	Prior to the Trade Date, neither the Company nor any of its affiliates has taken any action which is
designed to or which has constituted or which might have been expected to cause or result in stabilization or
manipulation of the price of any security of the Company in connection with the offering of the exchangeable
notes; and
	 
	 	(xi)	 	None of the Company or any of its subsidiaries is in violation of its certificate of incorporation or
certificate of formation, or its bylaws or limited liability company agreement (or other organizational
documents), or in default in the performance or observance of any material obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be bound, other than such defaults that
individually or in the aggregate would

9

 

	 	 	 	not have a Material Adverse Effect. “Material Adverse Effect” means
any change in the capital stock, increase in long-term debt or any decreases in consolidated net current
assets or stockholders’ equity of the Company or any of its subsidiaries or any material adverse change, or
any development involving a prospective material adverse change, in or affecting the general affairs,
management, current or future consolidated financial position, stockholders’ equity or results of operations
of the Company and its subsidiaries taken as a whole.

	 	(b)	 	Each party makes to the other the representations and warranties set forth in Sections 3(a) through (f) of
the Agreement with respect to the Agreement as supplemented by this Confirmation; provided that Dealer makes the
representation and warranty set forth in Section 3(f) and Company makes the representation and warranty set forth
in Section 3(e). In addition, each of Dealer and Company acknowledges that the offer and sale of the Transaction
to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities
Act”), by virtue of Section 4(2) thereof. Accordingly, Dealer represents and warrants to Company that (i) it has
the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total
loss of its investment and its investments in and liabilities in respect of the Transaction, which it understands
are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in
connection with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an
“accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is
entering into the Transaction for its own account without a view to the distribution or resale thereof, (iv) the
assignment, transfer or other disposition of the Transaction has not been and will not be registered under the
Securities Act and is restricted under the Securities Act and state securities laws, (v) its financial condition
is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose
of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is capable of
assessing the merits of and understanding (on its own behalf or through independent professional advice), and
understands and accepts, the terms, conditions and risks of the Transaction.

	 	9.	 	Other Provisions:

	 	(a)	 	Opinions. Company shall deliver an opinion of counsel, dated as of the Trade Date, to Dealer with respect to
the matters set forth in Section 3(a) of the Agreement and Section 8(a)(vi) of this Confirmation.
	 
	 	(b)	 	Repurchase Notices. Company shall, on any day on which Company effects any repurchase of Shares, promptly give
Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day, and if such notice relates to
material non-public information at the time, simultaneously publicly announce such information, if following such
repurchase, the Notice Percentage as determined on such day is (i) greater than 4.5% and (ii) greater by 0.5% than
the Notice Percentage included in the immediately preceding Repurchase Notice (or, in the case of the first such
Repurchase Notice, greater than the Notice Percentage as of the date hereof). The “Notice Percentage” as of any day
is the fraction, expressed as a percentage, the numerator of which is the product of the Number of Warrants and the
Warrant Entitlement and the denominator of which is the number of Shares outstanding on such day.
	 
	 	(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.

10

 

	 	(e)	 	Transfer and Assignment. Buyer may transfer and assign its rights and obligations hereunder and under the
Agreement, in whole or in part, at any time to any person or entity whatsoever without the consent of Company.
	 
	 	(f)	 	Dividends. If at any time during the period from and including the Trade Date, to but excluding the final
Expiration Date, an ex-dividend date for a cash dividend occurs with respect to the Shares (an “Ex-Dividend Date”),
then the Calculation Agent will adjust the Strike Price to preserve the fair value of the Warrant to Dealer after
taking into account such dividend.
	 
	 	(g)	 	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(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.

(C) 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 Dealer’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.”

(D) 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.

(E) 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 penultimate and final sentences in their
entirety and replacing them 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) Dealer shall have the right to designate such event
an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the
Agreement, and (2) Company shall be deemed the sole Affected Party and the Transaction shall be deemed the
sole Affected Transaction:

(A) Company sells, leases or otherwise transfers in one transaction or a series of transactions all or
substantially all of the assets of Company and its subsidiaries, taken as a whole, to any person other
than Company or any of its subsidiaries;

(B) There is a default by Company under any of its Public Indebtedness under which there may be
outstanding in excess of $310 million, whether such Public Indebtedness now exists or

11

 

shall hereafter
be created, resulting in such Public Indebtedness becoming or being declared due and payable; “Public
Indebtedness” shall mean any indebtedness of the Company for money borrowed under notes, bonds or
similar instruments offered and sold by the Company in an offering registered with the Securities and
Exchange Commission or pursuant to Rule 144A under the Securities Act;

(C) Any “person” or “group” within the meaning of Section 13(d) of the Exchange Act other than 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
Company representing more than 50% of the ordinary voting power of such common equity; or

(D) Dealer, 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 of 1933, as amended (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
Dealer).

	(h)	 	No Collateral or Setoff. Notwithstanding any provision of the Agreement or any other agreement between the
parties to the contrary, the obligations of Company hereunder are not secured by any collateral. Obligations under
this Transaction shall not be set off by Company against any other obligations of the parties, whether arising under
the Agreement, this Confirmation, under any other agreement between the parties hereto, by operation of law or
otherwise. Any provision in the Agreement with respect to the satisfaction of Company’s payment obligations to the
extent of Dealer’s payment obligations to Company in the same currency and in the same Transaction (including,
without limitation Section 2(c) thereof) shall not apply to Company and, for the avoidance of doubt, Company shall
fully satisfy such payment obligations notwithstanding any payment obligation to Company by Dealer in the same
currency and in the same Transaction. In calculating any amounts under Section 6(e) of the Agreement,
notwithstanding anything to the contrary in the Agreement, (1) separate amounts shall be calculated as set forth in
such Section 6(e) with respect to (a) this Transaction and (b) all other Transactions, and (2) such separate amounts
shall be payable pursuant to Section 6(d)(ii) of the Agreement.
	 
	(i)	 	Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If, in respect
of this Transaction, subject to paragraph (h) above, an amount is payable by Company to Dealer, (i) pursuant to
Section 12.7 or Section 12.9 of the Equity Definitions (except in the event of an Insolvency, Nationalization,
Tender Offer or Merger Event in which the consideration or proceeds to be paid to holders of shares consists solely
of cash) or (ii) pursuant to Section 6(d)(ii) of the Agreement (except in the event of an Event of Default in which
Company is the Defaulting Party or a Termination Event in which Company is the Affected Party, other than an Event
of Default of the type described in (x) Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or (y) a
Termination Event of the type described in Section 5(b)(i), (ii), (iii), (iv), (v) or (vi) 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 Dealer, confirmed in writing
within one Scheduled Trading Day, no later than 12:00 p.m. New York local time on the Merger Date, Tender Offer
Date, Announcement Date (in the case of a Nationalization, Insolvency or Delisting), Early Termination Date or date
of cancellation, as applicable; provided that if Company does not validly elect to satisfy its Payment Obligation by
the Share Termination Alternative, Dealer shall have the right to require Company to satisfy its Payment Obligation
by the Share Termination Alternative. Notwithstanding the foregoing, Company’s or Dealer’s right to elect
satisfaction of a Payment Obligation in the Share Termination Alternative as set forth in this clause

12

 

	 	 	shall only
apply to this Transaction and, notwithstanding anything to the contrary in the Agreement, (1) separate amounts shall
be calculated with respect to (a) the Transaction 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 Dealer the Share Termination
Delivery Property on the date (the
“Share Termination Payment Date”) on
which the Payment Obligation would
otherwise be due pursuant to Section
12.7 or Section 12.9 of the Equity
Definitions or pursuant to Section
6(d)(ii) of the Agreement, subject to
paragraph (j)(i) below, in
satisfaction, subject to paragraph
(j)(ii) below, of the Payment
Obligation in the manner reasonably
requested by Dealer 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 Dealer 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 (j)(i) below, the
Share Termination Unit Price shall be
determined by the discounted price
applicable to such Share Termination
Delivery Units. In the case of a
Registration Settlement of Share
Termination Delivery Units that are
Restricted Shares (as defined below)
as set forth in paragraph (j)(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,

13

 

	 	 	 
	 

	 	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 9.1(c), 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.

	(j)	 	Registration/Private Placement Procedures. If, in the
reasonable opinion of Dealer, following any delivery of Shares or
Share Termination Delivery Property to Dealer hereunder, such
Shares or Share Termination Delivery Property would be in the hands
of Dealer 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 any applicable
material restrictions pursuant to any applicable 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 Dealer waives the need for
registration/private placement procedures set forth in (i) and (ii)
below. Notwithstanding the foregoing, solely in respect of any
Daily Number of Warrants exercised or deemed exercised on any
Expiration Date, Company shall elect, prior to the first Settlement
Date for the first Expiration Date, a Private Placement Settlement
or Registration Settlement for all deliveries of Restricted Shares
for all such Expiration Dates which election shall be applicable to
all Settlement Dates for such Warrants and the procedures in clause
(i) or clause (ii) below shall apply for all such delivered
Restricted Shares on an aggregate basis commencing after the final
Settlement Date for such Warrants. The Calculation Agent shall
make reasonable adjustments to settlement terms and provisions
under this Confirmation to reflect a single Private Placement or
Registration Settlement for such aggregate Restricted Shares
delivered hereunder.

	 	(i)	 	If Company elects to settle the Transaction pursuant to
this clause (i) (a “Private Placement Settlement”), then
delivery of Restricted Shares by Company shall be effected
in customary private placement procedures with respect to
such Restricted Shares reasonably acceptable to Dealer;
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 Dealer (or any
affiliate designated by Dealer) 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
Dealer (or any such affiliate of Dealer). The Private
Placement Settlement of such Restricted Shares shall include
customary representations, covenants, blue sky and other
governmental filings and/or registrations, indemnities to
Dealer, due diligence rights (for Dealer or any designated
buyer of the Restricted Shares by Dealer), opinions and
certificates, and such other documentation as is customary
for private placement agreements, all reasonably acceptable
to Dealer. In the case of a

14

 

	 	 	 	Private Placement Settlement,
Dealer 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 Dealer hereunder; provided that in no event shall such
number be greater than 2 times the Number of Warrants
multiplied by the Warrant Entitlement (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
Dealer 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) Company authorized any 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 Dealer of the occurrence of
any of the foregoing events (including the number of
Shares subject to clause (i), (ii) or (iii) and the
corresponding number of Restricted Shares to be
delivered) and promptly deliver such Restricted Shares
thereafter.
	 
	 	(ii)	 	If Company elects to settle the Transaction pursuant to
this clause (ii) (a “Registration Settlement”), then Company
shall 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 Dealer, 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
Dealer. If Dealer, in its sole reasonable discretion, is
not satisfied with such procedures and documentation Private
Placement Settlement shall apply. If Dealer 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
Dealer 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 exceed 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

15

 

	 	 	 	Payment Obligation exceeds the realized net proceeds from
such resale, Company shall transfer to Dealer by the open of
the regular trading session on the Exchange on the Exchange
Trading Day immediately following the last day of the Resale
Period the amount of such excess (the “Additional Amount”)
in cash or in a number of Shares (“Make-whole Shares”) in an
amount that, based on the Settlement Price on the last day
of the Resale Period (as if such day was the “Valuation
Date” for purposes of computing such Settlement Price), has
a dollar value equal to the Additional Amount. The Resale
Period shall continue to enable the sale of the Make-whole Shares. If Company elects to pay the Additional Amount in
Shares, the requirements and provisions for Registration
Settlement shall apply. This provision shall be applied
successively until the Additional Amount is equal to zero.
In no event shall Company deliver a number of Restricted
Shares greater than the Maximum Amount.
	 
	 	(iii)	 	Without limiting the generality of the foregoing,
Company agrees that any Restricted Shares delivered to
Dealer, as purchaser of such Restricted Shares, (i) may be
transferred by and among Dealer and its affiliates and
Company shall effect such transfer without any further
action by Dealer 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 Dealer (or such affiliate
of Dealer) to Company or such transfer agent of seller’s and
broker’s representation letters customarily delivered by
Dealer in connection with resales of restricted securities
pursuant to Rule 144 under the Securities Act, without any
further requirement for the delivery of any certificate,
consent, agreement, opinion of counsel, notice or any other
document, any transfer tax stamps or payment of any other
amount or any other action by Dealer (or such affiliate of
Dealer).

	 	 	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.
	 
	(k)	 	Limit on Beneficial Ownership. Notwithstanding any other
provisions hereof, Dealer 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, Dealer
would directly or indirectly beneficially own (as such term is
defined for purposes of Section 13(d) of the Exchange Act) or “own
or control” (within the meaning of Article 12 Section 2 of the
Company’s Certificate of Incorporation) in excess of 9.0% 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, Dealer would directly or indirectly so
beneficially own, or so own or control, in excess of 9.0% of the
outstanding Shares. If any delivery owed to Dealer 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, Dealer gives notice to Company that, after such delivery,
Dealer would not directly or indirectly so beneficially own, or so
own or control, in excess of 9.0% of the outstanding Shares.
	 
	(l)	 	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 Dealer
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

16

 

	 	 	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 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
Shares 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 Dealer (or such affiliate of
Dealer) to Company or such transfer agent of customary seller’s and
broker’s representation letters in connection with resales of
restricted securities pursuant to Rule 144 of the Securities Act,
without any further requirement for the delivery of any
certificate, consent, agreement, opinion of counsel, notice or any
other document, any transfer tax stamps or payment of any other
amount or any other action by Dealer (or such affiliate of Dealer).
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 Dealer and its
affiliates and Company shall effect such transfer without any
further action by Dealer. 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.
	 
	(m)	 	Additional Termination Event. If within the period commencing
on the Trade Date and ending on the second anniversary of the
Premium Payment Date, Buyer reasonably determines that it is
advisable to terminate a portion of the Transaction so that Buyer’s
related hedging activities will comply with applicable securities
laws, rules or regulations, an Additional Termination Event shall
occur in respect of which (i) Company shall be the sole Affected
Party and (ii) the Transaction shall be the sole Affected
Transaction.
	 
	(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 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.
	 
	(o)	 	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.
	 
	(p)	 	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 Dealer in connection with this Transaction, subject to
the provisions regarding Deficit Restricted Shares
	 
	(q)	 	Status of Claims in Bankruptcy. Dealer acknowledges and agrees
that this Confirmation is not intended to convey to Dealer rights
with respect to the Transaction that are senior to the claims of
common stockholders in any U.S. bankruptcy proceedings of Company;
provided that nothing herein shall limit or shall be deemed to
limit Dealer’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 Dealer’s rights in respect of any
transactions

17

 

	 

	 	other than the Transaction.
	 
	 	 
	(r)	 	Securities Contract; Swap Agreement. Each of Dealer and
Company agrees and acknowledges (A) that this Confirmation is (i) a
“securities contract,” as such term is defined in Section 741(7) of
Title 11 of the United States Code (the “Bankruptcy Code”), with
respect to which each payment and delivery hereunder is a
“settlement payment,” as such term is defined in Section 741(8) of
the Bankruptcy Code, and (ii) a “swap agreement,” as such term is
defined in Section 101(53B) of the Bankruptcy Code, with respect to
which each payment and delivery hereunder is a “transfer,” as such
term is defined in Section 101(54) of the Bankruptcy Code, and (B)
that Dealer is entitled to the protections afforded by, among other
sections, Section 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and
560 of the Bankruptcy Code.
	 
	(s)	 	Right to Extend. Dealer may postpone any Exercise Date,
Settlement Date or any other date or valuation or delivery with
respect to some or all of the relevant Warrants (in which case the
Calculation Agent may make appropriate adjustments to the relevant
number of Warrants being exercised), if Dealer determines, in its
reasonable discretion, that such action is necessary or advisable
to preserve Dealer’s Hedging Activity hereunder in light of
existing liquidity conditions or to enable Dealer to effect
purchases of Shares in connection with its Hedging Activity
hereunder in a manner that would, if Dealer were the Company or an
affiliated purchaser of the Company, be in compliance with
applicable legal and regulatory requirements.
	 
	(t)	 	Role of Agent. Each party agrees and acknowledges that (i)
Bear, Stearns & Co., an affiliate of Dealer (“Agent”), has acted
solely as agent and not as principal with respect to this
Transaction and (ii) Agent 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.

18

 

     Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it to Michael O’Donovan, 383 Madison Avenue, New York, NY 10179,
or by fax on (917) 849-0251.

	 	 	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Bear, Stearns & Co. Inc., as agent
for Bear, Stearns International
Limited	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ James D. Kern
	 

	 	 	 	 	 	 

Authorized Signatory
	 	 
	 

	 	 	 	 	 	Name: James D. Kern	 	 

	 	 	 	 	 
	Accepted and confirmed
as of the Trade Date:	 	 
	 
	 	 	 	 
	Superior Energy Services, Inc.	 	 
	 
	 	 	 	 
	By:
	 	/s/ Robert S. Taylor
	 

	 	 

Authorized Signatory
	 	 
	 

	 	Name: Robert S. Taylor	 	 

 

 

ANNEX A: Daily Number of Warrants

	 	 	 	 	 
	Expiration Date	 	Number of Warrants
	3/15/2012

	 	 	146,276	 
	3/16/2012

	 	 	146,276	 
	3/19/2012

	 	 	146,276	 
	3/20/2012

	 	 	146,276	 
	3/21/2012

	 	 	146,276	 
	3/22/2012

	 	 	146,276	 
	3/23/2012

	 	 	146,276	 
	3/26/2012

	 	 	146,276	 
	3/27/2012

	 	 	146,276	 
	3/28/2012

	 	 	146,276	 
	3/29/2012

	 	 	146,276	 
	3/30/2012

	 	 	146,276	 
	4/2/2012

	 	 	146,276	 
	4/3/2012

	 	 	146,276	 
	4/4/2012

	 	 	146,276	 
	4/5/2012

	 	 	146,276	 
	4/9/2012

	 	 	146,276	 
	4/10/2012

	 	 	146,276	 
	4/11/2012

	 	 	146,276	 
	4/12/2012

	 	 	146,276	 
	4/13/2012

	 	 	146,276	 
	4/16/2012

	 	 	146,276	 
	4/17/2012

	 	 	146,276	 
	4/18/2012

	 	 	146,276	 
	4/19/2012

	 	 	146,276	 
	4/20/2012

	 	 	146,276	 
	4/23/2012

	 	 	146,276	 
	4/24/2012

	 	 	146,276	 
	4/25/2012

	 	 	146,276	 
	4/26/2012

	 	 	146,276exv10w6

 

EXHIBIT 10.6

December 7, 2006

	 	 	 
	To:

	 	Superior Energy Services, Inc.

1105 Peters Road

Harvey, Louisiana, 70058

Attention: Mr. Robert S. Taylor, Chief Financial Officer

Telephone No.: (504) 210-4105

Facsimile No.:   (504) 362-9642
	From:

	 	Lehman Brothers Inc., acting as Agent

Lehman Brothers OTC Derivatives Inc., acting as Principal

Attention: Transaction Management Group

Telephone No.: (212) 526-9986

Facsimile No.:   (646) 885-9546
	 

	 	Re: Warrants

     The purpose of this letter agreement is to confirm the terms and conditions of the Warrants
issued by Superior Energy Services, Inc. (“Company”) to Lehman Brothers OTC Derivatives Inc.
(“Dealer”) 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. Lehman Brothers OTC Derivatives Inc. is not a member of the Securities Investor
Protection Corporation.

     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 Dealer 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 Dealer and Company had executed
an agreement in such form (but without any Schedule except for (i) the election of the
laws of the State of New York as the governing law, and (ii) the election of US Dollars
(“USD”) as the Termination Currency) 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:

	 	 	 	 	 
	General Terms:	 	 
	 

	 	Trade Date:
	 	December 7, 2006
	 

	 	Effective Date:
	 	December 12, 2006; provided that either
Buyer or Seller may cancel all (but not
less than all) the Warrants by notice
to the other party prior to payment

 

 

	 	 	 	 	 
	 

	 	 	 	of
the Premium on the Effective Date, in
which case these Warrants shall never
become effective and neither party
shall have any obligation to the other
party in respect of the Transaction.
	 

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

	 	Warrant Style:
	 	European
	 

	 	Seller:
	 	Company
	 

	 	Buyer:
	 	Dealer
	 

	 	Shares:
	 	The common stock of Company, par value
USD 0.001 per Share (Exchange symbol
“SPN”)
	 

	 	Number of Warrants:
	 	For each Expiration Date, a number of
Warrants set forth next to such an
Expiration Date on Annex A hereto (the
“Daily Number of Warrants”), subject to
adjustment as provided herein; provided
that if Bear, Stearns & Co. Inc.,
Lehman Brothers Inc. and JP Morgan
Securities, Inc., as the initial
purchasers party to that certain
purchase agreement (the “Purchase
Agreement”) relating to the
exchangeable notes to be issued by
SESI, LLC exercise their right to
purchase additional exchangeable notes
as set forth therein, then, the Number
of Warrants shall be automatically
increased by an aggregate number equal
to the product of (i) the Applicable
Percentage, (ii) the Warrant
Entitlement and (iii) the initial
exchange rate of the exchangeable
notes.
	 

	 	Warrant Entitlement:
	 	One Share per Warrant
	 

	 	Strike Price:
	 	USD 59.4176
	 

	 	Applicable Percentage:
	 	50%
	 

	 	Premium:
	 	USD 30,200,000 (Premium per Warrant USD
6.8820).
	 

	 	Premium Payment Date:
	 	The Effective Date.
	 

	 	Exchange:
	 	New York Stock Exchange
	 

	 	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

2

 

	 	 	 	 	 
	 

	 	 	 	including
the 30th 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 such 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:
	 	March 15, 2012 (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
	 

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

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

	 	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.”

3

 

	 	 	 	 	 
	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 Dealer the
Share Delivery Quantity of Shares for
such Settlement Date to the account
specified herein 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 “SPN UN
<EQUITY> VAP <GO>” (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(j)(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 the Representation and Agreement
contained in Section 9.11 of the Equity
Definitions shall be modified by
excluding any representations therein
relating to restrictions, obligations,
limitations or requirements under
applicable securities laws as a result
of the fact that Seller is the Issuer
of the Shares and 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.

     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(f) of
this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity
Definitions.
	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
Dealer 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(g)(ii)(C) of this
Confirmation, Dealer may elect, in its commercially reasonable judgment,
whether the provisions of Section 12.3 of the Equity Definitions or Section
9(g)(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, such exchange or quotation system shall thereafter be deemed to be
the Exchange.
	Additional Disruption Events:	 	 
	 

	 	Change in Law:
	 	Applicable
	 

	 	Failure to Deliver:
	 	Applicable
	 

	 	Insolvency Filing:
	 	Applicable
	 

	 	Hedging Disruption:
	 	Applicable
	 

	 	Increased Cost of Hedging:
	 	Applicable
	 

	 	Loss of Stock Borrow:
	 	Applicable
	 

	 	       Maximum Stock Loan Rate:
	 	300 basis points
	 

	 	Increased Cost of Stock Borrow:
	 	Applicable
	 

	 	       Initial Stock Loan Rate:
	 	35 basis points
	 

	 	Hedging Party:
	 	Dealer for all applicable Additional Disruption Events
	 

	 	Determining Party:
	 	Dealer for all applicable Additional Disruption Events

6

 

	 	 	 	 	 
	 

	 	Non-Reliance:
	 	Applicable
	 
	 

	 	Agreements and Acknowledgments	 	 
	 

	 	   Regarding Hedging Activities:
	 	Applicable
	 
	 

	 	Additional Acknowledgments:
	 	Applicable

	 	 	 	 	 	 	 
	4.	 	Calculation Agent:	 	Dealer
	5.	 	Account Details:	 	 
	 

	 	(a)
	 	Account for payments to Company:
	 	Whitney National Bank

228 St. Charles Avenue

New Orleans, LA 70130

ABA 065000171
	 

	 	 	 	 	 	For credit to:
	 

	 	 	 	 	 	SESI, LLC

1105 Peters Road

Harvey, LA 70058

Account 713121440

	 

	 	 	 	Account for delivery
of Shares to Company:
	 	To be provided under separate cover by Company.
	 

	 	(b)
	 	 Account for payments to Dealer:
	 	To be provided by Dealer.
	 

	 	 	 	Account for delivery
of Shares to Dealer:
	 	To be provided by Dealer.

	6.	 	Offices:

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

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

	7.	 	Notices: For purposes of this Confirmation:

	 	(a)	 	Address for notices or communications to Company:

Superior Energy Services, Inc.

1105 Peters Road

Harvey, LA 70058

Attention: Mr. Robert S. Taylor, Chief Financial Officer

Telephone No.: (504) 210-4105

Facsimile No.: (504) 362-9624

7

 

	 	(b)	 	Address for notices or communications to Dealer:

Lehman Brothers Inc., acting as Agent

Lehman Brothers OTC Derivatives Inc., acting as Principal

745 Seventh Avenue

New York, NY 10019

Attention: Transaction Management Group

Telephone No.: (212) 526-9986

Facsimile No.: (646) 885-9546

With a copy to:

Lehman Brothers Inc., acting as Agent

Lehman Brothers OTC Derivatives Inc., acting as Principal

745 Seventh Avenue

New York, NY 10019

Attention: Steve Roti-US Equity Linked

Telephone No: (212) 526-0055

Facsimile No: (917) 552-0561

	8.	 	Representations and Warranties:

	 	(a)	 	The Company hereby represents and warrants to Dealer that:

	 	(i)	 	The Shares 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;
	 
	 	(ii)	 	Company is an “eligible contract participant” (as such term is defined in Section 1a(12) of the
Commodity Exchange Act, as amended (the “CEA”));
	 
	 	(iii)	 	Company and each of its affiliates is not, on the date hereof, in possession of any material non-public
information with respect to Company;
	 
	 	(iv)	 	Without limiting the generality of Section 13.1 of the Equity Definitions, Company acknowledges that
Dealer is not making any representations or warranties with respect to the treatment of the Transaction under
FASB Statements 149 or 150, EITF Issue No. 00-19 (or any successor issue statements) or under FASB’s
Liabilities & Equity Project;
	 
	 	(v)	 	Prior to the Trade Date, Company shall deliver to Dealer a resolution of Company’s board of directors
authorizing the Transaction and such other certificate or certificates as Dealer shall reasonably request;
	 
	 	(vi)	 	Company is not, and after giving effect to the transactions contemplated hereby will not be required
to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as
amended;
	 
	 	(vii)	 	On the Trade Date (A) the assets of Company at their fair valuation exceed the liabilities of Company,
including contingent liabilities, (B) the capital of Company is adequate to conduct the business of Company
and (C) Company has the ability to pay its debts and obligations as such debts mature and does not intend to,
or does not believe that it will, incur debt beyond its ability

8

 

	 	 	 	to pay as such debts mature;
	 
	 	(viii)	 	Company understands that no obligations of Dealer to it hereunder will be entitled to the benefit of
deposit insurance and that such obligations will not be guaranteed by any affiliate of Dealer or any
governmental agency;
	 
	 	(ix)	 	During the period starting on the first Expiration Date and ending on the last Expiration Date (the
“Settlement Period”), the Shares or securities that are convertible into, or exchangeable or exercisable for
Shares, are not, and shall not be, subject to a “restricted period,” as such term is defined in Regulation M
under the Exchange Act (“Regulation M”) and (B) Issuer shall not engage in any “distribution,” as such term
is defined in Regulation M, other than a distribution meeting the requirements of the exceptions set forth in
sections 101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business Day immediately
following the Settlement Period;
	 
	 	(x)	 	Prior to the Trade Date, neither the Company nor any of its affiliates has taken any action which is
designed to or which has constituted or which might have been expected to cause or result in stabilization or
manipulation of the price of any security of the Company in connection with the offering of the exchangeable
notes; and
	 
	 	(xi)	 	None of the Company or any of its subsidiaries is in violation of its certificate of incorporation or
certificate of formation, or its bylaws or limited liability company agreement (or other organizational
documents), or in default in the performance or observance of any material obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be bound, other than such defaults that
individually or in the aggregate would not have a Material Adverse Effect. “Material Adverse Effect” means
any change in the capital stock, increase in long-term debt or any decreases in consolidated net current
assets or stockholders’ equity of the Company or any of its subsidiaries or any material adverse change, or
any development involving a prospective material adverse change, in or affecting the general affairs,
management, current or future consolidated financial position, stockholders’ equity or results of operations
of the Company and its subsidiaries taken as a whole.

	 	(b)	 	Each party makes to the other the representations and warranties set forth in Sections 3(a) through (f) of
the Agreement with respect to the Agreement as supplemented by this Confirmation; provided that Dealer makes the
representation and warranty set forth in Section 3(f) and Company makes the representation and warranty set forth
in Section 3(e). In addition, each of Dealer and Company acknowledges that the offer and sale of the Transaction
to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities
Act”), by virtue of Section 4(2) thereof. Accordingly, Dealer represents and warrants to Company that (i) it has
the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total
loss of its investment and its investments in and liabilities in respect of the Transaction, which it understands
are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in
connection with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an
“accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is
entering into the Transaction for its own account without a view to the distribution or resale thereof, (iv) the
assignment, transfer or other disposition of the Transaction has not been and will not be registered under the
Securities Act and is restricted under the Securities Act and state securities laws, (v) its financial condition
is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose
of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is capable of
assessing the merits of and understanding (on its own behalf or through independent professional advice), and
understands and accepts, the terms, conditions and risks of the Transaction.

9

 

	9.	 	Other Provisions:

	 	(a)	 	Opinions. Company shall deliver an opinion of counsel, dated as of the Trade Date, to Dealer with respect to
the matters set forth in Section 3(a) of the Agreement and Section 8(a)(vi) of this Confirmation.
	 
	 	(b)	 	Repurchase Notices. Company shall, on any day on which Company effects any repurchase of Shares, promptly give
Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day, and if such notice relates to
material non-public information at the time, simultaneously publicly announce such information, if following such
repurchase, the Notice Percentage as determined on such day is (i) greater than 4.5% and (ii) greater by 0.5% than
the Notice Percentage included in the immediately preceding Repurchase Notice (or, in the case of the first such
Repurchase Notice, greater than the Notice Percentage as of the date hereof). The “Notice Percentage” as of any day
is the fraction, expressed as a percentage, the numerator of which is the product of the Number of Warrants and the
Warrant Entitlement and the denominator of which is the number of Shares outstanding on such day.
	 
	 	(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)	 	Transfer and Assignment. Buyer may transfer and assign its rights and obligations hereunder and under the
Agreement, in whole or in part, at any time to any person or entity whatsoever without the consent of Company.
	 
	 	(f)	 	Dividends. If at any time during the period from and including the Trade Date, to but excluding the final
Expiration Date, an ex-dividend date for a cash dividend occurs with respect to the Shares (an “Ex-Dividend Date”),
then the Calculation Agent will adjust the Strike Price to preserve the fair value of the Warrant to Dealer after
taking into account such dividend.
	 
	 	(g)	 	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(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.

(C) 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 Dealer’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.”

(D) 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

10

 

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.

	 	(E)	 	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 penultimate and final sentences in their
entirety and replacing them 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) Dealer shall have the right to designate such event
an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the
Agreement, and (2) Company shall be deemed the sole Affected Party and the Transaction shall be deemed the
sole Affected Transaction:

(A) Company sells, leases or otherwise transfers in one transaction or a series of transactions all or
substantially all of the assets of Company and its subsidiaries, taken as a whole, to any person other
than Company or any of its subsidiaries;

(B) There is a default by Company under any of its Public Indebtedness under which there may be
outstanding in excess of $310 million, whether such Public Indebtedness now exists or shall hereafter
be created, resulting in such Public Indebtedness becoming or being declared due and payable; “Public
Indebtedness” shall mean any indebtedness of the Company for money borrowed under notes, bonds or
similar instruments offered and sold by the Company in an offering registered with the Securities and
Exchange Commission or pursuant to Rule 144A under the Securities Act;

(C) Any “person” or “group” within the meaning of Section 13(d) of the Exchange Act other than 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
Company representing more than 50% of the ordinary voting power of such common equity; or

(D) Dealer, 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 of 1933, as amended (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
Dealer).

	 	(h)	 	No Collateral or Setoff. Notwithstanding any provision of the Agreement or any other agreement between the
parties to the contrary, the obligations of Company hereunder are not secured by any collateral. Obligations under
this Transaction shall not be set off by Company against any other obligations of the parties, whether arising under
the Agreement, this Confirmation, under any other agreement between the parties hereto, by operation of law or
otherwise. Any provision in the Agreement with respect to the satisfaction of Company’s payment obligations to the
extent of Dealer’s payment obligations to Company in the same currency and in the same Transaction (including,
without limitation Section 2(c) thereof) shall not apply to Company and, for the avoidance of doubt, Company shall
fully satisfy such payment obligations notwithstanding any payment obligation to Company by

11

 

	 	 	 	Dealer in the same
currency and in the same Transaction. In calculating any amounts under Section 6(e) of the Agreement,
notwithstanding anything to the contrary in the Agreement, (1) separate amounts shall be calculated as set forth in
such Section 6(e) with respect to (a) this Transaction and (b) all other Transactions, and (2) such separate amounts
shall be payable pursuant to Section 6(d)(ii) of the Agreement.

	 	(i)	 	Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If, in respect
of this Transaction, subject to paragraph (h) above, an amount is payable by Company to Dealer, (i) pursuant to
Section 12.7 or Section 12.9 of the Equity Definitions (except in the event of an Insolvency, Nationalization,
Tender Offer or Merger Event in which the consideration or proceeds to be paid to holders of shares consists solely
of cash) or (ii) pursuant to Section 6(d)(ii) of the Agreement (except in the event of an Event of Default in which
Company is the Defaulting Party or a Termination Event in which Company is the Affected Party, other than an Event
of Default of the type described in (x) Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or (y) a
Termination Event of the type described in Section 5(b)(i), (ii), (iii), (iv), (v) or (vi) 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 Dealer, confirmed in writing
within one Scheduled Trading Day, no later than 12:00 p.m. New York local time on the Merger Date, Tender Offer
Date, Announcement Date (in the case of a Nationalization, Insolvency or Delisting), Early Termination Date or date
of cancellation, as applicable; provided that if Company does not validly elect to satisfy its Payment Obligation by
the Share Termination Alternative, Dealer shall have the right to require Company to satisfy its Payment Obligation
by the Share Termination Alternative. Notwithstanding the foregoing, Company’s or Dealer’s right to elect
satisfaction of a Payment Obligation in the Share Termination Alternative as set forth in this clause shall only
apply to this Transaction and, notwithstanding anything to the contrary in the Agreement, (1) separate amounts shall
be calculated with respect to (a) the Transaction 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 Dealer the Share Termination
Delivery Property on the date (the
“Share Termination Payment Date”) on
which the Payment Obligation would
otherwise be due pursuant to Section
12.7 or Section 12.9 of the Equity
Definitions or pursuant to Section
6(d)(ii) of the Agreement, subject to
paragraph (j)(i) below, in
satisfaction, subject to paragraph
(j)(ii) below, of the Payment
Obligation in the manner reasonably
requested by Dealer 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 Dealer 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

12

 

	 	 	 
	 

	 	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 (j)(i) below, the
Share Termination Unit Price shall be
determined by the discounted price
applicable to such Share Termination
Delivery Units. In the case of a
Registration Settlement of Share
Termination Delivery Units that are
Restricted Shares (as defined below)
as set forth in paragraph (j)(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 9.1(c), 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.

	 	(j)	 	Registration/Private Placement Procedures. If, in the
reasonable opinion of Dealer, following any delivery of Shares or
Share Termination Delivery Property to Dealer hereunder, such
Shares or Share Termination Delivery Property would be in the hands
of Dealer 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 any applicable
material restrictions pursuant to any applicable 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 Dealer waives the need for
registration/private placement procedures set forth in (i) and (ii)
below. Notwithstanding the

13

 

	 	 	 	foregoing, solely in respect of any
Daily Number of Warrants exercised or deemed exercised on any
Expiration Date, Company shall elect, prior to the first Settlement
Date for the first Expiration Date, a Private Placement Settlement
or Registration Settlement for all deliveries of Restricted Shares
for all such Expiration Dates which election shall be applicable to
all Settlement Dates for such Warrants and the procedures in clause
(i) or clause (ii) below shall apply for all such delivered
Restricted Shares on an aggregate basis commencing after the final
Settlement Date for such Warrants. The Calculation Agent shall
make reasonable adjustments to settlement terms and provisions
under this Confirmation to reflect a single Private Placement or
Registration Settlement for such aggregate Restricted Shares
delivered hereunder.

	 	(i)	 	If Company elects to settle the Transaction pursuant to
this clause (i) (a “Private Placement Settlement”), then
delivery of Restricted Shares by Company shall be effected
in customary private placement procedures with respect to
such Restricted Shares reasonably acceptable to Dealer;
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 Dealer (or any
affiliate designated by Dealer) 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
Dealer (or any such affiliate of Dealer). The Private
Placement Settlement of such Restricted Shares shall include
customary representations, covenants, blue sky and other
governmental filings and/or registrations, indemnities to
Dealer, due diligence rights (for Dealer or any designated
buyer of the Restricted Shares by Dealer), opinions and
certificates, and such other documentation as is customary
for private placement agreements, all reasonably acceptable
to Dealer. In the case of a Private Placement Settlement,
Dealer 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 Dealer hereunder; provided that in no event shall such
number be greater than 2 times the Number of Warrants
multiplied by the Warrant Entitlement (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
Dealer 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) Company authorized any 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 Dealer of the occurrence of
any of the foregoing events (including the number of
Shares subject to clause (i), (ii) or (iii) and the
corresponding number of Restricted Shares to be
delivered) and promptly deliver such Restricted Shares
thereafter.
	 
	 	(ii)	 	If Company elects to settle the Transaction pursuant to
this clause (ii) (a “Registration Settlement”), then Company
shall file and use its reasonable best efforts to make
effective under the Securities Act a registration statement
or supplement or amend an outstanding registration

14

 

	 	 	 	statement
in form and substance reasonably satisfactory to Dealer, 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
Dealer. If Dealer, in its sole reasonable discretion, is
not satisfied with such procedures and documentation Private
Placement Settlement shall apply. If Dealer 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
Dealer 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 exceed 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 Dealer by the open of
the regular trading session on the Exchange on the Exchange
Trading Day immediately following the last day of the Resale
Period the amount of such excess (the “Additional Amount”)
in cash or in a number of Shares (“Make-whole Shares”) in an
amount that, based on the Settlement Price on the last day
of the Resale Period (as if such day was the “Valuation
Date” for purposes of computing such Settlement Price), has
a dollar value equal to the Additional Amount. The Resale
Period shall continue to enable the sale of the Make-whole
Shares. If Company elects to pay the Additional Amount in
Shares, the requirements and provisions for Registration
Settlement shall apply. This provision shall be applied
successively until the Additional Amount is equal to zero.
In no event shall Company deliver a number of Restricted
Shares greater than the Maximum Amount.
	 
	 	(iii)	 	Without limiting the generality of the foregoing,
Company agrees that any Restricted Shares delivered to
Dealer, as purchaser of such Restricted Shares, (i) may be
transferred by and among Dealer and its affiliates and
Company shall effect such transfer without any further
action by Dealer 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 Dealer (or such affiliate
of Dealer) to Company or such transfer agent of seller’s and
broker’s representation letters customarily delivered by
Dealer in connection with resales of restricted securities
pursuant to Rule 144 under the Securities Act, without any
further requirement for the delivery of any certificate,
consent, agreement, opinion of counsel, notice or any other
document, any transfer tax stamps or payment of any other
amount or any other action by Dealer (or such affiliate of
Dealer).

	 	 	 	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.
	 
	 	(k)	 	Limit on Beneficial Ownership. Notwithstanding any other
provisions hereof, Dealer may not exercise any Warrant hereunder,
and Automatic Exercise shall not apply with respect thereto, to the
extent (but

15

 

	 	 	 	only to the extent) that, after such receipt, Dealer
would directly or indirectly beneficially own (as such term is
defined for purposes of Section 13(d) of the Exchange Act) or “own
or control” (within the meaning of Article 12 Section 2 of the
Company’s Certificate of Incorporation) in excess of 9.0% 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, Dealer would directly or indirectly so
beneficially own, or so own or control, in excess of 9.0% of the
outstanding Shares. If any delivery owed to Dealer 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, Dealer gives notice to Company that, after such delivery,
Dealer would not directly or indirectly so beneficially own, or so
own or control, in excess of 9.0% of the outstanding Shares.
	 
	 	(l)	 	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 Dealer
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 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
Shares 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 Dealer (or such affiliate of
Dealer) to Company or such transfer agent of customary seller’s and
broker’s representation letters in connection with resales of
restricted securities pursuant to Rule 144 of the Securities Act,
without any further requirement for the delivery of any
certificate, consent, agreement, opinion of counsel, notice or any
other document, any transfer tax stamps or payment of any other
amount or any other action by Dealer (or such affiliate of Dealer).
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 Dealer and its
affiliates and Company shall effect such transfer without any
further action by Dealer. 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.
	 
	 	(m)	 	Additional Termination Event. If within the period commencing
on the Trade Date and ending on the second anniversary of the
Premium Payment Date, Buyer reasonably determines that it is
advisable to terminate a portion of the Transaction so that Buyer’s
related hedging activities will comply with applicable securities
laws, rules or regulations, an Additional Termination Event shall
occur in respect of which (i) Company shall be the sole Affected
Party and (ii) the Transaction shall be the sole Affected
Transaction.
	 
	 	(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 the other party has
represented, expressly or otherwise, that such other party would
not, in the event of such a suit, action or 

16

 

	 	 	 	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)	 	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.
	 
	 	(p)	 	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 Dealer in connection with this Transaction, subject to
the provisions regarding Deficit Restricted Shares
	 
	 	(q)	 	Status of Claims in Bankruptcy. Dealer acknowledges and agrees
that this Confirmation is not intended to convey to Dealer rights
with respect to the Transaction that are senior to the claims of
common stockholders in any U.S. bankruptcy proceedings of Company;
provided that nothing herein shall limit or shall be deemed to
limit Dealer’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 Dealer’s rights in respect of any
transactions other than the Transaction.
	 
	 	(r)	 	Securities Contract; Swap Agreement. Each of Dealer and
Company agrees and acknowledges (A) that this Confirmation is (i) a
“securities contract,” as such term is defined in Section 741(7) of
Title 11 of the United States Code (the “Bankruptcy Code”), with
respect to which each payment and delivery hereunder is a
“settlement payment,” as such term is defined in Section 741(8) of
the Bankruptcy Code, and (ii) a “swap agreement,” as such term is
defined in Section 101(53B) of the Bankruptcy Code, with respect to
which each payment and delivery hereunder is a “transfer,” as such
term is defined in Section 101(54) of the Bankruptcy Code, and (B)
that Dealer is entitled to the protections afforded by, among other
sections, Section 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and
560 of the Bankruptcy Code.
	 
	 	(s)	 	Right to Extend. Dealer may postpone any Exercise Date,
Settlement Date or any other date or valuation or delivery with
respect to some or all of the relevant Warrants (in which case the
Calculation Agent may make appropriate adjustments to the relevant
number of Warrants being exercised), if Dealer determines, in its
reasonable discretion, that such action is necessary or advisable
to preserve Dealer’s Hedging Activity hereunder in light of
existing liquidity conditions or to enable Dealer to effect
purchases of Shares in connection with its Hedging Activity
hereunder in a manner that would, if Dealer were the Company or an
affiliated purchaser of the Company, be in compliance with
applicable legal and regulatory requirements.
	 
	 	(t)	 	Role of Agent. Each party agrees and acknowledges that (i)
Lehman Brothers Inc., an affiliate of Dealer (“Agent”), has acted
solely as agent and not as principal with respect to this
Transaction and (ii) Agent 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.
	 
	 	(u)	 	Regulatory Provisions. (i) Company represents and warrants
that it has received and read and understands the Notice of
Regulatory Treatment and the OTC Option Risk Disclosure Statement.
(ii) The Agent will furnish Company upon written request a
statement as to the source and amount of any remuneration received
or to be received by the Agent in connection with the Transaction
evidenced hereby.

17

 

     Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it by fax on (646) 885-9546.

	 	 	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Lehman Brothers OTC Derivatives Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Anatoly Kozlov
	 

	 	 	 	 	 	 

Authorized Signatory
	 	 
	 

	 	 	 	 	 	Name: Anatoly Kozlov	 	 

Accepted and confirmed

as of the Trade Date:

	 	 	 	 	 	 	 
	Superior Energy Services, Inc.	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	/s/ Robert S. Taylor
	 

	 	 

Authorized Signatory
	 	 	 	 
	 

	 	Name: Robert S. Taylor	 	 	 	 

 

 

ANNEX A: Daily Number of Warrants

	 	 	 
	Expiration Date	 	Number of Warrants
	3/15/2012
	 	146,276
	3/16/2012
	 	146,276
	3/19/2012
	 	146,276
	3/20/2012
	 	146,276
	3/21/2012
	 	146,276
	3/22/2012
	 	146,276
	3/23/2012
	 	146,276
	3/26/2012
	 	146,276
	3/27/2012
	 	146,276
	3/28/2012
	 	146,276
	3/29/2012
	 	146,276
	3/30/2012
	 	146,276
	4/2/2012
	 	146,276
	4/3/2012
	 	146,276
	4/4/2012
	 	146,276
	4/5/2012
	 	146,276
	4/9/2012
	 	146,276
	4/10/2012
	 	146,276
	4/11/2012
	 	146,276
	4/12/2012
	 	146,276
	4/13/2012
	 	146,276
	4/16/2012
	 	146,276
	4/17/2012
	 	146,276
	4/18/2012
	 	146,276
	4/19/2012
	 	146,276
	4/20/2012
	 	146,276
	4/23/2012
	 	146,276
	4/24/2012
	 	146,276
	4/25/2012
	 	146,276
	4/26/2012
	 	146,276

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