Document:

EX-10.2

EXHIBIT 10.2

LUMINENT MORTGAGE CAPITAL, INC.

NOTE

$5,000,000.00 New York, New York September 12, 2007

FOR VALUE RECEIVED, LUMINENT MORTGAGE CAPITAL, INC., a Maryland corporation (the “Borrower”),
promises to pay to the order of Arco Capital Corporation Ltd. (the “Lender”), at the time or times
which shall be determined by the provisions of the Credit Agreement referred to below, FIVE MILLION
DOLLARS AND 00/100 ($5,000,000.00) or, if less, the unpaid principal amount of the Loan evidenced
by this Note and made by the Lender to the Borrower under the Credit Agreement referred to below.

The Borrower also promises to pay interest on the unpaid principal amount hereof from time to
time outstanding, from the date such amount is advanced by the Lender to the Borrower until paid in
full at the rates and at the times which shall be determined in accordance with the provisions of
the Credit Agreement (as amended as of September 12, 2007, the “Credit Agreement”) dated as of
August 21, 2007 between the Borrower and the Lender.

The date and amount of the Loan evidenced by this Note and, each repayment and prepayment of
principal thereof, shall be endorsed by the Lender on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided that the failure
to make or any error in making any such endorsement on such schedule shall not limit, extinguish or
in any way modify the obligation of the Borrower to repay the Loan evidenced by this Note strictly
in accordance with the Credit Agreement.

This Note is issued pursuant to and entitled to the benefits of the Credit Agreement, to which
reference is hereby made for a more complete statement of the terms and conditions under which the
Loans evidenced hereby and thereby are made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.

All payments of principal and interest in respect of this Note shall be made in lawful
currency of the United States of America without defense, set-off or counterclaim, in immediately
available or same day funds, delivered to the Lender not later than 2:00 p.m. (New York City time)
on the date due, at its address referred to in the Credit Agreement or to such other location as
the Lender may designate from time to time.

This Note may be transferred by the Lender without the prior written consent of the Borrower.
Until notified in writing of the transfer of this Note, the Borrower shall be entitled to deem the
Lender as the holder of this Note. The Lender and any subsequent holder of this Note agrees that
before disposing of this Note or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest hereon has been paid;
provided, however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Borrower hereunder with respect to
payments of principal and interest on this Note.

This Note is subject to prepayment at the option of the Borrower as provided in the Credit
Agreement. Upon the occurrence of an Event of Default, the unpaid balance of the principal amount
of this Note may become, or may be declared to be, due and payable in the manner, upon the
conditions and with the effect provided in the Credit Agreement.

No reference herein to the Credit Agreement and no provision of this Note or the Credit
Agreement shall alter or impair the obligation of the Borrower, which is absolute and
unconditional, to pay the principal of and interest on this Note at the place, at the respective
times, and in the currency herein prescribed.

The Borrower hereby waives diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any statute of limitations as a
defense to any demand hereunder.

THIS NOTE SHALL BE GOVERNED BY AND INTERPRETED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF
LAW OTHER THAN SECTION 5-1401 AND SECTION 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK.

1

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered by
its duly authorized officer, as of the day and year first above written.

LUMINENT MORTGAGE CAPITAL, INC.

By: /s/ S. TREZEVANT MOORE, JR.

S. Trezevant Moore, Jr.

Chief Executive Officer

2

Schedule of Loans

Date of Loan:

Principal Amount of Loan: 

Duration of Interest Period:

Payments or Prepayments of Principal:

Balance Outstanding:

Notation made by:

3ex10-1.htm

    Exhibit
      10.1

     

     

     

    

    

      

      
        	
                

              	
                MORGAN
                  STANLEY & CO. INCORPORATED

                1585
                  BROADWAY

                NEW
                  YORK, NY  10036-8293

                (212)
                  761-4000

              

      

      

September 14, 2007

    

    Fixed
      Dollar Accelerated Share Repurchase Transaction

    

    International
      Flavors & Fragrances Inc.

    521
      West 57th
      Street

    New
      York, NY 10019

     
      
        

      

    

    

    Dear
      Sir/Madam:

    

    The
      purpose of this letter agreement (this “Confirmation”) is to confirm the terms
      and conditions of the Transaction entered into between Morgan Stanley & Co.
      Incorporated (“MSCO”) and International Flavors & Fragrances Inc. (the
“Issuer”) on the Trade Date specified below (the “Transaction”).  This
      confirmation constitutes a “Confirmation” as referred to in the ISDA Master
      Agreement specified below.

    

    The
      definitions and provisions contained in the 2002 ISDA Equity Derivatives
      Definitions (as published by the International Swaps and Derivatives
      Association, Inc. (“ISDA”)) (the “Equity Definitions”) are incorporated into
      this Confirmation.  In the event of any inconsistency between the
      Equity Definitions and this Confirmation, this Confirmation will
      govern.  Any reference to a currency shall have the meaning contained
      in Annex A to the 1998 ISDA FX and Currency Option Definitions, as published
      by
      ISDA.  “Other ASR Transaction” shall mean the Fixed
      Dollar Collared Accelerated Share Repurchase with Acceleration Rights
      Transaction dated September 14, 2007 between the Issuer and MSCO.

    

    1.  This
      Confirmation evidences a complete and binding agreement between MSCO and Issuer
      as to the terms of the Transaction to which this Confirmation
      relates.  This Confirmation shall be subject to an agreement (the
“Agreement”) in the form of the 2002 ISDA Master Agreement (the
“ISDA Form”) as if MSCO and Issuer had executed an
      agreement in
      such form without any Schedule.  For the avoidance of doubt, the
      Transaction and the Other ASR Transaction shall be the only transactions under
      the Agreement, and all references herein to the "Agreement" shall be deemed
      to
      include the Other ASR Transaction.

    

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

    

    GENERAL
      TERMS:

    

    
      	
              Trade
                Date:

            	
              September
                14, 2007

            

    

    

    
      	
              Buyer:

            	
              Issuer

            

    

    

    
      	
              Seller:

            	
              MSCO

            

    

    

    
      	
              Shares:

            	
              Common
                Stock of Issuer (Ticker: IFF)

            

    

    

    
      	
              Number
                of Shares:

            	
              The
                number of Shares delivered in accordance with Physical Settlement
                below.

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	 	
               

            	
              Page
                2

            

    

    

    

    
      	
              Forward
                Price:

            	
              A
                price per Share (as determined by the Calculation Agent) equal to
                (i) the
                sum of the 10b-18 VWAP for each Trading Day during the Calculation
                Period
                dividedby (ii) the number of Trading Days in the Calculation Period
                minus
                (iii) the Discount (as specified in Schedule
                I)

            

    

    

    
      	
              10b-18
                VWAP:

            	
              For
                each Trading Day during the Calculation Period, a price per share
                (as
                determined by the Calculation Agent) equal to the volume-weighted
                average
                price of the Rule 10b-18 eligible trades in the Shares for the entirety
                of
                such Trading Day as determined by reference to the screen entitled
“IFF.N
                AQR SEC” or any successor page as reported by Bloomberg L.P. (without
                regard to pre-open or after hours trading outside of any regular
                trading
                session for such Trading Day or block trades (as defined in Rule
                10b-18(b)(5) of the Securities Exchange Act of 1934 as amended (the
                “Exchange Act”)) on such Trading
                Day).

            

    

    

    
      	
              Calculation
                Period:

            	
              The
                period from and including the first Trading Day that occurs after
                the
                Initial Hedge Period Completion Date as defined in the Other ASR
                Transaction to but excluding the Valuation
                Date.

            

    

    

    
      	
              Trading
                Day:

            	
              Any
                Exchange Business Day that is not a Disrupted Day or an Excluded
                Day (as
                defined below)

            

    

    

    
      	
              Initial
                Shares:

            	
              90%
                of (i) the Prepayment Amount divided by (ii) the official closing
                price of
                the Shares on the Exchange on September 27,
                2007

            

    

    

    
      	
              Initial
                Share Delivery Date:

            	
              September
                28, 2007.  On the Initial Share Delivery Date, Seller shall
                deliver a number of Shares equal to the Initial Shares to Buyer in
                accordance with Section 9.4 of the Equity Definitions, with the Initial
                Share Delivery Date deemed to be a “Settlement Date” for purposes of such
                Section 9.4.

            

    

    

    
      	
              Prepayment:

            	
              Applicable

            

    

    

    
      	
              Prepayment
                Amount:

            	
              USD337,500,000

            
	 	 
	
              Commission
                Amount:

            	
              As
                specified in Schedule I

            
	 	 
	
              Adjustment
                Amount:

            	
              As
                specified in Schedule I

            
	 	 
	
              Structuring
                Fee:

            	
              As
                specified in Schedule I

            

    

    

    
      	
              Prepayment
                Date:

            	
              September
                28, 2007.  On the Prepayment Date, Buyer shall pay to Seller the
                Prepayment Amount, the Commission Amount, the Adjustment Amount and
                the
                Structuring Fee.

            

    

    

    
      	
              Exchange:

            	
              NYSE

            

    

    

    
      	
              Related
                Exchange:

            	
              The
                primary exchange on which options or futures on the relevant Shares
                are
                traded.

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	 	
               

            	
              Page
                3

            

    

    

    

    
      	
              Market
                Disruption Event:

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

               

              Notwithstanding
                anything to the contrary in the Equity Definitions, if any Scheduled
                Trading Day in the Calculation Period is a Disrupted Day, the Calculation
                Agent shall have the option in its sole discretion either (i) to
                determine
                the weighting of each Rule 10b-18 eligible transaction in the Shares
                on
                the relevant Disrupted Day using its commercially reasonable judgment
                for
                purposes of calculating the Forward Price, as applicable, (ii) to
                elect to
                extend the Calculation Period by a number of Scheduled Trading Days
                equal
                to the number of Disrupted Days during the Calculation Period or
                (iii) to
                suspend the Calculation Period, as appropriate, until the circumstances
                giving rise to such suspension have ceased.  For the avoidance
                of doubt, if Calculation Agent elects the option described in clause
                (i)
                above, then such Disrupted Day shall be deemed to be a Trading Day
                for
                purposes of calculating the Forward Price.

            
	 	 
	
              Excluded
                Day

            	
              November
                23, 2007; and December 24 and 31,
                2007

            

    

    

    VALUATION:

    

    
      	
              Valuation
                Time:

            	
              The
                Scheduled Closing Time on the relevant
                Exchange

            

    

    

    
      	
              Valuation
                Date:

            	
              The
                Scheduled Valuation Date (as specified in Schedule I), subject to
                extension in accordance with “Market Disruption Event” above or Section 9,
                Section 10 or Section 11(c) below.  On the Valuation Date,
                Calculation Agent shall calculate the Settlement
                Amount.

            
	 	 

    

    SETTLEMENT
      TERMS:

    

    
      	
              Physical
                Settlement:

               

               

               

            	
              Applicable.

               

              On
                the Settlement Date, Seller shall deliver to Buyer a number of Shares
                equal to (a) (i) the Prepayment Amount  divided by (ii)
                the Forward Price as determined on the Valuation Date, minus (b)
                the Initial Shares (such number of Shares, the “Settlement Amount”),
                rounded to the nearest whole number of Shares; provided, however,
                that if
                the Settlement Amount is less than zero, then Buyer shall deliver
                to
                Seller a number of Shares equal to 105% of the absolute value of
                the
                Settlement Amount (such number of Shares, the “Payment
                Shares”).

               

              Notwithstanding
                the proviso above, if the Settlement Amount is less than zero, Buyer
                may
                cash settle its obligation to deliver the Payment Shares by delivering
                to
                Seller a notice by

               

            

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    
      	 	
               

            	
              Page
                4

            

    

    

    

    
      	 	
              no
                later than the Valuation Date electing to cash settle its obligation
                to
                deliver the Payment Shares.  Any such cash settlement shall be
                effected in accordance with “Cash Settlement of Payment Shares”
                below.

               

            
	 	
              For
                the avoidance of doubt, upon the date that (i) Buyer satisfies its
                obligation to deliver the Payment Shares to Seller in accordance
                with the
                terms of this paragraph or (ii) the Settlement Balance (as defined
                below)
                is reduced to zero in connection with cash settlement of Buyer’s
                obligation to deliver Payment Shares (as described under “Cash Settlement
                of Payment Shares” below), then Buyer shall have no further delivery or
                payment obligations under the terms of this Transaction and this
                Transaction shall be deemed to have been settled as of such
                date.

            

    

    

    
      	
              Settlement
                Currency:

            	
              USD

            
	 	 
	
              Settlement
                Date:

            	
              Three
                Exchange Business Days after the Valuation Date, or if such date
                is not a
                Clearance System Business Day or if there is a Settlement Disruption
                Event
                on such day, the immediately succeeding Clearance System Business
                Day on
                which there is no Settlement Disruption
                Event.

            

    

    

    
      	
              Cash
                Settlement of Payment Shares

            	
              If
                Buyer elects to cash settle its obligation to deliver Payment Shares,
                then
                on the Valuation Date a balance (the “Settlement Balance”) shall be
                created with an initial balance equal to the absolute value of the
                Settlement Amount.  On the Settlement Date, Buyer shall deliver
                to Seller a U.S. dollar amount equal to the Payment Shares multiplied
                by a
                price per Share as reasonably determined by the Calculation Agent
                (such
                cash amount, the “Initial Cash Settlement Amount”).  On the
                Exchange Business Day immediately following the delivery of the Initial
                Cash Settlement Amount, Seller shall begin purchasing Shares in a
                commercially reasonable manner (all such Shares purchased, “Cash
                Settlement Shares”).  At the end of each Exchange Business Day
                on which Seller purchases Cash Settlement Shares, Seller shall reduce
                (i)
                the Settlement Balance by the number of Cash Settlement Shares purchased
                on such Exchange Business Day and (ii) the Initial Cash Settlement
                Amount
                by the aggregate purchase price (including commissions) of the Cash
                Settlement Shares on such Exchange Business Day.  If, on any Exchange
                Business Day, the Initial Cash Settlement Amount is reduced to or
                below
                zero but the Settlement Balance is above zero,  the Buyer shall
                (i) deliver to Seller or as directed by Seller on the next Exchange
                Business Day after such Exchange Business Day an additional U.S.
                dollar
                amount (an “Additional Cash Settlement Amount”) equal to  the
                Settlement Balance as of such Exchange Business  Day multiplied
                by  a price per Share as reasonably determined by the
                Calculation Agent.  This provision shall be applied successively
                until the Settlement Balance is reduced to zero.  On the
                Exchange Business Day that the Settlement Balance is reduced to zero,
                Seller shall

            
	 	 

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    
      	 	
               

            	
              Page
                5

            

    

    

    
 

    
      	 	
              return
                to Buyer any unused portion of the Initial Cash Settlement Amount
                or the
                Additional Cash Settlement Amount, as the case may be.  For the
                avoidance of doubt, any purchases of Cash Settlement Shares contemplated
                by this paragraph shall be subject to Seller’s covenants in Section
                11(b).

            

    

    

    Share
      Adjustments:

    

    
      	
              Potential
                Adjustment Event:

            	
              Notwithstanding
                anything to the contrary in Section 11.2(e) of the Equity Definitions,
                an
                Extraordinary Dividend shall not constitute a Potential Adjustment
                Event

            
	 	 
	
              Extraordinary
                Dividend:

            	
              For
                any fiscal quarter occurring (in whole or in part) during the period
                from
                and including the first day of the Hedge Period to and including
                the
                Termination Date, any dividend or distribution on the Shares with
                an
                ex-dividend date occurring during such fiscal quarter (other than
                any
                dividend or distribution of the type described in Section 11.2(e)(i)
                or
                Section 11.2(e)(ii)(A) or (B) of the Equity Definitions) (a
                “Dividend”) that is either (i) a non-regularly scheduled
                Divided or (ii) the amount or value of which (as determined by the
                Calculation Agent exceeds the Ordinary Dividend Amount.

            
	 	 
	
              Ordinary
                Dividend Amount:

            	
              For
                any calendar quarter, USD 0.23

            

    

    

    
      	
              Method
                of Adjustment:

            	
              Calculation
                Agent Adjustment; provided that if Seller suspends trading in the
                Shares
                for all or any portion of a Trading Day within the Calculation Period,
                the
                suspension shall be treated as a Potential Adjustment Event subject
                to
                Calculation Agent Adjustment.  In the case of a suspension
                pursuant to Section 10, the Calculation Agent shall make such adjustments
                prior to the period of suspension, if it is practical to do
                so.  Otherwise, and in all cases of a suspension as contemplated
                under “Market Disruption Event” above, the Calculation Agent shall make
                such adjustments promptly following the period of
                suspension.

            

    

    

    EXTRAORDINARY
      EVENTS:

    

    Consequences
      of Merger Events:

    

    
      	
              Share-for-Share:

            	
              Modified
                Calculation Agent Adjustment

            

    

    

    
      	
              Share-for-Other:

            	
              Cancellation
                and Payment on that portion of the Other Consideration that consists
                of
                cash; Modified Calculation Agent Adjustment on the remainder of the
                Other
                Consideration

            

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    
      	 	
               

            	
              Page
                6

            

    

    

     

    
      	
              Share-for-Combined:

            	
              Component
                Adjustment

            

    

    

    
      	
              Tender
                Offer:

            	
              Applicable

            

    

    

    Consequences
      of Tender Offers:

    

    
      	
              Share-for-Share:

            	
              Modified
                Calculation Agent Adjustment

            

    

    

    
      	
              Share-for-Other:

            	
              Modified
                Calculation Agent Adjustment

            

    

    

    
      	
              Share-for-Combined:

            	
              Modified
                Calculation Agent Adjustment

            

    

    

    For
      purposes of this Transaction, the definition of Merger Date in Section 12.1(c)
      shall be amended to read, “Merger Date shall mean the Announcement
      Date.”  For purposes of this Transaction, the definition of Tender
      Offer Date in Section 12.1(e) shall be amended to read, “Tender Offer Date shall
      mean the Announcement Date.”

    

    
      	
              Composition
                of Combined Consideration:

            	
              Applicable

            

    

    

    
      	
              Nationalization,
                Insolvency or Delisting:

            	
              Cancellation
                and Payment

            

    

     

    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:

              Maximum
                Stock Loan Rate:

            	
              Applicable

              100bps

            

    

    

    
      	
              Increased
                Cost of Stock Borrow:

              Initial
                Stock Loan Rate:

            	
              Applicable

              25bps

            

    

    

    
      	
              Determining
                Party:

            	
              For
                all Extraordinary Events, MSCO

            

    

    

    
      	
              Hedging
                Party:

            	
              For
                all Additional Disruption Events,
                MSCO

            

    

    

    
      	
              Non-Reliance:

            	
              Applicable

            

    

    

    AGREEMENTS
      AND ACKNOWLEDGMENTS:

    

    
      	
              Regarding
                Hedging Activities:

            	
              Applicable

            

    

    

    
      	
              Additional
                Acknowledgments:

            	
              Applicable

            

    

    

    
      	
              3.  Calculation
                Agent:

            	
              MSCO

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	 	
               

            	
              Page
                7

            

    

    

    

    
      	
              4.  Account
                Details:

            	
              To
                be provided

            

    

    

    5.           (a)
      Nationalization or Insolvency.  The words “the Transaction will be
      cancelled,” in the first line of Section 12.6(c)(ii) are replaced with the words
“MSCO will have the right to cancel this Transaction,”.

    

    (b)  Additional
      Termination
      Event.  The declaration of any Extraordinary Dividend by Issuer during
      the period from and including the Trade Date to but excluding the Valuation
      Date
      shall constitute an Additional Termination Event with this Transaction as the
      only “Affected Transaction” and Issuer as the sole “Affected
      Party”.

    

    (c)
      For the avoidance of doubt, this
      Transaction shall be deemed to be a “Forward Transaction” for purposes of the
      Equity Definitions; provided, however, that in Section 9.2(a)(iii)
      of the Equity Definitions the words “the Excess Dividend Amount, if any, and”
shall be deleted.

    

    

    6.  Certain
      Payments and Deliveries by MSCO.  Notwithstanding anything to the
      contrary herein, or in the Equity Definitions, if at any time (i) an Early
      Termination Date occurs and MSCO would be required to make a payment pursuant
      to
      Sections 6(d) and 6(e) of the Agreement, (ii) a Tender Offer occurs and MSCO
      would be required to make a payment pursuant to Sections 12.3 and 12.7 of the
      Equity Definitions, (iii) a Merger Event occurs and MSCO would be required
      to
      make a payment pursuant to Sections 12.2 and 12.7 of the Equity Definitions
      or
      (iv) an Additional Disruption Event occurs and MSCO would be required to make
      a
      payment pursuant to Sections 12.8 and 12.9 of the Equity Definitions, then
      Issuer shall have the option to require MSCO to make such payment in cash or
      to
      settle such payment amount in Shares (any such payment described in Sections
      6(i), (ii), (iii), or (iv) above, an “MSCO Payment
      Amount”).  If Issuer elects for MSCO to settle an MSCO
      Payment Amount in Shares, then on the date such MSCO Payment Amount is due,
      a
      Settlement Balance shall be established with an initial balance equal to the
      MSCO Payment Amount. On such date, MSCO shall commence purchasing Shares for
      delivery to Issuer.  At the end of each Trading Day on which MSCO
      purchases Shares pursuant to this Section 6, MSCO shall reduce the Settlement
      Balance by the amount paid by MSCO to purchase the Shares purchased on such
      Trading Day.  MSCO shall deliver any Shares purchased on a Trading Day
      to Issuer on the third Exchange Business Day following the relevant Trading
      Day.  MSCO shall continue purchasing Shares until the Settlement
      Balance has been reduced to zero.

    

    

    7.  Certain
      Payments and Deliveries by Issuer.  Notwithstanding anything to the
      contrary herein, or in the Equity Definitions, if at any time (i) an Early
      Termination Date occurs and Issuer would be required to make a payment pursuant
      to Sections 6(d) and 6(e) of the Agreement, (ii) a Tender Offer occurs and
      Issuer would be required to make a payment pursuant to Sections 12.3 and 12.7
      of
      the Equity Definitions, (iii) a Merger Event occurs and Issuer would be required
      to make a payment pursuant to Sections 12.2 and 12.7 of the Equity Definitions
      or (iv) an Additional Disruption Event occurs and Issuer would be required
      to
      make a payment pursuant to Sections 12.8 and 12.9 of the Equity Definitions
      (any
      such payment described in Sections 7(i), (ii), (iii), or (iv) above, an
“Early Settlement Payment”), then Issuer shall have the option,
      in lieu of making such cash payment, to settle its payment obligations under
      Sections 7(i), (ii), (iii), or (iv) above in Shares (such Shares, the
“Early Settlement Shares”).  In order to elect to
      deliver Early Settlement Shares, (i) Issuer must notify MSCO of its election
      by
      no later than 4 p.m. EST on the date that is three Exchange Business Days before
      the date that the Early Settlement Payment is due, (ii) must specify whether
      such Early Settlement Shares are to be sold by means of a registered offering
      or
      by means of a private placement and (iii) the conditions described in Section
      8
      below must be satisfied on each day Early Settlement Shares are to be sold
      by
      Seller in connection with Buyer’s election to deliver Early Settlement Shares in
      connection with the settlement of an Early Settlement Payment.

    

    

    8.           Conditions
      to Delivery of Early Settlement Shares.

    

    (a) If
      Issuer timely elects
      to deliver Early Settlement Shares and Make-Whole Shares by means of a
      registered offering, the following provisions shall apply:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	 	
               

            	
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    (i)
      On the later of (A) the Trading Day following the Issuer’s election to deliver
      Early Settlement Shares and any Make-Whole Shares by means of a registered
      offering (the “Registration Notice Date”), and (B) the date on
      which the Registration Statement is declared effective by the SEC or becomes
      effective (the “Registered Share Delivery Date”), the Issuer
      shall deliver to MSCO a number of Early Settlement Shares equal to the quotient
      of (I) the relevant Early Settlement Payment dividedby (II) a
      price per Share as reasonably determined by the Calculation Agent.

    

    (ii)
      Promptly following the Registration Notice Date, the Issuer shall file with
      the
      SEC a registration statement (“Registration Statement”)
      covering the public resale by MSCO of the Early Settlement Shares and any
      Make-Whole Shares (collectively, the “Registered Securities”)
      on a continuous or delayed basis pursuant to Rule 415 (or any similar or
      successor rule), if available, under the Securities Act; provided that
      no such filing shall be required pursuant to this paragraph (ii) if the Issuer
      shall have filed a similar registration statement with unused capacity at least
      equal to the relevant Settlement Amount and such registration statement has
      become effective or been declared effective by the SEC on or prior to the
      Registration Notice Date and no stop order is in effect with respect to such
      registration statement as of the Registration Notice Date.  The Issuer
      shall use its best efforts to file an automatic shelf registration statement
      or
      have the Registration Statement declared effective by the SEC as promptly as
      possible.

    

    (iii)
      Promptly following the Registration Notice Date, the Issuer shall afford MSCO
      a
      reasonable opportunity to conduct a due diligence investigation with respect
      to
      the Issuer customary in scope for underwritten offerings of equity securities
      (including, without limitation, the availability of senior management to respond
      to questions regarding the business and financial condition of the Issuer and
      the right to have made available to MSCO for inspection all financial and other
      records, pertinent corporate documents and other information reasonably
      requested by MSCO), and MSCO shall be satisfied in all material respects with
      the results of such due diligence investigation of the Issuer.  For
      the avoidance of doubt, the Issuer shall not have the right to deliver Shares
      pursuant to this Section 8(a) (and the conditions to delivery of Early
      Settlement Shares specified in this Section 8(a) shall not be satisfied) until
      MSCO is satisfied in all material respects with the results of such due
      diligence investigation of the Issuer.

    

    (iv)
      From the effectiveness of the Registration Statement until all Registered
      Securities have been sold by MSCO, the Issuer shall, at the request of MSCO,
      make available to MSCO a printed prospectus relating to the Registered
      Securities in form and substance (including, without limitation, any sections
      describing the plan of distribution) satisfactory to MSCO (a
“Prospectus”, which term shall include any prospectus
      supplement thereto), in such quantities as Morgan shall reasonably
      request.

    

    (v)
      The Issuer shall use its best efforts to prevent the issuance of any stop order
      suspending the effectiveness of the Registration Statement or of any order
      preventing or suspending the use of any Prospectus and, if any such order is
      issued, to obtain the lifting thereof as soon thereafter as is possible. 
If the Registration Statement, the Prospectus or any document incorporated
      therein by reference contains a misstatement of a material fact or omits to
      state a material fact required to be stated therein or necessary to make any
      statement therein not misleading, the Issuer shall as promptly as practicable
      file any required document and prepare and furnish to MSCO a reasonable number
      of copies of such supplement or amendment thereto as may be necessary so that
      the Prospectus, as thereafter delivered to the purchasers of the Registered
      Securities will not contain a misstatement of a material fact or omit to state
      a
      material fact required to be stated therein or necessary to make any statement
      therein not misleading.

    

    (vi)
      On or prior to the Registered Share Delivery Date, the Issuer shall enter into
      an agreement (a “Transfer Agreement”) with MSCO (or any
      affiliate of MSCO designated by MSCO) in connection with the public resale
      of
      the Registered Securities, substantially similar to underwriting

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    
      	 	
               

            	
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    agreements
      customary for underwritten offerings of equity securities, in form and substance
      reasonably satisfactory to MSCO (or such affiliate), which Transfer Agreement
      shall (without limitation of the foregoing):

    

    (A)
      contain provisions substantially similar to those contained in such underwriting
      agreements relating to the indemnification of, and contribution in connection
      with the liability of, MSCO and its affiliates,

    

    (B)
      provide for delivery to MSCO (or such affiliate) of customary opinions
      (including, without limitation, accounting comfort letters, opinions relating
      to
      the due authorization, valid issuance and fully paid and non-assessable nature
      of the Registered Securities and the lack of material misstatements and
      omissions in the Registration Statement, the Prospectus and the Issuer’s filings
      under the Exchange Act of 1934, as amended and modified (the “Exchange
      Act”)); and

    

    (C)
      provide for the payment by the Issuer of all fees and expenses in connection
      with such resale, including all registration costs and all fees and expenses
      of
      counsel for MSCO (or such affiliate).

    

    (vii)
      On the Registered Share Delivery Date, a balance (the “Settlement
      Balance”) shall be established with an initial balance equal to the
      applicable amount of the relevant Early Settlement Payment.  Following the
      delivery of Early Settlement Shares or any Make-Whole Shares, Seller shall
      sell
      all such Early Settlement Shares or Make-Whole Shares in a commercially
      reasonable manner.

    

    (viii)
      At the end of each day upon which sales have been made, the Settlement Balance
      shall be (A) reduced by an amount equal to the aggregate proceeds received
      by
      MSCO upon settlement of the sale of such Share, and (B) increased by an amount
      (as reasonably determined by the Calculation Agent) equal to MSCO’s funding cost
      with respect to the then-current Settlement Balance as of the close of business
      on such day.

    

    (ix)
      If, on any date, the Settlement Balance has been reduced to zero but not all
      of
      the Early Settlement Shares have been sold, no additional Early Settlement
      Shares shall be sold and MSCO shall promptly deliver to the Issuer (A) any
      remaining Early Settlement Shares and (B) if the Settlement Balance has been
      reduced to an amount less than zero, an amount in cash equal to the absolute
      value of the then-current Settlement Balance.

    

    (x)
      If, on any date, all of the Early Settlement Shares have been sold and the
      Settlement Balance has not been reduced to zero, the Issuer shall promptly
      deliver to MSCO an additional number of Shares (“Make-Whole Shares”) equal to
      (A) the Settlement Balance as of such date divided by (B) the price per Share
      as
      reasonably determined by the Calculation Agent.  This clause (x) shall
      be applied successively until the Settlement Balance is reduced to
      zero.

    

    (xi)  If
      at any time the number of Shares covered by the Registration Statement is less
      than the number of Registered Securities required to be delivered pursuant
      to
      this Section 8(a), the Issuer shall, at the request of MSCO, file additional
      registration statement(s) to register the sale of all Registered Securities
      required to be delivered to MSCO.

    

    (xii)
      The Issuer shall cooperate with MSCO and use its reasonable best efforts to
      take
      any other action necessary to effect the intent of the provisions set forth
      in
      this Section 8(a).

    

    (b)  If
      Issuer timely elects to deliver Early Settlement Shares and Make-Whole Shares
      by
      means of a private placement, the following provisions shall
      apply:

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

    
      	 	
               

            	
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    (i)   all
      Early Settlement Shares
      and Make-Whole Shares shall be delivered to the Seller (or any affiliate of
      the
      Seller designated by the Seller) pursuant to the exemption from the registration
      requirements of the Securities Act provided by
      Section 4(2) thereof;

    

    (ii)   Seller
      and any
      potential purchaser of any such Shares from the Seller (or any affiliate of
      the
      Seller designated by the Seller) identified by Seller shall have been afforded
      a
      commercially reasonable opportunity to conduct a due diligence investigation
      with respect to Issuer customary in scope for private placements of equity
      securities (including, without limitation, the right to have made available
      to
      them for inspection all financial and other records, pertinent corporate
      documents and other information reasonably requested by them) and Buyer shall
      not disclose material non-public information in connection with such due
      diligence investigation; provided, however, if Seller is not reasonably
      satisfied with such due diligence investigation or no such investigation is
      afforded to Seller due to circumstances at Buyer that make such investigation
      impractical, then such dissatisfaction or the failure by Issuer to afford Seller
      with such opportunity to conduct a due diligence investigation shall not provide
      a basis for Seller to refuse to accept the Early Settlement Shares and
      Make-Whole Shares by means of a private placement; provided, further,
      for the avoidance of doubt, that Seller’s dissatisfaction with the due diligence
      investigation or the failure by Issuer to afford Seller with such opportunity
      to
      conduct a due diligence investigation may be used as a factor by MSCO in
      determining the per share value of the Early Settlement Shares pursuant to
      Section 8(b)(v) below; and

     

    (iii)  an
      agreement (a “Private Placement Agreement”) shall have been
      entered into between Issuer and the Seller (or any affiliate of the Seller
      designated by the Seller) in connection with the private placement of such
      Shares by Issuer to the Seller (or any such affiliate) and the private resale
      of
      such Shares by the Seller (or any such affiliate), substantially similar to
      private placement purchase agreements customary for private placements of equity
      securities, in form and substance commercially reasonably satisfactory to the
      Seller and the Issuer, which Private Placement Agreement shall include, without
      limitation, provisions substantially similar to those contained in such private
      placement purchase agreements relating to the indemnification of, and
      contribution in connection with the liability of, the Seller and its affiliates,
      and shall provide for the payment by Issuer of all fees and expenses in
      connection with such resale, including all reasonable fees and expenses of
      one
      counsel for the Seller but not including any underwriter or broker discounts
      and
      commissions, and shall contain representations, warranties and agreements of
      Issuer and Seller reasonably necessary or advisable to establish and maintain
      the availability of an exemption from the registration requirements of the
      Securities Act for such resales.

    

    (iv)  If
      Issuer elects to deliver Early Settlement Shares to satisfy its payment
      obligation of an Early Settlement Payment, neither Issuer nor Seller shall
      take
      or cause to be taken any action that would make unavailable either (i) the
      exemption set forth in Section 4(2) of the Securities Act for the sale
      of any Early Settlement Shares or Make-Whole Shares by Issuer to the Seller
      or
      (ii) an exemption from the registration requirements of the Securities Act
      reasonably acceptable to the Seller for resales of Early Settlement Shares
      and
      Make-Whole Shares by the Seller.

    

    (v)
      On the date requested by MSCO, (A) Issuer shall deliver a number of Early
      Settlement Shares equal to the quotient of (I) the relevant Early Settlement
      Payment divided by (II) a per share value, determined by MSCO in a commercially
      reasonable manner and which may be based on indicative bids from institutional
      “accredited investors” (as defined in Rule 501 under the Securities Act of 1933,
      as amended (the “Securities Act”)) and (B) the provisions of Sections 8(a)(vii)
–(x) shall apply to the Early Settlement Shares delivered pursuant to this
      Section 8(b)(v).  For purposes of applying the foregoing, the
      Registered Share Delivery Date referred to in 8(a)(vii) shall be the date on
      which Issuer delivers the Early Settlement Shares.

    

    (vi)
      For the avoidance of doubt nothing in this Section 8(b) shall be read as
      requiring the Buyer to deliver cash in respect of the settlement of the
      transactions contemplated by the Agreement.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
               

            	
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    (c)  The
      provisions of Section 8(b) shall apply to any then-current Settlement Balance
      if
      (i) on any given day, Issuer cannot satisfy any of the conditions of Section
      8(a) or (ii) for a period of at least ten (10) consecutive Exchange Business
      Days, MSCO has determined that it is inadvisable to effect sales of Registered
      Securities.

    

    (d)  If
      Issuer elects to deliver Early Settlement Shares to satisfy its payment
      obligation of an Early Settlement Payment, then, if necessary, Issuer shall
      use
      its best efforts to cause the number of authorized but unissued Shares of Common
      Stock to be increased to an amount sufficient to permit Issuer to fulfill its
      obligations to satisfy its payment obligation of a Early Settlement Payment
      by
      delivering Early Settlement Shares.

    

    9.  Special
      Provisions for Merger Events.  Notwithstanding anything to the
      contrary herein or in the Equity Definitions, to the extent that an Announcement
      Date for a potential Merger Transaction occurs during the term of this
      Transaction and such Announcement Date does not cause this Transaction to
      terminate in whole under the provisions of “Extraordinary Event” in paragraph 2
      above:

    

    (a)  As
      soon as practicable following the public announcement of such potential Merger
      Transaction, Issuer shall provide MSCO with written notice of such
      announcement;

    

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

    

    (c)  MSCO
      in its sole discretion may extend the Calculation Period to account for any
      reduction in the number of Shares that could be purchased on each day during
      the
      Calculation Period in compliance with Rule 10b-18 following the Announcement
      Date.

    

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

    

    10.  Seller
      Adjustments.  In the event that Seller reasonably determines that it
      is appropriate with regard to any legal, regulatory or self-regulatory
      requirements or related policies and procedures (whether or not such
      requirements, policies or procedures are imposed by law or have been voluntarily
      adopted by Seller, and including, without limitation, Rule 10b-18, Rule 10b-5,
      Regulation 13D-G and Regulation 14E, “Requirements”), for
      Seller to refrain from purchasing Shares or to purchase fewer than the number
      of
      Shares Seller would otherwise purchase on any Trading Day during the duration
      of
      this Transaction, then Seller may, in its discretion, elect that the Initial
      Hedge Period or the Calculation Period, as the case may be, be suspended and,
      if
      appropriate, extended with regard to any Requirements. Seller shall notify
      the
      Issuer upon the exercise of Seller’s rights pursuant to this Section 10 and
      shall subsequently notify the Issuer on the day Seller believes that the
      circumstances giving rise to such exercise have changed.  If the
      Initial Hedge Period or the Calculation Period is suspended pursuant to this
      Section 10, at the end of such suspension Seller shall determine the number
      of
      Trading Days remaining in the Calculation Period, as appropriate, and the terms
      of this Transaction shall be adjusted as set forth above under “Physical
      Settlement.”

    

    11.  Covenants.

    

    (a)  The
      Buyer covenants and agrees:

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    
      	 	
               

            	
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    (i)(a)
      that it will not treat this
      Transaction, any portion hereof, or any obligation hereunder as giving rise
      to
      any interest income or other inclusions of ordinary income; (b) it will not
      treat the delivery of any portion of the Shares or cash to be delivered pursuant
      to this Transaction as the payment of interest or ordinary income; (c) it will
      treat this Transaction in its entirety as a forward contract for the delivery
      of
      such Shares or cash; and (d) it will not take any action (including filing
      any
      tax return or form or taking any position in any tax proceeding) that is
      inconsistent with the obligations contained in (a) through
      (c).  Notwithstanding the preceding sentence, Buyer may take any
      action or position required by law, provided that Buyer delivers to Seller
      an
      unqualified opinion of counsel, nationally recognized as expert in Federal
      tax
      matters and acceptable to Buyer, to the effect that such action or position
      is
      required by a statutory change or a Treasury regulation or applicable court
      decision published after the Trade Date;

    

    (ii)  that
      during the term of
      this Agreement, neither it nor any of its affiliates shall directly or
      indirectly (which shall be deemed to include the writing or purchase of any
      cash-settled derivative instrument) purchase Shares (or any security convertible
      into or exchangeable for Shares) without the prior written approval of Seller
      or
      take any other action that would cause the purchase by Seller of any Shares
      in
      connection with this Agreement not to comply with Rule 10b-18 under the Exchange
      Act (assuming for the purposes of this paragraph that such Rule were otherwise
      applicable to such purchases);

    

    (iii)
      to comply with all laws, rules
      and regulations applicable to it (including, without limitation, the Securities
      Act of 1933, as amended (the “Securities Act”) and the Exchange Act) in
      connection with the transactions contemplated by this Confirmation;

    

    (iv)  that
      it is not relying,
      and has not relied, upon Seller or any of its representatives or advisors with
      respect to the legal, accounting, tax or other implications of this Agreement
      and that it has conducted its own analyses of the legal, accounting, tax and
      other implications of this Agreement, and that Seller and its affiliates may
      from time to time effect transactions for their own account or the account
      of
      customers and hold positions in securities or options on securities of the
      Buyer
      and that Seller and its affiliates may continue to conduct such transactions
      during the term of this Agreement; and

    

    (v)  that
      neither it nor any
      affiliates shall take any action that would cause Regulation M under the
      Exchange Act (“Regulation M”), to be applicable to any purchases of Shares, or
      any security for which Shares is a reference security (as defined in Regulation
      M), by Buyer or any affiliated purchasers (as defined in Regulation M) during
      the Calculation Period unless it shall have provided notice thereof to Seller
      pursuant to Section 11(c) below.

    

    (b)  Seller
      covenants and agrees that with respect to the purchase of any Shares in
      connection with this Agreement (except for any purchases made by Seller during
      the Calculation Period in connection with dynamic hedge adjustments of the
      Seller’s exposure to the Transaction as a result of any equity optionality
      contained in such Transaction), Seller shall make any such purchase in a manner
      that Seller reasonably believes, based on the representations and warranties
      set
      forth herein and any other information provided to Seller by Buyer, would meet
      the requirements of the safe harbor under the provisions of Rule 10b-18 as
      if
      such purchases were made by Buyer; provided, however, that it is
      understood and agreed that Seller will not be obligated to comply with this
      paragraph upon the occurrence of a Valuation Date other than the Scheduled
      Valuation Date or if an Event of Default, Additional Disruption Event,
      Extraordinary Event or Additional Termination Event occurs provided,
further, that Seller shall take into account Shares purchased in
      connection with the Other ASR Transaction in making its determinations as to
      whether such purchases would meet such requirements if they had been made by
      Buyer pursuant to this Section 11(b).

    

    (c)  If
      Buyer concludes that it will be engaged in a distribution of the Shares for
      purposes of Regulation M, Buyer agrees that it will, on one Trading Day's
      written notice, direct MSCO not to purchase Shares in connection with hedging
      the Transaction during the "restricted period" (as defined in Regulation
      M).  If on any Trading Day Buyer delivers written notice (and confirms
      by telephone) by 9:00 a.m. New York City Time (the "Notification Time"), then
      such notice shall be effective to suspend the Calculation Period as of such
      Notification Time.  In the event that Buyer delivers notice and/or
      confirms by telephone after the Notification

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    
      	 	
               

            	
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    Time,
      then the Calculation Period shall be suspended effective as of 9:00 a.m. New
      York City time on the following Trading Day or as otherwise required by law
      or
      agreed between Buyer and Seller.  If the Calculation Period is
      suspended pursuant to this Section 11(c), at the end of such suspension Seller
      shall determine the number of Trading Days remaining in the Calculation Period,
      as appropriate, and the terms of this Transaction shall be adjusted as set
      forth
      above under “Physical Settlement”.

    

    12.  Representations,
      Warranties and Acknowledgments.

    

    (a)
      The Buyer hereby represents and warrants to Seller that:

    

    (i)  as
      of the date hereof,
      the Buyer (A) is not in possession of any material, non-public information
      with
      respect to the Buyer or any of its securities, and is entering into this
      Agreement in good faith and not as part of a plan or scheme to evade the
      prohibitions of Rule 10b5-1 of the Exchange Act and (B) agrees not to alter
      or
      deviate from the terms of this Agreement or enter into or alter a corresponding
      or hedging transaction or position with respect to the Shares (including,
      without limitation, with respect to any securities convertible or exchangeable
      into the Shares) (other than, for the avoidance of doubt, the Other ASR
      Transaction) during the term of this Agreement;

    

    (ii)  the
      transactions
      contemplated by this Confirmation have been authorized under Buyer’s publicly
      announced program to repurchase Shares;

    

    (iii)  the
      Buyer is not
      entering into this Agreement to facilitate a distribution of the Shares (or
      any
      security convertible into or exchangeable for Shares) or in connection with
      a
      future issuance of securities except pursuant to the Buyer’s employee benefit
      plans and dividend reinvestment plan or other publicly disclosed
      transaction;

    

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

    

    (v)  the
      Buyer is as of the
      date hereof, and after giving effect to the transactions contemplated hereby
      will be, Solvent.  As used in this paragraph, the term “Solvent”
means, with respect to a particular date, that on such date (A) the present
      fair
      market value (or present fair saleable value) of the assets of the Buyer is
      not
      less than the total amount required to pay the liabilities of the Buyer on
      its
      total existing debts and liabilities (including contingent liabilities) as
      they
      become absolute and matured, (B) the Buyer is able to realize upon its
      assets and pay its debts and other liabilities, contingent obligations and
      commitments as they mature and become due in the normal course of business,
      (C) assuming consummation of the transactions as contemplated by this
      Agreement, the Buyer is not incurring debts or liabilities beyond its ability
      to
      pay as such debts and liabilities mature, (D) the Buyer is not engaged in
      any business or transaction, and does not propose to engage in any business
      or
      transaction, for which its property would constitute unreasonably small capital
      after giving due consideration to the prevailing practice in the industry in
      which the Buyer is engaged and (E) the Buyer is not a defendant in any civil
      action that could reasonably be expected to result in a judgment that the Buyer
      is or would become unable to satisfy.

    

    (b)  Seller
      and the Buyer each hereby acknowledges that any transactions by Seller in the
      Shares will be undertaken by Seller, as the case may be, as principal for its
      own account.  All of the actions to be taken by Seller in connection
      with this Agreement, shall be taken by Seller independently and without any
      advance or subsequent consultation with the Buyer.

    

    (c)  It
      is the intent of the parties that this Confirmation and this Transaction comply
      with the requirements of Rule 10b5-1(c)(1)(i) (A) and (B) of the Exchange
      Act.  The parties agree that the Agreement shall be interpreted to
      comply with the requirements of Rule 10b5-1(c).

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    
      	 	
               

            	
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    13.  Acknowledgements
      of Buyer Regarding Hedging and Market Activity.  Buyer agrees,
      understands and acknowledges that:

     

    
      	
               

            	
              (a)

            	
              during
                the period from (and including) the first Trading Day that occurs
                after
                the Trade Date to (and including) the Settlement Date, Seller and
                its
                affiliates may buy or sell Shares or other securities or buy or sell
                options or futures contracts or enter into swaps or other derivative
                securities in order to adjust its hedge position with respect to
                the
                transactions contemplated by this
                Transaction;  

            

    

     

    
      	
               

            	
              (b)

            	
              Seller
                and its affiliates also may be active in the market for the Shares
                other
                than in connection with hedging activities in relation to the transactions
                contemplated by this
                Transaction; 

            

    

     

    
      	
               

            	
              (c)

            	
              Seller
                shall make its own determination as to whether, when and in what
                manner
                any hedging or market activities in the Issuer’s securities shall be
                conducted and shall do so in a manner that it deems appropriate to
                hedge
                its price and market risk with respect to 10b-18 VWAP;
                and

            

    

     

    
      	
               

            	
              (d)

            	
              any
                market activities of Seller and its affiliates with respect to the
                Shares
                may affect the market price and volatility of the Shares, as well
                as the
                10b-18 VWAP, each in a manner that may be adverse to
                Buyer.

            

    

    

    14.  Indemnification.

    

    (a)  In
      the event that Seller becomes involved in any capacity in any action, proceeding
      or investigation brought by or against any person in connection with any matter
      referred to in this Agreement, the Buyer will reimburse Seller for its
      reasonable legal and other expenses (including the cost of any investigation
      and
      preparation) incurred in connection therewith.  The Buyer also will
      indemnify and hold Seller harmless against any losses, claims, damages or
      liabilities to which it may become subject in connection with any matter
      referred to in this Agreement, except to the extent that any such loss, claim,
      damage or liability results from the gross negligence or bad faith of Seller
      in
      effecting the transactions which are the subject of this Agreement;
provided, however, that if it is determined by a court of competent
      jurisdiction in a final judgment that Seller is not entitled to be indemnified
      hereunder in connection with such matter, then Seller shall reimburse the Buyer
      for any expenses paid pursuant to the first sentence of this Section
      14.  If for any reason the foregoing indemnification is unavailable to
      Seller or insufficient to hold it harmless, then the Buyer shall contribute
      to
      the amount paid or payable by Seller as a result of such loss, claim, damage
      or
      liability in such proportion as is appropriate to reflect the relative fault
      of
      the Buyer on one hand and Seller on the other hand with respect to such loss,
      claim, damage, or liability and any other relevant equitable
      considerations.  The reimbursement, indemnity and contribution
      obligations of the Buyer under this Section 14 shall be in addition to any
      liability which the Buyer may otherwise have, shall extend upon the same terms
      and conditions to any affiliate of Seller and the partners, directors, officers,
      agents, employees and controlling persons (if any), as the case may be, of
      Seller and any such affiliate and shall be binding upon and inure to the benefit
      of any successors, assigns, heirs and personal representatives of the Buyer,
      Seller, any such affiliate and any such person.  The Buyer also agrees
      that neither Seller nor any of such affiliates, partners, directors, officers,
      agents, employees or controlling persons shall have any liability to the Buyer
      for or in connection with any matter referred to in this Agreement except to
      the
      extent that any losses, claims, damages, liabilities or expenses incurred by
      the
      Buyer result from the gross negligence or bad faith of Seller in effecting
      the
      transactions that are the subject of this Agreement.  The foregoing
      provisions shall survive any termination or completion of this Agreement. For
      the purposes of this Section 14, the term “Seller” shall include MSCO and its
      affiliates.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
               

            	
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    (b)  Subject
      to Section 14(c), the reimbursement, indemnity and contribution obligations
      of
      the Buyer under Section 14(a) (each, an “Obligation”) shall be
      paid promptly in cash.

    

    (c)  In
      connection with any Obligation under Section 14(b) above, the Buyer, in lieu
      of
      making any cash payment as contemplated by that section, may elect to satisfy
      such Obligation by delivering Shares to Seller (such Shares, the
“Indemnity Shares”) by notifying Seller of such election within
      one Trading Day of being informed by Seller that such Obligation is due and
      payable.  The provisions of “Certain Payments and Deliveries by
      Issuer” in Section 7 above shall apply to such a share settlement of an
      Obligation as if the relevant Obligation was the “Early Settlement Payment” and
      the Indemnity Shares were “Early Settlement Shares”.  In order to
      elect to deliver Indemnity Shares, Issuer must (i) specify whether such
      Indemnity Shares are to be sold by means of a registered offering or by means
      of
      a private placement and (ii) the conditions described in Section 8 above must
      be
      satisfied as if the Indemnity Shares were “Early Settlement Shares” and any
      additional Shares Issuer delivers to reduce the settlement balance to zero
      in
      connection with this Section 14 were “Make-Whole Shares”.

    

    15. The
      parties hereto agree and acknowledge that Seller is a
“financial participant” within the meaning of Section 101(22) of Title 11 of the
      United States Code (the “Bankruptcy Code”).  The
      parties hereto further agree and acknowledge that this Transaction is either
      (i)
      a “securities contract” as such term is defined in Section 741(7) of the
      Bankruptcy Code, in which case each payment and delivery made pursuant to this
      Transaction is a “settlement payment”, as such term is defined in Section 741(8)
      of the Bankruptcy Code, and that Seller is entitled to the protections afforded
      by, among other sections, Sections 362(b)(6), 546(e) and 555 of the Bankruptcy
      Code, or (ii) a “swap agreement”, as such term is defined in Section 101(53B) of
      the Bankruptcy Code, in which case each party is a “swap participant”, as such
      term is defined in Section 101(53C) of the Bankruptcy Code, and that Seller
      is
      entitled to the protections afforded by, among other sections, Sections
      362(b)(17), 546(g) and 560 of the Bankruptcy Code.

    

    16.  Seller
      and Issuer hereby agree and acknowledge that Seller has authorized the Issuer
      to
      disclose this Transaction to any and all persons, and there are no express
      or
      implied agreements, arrangements or understandings to the contrary, and
      authorizes the Issuer to use any information that the Issuer receives or has
      received with respect to this Transaction in any manner.

    

    17.  Treatment
      in Bankruptcy; No Setoff; No Collateral.

     

    (a)  In
      the event the Buyer becomes the subject of proceedings (“Bankruptcy
      Proceedings”) under the U.S. Bankruptcy Code or any other applicable
      bankruptcy or insolvency statute from time to time in effect, any rights or
      claims of Seller hereunder in respect of this transaction shall rank for all
      purposes no higher than, but on a parity with, the rights or claims of holders
      of Shares, and Seller hereby agrees that its rights and claims hereunder shall
      be subordinated to those of all parties with claims or rights against the Buyer
      (other than common stockholders) to the extent necessary to assure such ranking.
      Without limiting the generality of the foregoing, after the commencement of
      Bankruptcy Proceedings, the claims of Seller hereunder shall for all purposes
      have rights equivalent to the rights of a holder of a percentage of the Shares
      equal to the aggregate amount of such claims (the “Claim
      Amount”) taken as a percentage of the sum of (i) the Claim Amount and
      (ii) the aggregate fair market value of all outstanding Shares on the record
      date for distributions made to the holders of such Shares in the related
      Bankruptcy Proceedings.  Notwithstanding any right it might otherwise
      have to assert a higher priority claim in any such Bankruptcy Proceedings,
      Seller shall be entitled to receive a distribution solely to the extent and
      only
      in the form that a holder of such percentage of the Shares would be entitled
      to
      receive in such Bankruptcy Proceedings, and, from and after the commencement
      of
      such Bankruptcy Proceedings, Seller expressly waives (i) any other rights or
      distributions to which it might otherwise be entitled in such Bankruptcy
      Proceedings in respect of its rights and claims hereunder and (ii) any rights
      of
      setoff it might otherwise be entitled to assert in respect of such rights and
      claims.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    
      	 	
               

            	
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    (b)  Notwithstanding
      any provision of this Agreement or any other agreement between the parties
      to
      the contrary, neither the obligations of the Buyer nor the obligations of Seller
      hereunder are secured by any collateral, security interest, pledge or
      lien.

    

    18.  Share
      Cap.  Notwithstanding any other provision of this Agreement to the
      contrary, in no event shall the Buyer be required to deliver to Seller a number
      of Shares that exceeds the Share Cap (as specified in Schedule I), subject
      to
      reduction by the number of Shares delivered hereunder by the Buyer on any prior
      date.

    

    19.  Account
      Details:

    

    
      	 	
              Account
                for Payments to MSCO:

            	
              To
                be provided by Seller

            

    

    

    
      	 	
              Account
                for Payments to Issuer:

            	
              To
                be provided by Issuer

            

    

    

    
      	
              20.

            	
              Governing
                law: The laws of the State of New
                York.

            

    

    

    EACH
      PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT
      TO ANY LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS CONFIRMATION OR
      ANY
      TRANSACTION CONTEMPLATED HEREBY.

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    

    
      	 	
               

            	
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    Please
      confirm that the foregoing correctly sets forth the terms of our agreement
      by
      executing this Confirmation and returning it to us by facsimile to
      the number provided on the attached facsimile cover page.

    

    Confirmed
      as of the date first written above:

    

    
      	
              INTERNATIONAL
                FLAVORS & FRAGRANCES INC.

            	 	
              MORGAN
                STANLEY & CO. INCORPORATED

            
	 	 	 	 	 	 	 
	
              By:

            	
              /s/
                Douglas Wetmore

            	 	 	
              By:

            	
              /s/
                Kevin Woodruff

            	 
	 	
              Name:

            	
              Douglas
                Wetmore

            	 	 	
              Name:

            	
              Kevin
                Woodruff

            
	 	
              Title:

            	
              SVP
                & CFO

            	 	 	
              Title:

            	
              Managing
                Director

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