Document:

Exhibit
10.3

 

	
   

  	
   

  	
  Opening
  Transaction

  
	
  To:

  	
   

  	
  Regal Entertainment Group

  
	
   

  	
   

  	
   

  
	
  A/C:

  	
   

  	
  YHGHR0

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Credit
  Suisse Capital LLC

  Eleven Madison Avenue

  New York, NY 10010

  
	
   

  	
   

  	
   

  
	
  Re:

  	
   

  	
  Issuer Warrant
  Transaction

  
	
   

  	
   

  	
   

  
	
  Ref. No:

  	
   

  	
  53380038

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  March 5, 2008

  

 

Dear Sir(s):

 

The purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of
the above-referenced transaction entered into on the Trade Date specified below
(the “Transaction”)
between Credit Suisse Capital LLC (“Dealer”), represented by Credit Suisse
Securities (USA) LLC (“Agent”) as its agent, and Regal
Entertainment Group (“Issuer”).  This
communication constitutes a “Confirmation” as referred to in the ISDA
Master Agreement specified below.

 

1.             This
Confirmation is subject to, and incorporates, the definitions and provisions of
the 2000 ISDA Definitions (including the Annex thereto) (the “2000
Definitions”) and the definitions and provisions of
the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”,
and together with the 2000 Definitions, the “Definitions”),
in each case as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”). 
In the event of any inconsistency between the 2000 Definitions and the
Equity Definitions, the Equity Definitions will govern.  For purposes of the Equity Definitions, each
reference herein to a Warrant shall be deemed to be a reference to a Call
Option or an Option, as context requires.

 

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.

 

This
Confirmation evidences a complete and binding agreement between Dealer 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 1992 ISDA Master Agreement as if Dealer and Issuer had executed
an agreement in such form on the date hereof (but without any Schedule except
for (i) the election of Loss and Second Method and US Dollars (“USD”) as the Termination Currency and (ii) the
replacement of the word “third” in the last line of Section 5(a)(i) with
the word “first”).

 

All
provisions contained in, or incorporated by reference to, the Agreement will
govern this Confirmation except as expressly modified herein.  In the event of any inconsistency between
this Confirmation and either the Definitions or the Agreement, this
Confirmation shall govern.

 

 

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:

  	
   

  	
  March 5, 2008

  
	
   

  	
   

  	
   

  
	
  Effective Date:

  	
   

  	
  March 10, 2008, or
  such other date as agreed between the parties, subject to Section 8(l) below

  
	
   

  	
   

  	
   

  
	
  Components:

  	
   

  	
  The Transaction will be
  divided into individual Components, each with the terms set forth in this
  Confirmation, and, in particular, with the Number of Warrants and Expiration
  Date set forth in this Confirmation. The payments and deliveries to be made
  upon settlement of the Transaction will be determined separately for each
  Component as if each Component were a separate Transaction under the
  Agreement.

  
	
   

  	
   

  	
   

  
	
  Warrant Style:

  	
   

  	
  European

  
	
   

  	
   

  	
   

  
	
  Warrant Type:

  	
   

  	
  Call

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
   

  	
  Issuer

  
	
   

  	
   

  	
   

  
	
  Buyer:

  	
   

  	
  Dealer

  
	
   

  	
   

  	
   

  
	
  Shares:

  	
   

  	
  The Common Stock of
  Issuer, par value USD0.001 per share (Ticker Symbol: “RGC”).

  
	
   

  	
   

  	
   

  
	
  Number of Warrants:

  	
   

  	
  For each Component, as
  provided in Annex A to this Confirmation.

  
	
   

  	
   

  	
   

  
	
  Warrant Entitlement:

  	
   

  	
  One Share per Warrant

  
	
   

  	
   

  	
   

  
	
  Strike Price:

  	
   

  	
  USD25.3760

  
	
   

  	
   

  	
   

  
	
  Premium:

  	
   

  	
  USD5,700,000 (Premium per Warrant USD0.691009)

  
	
   

  	
   

  	
   

  
	
  Premium Payment Date:

  	
   

  	
  The Effective Date

  
	
   

  	
   

  	
   

  
	
  Exchange:

  	
   

  	
  New York Stock Exchange

  
	
   

  	
   

  	
   

  
	
  Related Exchange:

  	
   

  	
  All Exchanges

  
	
   

  	
   

  	
   

  
	
  Procedures for Exercise:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  In respect of any Component:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Expiration Time:

  	
   

  	
  Valuation Time

  
	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
  As provided in Annex
  A to this Confirmation (or, if such date is not a Scheduled Trading Day,
  the next following Scheduled Trading Day that is not already an Expiration
  Date for another Component); provided
  that if that date is a Disrupted Day, the Expiration Date for such Component
  shall be the first succeeding Scheduled Trading Day that is not a Disrupted
  Day and is not or is not deemed to be an Expiration Date in respect of any
  other Component of the Transaction hereunder; and provided further that if the Expiration Date has not
  occurred pursuant to

  

 

2

 

	
   

  	
   

  	
  the preceding proviso
  as of the Final Disruption Date, the Calculation Agent may
  elect in its discretion that the Final Disruption Date shall be the Expiration
  Date (irrespective of whether such date is an Expiration Date in respect of
  any other Component for the Transaction). “Final Disruption Date”
  means August 4, 2011. 
  Notwithstanding the foregoing and anything to the contrary in the
  Equity Definitions, if a Market Disruption Event occurs on any Expiration
  Date, the Calculation Agent may determine that such Expiration Date is a
  Disrupted Day only in part, in which case the Calculation Agent shall make
  adjustments to the Number of Warrants for the relevant Component for which
  such day shall be the Expiration Date and shall designate the Scheduled
  Trading Day determined in the manner described in the immediately preceding
  sentence as the Expiration Date for the remaining Warrants for such
  Component.  Section 6.6 of the
  Equity Definitions shall not apply to any Valuation Date occurring on an
  Expiration Date.

  
	
   

  	
   

  	
   

  
	
  Market Disruption Event:

  	
   

  	
  Section 6.3(a) of
  the Equity Definitions is hereby amended by deleting the words “during the
  one hour period that ends at the relevant Valuation Time, Latest Exercise
  Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may
  be,” in clause (ii) thereof.

  
	
   

  	
   

  	
   

  
	
  Automatic Exercise:

  	
   

  	
  Applicable; and means
  that the Number of Warrants for the corresponding Expiration Date will be
  deemed to be automatically exercised at the Expiration Time on such
  Expiration Date unless Buyer notifies Seller (by telephone or in writing)
  prior to the Expiration Time on such Expiration Date that it does not wish
  Automatic Exercise to occur, in which case Automatic Exercise will not apply
  to such Expiration Date.

  
	
   

  	
   

  	
   

  
	
  Issuer’s Telephone Number

  and Telex and/or Facsimile Number

  and Contact Details for purpose of

  	
   

  	
   

  
	
  Giving Notice:

  	
   

  	
  Attn:  Chief Financial Officer

  
	
   

  	
   

  	
  Telephone:  (865) 922-1123

  
	
   

  	
   

  	
  Facsimile:  (865) 922-6085

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:  Senior Vice President, Finance

  
	
   

  	
   

  	
  Facsimile:  (865) 922-6085

  
	
   

  	
   

  	
   

  
	
  Settlement Terms:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  In respect of any Component:

  	
   

  	
   

  
	
  Settlement Method Election:

  	
   

  	
  Applicable; provided that (i) references to “Physical Settlement”
  in Section 7.1 of the Equity Definitions shall be replaced by references
  to “Net Share Settlement”; (ii) Issuer may elect Cash Settlement 

  

 

3

 

	
   

  	
   

  	
  only if Issuer
  represents and warrants to Dealer in writing on the date of such election
  that the representations and warranties set forth in clauses (A) and (B) of
  Section 7(a)(i) of this Confirmation are true and correct as of
  such date and Issuer is electing Cash Settlement in good faith and not as
  part of a plan or scheme to evade compliance with the federal securities
  laws; and (iii) any election of settlement method shall apply to all Components.

  
	
   

  	
   

  	
   

  
	
  Electing Party:

  	
   

  	
  Issuer

  
	
   

  	
   

  	
   

  
	
  Settlement Method Election Date:

  	
   

  	
  The third Scheduled
  Trading Day immediately preceding the Expiration Date for the Component with
  the earliest Expiration Date.

  
	
   

  	
   

  	
   

  
	
  Default Settlement Method:

  	
   

  	
  Net Share Settlement

  
	
   

  	
   

  	
   

  
	
  Settlement Currency:

  	
   

  	
  USD

  
	
   

  	
   

  	
   

  
	
  Net Share Settlement:

  	
   

  	
  On each Settlement
  Date, Issuer shall deliver to Dealer a number of Shares equal to the Number
  of Shares to be Delivered for such Settlement Date to the account specified
  by Dealer and cash in lieu of any fractional Shares valued at the Relevant
  Price on the Valuation Date corresponding to such Settlement Date.  If, in the reasonable judgment of Dealer,
  for any reason, the Shares deliverable upon Net Share Settlement would not be
  immediately freely transferable by Dealer under Rule 144 under the
  Securities Act of 1933, as amended (the “Securities Act”),
  then Dealer may elect to either (x) accept delivery of such Shares
  notwithstanding any restriction on transfer or (y) have the provisions
  set forth in Section 8(b) below apply.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Number of Shares to
  be Delivered shall be delivered by Issuer to Dealer no later than 12:00 noon
  (local time in New York City) on the relevant Settlement Date.

  
	
   

  	
   

  	
   

  
	
  Number of Shares to be Delivered:

  	
   

  	
  In respect of any
  Exercise Date, subject to the last sentence of Section 9.5 of the Equity
  Definitions, the product of (i) the Number of Warrants exercised or
  deemed exercised on such Exercise Date, (ii) the Warrant Entitlement and
  (iii) (A) the excess of the VWAP Price on the Valuation Date
  occurring on such Exercise Date over the Strike Price (or, if no such excess,
  zero) divided by (B) such VWAP Price.

  
	
   

  	
   

  	
   

  
	
  Settlement Price:

  	
   

  	
  VWAP Price

  
	
   

  	
   

  	
   

  
	
  VWAP Price:

  	
   

  	
  For any Valuation Date,
  the New York Volume Weighted Average Price per share of Shares for the
  regular trading session (including any extensions thereof) of the Exchange on
  such Valuation Date (without regard to pre-open or after hours trading
  outside of such regular trading session), as published by Bloomberg at 4:15 p.m.
  New York City time (or 15 minutes following the end of any extension of the 

  

 

4

 

	
   

  	
   

  	
  regular trading
  session) on such Valuation Date, on Bloomberg page “RGC <Equity>
  AQR” (or any successor thereto) (or if such published volume weighted average
  price is unavailable or is manifestly incorrect, the market value of one
  Share on such Valuation Date, as determined by the Calculation Agent using a
  volume weighted method).

  
	
   

  	
   

  	
   

  
	
  Other Applicable Provisions:

  	
   

  	
  The provisions of
  Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (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, including, without limitation, with
  respect to any sale, re-sale, assignment or transfer of such Shares, under
  applicable securities laws as a result of the fact that Seller is the Issuer
  of the Shares) and 9.12 of the Equity Definitions will be applicable, as if
  “Physical Settlement” applied to the Transaction.

  
	
   

  	
   

  	
   

  
	
  Adjustments:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  In respect of any Component:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Method of Adjustment:

  	
   

  	
  Calculation Agent
  Adjustment; provided that in respect of an
  Extraordinary Dividend, “Calculation Agent Adjustment” shall be as described
  in the provision below.

  
	
   

  	
   

  	
   

  
	
  Extraordinary Dividend:

  	
   

  	
  Any cash dividend or
  distribution on the Shares with an ex dividend date occurring on or after the
  Trade Date and on or prior to the Expiration Date that exceeds the Ordinary
  Dividend Amount for such dividend or distribution.

  
	
   

  	
   

  	
   

  
	
  Ordinary Dividend:

  	
   

  	
  For the first dividend
  or distribution on the Shares for which the ex dividend date occurs during
  any regular quarterly dividend period of Issuer, USD0.30; for any other
  dividend or distribution on the Shares for which the ex dividend date occurs
  during the same regular quarterly dividend period, USD0.00.

  
	
   

  	
   

  	
   

  
	
  Calculation Agent Adjustment

  for Extraordinary
  Dividend:

  	
   

  	
  If an ex-dividend date
  for an Extraordinary Dividend occurs, then the Calculation Agent will make
  adjustments to the Strike Price, the Number of Warrants, the Warrant
  Entitlement and/or any other variable relevant to the exercise, settlement,
  payment or other terms of the Transaction as it determines appropriate
  to account for the economic effect on the Transaction of such Extraordinary Dividend.

  
	
   

  	
   

  	
   

  
	
  Extraordinary Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Consequences of Merger Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)  Share-for-Share:

  	
   

  	
  Modified Calculation
  Agent Adjustment

  
	
   

  	
   

  	
   

  
	
  (b)  Share-for-Other:

  	
   

  	
  Cancellation and
  Payment (Calculation Agent Determination)

  

 

5

 

	
  (c)  Share-for-Combined:

  	
   

  	
  Cancellation and
  Payment (Calculation Agent Determination), provided
  that the Calculation Agent may elect Component Adjustment

  
	
   

  	
   

  	
   

  
	
  Tender Offer:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Consequences of Tender Offers:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)  Share-for-Share:

  	
   

  	
  Modified Calculation
  Agent Adjustment

  
	
   

  	
   

  	
   

  
	
  (b)  Share-for-Other:

  	
   

  	
  Modified Calculation
  Agent Adjustment

  
	
   

  	
   

  	
   

  
	
  (c)  Share-for-Combined:

  	
   

  	
  Modified Calculation
  Agent Adjustment

  
	
   

  	
   

  	
   

  
	
  Modified Calculation

  	
   

  	
   

  
	
  Agent Adjustment:

  	
   

  	
  With respect to any
  Merger Event to which Modified Calculation Agent Adjustment applies, as a
  condition precedent to the adjustments contemplated in Section 12.2(e)(i) of
  the Equity Definitions, the Dealer, the Issuer of the Affected Shares and the
  entity which will be the Issuer of the New Shares shall, prior to the Merger
  Date, have entered into such documentation containing representations,
  warranties and agreements relating to securities law and other issues as
  Dealer has determined, in its reasonable discretion, to be reasonably
  necessary or appropriate to allow Dealer to continue as a party to the
  Transaction, as adjusted under Section 12.2(e)(i) of the Equity
  Definitions, and to preserve its hedging or hedge unwind activities in
  connection with the Transaction in a manner compliant with applicable legal,
  regulatory or self-regulatory requirements, or with related policies and
  procedures applicable to Dealer, and if such conditions are not met or if the
  Calculation Agent determines that no adjustment that it could make under Section 12.2(e)(i) of
  the Equity Definitions will produce a commercially reasonable result, then
  the consequences set forth in Section 12.2(e)(ii) of the Equity Definitions
  shall apply.

  
	
   

  	
   

  	
   

  
	
  Reference Markets:

  	
   

  	
  For the avoidance of
  doubt, and without limiting the generality of the foregoing provisions, any
  adjustment effected by the Calculation Agent pursuant to Section 12.2(e) and/or
  Section 12.3(d) of the Equity Definitions may be determined by
  reference to the adjustment(s) made in respect of Merger Events or
  Tender Offers, as the case may be, in the convertible bond market.

  
	
   

  	
   

  	
   

  
	
  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 shall also constitute a Delisting if the Exchange is
  located in the United States and the Shares are not immediately re-listed,
  re-traded or re-quoted on any of the New York Stock Exchange, the American
  Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market
  (or 

  

 

6

 

	
   

  	
   

  	
  their respective
  successors); if the Shares are immediately re-listed, re-traded or re-quoted
  on any such exchange or quotation system, such exchange or quotation system
  shall thereafter be deemed to be the Exchange.

  
	
   

  	
   

  	
   

  
	
  Additional Disruption Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)  Change in Law:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (b)  Failure to Deliver:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (c)  Insolvency Filing:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (d)  Hedging Disruption:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (e)  Increased Cost of Hedging:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (f)  Loss of Stock Borrow:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
    Maximum Stock Loan Rate:

  	
   

  	
  2.00% per annum

  
	
   

  	
   

  	
   

  
	
  (g)  Increased Cost of Stock Borrow:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
     Initial Stock Loan Rate:

  	
   

  	
  0.25% per annum

  
	
   

  	
   

  	
   

  
	
  Hedging Party:

  	
   

  	
  Buyer

  
	
   

  	
   

  	
   

  
	
  Determining Party:

  	
   

  	
  Buyer

  
	
   

  	
   

  	
   

  
	
  Non-Reliance:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Agreements and Acknowledgments

  	
   

  	
   

  
	
  Regarding Hedging Activities:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Additional Acknowledgments:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  3.  Calculation Agent:

  	
   

  	
  Dealer.

  
	
   

  	
   

  	
   

  
	
  4.  Account Details:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dealer Payment Instructions:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Citibank, National Association

  	
   

  	
   

  
	
  Bank Routing: 021-000-089

  	
   

  	
   

  
	
  Swift: CITIUS33

  	
   

  	
   

  
	
  Account Name: Credit Suisse Capital
  LLC

  	
   

  	
   

  
	
  Account No.: 3045-9883

  	
   

  	
   

  
	
  BIC: CSFBUS3L

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Issuer Payment Instructions:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  To be provided by Issuer.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5.  Offices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The Office of Dealer for the Transaction is:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Credit Suisse Capital LLC

  	
   

  	
   

  
	
  Eleven Madison Avenue

  	
   

  	
   

  
	
  New York, NY 10010

  	
   

  	
   

  
							

 

7

 

	
   

  	
  The Office of Issuer
  for the Transaction is:

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  Regal Entertainment
  Group

  	
   

  	 

	
   

  	
   

  	
  7132 Regal Lane

  	
   

  	 

	
   

  	
   

  	
  Knoxville, TN 37918

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  6.

  	
  Notices: For purposes of this Confirmation:

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  (a)

  	
  Address for notices or
  communications to Issuer:

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  To:

  	
  Regal Entertainment
  Group

  	 

	
   

  	
   

  	
  7132 Regal Lane

  	 

	
   

  	
   

  	
  Knoxville, TN 37918

  	 

	
   

  	
  Attn:

  	
  Chief Financial Officer

  	 

	
   

  	
  Telephone:

  	
  (865) 922-1123

  	 

	
   

  	
  Facsimile:

  	
  (865) 922-6085

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  (b)

  	
  Address for notices or
  communications to Dealer:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	 

	
   

  	
  To:

  	
  Credit
  Suisse Capital LLC

  	 

	
   

  	
   

  	
  c/o
  Credit Suisse Securities (USA) LLC

  	 

	
   

  	
   

  	
  Eleven Madison Avenue

  	 

	
   

  	
   

  	
  New York, NY10010

  	 

	
   

  	
  Attn:

  	
  Equity Linked
  Origination Group

  	 

									

 

7.     Representations,
Warranties and Agreements:

 

(a)           In
addition to the representations and warranties in the Agreement and those
contained elsewhere herein, Issuer represents and warrants to and for the
benefit of, and agrees with, Dealer as follows:

 

(i)            On
the Trade Date, (A) none of Issuer and its officers and directors is aware
of any material nonpublic information regarding Issuer or the Shares and (B) all
reports and other documents filed by Issuer with the Securities and Exchange
Commission pursuant to the Exchange Act when considered as a whole (with the
more recent such reports and documents deemed to amend inconsistent statements
contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading.

 

(ii)           Without
limiting the generality of Section 13.1 of the Equity Definitions, Issuer
acknowledges that Dealer is not making any representations or warranties with
respect to the treatment of the Transaction under FASB Statements 128, 133 (as
amended), 149 or 150, EITF Issue No. 00-19, 01-6 or 03-6 (or any successor
issue statements) or under any accounting standards including FASB’s
Liabilities & Equity Project.

 

(iii)          Prior
to the Trade Date, Issuer shall deliver to Dealer a resolution of Issuer’s
board of directors authorizing the Transaction and such other certificate or
certificates as Dealer shall reasonably request.

 

(iv)          Issuer
is not entering into this Confirmation to create actual or apparent trading
activity in the Shares (or any security convertible into or exchangeable for
Shares) or to raise or depress or otherwise manipulate the price of the Shares
(or any security convertible into or exchangeable for Shares) or otherwise in
violation of the Exchange Act.

 

(v)           Issuer
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.

 

8

 

(vi)          On
the Trade Date and the Premium Payment Date (A) the assets of Issuer at
their fair valuation exceed the liabilities of Issuer, including contingent
liabilities, (B) the capital of Issuer is adequate to conduct the business
of Issuer and (C) Issuer 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.

 

(vii)         Issuer shall not take any action to
decrease the number of Available Shares below the Capped Number (each as
defined below).

 

(viii)        The representations and warranties of
Issuer set forth in Section 3 of the Agreement and Section 2 of the
Purchase Agreement dated as of the Trade Date between Issuer and Credit Suisse
Securities (USA) LLC,
as representative of the initial purchasers party thereto (the “Purchase Agreement”), are true and correct as of the Trade
Date and the Effective Date and are hereby deemed to be repeated to Dealer as
if set forth herein.

 

(ix)           Issuer understands 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.

 

(x)            (A) 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.

 

(xi)           During the Settlement Period, neither
Issuer nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18
of the Exchange Act (“Rule 10b-18”))
shall directly or indirectly (including, without limitation, by means of any
cash-settled or other derivative instrument) purchase, offer to purchase, place
any bid or limit order that would effect a purchase of, or commence any tender
offer relating to, any Shares (or an equivalent interest, including a unit of
beneficial interest in a trust or limited partnership or a depository share) or
any security convertible into or exchangeable or exercisable for Shares, except
through Dealer.

 

(b)           Each of Dealer and Issuer agrees and
represents that it is an “eligible contract participant” as defined in Section

1a(12) of the U.S. Commodity Exchange Act, as amended.

 

(c)           Each of Dealer and Issuer
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 Issuer 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 this Confirmation, 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.

 

(d)           Each of Dealer and Issuer agrees and
acknowledges that Dealer is a “financial institution,” “swap participant” and “financial
participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of
Title 11 of the United States Code (the “Bankruptcy
Code”).  The parties hereto
further agree and acknowledge (A) that this Confirmation is (i) a “securities
contract,” as such term 

 

9

 

is defined in Section 741(7) of 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, Sections 362(b)(6), 362(b)(17), 546(e),
546(g), 555 and 560 of the Bankruptcy Code.

 

(e)           Each
party acknowledges and agrees to be bound by the Conduct Rules of the
National Association of Securities Dealers, Inc. applicable to
transactions in options, and further agrees not to violate the position and
exercise limits set forth therein.

 

(f)            Issuer
shall deliver to Dealer an opinion of counsel, dated as of the Trade Date and
reasonably acceptable to Dealer in form and substance, with respect to the
matters set forth in Section 3(a) of the Agreement.

 

8.     Other
Provisions:

 

(a)           Alternative Calculations and Payment on Early Termination and on
Certain Extraordinary Events. 
If Issuer shall owe Buyer any amount pursuant to Sections 12.2, 12.3,
12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of a Tender
Offer, a Merger Event, Insolvency or Nationalization in each case, in which the
consideration or proceeds to be paid to holders of Shares consists solely of
cash) or pursuant to Section 6(d)(ii) of the Agreement (except in the
event of an Event of Default in which Issuer is the Defaulting Party or a
Termination Event in which Issuer is the Affected Party, that resulted from an
event or events within Issuer’s control) (a “Payment
Obligation”), Issuer 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 Buyer, confirmed in
writing within one Scheduled Trading Day, between the hours of 9:00 A.M.
and 4:00 P.M. New York City time on the Merger Date, Tender Offer Date or
Early Termination Date, as applicable (“Notice of Share
Termination”).  Upon such
Notice of Share Termination, the following provisions shall apply on the
Scheduled Trading Day immediately following the Merger Date, the Tender Offer
Date or Early Termination Date, as applicable:

 

	
  Share Termination
  Alternative:

  	
   

  	
  Applicable and means
  that Issuer shall deliver to Dealer the Share Termination Delivery Property
  on the date on which the Payment Obligation would otherwise be due pursuant
  to Section 12.7 or 12.9 of the Equity Definitions or
  Section 6(d)(ii) of the Agreement, as applicable (the “Share Termination Payment Date”), in satisfaction of the
  Payment Obligation.

  
	
   

  	
   

  	
   

  
	
  Share Termination
  Delivery

  	
   

  	
   

  
	
  Property:

  	
   

  	
  A number of Share
  Termination Delivery Units, as calculated by the Calculation Agent, equal to
  the Payment Obligation divided by the Share Termination Unit Price. The
  Calculation Agent shall adjust the Share Termination Delivery Property by
  replacing any fractional portion of the aggregate amount 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 of property
  contained in one Share Termination Delivery Unit on the date such Share
  Termination Delivery Units are to be delivered as Share Termination Delivery
  Property, as determined by the Calculation Agent in its discretion by commercially
  reasonable means and notified by the Calculation Agent to Issuer at the time
  of notification of the Payment Obligation.

  
	
   

  	
   

  	
   

  
	
  Share Termination
  Delivery Unit:

  	
   

  	
  In the case of a
  Termination Event, Event of Default or Delisting, one Share or, in the case
  of an Insolvency, Nationalization, Merger Event or Tender Offer, a Share or 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

  

 

10

 

	
   

  	
   

  	
  lieu of fractional
  amounts of any securities) in such Insolvency, Nationalization, Merger Event
  or Tender Offer. If such Insolvency, Nationalization, Merger Event or Tender
  Offer 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:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Other applicable
  provisions:

  	
   

  	
  If Share Termination
  Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.10, 9.11
  (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,
  including, without limitation, with respect to any sale, re-sale, assignment
  or transfer of such Shares, under applicable securities laws as a result of
  the fact that Seller is the Issuer of the Shares) and 9.12 of the Equity Definitions
  will be applicable as if “Physical Settlement” applied to the Transaction,
  except that all references to “Shares” shall be read as references to “Share
  Termination Delivery Units”. If, in the reasonable judgment of Dealer, for
  any reason, any securities comprising the Share Termination Delivery Units
  deliverable pursuant to this Section 8(a) would not be immediately
  freely transferable by Dealer under Rule 144 under the Securities Act,
  then Dealer may elect to either (x) accept delivery of such securities
  notwithstanding any restriction on transfer or (y) have the provisions
  set forth in Section 8(b) below apply.

  

 

(b)           Registration/Private
Placement Procedures.  (i) 
With respect to the Transaction, the following provisions shall apply to the
extent provided for above opposite the caption “Net Share Settlement” in Section 2
or in paragraph (a) of this Section 8.  If so applicable, then, at the election of
Issuer by notice to Buyer within one Exchange Business Day after the relevant
delivery obligation arises,  but in any
event at least one Exchange Business Day prior to the date on which such
delivery obligation is due, either (A) all Shares or Share Termination
Delivery Units, as the case may be, delivered by Issuer to Buyer shall be, at
the time of such delivery, covered by an effective registration statement of
Issuer for immediate resale by Buyer (such registration statement and the
corresponding prospectus (the “Prospectus”)
(including, without limitation, any sections describing the plan of distribution)
in form and content commercially reasonably satisfactory to Buyer) or (B) Issuer
shall deliver additional Shares or Share Termination Delivery Units, as the
case may be, so that the value of such Shares or Share Termination Delivery
Units, as determined by the Calculation Agent to reflect an appropriate
liquidity discount, equals the value of the number of Shares or Share
Termination Delivery Units that would otherwise be deliverable if such Shares
or Share Termination Delivery Units were freely tradeable (without prospectus
delivery) upon receipt by Buyer (such value, the “Freely Tradeable Value”); provided
that, if requested by Dealer, Issuer shall make the election described in this
clause (B) with respect to Shares delivered on all Settlement Dates no
later than one Exchange Business Day prior to the first Expiration Date, and
the applicable procedures described below shall apply to all Shares delivered
on the Settlement Dates on an aggregate basis. 
(For the avoidance of doubt, as used in this paragraph (b) only,
the term “Issuer” shall mean the issuer of the relevant securities, as the
context shall require.)

 

(ii)           If Issuer makes the election described in
clause (b)(i)(A) above:

 

(A)          Buyer (or an affiliate of Buyer
designated by Buyer) shall be afforded a reasonable opportunity to conduct a
due diligence investigation with respect to Issuer that is customary in scope
for underwritten offerings of equity securities and that yields results that
are commercially reasonably satisfactory to Buyer or such affiliate, as the
case may be, in its discretion; and

 

(B)           Buyer (or an affiliate of Buyer
designated by Buyer) and Issuer shall enter into an agreement (a “Registration Agreement”) on commercially reasonable terms in
connection with the public resale of such Shares or Share Termination Delivery
Units, as the case may be, by Buyer or such affiliate substantially similar to
underwriting agreements customary for 

 

11

 

underwritten offerings of equity securities, in form and substance
commercially reasonably satisfactory to Buyer or such affiliate and Issuer,
which Registration Agreement shall include, without limitation, provisions
substantially similar to those contained in such underwriting agreements relating
to the indemnification of, and contribution in connection with the liability
of, Buyer and its affiliates and Issuer, shall provide for the payment by
Issuer of all expenses in connection with such resale, including all
registration costs and all fees and expenses of counsel for Buyer, and shall
provide for the delivery of accountants’ “comfort letters” to Buyer or such
affiliate with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Prospectus.

 

(iii)          If Issuer makes the election described in
clause (b)(i)(B) above:

 

(A)          Buyer (or an affiliate of Buyer
designated by Buyer) and any potential institutional purchaser of any such
Shares or Share Termination Delivery Units, as the case may be, from Buyer or
such affiliate identified by Buyer shall be afforded a commercially reasonable
opportunity to conduct a due diligence investigation in compliance with
applicable law 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),
subject to execution by such recipients of customary confidentiality agreements
reasonably acceptable to Issuer;

 

(B)           Buyer (or an affiliate of Buyer
designated by Buyer) and Issuer shall enter into an agreement (a “Private Placement Agreement”) on commercially reasonable
terms in connection with the private placement of such Shares or Share
Termination Delivery Units, as the case may be, by Issuer to Buyer or such
affiliate and the private resale of such shares by Buyer or such affiliate,
substantially similar to private placement purchase agreements customary for
private placements of equity securities, in form and substance commercially
reasonably satisfactory to Buyer and 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, Buyer and its
affiliates and Issuer, shall provide for the payment by Issuer of all expenses
in connection with such resale, including all fees and expenses of counsel for
Buyer, shall contain representations, warranties and agreements of Issuer
reasonably necessary or advisable to establish and maintain the availability of
an exemption from the registration requirements of the Securities Act for such
resales, and shall use best efforts to provide for the delivery of accountants’
“comfort letters” to Buyer or such affiliate with respect to the financial
statements and certain financial information contained in or incorporated by
reference into the offering memorandum prepared for the resale of such Shares;
and

 

(C)           Issuer agrees that any Shares or
Share Termination Delivery Units so delivered to Dealer, (i) may be
transferred by and among Dealer and its affiliates, and Issuer 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 with respect to such Shares or any securities issued
by Issuer comprising such Share Termination Delivery Units, Issuer shall
promptly remove, or cause the transfer agent for such Shares or securities to
remove, any legends referring to any such restrictions or requirements from
such Shares or securities upon delivery by Dealer (or such affiliate of Dealer)
to Issuer 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).

 

(D)          Issuer shall not take, or cause 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 Issuer to Dealer (or any affiliate
designated by Dealer) of the Shares or Share Termination Delivery Units, as the
case may be, or the exemption pursuant to Section 4(1) or Section 4(3) of

 

12

 

the Securities Act for resales of the Shares or Share Termination
Delivery Units, as the case may be, by Dealer (or any such affiliate of
Dealer).

 

(c)           Make-whole
Shares. If Issuer makes the election described in clause (i)(B) of
paragraph (b) of this Section 8, then Dealer or its affiliate may
sell (which sale shall be made in a commercially reasonable manner) such Shares
or Share Termination Delivery Units, as the case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day
following delivery of such Shares or Share Termination Delivery Units, as the
case may be, and ending on the Exchange Business Day on which Dealer completes
the sale of all such Shares or Share Termination Delivery Units, as the case
may be, or a sufficient number of Shares or Share Termination Delivery Units,
as the case may be, so that the realized net proceeds of such sales exceed the
Freely Tradeable Value.  If any of such
delivered Shares or Share Termination Delivery Units remain after such realized
net proceeds exceed the Freely Tradeable Value, Dealer shall return such
remaining Shares or Share Termination Delivery Units to Issuer.  If the Freely Tradeable Value exceeds the
realized net proceeds from such resale, Issuer 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”), at Issuer’s
election (of which election Issuer shall notify Dealer promptly following
notice by Dealer to Issuer of the Additional Amount), either (i) in cash
or (ii) in a number of additional Shares (“Make-whole
Shares”) in an amount that, based on the Relevant Price on the last
day of the Resale Period (as if such day was the “Valuation Date” for purposes
of computing such Relevant Price), has a dollar value equal to the Additional
Amount.  The Resale Period shall continue
to enable the sale of the Make-whole Shares in the manner contemplated by this Section 8(c).  This provision shall be applied successively
until the Additional Amount is equal to zero, subject to Section 8(e).

 

(d)           Beneficial Ownership.
Notwithstanding anything to the contrary in the Agreement or this Confirmation,
in no event shall Buyer be entitled to receive, or shall be deemed to receive,
any Shares if, immediately upon giving effect to such receipt of such Shares, (i) the “beneficial ownership” (within the
meaning of Section 13 of the Exchange Act and the rules promulgated
thereunder) of Shares by Buyer or any affiliate of Buyer subject to aggregation
with Buyer under such Section 13 and rules or any “group”,
as such term is used in such Section 13 and rules, of which Buyer or any
such affiliate of Buyer is a member or may be deemed to be a member (collectively, “Buyer Group”)
would be equal to or greater than 9.0% or more of the outstanding Shares or (ii) Buyer, Buyer Group or any person whose
ownership position would be aggregated with that of Buyer or Buyer Group
(Buyer, Buyer Group or any such person, a “Buyer Person”)
under Section 203 of the Delaware General Corporation Law (the “DGCL Takeover Statute”)
or any state or federal bank holding company or banking laws, or other federal,
state or local regulations or regulatory orders applicable to ownership of
Shares (“Applicable Laws”), owns, beneficially
owns, constructively owns, controls, holds the power to vote or otherwise meets
a relevant definition of ownership in excess of a number of Shares equal to (x) the
number of Shares that would give rise to reporting or registration obligations
or other requirements (including obtaining prior approval by a state or federal regulator) of a
Buyer Person under Applicable Laws (including, without limitation, “interested
stockholder” or “acquiring person” status under the DGCL Takeover Statute) and
with respect to which such requirements have not been met or the relevant
approval has not been received minus (y) 0.5%
of the number of Shares outstanding on the date of determination (either such
condition described in clause (i) or (ii), an “Excess Ownership Position”).  If any delivery owed to Buyer hereunder is not made,
in whole or in part, as a result of this provision, Issuer’s obligation to make
such delivery shall not be extinguished and Issuer shall make such delivery as
promptly as practicable after, but in no event later than one Exchange Business
Day after, Buyer gives notice to Issuer that such delivery would not result in the existence of an Excess Ownership Position.

 

(e)           Limitations on Settlement
by Issuer.  Notwithstanding
anything herein or in the Agreement to the contrary, in no event shall Issuer be
required to deliver Shares in connection with the Transaction in excess of
16,497,624 (as such number may be adjusted from time to time in accordance with
the provisions hereof) (the “Capped Number”).  Issuer represents and warrants to Dealer
(which representation and warranty shall be deemed to be repeated on each day
that the Transaction is outstanding) that the Capped Number is equal to or less
than the number of authorized but unissued Shares of the Issuer that are not
reserved for future issuance in connection with transactions in the Shares
(other than the Transaction) on the date of the determination of the Capped
Number (such Shares, the “Available 

 

13

 

Shares”). 
In the event Issuer shall not have delivered the full number of Shares
otherwise deliverable as a result of this Section 8(e) (the resulting
deficit, the “Deficit Shares”), Issuer shall be
continually obligated to deliver, from time to time until the full number of
Deficit Shares have been delivered pursuant to this paragraph, Shares when, and
to the extent, that (i) Shares are repurchased, acquired or otherwise
received by Issuer or any of its subsidiaries after the Trade Date (whether or
not in exchange for cash, fair value or any other consideration), (ii) authorized
and unissued Shares reserved for issuance in respect of other transactions
prior to such date which prior to the relevant date become no longer so
reserved and (iii) Issuer additionally authorizes any unissued Shares that
are not reserved for other transactions. 
Issuer 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 Shares to be delivered) and promptly
deliver such Shares thereafter.

 

(f)            Amendments to Equity Definitions. 
The following amendments shall be made to the Equity Definitions:

 

(i)            The first sentence
of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof,
is hereby amended to read as follows: ‘(c) If “Calculation Agent
Adjustment” is specified as the Method of Adjustment in the related
Confirmation of a Share Option Transaction, then following the announcement or
occurrence of any Potential Adjustment Event, the Calculation Agent will
determine whether such Potential Adjustment Event has a material effect on the
theoretical value of the relevant Shares or options on the Shares and, if so,
will (i) make appropriate adjustment(s), if any, to any one or more of:’
and, the portion of such sentence immediately preceding clause (ii) thereof
is hereby amended by deleting the words “diluting or concentrative” and the
words “(provided that no adjustments will be made to account solely for changes
in volatility, expected dividends, stock loan rate or liquidity relative to the
relevant Shares)” and replacing such latter phrase with the words “(and, for
the avoidance of doubt, adjustments may be made to account solely for changes
in volatility, expected dividends, stock loan rate or liquidity relative to the
relevant Shares)”; and

 

(ii)           Section 11.2(e)(vii) of
the Equity Definitions is hereby amended by deleting the words “diluting or
concentrative” and replacing them with “material”.

 

(g)           Additional Termination Events.  The occurrence of any of the following shall
constitute an Additional Termination Event with respect to which the
Transaction shall be the sole Affected Transaction and Issuer shall be the sole
Affected Party; provided that with respect to any
Additional Termination Event, Dealer may choose to treat part of the
Transaction as the sole Affected Transaction, and, upon the termination of the
Affected Transaction, a Transaction with terms identical to those set forth
herein except with a Number of Warrants equal to the unaffected number of
Warrants shall be treated for all purposes as the Transaction, which shall
remain in full force and effect:

 

(i)            Buyer reasonably
determines, based on advice of counsel, 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;

 

(ii)           any Person or Group
(other than Permitted Holders) (1) becomes the beneficial owner
(determined in accordance with Rule 13d-3 under the Exchange Act) of
Issuer’s voting stock representing 50% or more of the total voting power of all
of Issuer’s outstanding classes of voting stock or (2) has the power,
directly or indirectly, to elect a majority of the members of Issuer’s board of
directors;

 

(iii)          the Permitted
Holders become the beneficial owner (determined in accordance with Rule 13d-3
under the Exchange Act) of Issuer’s voting stock representing 100% of the total
voting power of all of Issuer’s outstanding classes of voting stock;

 

(iv)          any merger or
consolidation of Issuer with or into any Person or any sale, transfer or other
conveyance, whether direct or indirect, of all or substantially all of Issuer’s
assets, on a consolidated basis, in one transaction or a series of related
transactions, if, immediately after giving effect to such transaction(s), (1) any
Person or Group (other than Permitted Holders) becomes the beneficial owner
(determined in accordance with Rule 13d-3 under the Exchange Act) of
Issuer’s voting stock representing 50% or more of the total voting power of all
of Issuer’s 

 

14

 

outstanding classes of voting stock or (2) Permitted
Holders become the beneficial owner (determined in accordance with Rule 13d-3
under the Exchange Act) of shares of Issuer’s voting stock representing 100% of
the total voting power of all of Issuer’s outstanding classes of voting stock;
or

 

(v)           Issuer is liquidated
or dissolved or holders of Shares approve any plan or proposal for Issuer’s
liquidation or dissolution.

 

Notwithstanding the foregoing, a transaction or
transactions set forth in clause (iv) above will not constitute an
Additional Termination Event if at least 90% of the consideration for Shares
(excluding cash payments for fractional shares and cash payments pursuant to
dissenters’ appraisal rights) in such transaction or transactions consists of
common stock quoted or listed for trading on a national securities exchange or
market or which will be so quoted or listed when issued or exchanged in connection
with such transaction or transactions.

 

“Permitted Holders”
means Anschutz Company and its affiliates.

 

“Person”
and “Group” have the meanings
given to them in Sections 13(d) and 14(d) of the Exchange Act or any
successor provisions, and “Group”
includes any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange
Act or any successor provision.

 

(h)           Extension of Settlement. 
Dealer may divide any Component into additional Components and designate
the Expiration Date and the Number of Warrants for each such Component if
Dealer determines, in its reasonable discretion based on advice of counsel,
that such further division is necessary or advisable to preserve Dealer’s hedging
activity hereunder in light of existing liquidity conditions in the cash market
or stock loan market or to enable Dealer to effect purchases of Shares in
connection with its hedging activity hereunder in a manner that would, if
Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with
applicable legal and regulatory requirements.

 

(i)            Transfer and Assignment. 
Buyer may transfer or assign its rights and obligations hereunder and
under the Agreement, in whole or in part, at any time without the consent of
Issuer; provided  that at any time at which (i) an Excess Ownership Position exists or (ii) a Hedging Disruption has
occurred and is continuing, if Buyer, in its discretion, is unable to effect a
transfer or assignment to a third party after using its commercially reasonable
efforts on pricing terms reasonably acceptable to Buyer such that an Excess
Ownership Position or a Hedging Disruption, as the case may be, no longer
exists, Buyer may designate any Scheduled Trading Day as an Early Termination
Date with respect to a portion (the “Terminated Portion”)
of the Transaction, such that such Excess Ownership Position or Hedging
Disruption, as the case may be, no longer exists.   In the event
that Buyer so designates an Early Termination Date with respect to a portion of
the Transaction, a payment or delivery shall be made pursuant to Section 6
of the Agreement and Section 8(a) of this Confirmation as if (i) an
Early Termination Date had been designated in respect of a Transaction having
terms identical to the Terminated Portion of the Transaction, (ii) Issuer shall be the sole Affected Party with
respect to such partial termination and (iii) such portion of the
Transaction shall be the only Terminated Transaction.

 

(j)            Equity Rights.  Buyer acknowledges
and agrees that this Confirmation is not intended to convey to it rights with
respect to the Transaction that are senior to the claims of common stockholders
in the event of Issuer’s bankruptcy.  For
the avoidance of doubt, the parties agree that the preceding sentence shall not
apply at any time other than during Issuer’s bankruptcy to any claim arising as
a result of a breach by Issuer of any of its obligations under this
Confirmation or the Agreement.  For the
avoidance of doubt, the parties acknowledge that this Confirmation is not
secured by any collateral that would otherwise secure the obligations of Issuer
herein under or pursuant to any other agreement.

 

(k)           Netting and Set-off.

 

(i)            If on any date cash
would otherwise be payable or Shares or other property would otherwise be
deliverable hereunder or pursuant to the Agreement or pursuant to any other
agreement between the parties by Issuer to Buyer and cash would otherwise be
payable or Shares or other property would otherwise be deliverable hereunder or
pursuant to the Agreement or pursuant to any other agreement between the
parties by Buyer to Issuer and the type of property 

 

15

 

required to be paid or delivered by each such party on
such date is the same, then, on such date, each such party’s obligation to make
such payment or delivery will be automatically satisfied and discharged and, if
the aggregate amount that would otherwise have been payable or deliverable by
one such party exceeds the aggregate amount that would otherwise have been
payable or deliverable by the other such party, replaced by an obligation of
the party by whom the larger aggregate amount would have been payable or
deliverable to pay or deliver to the other party the excess of the larger
aggregate amount over the smaller aggregate amount.

 

(ii)           In addition to and
without limiting any rights of set-off that a party hereto may have as a matter
of law, pursuant to contract or otherwise, upon the occurrence of an Early Termination
Date, Buyer shall have the right to terminate, liquidate and otherwise close
out the Transaction and to set off any obligation or right that Buyer or any
affiliate of Buyer may have to or against Issuer hereunder or under the
Agreement against any right or obligation Buyer or any of its affiliates may
have against or to Issuer, including without limitation any right to receive a
payment or delivery pursuant to any provision of the Agreement or
hereunder.  In the case of a set-off of
any obligation to release, deliver or pay assets against any right to receive
assets of the same type, such obligation and right shall be set off in
kind.  In the case of a set-off of any
obligation to release, deliver or pay assets against any right to receive
assets of any other type, the value of each of such obligation and such right
shall be determined by the Calculation Agent and the result of such set-off
shall be that the net obligor shall pay or deliver to the other party an amount
of cash or assets, at the net obligor’s option, with a value (determined, in
the case of a delivery of assets, by the Calculation Agent) equal to that of
the net obligation.  In determining the
value of any obligation to release or deliver Shares or any right to receive
Shares, the value at any time of such obligation or right shall be determined
by reference to the market value of the Shares at such time, as determined by
the Calculation Agent.  If an obligation
or right is unascertained at the time of any such set-off, the Calculation Agent
may in good faith estimate the amount or value of such obligation or right, in
which case set-off will be effected in respect of that estimate, and the
relevant party shall account to the other party at the time such obligation or
right is ascertained.

 

(iii)          Notwithstanding any
provision of the Agreement (including without limitation Section 6(f) thereof)
and this Confirmation (including without limitation this Section 8(k)) or
any other agreement between the parties to the contrary, (A) Issuer shall
not net or set off its obligations under the Transaction against its rights
against Buyer under any other transaction or instrument; (B) Buyer may net
and set off any rights of Buyer against, or obligations of Buyer to, Issuer
arising under the Transaction only against obligations of Buyer to, or rights
of Buyer against, Issuer arising under any transaction or instrument if such
transaction or instrument is classified as equity under United States Generally
Accepted Accounting Principles and (C) in the event of bankruptcy or
liquidation of Issuer, neither party shall have the right to set off any
obligation that it may have to the other party under the Transaction against
any obligation such other party may have to it under the Agreement, this
Confirmation or any other agreement between the parties hereto, by operation of
law or otherwise.  Buyer will give notice
to Issuer of any netting or set off effected under this provision.

 

(l)            Effectiveness.  If, prior to the Effective Date, Buyer
reasonably determines that it is advisable to cancel the Transaction because of
concerns that Buyer’s related hedging activities could be viewed as not
complying with applicable securities laws, rules or regulations, the
Transaction shall be cancelled and shall not become effective, and neither
party shall have any obligation to the other party in respect of the
Transaction.

 

(m)          Amendment.  If the
initial purchasers party to the Purchase Agreement exercise their right to
purchase additional convertible notes as set forth therein, then, at the
discretion of Issuer, Dealer and Issuer will either enter into a new
confirmation evidencing additional warrants to be issued by Issuer to Dealer or
amend this Confirmation to evidence such additional warrants (in each case on
pricing terms acceptable to Dealer and Issuer) (such additional confirmation or
amendment to this Confirmation to provide for the payment by Dealer to Issuer
of the additional premium related thereto in an amount to be agreed between the
parties).

 

16

 

(n)           Lock Up.  Prior to the
first anniversary of the Trade Date, if the initial purchasers  party to the Purchase Agreement exercise
their right to purchase additional convertible notes set forth therein and
Issuer does not elect to issue the maximum number of Additional Warrants as
provided in paragraph (m) above, Issuer shall not issue or enter into any
warrant, a call option, a variable forward or other derivative linked to the
Shares (collectively, “Warrants”),
whether cash settled and/or physically settled and/or net share settled,
without a prior written consent of Dealer which shall not be unreasonably
withheld, unless such Warrants are issued (i) pursuant to any present or
future employee, director or consultant benefit plan or program of Issuer or
any hedging arrangements in respect thereof, (ii) to all Issuer’s
stockholders as a free distribution or a distribution for less than the fair
market value of such Warrants (as determined by the Calculation Agent), (iii) as
part of mandatorily convertible units in a bona fide capital raising
transaction unrelated to the convertible notes sold pursuant to the Purchase
Agreement, or (iv) as part of a bona fide Share repurchase transaction
unrelated to the convertible notes sold pursuant to the Purchase
Agreement.  “Additional
Warrants” shall equal to the product of (i) the Warrant
Entitlement, (ii) the initial conversion rate of the convertible notes and
(iii) the aggregate principal amount of the additional convertible notes
purchased by the initial purchasers divided by
USD1,000.

 

(o)           Designation by Dealer. 
Notwithstanding any other provision in this Confirmation to the contrary
requiring or allowing Dealer to purchase, sell, receive or deliver any Shares
or other securities to or from Issuer, Dealer may designate any of its
affiliates to purchase, sell, receive or deliver such Shares or other
securities and otherwise to perform Dealer’s obligations in respect of the
Transaction and any such designee may assume such obligations.  Dealer shall be discharged of its obligations
to Issuer to the extent of any such performance.

 

(p)           Disclosure.  Effective
from the date of commencement of discussions concerning the Transaction, Issuer
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 Issuer relating to such tax treatment
and tax structure.

 

(q)           Counterparts. This Confirmation may be executed in several
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

 

(r)            Waiver of Trial by Jury. 
EACH OF ISSUER AND DEALER HEREBY IRREVOCABLY
WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON
BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS OF DEALER OR ITS
AFFILIATES OR ISSUER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR
ENFORCEMENT HEREOF.

 

(s)           Submission
to Jurisdiction. Each party hereby irrevocably and unconditionally
submits for itself and its property in any legal action or proceeding by the
other party against it relating to the Transaction to which it is a party, or
for recognition and enforcement of any judgment in respect thereof, to the
exclusive jurisdiction of the Supreme Court of the State of New York, sitting
in New York County, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof.

 

(t)            Governing Law.  THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE).

 

(u)           Dealer/Agent.

 

(i)            Dealer represents that it is an “OTC
derivatives dealer” as such term is defined in the Securities and Exchange Act
of 1934 and is an affiliate of a broker-dealer that is registered with and
fully regulated by the Securities and Exchange Commission, Agent.

 

(ii)           Dealer is not a member of the SIPC
(Securities Investor Protection Corporation).

 

(iii)          The date and time of the Transaction
evidenced hereby will be furnished by Agent to Issuer upon written request, and
Agent will furnish to Issuer, upon written request, a 

 

17

 

statement as to the source and amount of any remuneration received, or
to be received by, Agent in connection with the Transaction evidenced hereby.

 

18

 

Please confirm that the
foregoing correctly sets forth the terms of our agreement by signing and
returning this Confirmation.

 

 

	
   

  	
  CREDIT
  SUISSE CAPITAL LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry Dixon

  	
   

  
	
   

  	
   

  	
  Name: Barry Dixon

  
	
   

  	
   

  	
  Title: Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vittorio Scialoja

  	
   

  
	
   

  	
   

  	
  Name: Vittorio Scialoja

  
	
   

  	
   

  	
  Title: Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT SUISSE SECURITIES (USA) LLC, 

  AS AGENT FOR CREDIT SUISSE

  CAPITAL LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marisa Scauzillo

  	
   

  
	
   

  	
   

  	
  Name: Marisa Scauzillo

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bik Kwan Chung

  	
   

  
	
   

  	
   

  	
  Name: Bik Kwan Chung

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed and Accepted By:

  
	
   

  
	
  REGAL ENTERTAINMENT GROUP

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Amy Miles

  	
   

  
	
   

  	
  Name: Amy Miles

  	
   

  
	
   

  	
  Title: CFO

  	
   

  
						

 

 

Annex A

 

For each Component of the
Transaction, the Number of Warrants and Expiration Date is set forth below.

 

	
  Component Number

  	
   

  	
  Number of Warrants

  	
   

  	
  Expiration Date

  	
   

  
	
  1

  	
   

  	
  274,960

  	
   

  	
  6/13/2011

  	
   

  
	
  2

  	
   

  	
  274,960

  	
   

  	
  6/14/2011

  	
   

  
	
  3

  	
   

  	
  274,960

  	
   

  	
  6/15/2011

  	
   

  
	
  4

  	
   

  	
  274,960

  	
   

  	
  6/16/2011

  	
   

  
	
  5

  	
   

  	
  274,960

  	
   

  	
  6/17/2011

  	
   

  
	
  6

  	
   

  	
  274,960

  	
   

  	
  6/20/2011

  	
   

  
	
  7

  	
   

  	
  274,960

  	
   

  	
  6/21/2011

  	
   

  
	
  8

  	
   

  	
  274,960

  	
   

  	
  6/22/2011

  	
   

  
	
  9

  	
   

  	
  274,960

  	
   

  	
  6/23/2011

  	
   

  
	
  10

  	
   

  	
  274,960

  	
   

  	
  6/24/2011

  	
   

  
	
  11

  	
   

  	
  274,960

  	
   

  	
  6/27/2011

  	
   

  
	
  12

  	
   

  	
  274,960

  	
   

  	
  6/28/2011

  	
   

  
	
  13

  	
   

  	
  274,960

  	
   

  	
  6/29/2011

  	
   

  
	
  14

  	
   

  	
  274,960

  	
   

  	
  6/30/2011

  	
   

  
	
  15

  	
   

  	
  274,960

  	
   

  	
  7/1/2011

  	
   

  
	
  16

  	
   

  	
  274,960

  	
   

  	
  7/5/2011

  	
   

  
	
  17

  	
   

  	
  274,960

  	
   

  	
  7/6/2011

  	
   

  
	
  18

  	
   

  	
  274,960

  	
   

  	
  7/7/2011

  	
   

  
	
  19

  	
   

  	
  274,960

  	
   

  	
  7/8/2011

  	
   

  
	
  20

  	
   

  	
  274,960

  	
   

  	
  7/11/2011

  	
   

  
	
  21

  	
   

  	
  274,960

  	
   

  	
  7/12/2011

  	
   

  
	
  22

  	
   

  	
  274,960

  	
   

  	
  7/13/2011

  	
   

  
	
  23

  	
   

  	
  274,960

  	
   

  	
  7/14/2011

  	
   

  
	
  24

  	
   

  	
  274,960

  	
   

  	
  7/15/2011

  	
   

  
	
  25

  	
   

  	
  274,960

  	
   

  	
  7/18/2011

  	
   

  
	
  26

  	
   

  	
  274,960

  	
   

  	
  7/19/2011

  	
   

  
	
  27

  	
   

  	
  274,960

  	
   

  	
  7/20/2011

  	
   

  
	
  28

  	
   

  	
  274,960

  	
   

  	
  7/21/2011

  	
   

  
	
  29

  	
   

  	
  274,960

  	
   

  	
  7/22/2011

  	
   

  
	
  30

  	
   

  	
  274,972

  	
   

  	
  7/25/2011

  	
   

  

 

2EXHIBIT
10(a)

 

 

 

 

                                                                                                                                                January 31,
2008

 

TO:  CRAIG A. SHELDON

 

Dear
Craig:

 

This
letter confirms that the term of your Employment Agreement dated November 1,
2004, as amended (the “Agreement”), is hereby amended to extend the term of the
Agreement for a one year period ending October 31, 2009. As such, (i) Section 1
of the Agreement is amended to provide that the term “Employment Period” means
the period commencing on the Effective Date and ending October 31, 2009
and (ii) Section 4.10(i) of the Agreement is amended to change
the date therein to October 31, 2009.

 

Please
acknowledge and confirm your agreement to the extension by signing and
returning a copy of this letter to Joanna Albrecht.

 

Sincerely,

 

	
  /s/
  R. Scott Jones

  	
   

  
	
  R.
  Scott Jones

  
	
  President
  and CEO

  
	
   

  
	
   

  
	
  ACKNOWLEDGED
  and CONFIRMED:

  
	
   

  
	
   

  
	
  /s/
  Craig A. Sheldon

  	
   

  
	
  Craig
  A. Sheldon

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