Document:

exv10w4

Exhibit 10.4

EXECUTION VERSION

Deutsche Bank AG, London Branch

Winchester House

1 Great Winchester Street

London EC2N 2DB

Telephone: 44 20 7545 8000

c/o Deutsche Bank Securities Inc.

60 Wall Street

New York, NY 10005 
Telephone:
1-212-250-2500

Internal Reference Nr.: 439460

                    June 9, 2011

	 	 	 	 	 

	To:	 	Integra LifeSciences Holdings Corporation
	 	 	311 Enterprise Drive
	 	 	Plainsboro, NJ 08536
	 

	 	Attention:
	 	Treasurer
	 

	 	Telephone No.:
	 	 (609) 275-0500
	 

	 	Facsimile No.:
	 	 (609) 750-4264
	 
	 	 	 	 
	Re:       
Base Call Option Transaction

     DEUTSCHE BANK AG IS NOT REGISTERED AS A BROKER DEALER UNDER THE U.S. SECURITIES EXCHANGE ACT
OF 1934. DEUTSCHE BANK SECURITIES INC. (“DBSI”) HAS ACTED SOLELY AS AGENT IN CONNECTION WITH THIS
TRANSACTION AND HAS NO OBLIGATION, BY WAY OF ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH
RESPECT TO THE PERFORMANCE OF EITHER PARTY UNDER THE TRANSACTION. AS SUCH, ALL DELIVERY OF FUNDS,
ASSETS, NOTICES, DEMANDS AND COMMUNICATIONS OF ANY KIND RELATING TO THIS TRANSACTION BETWEEN
DEUTSCHE BANK AG AND COUNTERPARTY SHALL BE TRANSMITTED THROUGH DBSI. DEUTSCHE BANK AG ACTING
THROUGH ITS LONDON BRANCH IS NOT A MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC).

     The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the call option transaction entered into between Deutsche Bank AG, London Branch
(“Dealer”) and Integra LifeSciences Holdings Corporation (“Counterparty”) as of the Trade Date
specified below (the “Transaction”). This letter agreement constitutes a “Confirmation” as referred
to in the ISDA Master Agreement specified below. This Confirmation shall replace any previous
agreements and serve as the final documentation for the Transaction.

     The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms
used herein are based on terms that are defined in the Offering

	 	 	 

	Chairman of the Supervisory Board: Clemens Börsig
Management Board: Josef Ackermann (Chairman), Hugo
Bänziger, Jürgen Fitschen, Anshuman Jain, Stefan
Krause, Hermann-Josef Lamberti, Rainer Neske

	 	Deutsche Bank AG is
authorized under German Banking
Law (competent authority: BaFin
— Federal Financial Supervising
Authority) and regulated by the
Financial Services Authority for
the conduct of UK business; a
member of the London Stock
Exchange. Deutsche Bank AG is a
joint stock corporation with
limited liability incorporated
in the Federal Republic of
Germany HRB No. 30 000 District
Court of Frankfurt am Main;
Branch Registration in England
and Wales BR000005; Registered
address: Winchester House, 1
Great Winchester Street, London
EC2N 2DB. Deutsche Bank Group
online:
	 

	 	http://www.deutsche-bank.com

 

 

Memorandum dated June 9, 2011 (the “Offering Memorandum”) relating to the 1.625% Convertible
Senior Notes due 2016 (as originally issued by Counterparty, the “Convertible Notes” and each USD
1,000 principal amount of Convertible Notes, a “Convertible Note”) issued by Counterparty in an
aggregate initial principal amount of USD 200,000,000 (as increased by up to an aggregate principal
amount of USD 30,000,000 if and to the extent that the Representatives (as defined herein) exercise
their option to purchase additional Convertible Notes pursuant to the Purchase Agreement (as
defined herein)) pursuant to an Indenture to be dated June 15, 2011 between Counterparty and Wells
Fargo Bank, National Association, as trustee (the “Indenture”). In the event of any inconsistency
between the terms defined in the Offering Memorandum, the Indenture and this Confirmation, this
Confirmation shall govern. The parties acknowledge that this Confirmation is entered into on the
date hereof with the understanding that (i) definitions set forth in the Indenture that are also
defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred
to herein will conform to the descriptions thereof in the Offering Memorandum. For the avoidance of
doubt, references herein to sections of the Indenture are based on the draft of the Indenture most
recently reviewed by the parties at the time of execution of this Confirmation. If any relevant
sections of the Indenture are changed, added or renumbered following execution of this Confirmation
but prior to the execution of the Indenture, the parties will amend this Confirmation in good faith
to preserve the economic intent of the parties based on the draft of the Indenture so reviewed. The
parties further acknowledge that references to the Indenture herein are references to the Indenture
as in effect on the date of its execution and if the Indenture is amended following its execution,
any such amendment will be disregarded for purposes of this Confirmation unless the parties agree
otherwise in writing.

     Each party is hereby advised, and each such party acknowledges, that the other party has
engaged in, or refrained from engaging in, substantial financial transactions and has taken other
material actions in reliance upon the parties’ entry into the Transaction to which this
Confirmation relates on the terms and conditions set forth below.

1. This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as
to the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Counterparty had executed an agreement in such form
(but without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election that the “Cross
Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(a) the phrase “or becoming capable at such time of being declared” shall be deleted from clause
(1) of such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (i) the default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the payment when due; and
(iii) the payment is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.”; (c) “Specified Indebtedness” will have the meaning specified in Section 14
of the Agreement, except that such term shall not include obligations in respect of deposits
received in the ordinary course of a party’s banking business; and (d) “Threshold Amount” means in
relation to Dealer, three percent (3%) of shareholders’ equity of Deutsche Bank AG (the “Dealer
Parent”) and in relation to Counterparty, USD 25 million.)) on the Trade Date. In the event of any
inconsistency between provisions of the Agreement and this Confirmation, this Confirmation will
prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby
agree that no transaction other than the Transaction to which this Confirmation relates shall be
governed by the Agreement.

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

     General
Terms.

	 	 	 

	Trade Date:

	 	June 9, 2011
	 
	 	 
	Effective Date:

	 	The third Exchange Business Day immediately prior to
the Premium Payment Date
	 
	 	 
	Option Style:

	 	“Modified American”, as described under “Procedures for
Exercise” below
	 
	 	 
	Option Type:

	 	Call

2

 

	 	 	 

	Buyer:

	 	Counterparty
	 
	 	 
	Seller:

	 	Dealer
	 
	 	 
	Shares:

	 	The common stock of Counterparty, par value USD0.01
per share (Exchange symbol “IART”).
	 
	 	 
	Number of Options:

	 	 200,000. For the avoidance of doubt, the Number of
Options shall be reduced by any Options exercised by
Counterparty. In no event will the Number of Options be
less than zero.
	 
	 	 
	Applicable Percentage:

	 	 20%
	 
	 	 
	Option Entitlement:

	 	A number equal to the product of the Applicable
Percentage and 17.4092.
	 
	 	 
	Strike Price:

	 	USD 57.441
	 
	 	 
	Premium:

	 	USD 7,460,000
	 
	 	 
	Premium Payment Date:

	 	June 15, 2011
	 
	 	 
	Exchange:

	 	The NASDAQ Global Select Market
	 
	 	 
	Related Exchange(s):

	 	All Exchanges
	 
	 	 
	Excluded Provisions:

	 	Section 14.03 and Section 14.04(g) of the Indenture.

     Procedures for Exercise.

	 	 	 

	Conversion Date:

	 	With respect to any conversion of a Convertible Note, the
date on which the Holder (as such term is defined in the
Indenture) of such Convertible Note satisfies all of the
requirements for conversion thereof as set forth in
Sections 14.02(b) and (c) of the Indenture.
	 
	 	 
	Free Convertibility Date:

	 	June 15, 2016
	 
	 	 
	Expiration Time:

	 	The Valuation Time
	 
	 	 
	Expiration Date:

	 	December 15, 2016, subject to earlier exercise.
	 
	 	 
	Multiple Exercise:

	 	Applicable, as described under “Automatic Exercise”
below.
	 
	 	 
	Automatic Exercise:

	 	Notwithstanding Section 3.4 of the Equity Definitions, on
each Conversion Date, a number of Options equal to the
number of Convertible Notes in denominations of USD
1,000 as to which such Conversion Date has occurred
shall be deemed to be automatically exercised; provided
that such Options shall be exercised or deemed to be
exercised only if Counterparty has provided a Notice of
Exercise to Dealer in accordance with “Notice of
Exercise” below.
	 
	 	 
	 

	 	Notwithstanding the foregoing, in no event shall the
number of Options that are exercised or deemed exercised
hereunder exceed the Number of Options.

3

 

	 	 	 

	Notice of Exercise:

	 	Notwithstanding anything to the contrary in the Equity
Definitions or under “Automatic Exercise” above, in
order to exercise any Options, Counterparty must notify
Dealer in writing before (i) 5:00 p.m. (New York City
time) on the Scheduled Valid Day immediately preceding
the scheduled first day of the Settlement Averaging
Period for the Options being exercised or (ii) 5:00 p.m.
(New York City time) on the fifth Scheduled Valid Day
immediately following the scheduled first day of the
Settlement Averaging Period for the Options being
exercised (in which case the Calculation Agent will
determine the adjustment to be made to any one or more
of the Strike Price, Number of Options, Option
Entitlement and any other variable relevant to the
exercise, settlement or payment for the Transaction in a
commercially reasonable manner as appropriate to reflect
the additional costs (including, but not limited to, hedging
mismatches and market losses) and reasonable expenses
incurred by Dealer in connection with its hedging
activities (including the unwinding of any hedge position)
due to such notification occurring after the time specified
in the immediately preceding clause (i)) of (w) the
number of such Options (without regard to any
adjustments by the Calculation Agent in accordance with
the immediately preceding clause (ii)) and (x) the
scheduled first day of the Settlement Averaging Period
and the scheduled Settlement Date, (y) the Relevant
Settlement Method for such Options, and (z) if the
Relevant Settlement Method for such Options is not Net
Share Settlement (as defined below), the percentage of
each Share issuable upon conversion in excess of the
principal portion of the Convertible Notes being
converted that will be paid in cash (the “Cash
Percentage”), and such notice shall also include the
information, representations, acknowledgements and
agreements required pursuant to “Settlement Method
Election Conditions” below; provided that in respect of
any Options relating to Convertible Notes with a
Conversion Date occurring on or after the Free
Convertibility Date, (A) such notice may be given on or
prior to the second Scheduled Valid Day immediately
preceding the Expiration Date and need only specify the
information required in clause (w) above, and (B) if the
Relevant Settlement Method for such Options is not Net
Share Settlement, Dealer shall have received a separate
notice (the “Notice of Final Settlement Method”) in
respect of all such Convertible Notes before 5:00 p.m.
(New York City time) on or prior to the Free
Convertibility Date specifying the information required in
clauses (y) and (z) above, as well as the information,
representations, acknowledgements and agreements
required pursuant to “Settlement Method Election
Conditions” below.
	 
	 	 
	Valuation Time:

	 	The close of trading of the regular trading session on the
Exchange;  provided that if the principal trading session is

4

 

	 	 	 

	 

	 	extended, the Calculation Agent shall determine the
Valuation Time in its reasonable discretion.
	 
	 	 
	Market Disruption Event:

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

	 	“‘Market Disruption Event’ means, in respect of a Share,
(i) a failure by the primary U.S. national or regional
securities exchange or market on which the Shares are
listed or admitted for trading to open for trading during its
regular trading session or (ii) the occurrence or existence
prior to 1:00 p.m., New York City time, on any Scheduled
Valid Day for the Shares for more than one half-hour
period in the aggregate during regular trading hours of
any suspension or limitation imposed on trading (by
reason of movements in price exceeding limits permitted
by the relevant stock exchange or otherwise) in the Shares
or in any options, contracts or future contracts relating to
the Shares.”

     Settlement Terms.

	 	 	 

	Settlement Method:

	 	For any Option, Net Share Settlement; provided that if the
Relevant Settlement Method set forth below for such
Option is not Net Share Settlement, then the Settlement
Method for such Option shall be such Relevant Settlement
Method, but only if the Settlement Method Election
Conditions have been satisfied and Counterparty shall
have notified Dealer of the Relevant Settlement Method
in the Notice of Exercise or Notice of Final Settlement
Method, as applicable, for such Option.
	 
	 	 
	Relevant Settlement Method:

	 	In respect of any Option, subject to the Settlement
Method Election Conditions:
	 
	 	 
	 

	 	 (i) if Counterparty has not specified a Cash Percentage
or has specified a Cash Percentage of 0% in respect of
settling its conversion obligations in respect of the related
Convertible Note pursuant to Section 14.02(a)(i) of the
Indenture, then, in either case, the Relevant Settlement
Method for such Option shall be Net Share Settlement;
	 
	 	 
	 

	 	 (ii) if Counterparty has specified a Cash Percentage of
between 0% and 100% in respect of settling its
conversion obligations in respect of the related
Convertible Note pursuant to Section 14.02(a)(i) of the
Indenture, then the Relevant Settlement Method for such
Option shall be Combination Settlement; and
	 
	 	 
	 

	 	 (iii) if Counterparty has specified a Cash Percentage of
100% in respect of settling its conversion obligations in
respect of the related Convertible Note pursuant to
Section 14.02(a)(i) of the Indenture, then the Relevant
Settlement Method for such Option shall be Cash
Settlement.

5

 

	 	 	 

	Settlement Method Election Conditions:

	 	For any Relevant Settlement Method other than Net Share
Settlement, such Relevant Settlement Method shall apply
to an Option only if the Notice of Exercise or Notice of
Final Settlement Method for such Option, as applicable,
contains:

	 	 	 	 	 

	 

	 	(i)
	 	a representation that, on the date of such Notice of
Exercise or Notice of Final Settlement Method, as
applicable, Counterparty is not in possession of any
material non-public information with respect to
Counterparty or the Shares;
	 
	 	 	 	 
	 

	 	(ii)
	 	a representation that Counterparty is electing the
settlement method for the related Convertible Note
and such Relevant Settlement Method in good faith
and not as part of a plan or scheme to evade the
prohibitions of Rule 10b-5 under the Securities
Exchange Act of 1934, as amended (the
“Exchange Act”);
	 
	 	 	 	 
	 

	 	(iii)
	 	a representation that Counterparty has not entered
into or altered any hedging transaction relating to
the Shares corresponding to or offsetting the
Transaction;
	 
	 	 	 	 
	 

	 	(iv)
	 	a representation that Counterparty is not electing
the settlement method for the related Convertible
Note and such Relevant Settlement Method to
create actual or apparent trading activity in the
Shares (or any security convertible into or
exchangeable for the Shares) or to raise or depress
or otherwise manipulate the price of the Shares (or
any security convertible into or exchangeable for
the Shares); and
	 
	 	 	 	 
	 

	 	(v)
	 	an acknowledgment by Counterparty that (A) any
transaction by Dealer following Counterparty’s
election of the settlement method for the related
Convertible Note and such Relevant Settlement
Method shall be made at Dealer’s sole discretion
and for Dealer’s own account and (B) Counterparty
does not have, and shall not attempt to exercise,
any influence over how, when, whether or at what
price to effect such transactions, including, without
limitation, the price paid or received per Share
pursuant to such transactions, or whether such
transactions are made on any securities exchange
or privately.

	 	 	 

	Net Share Settlement:

	 	If Net Share Settlement is applicable to any Option
exercised or deemed exercised hereunder, Dealer will
deliver to Counterparty, on the relevant Settlement Date
for each such Option, a number of Shares (the “Net Share
Settlement Amount”) equal to the sum, for each Valid
Day during the Settlement Averaging Period for each
such Option, of (i) the Daily Option Value for such Valid
Day, divided by (ii) the Relevant Price on such Valid Day,

6

 

	 	 	 

	 

	 	divided by (iii) the number of Valid Days in the
Settlement Averaging Period.
	 
	 	 
	 

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

	 	If Combination Settlement is applicable to any Option
exercised or deemed exercised hereunder, Dealer will pay
or deliver, as the case may be, to Counterparty, on the
relevant Settlement Date for each such Option:

	 	 	 	 	 

	 

	 	(i)
	 	cash in an amount equal to the sum, for each Valid
Day during the Settlement Averaging Period for
such Option, of (i) the Daily Option Value for such
Valid Day, divided by (ii) the number of Valid
Days in the Settlement Averaging Period,
multiplied by (iii) the Cash Percentage; and
	 
	 	 	 	 
	 

	 	(ii)
	 	a number of Shares (the “Combination Settlement
Share Amount”) equal to the sum, for each Valid
Day during the Settlement Averaging Period for
such Option, of (i) the Daily Option Value for such
Valid Day, divided by (ii) the Relevant Price on
such Valid Day, divided by (iii) the number of
Valid Days in the Settlement Averaging Period,
multiplied by (iv) (A) 100% minus (B) the Cash
Percentage.

	 	 	 

	 

	 	Dealer will deliver cash in lieu of any fractional Shares to
be delivered with respect to any Combination Settlement
Share Amount valued at the Relevant Price for the last
Valid Day of the Settlement Averaging Period.
	 
	 	 
	Cash Settlement:

	 	If Cash Settlement is applicable to any Option exercised
or deemed exercised hereunder, in lieu of Section 8.1 of
the Equity Definitions, Dealer will pay to Counterparty,
on the relevant Settlement Date for each such Option, an
amount of cash equal to the sum, for each Valid Day
during the Settlement Averaging Period for such Option,
of (i) the Daily Option Value for such Valid Day, divided
by (ii) the number of Valid Days in the Settlement
Averaging Period.
	 
	 	 
	Daily Option Value:

	 	For any Valid Day, an amount equal to (i) the Option
Entitlement on such Valid Day, multiplied by (ii) the
Relevant Price on such Valid Day less the Strike Price on
such Valid Day; provided that if the calculation contained
in clause (ii) above results in a negative number, the Daily
Option Value for such Valid Day shall be deemed to be
zero. In no event will the Daily Option Value be less than
zero.
	 
	 	 
	Valid Day:

	 	A day on which (i) there is no Market Disruption Event
and (ii) trading in the Shares generally occurs on the
Exchange or, if the Shares are not then listed on the

7

 

	 	 	 

	 

	 	Exchange, on the principal other U.S. national or regional
securities exchange on which the Shares are then listed or,
if the Shares are not then listed on a U.S. national or
regional securities exchange, on the principal other
market on which the Shares are then listed or admitted for
trading. If the Shares are not so listed or admitted for
trading, “Valid Day” means a Business Day.
	 
	 	 
	Scheduled Valid Day:

	 	A day that is scheduled to be a Valid Day on the principal
U.S. national or regional securities exchange or market on
which the Shares are listed or admitted for trading. If the
Shares are not so listed or admitted for trading,
“Scheduled Valid Day” means a Business Day.
	 
	 	 
	Business Day:

	 	Any day other than a Saturday, a Sunday or a day on
which the Federal Reserve Bank of New York is
authorized or required by law or executive order to close
or be closed.
	 
	 	 
	Relevant Price:

	 	For each of the 50 consecutive Valid Days during the
applicable Settlement Averaging Period, the per Share
volume-weighted average price as displayed under the
heading “Bloomberg VWAP” on Bloomberg page “IART
<equity> AQR” (or its equivalent successor if such page
is not available) in respect of the period from the
scheduled open of trading until the scheduled clos of
trading of the primary trading session on such Valid Day
(or if such volume-weighted average price is unavailable,
the market value of one Share on such Valid Day
determined, using a volume-weighted average method, by
the Calculation Agent). The Relevant Price shall be
determined without regard to after hours trading or any
other trading outside of the regular trading session trading
hours.
	 
	 	 
	Settlement Averaging Period:

	 	For any Option and regardless of the Settlement Method
applicable to such Option:

	 	 	 	 	 

	 

	 	(i)
	 	if the relevant Conversion Date occurs prior to the
Free Convertibility Date, the 50 consecutive
Valid-Day period beginning on, and including, the
second Valid Day after such Conversion Date; and
	 
	 	 	 	 
	 

	 	(ii)
	 	if the relevant Conversion Date occurs on or
following the Free Convertibility Date, the 50
consecutive Valid Days beginning on, and
including, the 52nd Scheduled Valid Day
immediately preceding the Expiration Date.

	 	 	 

	Settlement Date:

	 	For any Option, the date Shares and/or cash are delivered
with respect to the Convertible Note related to such
Option pursuant to Section 14.02(a) of the Indenture;
provided that the Settlement Date will not be prior to the
later of (i) the third Business Day immediately following
the final Valid Day of the Settlement Averaging Period
for such Option and (ii) the Exchange Business Day
immediately following the date Counterparty provides

8

 

	 	 	 

	 

	 	written notice to Dealer of such date of delivery under the
Indenture prior to 4:00 PM, New York City time.
	 
	 	 
	Settlement Currency:

	 	USD
	 
	 	 
	Other Applicable Provisions:

	 	The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 (as
modified below) of the Equity Definitions will be
applicable as if Physical Settlement were applicable.
	 
	 	 
	Representation and Agreement:

	 	Notwithstanding anything to the contrary in Equity
Definitions (including, but not limited to, Section 9.11
thereof), the parties acknowledge that (i) any Shares
delivered to Counterparty shall be, upon delivery, subject
to restrictions and limitations arising from Counterparty’s
status as issuer of the Shares under applicable securities
laws, (ii) Dealer may deliver any Shares required to be
delivered hereunder in certificated form in lieu of delivery
through the Clearance System and (iii) any Shares
delivered to Counterparty may be “restricted securities”
(as defined in Rule 144 under the Securities Act of 1933,
as amended (the “Securities Act”)).

3. Additional Terms applicable to the Transaction.

     Adjustments applicable to the Transaction:

	 	 	 

	Potential Adjustment Events:

	 	Notwithstanding Section 11.2(e) of the Equity
Definitions, a “Potential Adjustment Event” means an
occurrence of any event or condition, as set forth in any
Dilution Adjustment Provision, that would result in an
adjustment to the Conversion Rate (as defined in the
Indenture) of the Convertible Notes.
	 
	 	 
	Method of Adjustment:

	 	Calculation Agent Adjustment, which means that,
notwithstanding Section 11.2(c) of the Equity Definitions,
upon any Potential Adjustment Event, the Calculation
Agent shall make a corresponding adjustment to any one
or more of the Strike Price, Number of Options, Option
Entitlement and any other variable relevant to the
exercise, settlement or payment for the Transaction;
provided that, notwithstanding the foregoing, if any
Potential Adjustment Event occurs during the Settlement
Averaging Period but no adjustment was made to any
Convertible Note under the Indenture because the relevant
Holder (as such term is defined in the Indenture) was
deemed to be a record owner of the underlying Shares on
the related Conversion Date, then the Calculation Agent
shall make an adjustment, as determined by it, to the
terms hereof in order to account for such Potential
Adjustment Event.
	 
	 	 
	Dilution Adjustment Provisions:

	 	Section 14.04(a), (b), (c), (d) and (e) and Section 14.05 of
the Indenture.

     Extraordinary Events applicable to the Transaction:

	 	 	 

	Merger Events:

	 	Applicable; provided that notwithstanding Section 12.1(b)
of the Equity Definitions, a “Merger Event” means the

9

 

	 	 	 

	 

	 	occurrence of any event or condition set forth in the
definition of “Merger Event” in Section 14.07(a) of the
Indenture.
	 
	 	 
	Tender Offers:

	 	Applicable; provided that notwithstanding Section 12.1(d)
of the Equity Definitions, a “Tender Offer” means the
occurrence of any event or condition set forth in Section
14.04(e) of the Indenture.
	 
	 	 
	Consequence of Merger Events /

	 	
	Tender Offers:

	 	Notwithstanding Section 12.2 and Section 12.3 of the
Equity Definitions, upon the occurrence of a Merger
Event or a Tender Offer, the Calculation Agent shall
make a corresponding adjustment in respect of any
adjustment under the Indenture to any one or more of the
nature of the Shares (in the case of a Merger Event),
Strike Price, Number of Options, Option Entitlement and
any other variable relevant to the exercise, settlement or
payment for the Transaction; provided, however, that such
adjustment shall be made without regard to any
adjustment to the Conversion Rate pursuant to any
Excluded Provision; provided further that if, with respect
to a Merger Event or a Tender Offer, (i) the consideration
for the Shares includes (or, at the option of a holder of
Shares, may include) shares of an entity or person that is
not a corporation or is not organized under the laws of the
United States, any State thereof or the District of
Columbia or (ii) the Counterparty to the Transaction
following such Merger Event or Tender Offer, will not be
a corporation or will not be the Issuer following such
Merger Event or Tender Offer, then Cancellation and
Payment (Calculation Agent Determination) shall apply.
	 
	 	 
	Nationalization, Insolvency or Delisting:

	 	Cancellation and Payment (Calculation Agent
Determination); provided that, in addition to the
provisions of Section 12.6(a)(iii) of the Equity
Definitions, it will also constitute a Delisting if the
Exchange is located in the United States and the Shares
are not immediately re-listed, re-traded or re-quoted on
any of the New York Stock Exchange, The NASDAQ
Global Select Market or The NASDAQ Global Market (or
their respective successors); if the Shares are immediately
re-listed, re-traded or re-quoted on any of the New York
Stock Exchange, The NASDAQ Global Select Market or
The NASDAQ Global Market (or their respective
successors), such exchange or quotation system shall
thereafter be deemed to be the Exchange.
	 
	 	 
	Additional Disruption Events:

	 	
	 
	 	 
	Change in Law:

	 	Applicable; provided that (i) Section 12.9(a)(ii) of the
Equity Definitions is hereby amended by replacing the
parenthetical beginning after the word “regulation” in the
second line thereof with the words “(including, for the
avoidance of doubt and without limitation, (x) any tax law
or (y) adoption or promulgation of new regulations
authorized or mandated by existing statute)” and (ii)

10

 

	 	 	 

	 

	 	Section 12.9(a)(ii)(X) of the Equity Definitions is hereby
amended by replacing the word “Shares” with the phrase
“Hedge Positions.”
	 
	 	 
	          Failure to Deliver:

	 	Applicable
	 
	 	 
	          Hedging Disruption:

	 	Applicable
	 
	 	 
	          Increased Cost of Hedging:

	 	Applicable
	 
	 	 
	          Hedging Party:

	 	For all applicable Additional Disruption Events, Dealer.
	 
	 	 
	     Determining Party:

	 	For all applicable Extraordinary Events, Dealer.
	 
	 	 
	     Non-Reliance:

	 	Applicable
	 
	 	 
	     Agreements and Acknowledgements
	 	 
	 
	 	 
	     Regarding Hedging Activities:

	 	Applicable
	 
	 	 
	     Additional Acknowledgments:

	 	Applicable

	 	 	 	 	 

	4.

	 	   Calculation Agent.
	 	Dealer, whose judgments, determinations and calculations shall be
made in good faith and in a commercially reasonable manner. Following any determination or
calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the
Calculation Agent will provide to Counterparty by e-mail to the e-mail address provided by
Counterparty in such written request a report (in a commonly used file format for the storage and
manipulation of financial data) displaying in reasonable detail the basis for such calculation,
it being understood that the Calculation Agent shall not be obligated to disclose any
proprietary models used by it for such calculation.

	5.	 	Account Details.

	 	 	 

	(a)

	 	Account for payments to Counterparty:
	 
	 	 
	 

	 	Bank Name: Wells Fargo Bank
	 

	 	ABA #: 121000248
	 

	 	Beneficiary: First Clearing, LLC
	 

	 	Account #: 4122023377
	 

	 	FFC Account Name: Integra LifeSciences Holdings Corp
	 

	 	FFC Account Number: 8595-0713
	 
	 	 
	 

	 	Account for delivery of Shares to Counterparty:
	 
	 	 
	 

	 	American Stock Transfer & Trust Co LLC
	 

	 	Transfer Agent # 2941
	 

	 	Account # 10249
	 
	 	 
	(b)

	 	Account for payments to Dealer:
	 
	 	 
	 

	 	To be provided by Dealer.
	 
	 	 
	 

	 	Account for delivery of Shares from Dealer:

11

 

	 	 	 	 	 

	 

	 	 	 	To be provided by Dealer.
	 
	 	 
	6.	 	Offices.
	 
	 	 	 	 
	 

	 	(a)
	 	The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch
Party.
	 
	 	 	 	 
	 

	 	(b)
	 	The Office of Dealer for the Transaction is: London
	 
	 	 	 	 
	7.	 	Notices.

	 	 	 

	(a)

	 	Address for notices or communications to Counterparty:
	 
	 	 
	 

	 	Integra LifeSciences Holdings Corporation
	 

	 	311 Enterprise Drive
	 

	 	Plainsboro, NJ 08536

					

	 

	 	Attention:
	 	Treasurer
	 

	 	Telephone No.:
	 	(609) 275-0500
	 

	 	Facsimile No.:
	 	(609) 750-4264
	 
	 	 	 	 
	(b)

	 	Address for notices or communications to Dealer:

	 
	 	 	 	 
	 

	 	To:
	 	Deutsche Bank AG, London Branch
	 

	 	 	 	c/o Deutsche Bank Securities Inc.
	 

	 	Attn:
	 	Faiz Khan / Andrew Yaeger
	 

	 	Group:
	 	Equity-Linked Capital Markets
	 

	 	 	 	60 Wall Street, 4th Floor
	 

	 	 	 	New York, NY 10005
	 

	 	Faiz Tel:
	 	212-250-0668
	 

	 	Faiz Email:
	 	faiz.khan@db.com
	 

	 	Andrew Tel:
	 	212-250-2717
	 

	 	Andrew Email:
	 	Andrew.yaeger@db.com
	 

	 	Facsimile:
	 	732-460-7499
	 
	 	 	 	 
	 

	 	With a copy to:	 	 
	 
	 	 	 	 
	 

	 	Attn:
	 	Lars Kestner / Dushyant Chadha
	 

	 	Group:
	 	Corporate Derivatives
	 

	 	 	 	60 Wall Street, 4th Floor
	 

	 	 	 	New York, NY 10005
	 

	 	Lars Tel:
	 	212-250-6043
	 

	 	Lars Email:
	 	lars.kestner@db.com
	 

	 	Dushyant Tel:
	 	212-250-4980
	 	 	Dushyant Email: dushyant.chadha@db.com

	8.	 	Representations and Warranties of Counterparty.
	 
	 	 	Each of the representations and warranties of Counterparty set forth in Section 3 of the Purchase Agreement
(the “Purchase Agreement”), dated as of June 9, 2011, between Counterparty and the representatives of
the Initial Purchasers party thereto (the “Representatives”), is true and correct and is hereby deemed to be
repeated to Dealer as if set forth herein; provided that no such representation or warranty, other than the
representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be
the basis of an Event of Default under Section 5(a)(iv) of the Agreement. Counterparty hereby further
represents and warrants to Dealer on the date hereof and on and as of the Premium Payment Date that:

	 	(a)	 	Counterparty has all necessary corporate power and authority to execute, deliver and perform its
obligations in respect of the Transaction; such execution, delivery and performance have been
duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation

12

 

	 	 	 	has been duly and validly executed and delivered by Counterparty and constitutes its valid and
binding obligation, enforceable against Counterparty in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and
except that rights to indemnification and contribution hereunder may be limited by federal or state
securities laws or public policy relating thereto.
	 
	 	(b)	 	Neither the execution and delivery of this Confirmation nor the incurrence or performance of
obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of
incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or
regulation, or any order, writ, injunction or decree of any court or governmental authority or
agency, or any agreement or instrument to which Counterparty or any of its subsidiaries is a party
or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its
subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any
such agreement or instrument.
	 
	 	(c)	 	No consent, approval, authorization, or order of, or filing with, any governmental agency or body
or any court is required in connection with the execution, delivery or performance by Counterparty
of this Confirmation, except such as have been obtained or made and such as may be required
under the Securities Act or state securities laws.
	 
	 	(d)	 	Counterparty is not and will not be required to register as an “investment company” as such term
is defined in the Investment Company Act of 1940, as amended.
	 
	 	(e)	 	Counterparty is an “eligible contract participant” (as such term is defined in Section 1a(12) of the
Commodity Exchange Act, as amended, other than a person that is an eligible contract participant
under Section 1a(12)(C) of the Commodity Exchange Act).
	 
	 	(f)	 	Each of Counterparty and its officers and directors is not, on the date hereof, in possession of any
material non-public information with respect to Counterparty or the Shares.

	9.	 	Other Provisions.

	 	(a)	 	Opinions. Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date,
with respect to the matters set forth in Sections 8(a) through (c) of this Confirmation. Delivery of
such opinion to Dealer shall be a condition precedent for the purpose of Section 2(a)(iii) of the
Agreement with respect to each obligation of Dealer under Section 2(a)(i) of the Agreement.
	 
	 	(b)	 	Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any
repurchase of Shares or consummates or otherwise executes or engages in any transaction or event
(a “Conversion Rate Adjustment Event”) that would lead to an increase in the Conversion Rate
(as such term is defined in the Indenture), promptly give Dealer a written notice of such
repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if
following such repurchase or Conversion Rate Adjustment Event, the number of outstanding
Shares as determined on such day is (i) less than 26,749,873 (in the case of the first such notice) or
(ii) thereafter more than 1,622,916 less than the number of Shares included in the immediately
preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Dealer and its
affiliates and their respective officers, directors, employees, affiliates, advisors, agents and
controlling persons (each, an “Indemnified Person”) from and against any and all losses
(including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the
risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from
hedging activities or cessation of hedging activities and any losses in connection therewith with
respect to the Transaction), claims, damages, judgments, liabilities and expenses (including
reasonable attorney’s fees), joint or several, that an Indemnified Person may become subject to, as
a result of Counterparty’s failure to provide Dealer with a Repurchase Notice on the day and in the

13

 

	 	 	 	manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of
such Indemnified Persons for any reasonable legal or other expenses incurred in connection with
investigating, preparing for, providing testimony or other evidence in connection with or
defending any of the foregoing. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against the Indemnified
Person as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice in
accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in
writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and any others
Counterparty may designate in such proceeding and shall pay the fees and expenses of such
counsel related to such proceeding. Counterparty shall not be liable for any settlement of any
proceeding contemplated by this paragraph that is effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to
indemnify any Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Counterparty shall not, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated
by this paragraph that is in respect of which any Indemnified Person is or could have been a party
and indemnity could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all liability on
claims that are the subject matter of such proceeding on terms reasonably satisfactory to such
Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an
Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then Counterparty hereunder, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities. The remedies provided for in this paragraph (b) are
not exclusive and shall not limit any rights or remedies that may otherwise be available to any
Indemnified Person at law or in equity. The indemnity and contribution agreements contained in
this paragraph shall remain operative and in full force and effect regardless of the termination of
the Transaction.
	 
	 	(c)	 	Regulation M. Counterparty is not on the Trade Date engaged in a distribution, as such term is
used in Regulation M under the Exchange Act, of any securities of Counterparty, other than a
distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7)
of Regulation M. Counterparty shall not, until the second Scheduled Trading Day immediately
following the Effective Date, engage in any such distribution.
	 
	 	(d)	 	No Manipulation. Counterparty is not entering into the Transaction to create actual or apparent
trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to
raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or
exchangeable for the Shares) or otherwise in violation of the Exchange Act.
	 
	 	(e)	 	Transfer or Assignment.

	 	(i)	 	Counterparty shall have the right to transfer or assign its rights and obligations hereunder
with respect to all, but not less than all, of the Options hereunder (such Options, the
“Transfer Options”); provided that such transfer or assignment shall be subject to
reasonable conditions that Dealer may impose, including, but not limited to, the
following conditions:

	 	(A)	 	With respect to any Transfer Options, Counterparty shall not be released from
its notice and indemnification obligations pursuant to Section 9(b) or any
obligations under Section 9(m) or 9(r) of this Confirmation;
	 
	 	(B)	 	Any Transfer Options shall only be transferred or assigned to a third party that is
a United States person (as defined in the Internal Revenue Code of 1986, as
amended);

14

 

	 	(C)	 	Such transfer or assignment shall be effected on terms, including any reasonable
undertakings by such third party (including, but not limited to, an undertaking
with respect to compliance with applicable securities laws in a manner that, in
the reasonable judgment of Dealer, will not expose Dealer to material risks
under applicable securities laws) and execution of any documentation and
delivery of legal opinions with respect to securities laws and other matters by
such third party and Counterparty, as are requested and reasonably satisfactory
to Dealer;
	 
	 	(D)	 	Dealer will not, as a result of such transfer and assignment, be required to pay
the transferee on any payment date an amount under Section 2(d)(i)(4) of the
Agreement greater than an amount that Dealer would have been required to pay
to Counterparty in the absence of such transfer and assignment;
	 
	 	(E)	 	An Event of Default, Potential Event of Default or Termination Event will not
occur as a result of such transfer and assignment;
	 
	 	(F)	 	Without limiting the generality of clause (B), Counterparty shall cause the
transferee to make such Payee Tax Representations and to provide such tax
documentation as may be reasonably requested by Dealer to permit Dealer to
determine that results described in clauses (D) and (E) will not occur upon or
after such transfer and assignment; and
	 
	 	(G)	 	Counterparty shall be responsible for all reasonable costs and expenses,
including reasonable counsel fees, incurred by Dealer in connection with such
transfer or assignment.

	 	(ii)	 	Dealer may not, without Counterparty’s consent, transfer or assign all or any part of its
rights or obligations under the Transaction except to any affiliate of Dealer (A) that has a
rating for its long term, unsecured and unsubordinated indebtedness that is equal to or
better than Dealer’s credit rating at the time of such transfer or assignment, or (B) whose
obligations hereunder will be guaranteed, pursuant to the terms of a customary guarantee
in a form used by Dealer generally for similar transactions, by Dealer or the Dealer
Parent. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the
Option Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the
Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B)
or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially
reasonable efforts to effect a transfer or assignment of Options to a third party on pricing
terms reasonably acceptable to Dealer and within a time period reasonably acceptable to
Dealer such that no Excess Ownership Position exists, then Dealer may designate any
Exchange Business Day as an Early Termination Date with respect to a portion of the
Transaction (the “Terminated Portion”), such that following such partial termination no
Excess Ownership Position exists. In the event that Dealer so designates an Early
Termination Date with respect to a portion of the Transaction, a payment shall be made
pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been
designated in respect of a Transaction having terms identical to the Transaction and a
Number of Options equal to the number of Options underlying the Terminated Portion,
(2) Counterparty were the sole Affected Party with respect to such partial termination and
(3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of
doubt, the provisions of Section 9(k) shall apply to any amount that is payable by Dealer
to Counterparty pursuant to this sentence as if Counterparty was not the Affected Party).
The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A)
the numerator of which is the number of Shares that Dealer and each person subject to
aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act
and rules promulgated thereunder directly or indirectly beneficially own (as defined
under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder)
and (B) the denominator of which is the number of Shares outstanding. The “Option

15

 

	 	 	 	Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the
numerator of which is the sum of (1) the product of the Number of Options and the
Option Entitlement and (2) the aggregate number of Shares underlying any other call
option transaction sold by Dealer to Counterparty, and (B) the denominator of which is
the number of Shares outstanding. The “Share Amount” as of any day is the number of
Shares that Dealer and any person whose ownership position would be aggregated with
that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule,
regulation, regulatory order or organizational documents or contracts of Counterparty that
are, in each case, applicable to ownership of Shares (“Applicable Restrictions”), owns,
beneficially owns, constructively owns, controls, holds the power to vote or otherwise
meets a relevant definition of ownership under any Applicable Restriction, as determined
by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number
of Shares equal to (A) the minimum number of Shares that could give rise to reporting or
registration obligations (except for any filings of Schedule 13D or Schedule 13G under
the Exchange Act or any other filing obligations applicable as of the date hereof) or other
requirements (including obtaining prior approval from any person or entity) of a Dealer
Person, or could result in an adverse effect on a Dealer Person, under any Applicable
Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the
number of Shares outstanding.
	 
	 	(iii)	 	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, or
make or receive any payment in cash, to or from Counterparty, Dealer may designate any
of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or to
make or receive such payment in cash, 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 Counterparty to the extent of any such
performance.

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

	 	(i)	 	in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates
(each of which will be on or prior to such Nominal Settlement Date) and the number of
Shares that it will deliver on each Staggered Settlement Date;
	 
	 	(ii)	 	the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all
such Staggered Settlement Dates will equal the number of Shares that Dealer would
otherwise be required to deliver on such Nominal Settlement Date; and
	 
	 	(iii)	 	if the Net Share Settlement terms set forth above were to apply on the Nominal
Settlement Date, then the Net Share Settlement terms will apply on each Staggered
Settlement Date, except that the Net Shares will be allocated among such Staggered
Settlement Dates as specified by Dealer in the notice referred to in clause (i) above.

	 	(g)	 	Role of Agent. Whenever delivery of funds or other assets is required hereunder by or to
Counterparty, such delivery shall be effected through DBSI. In addition, all notices, demands and
communications of any kind relating to the Transaction between Dealer and Counterparty shall be
transmitted exclusively through DBSI.
	 
	 	(h)	 	Additional Termination Events.

16

 

	 	(i)	 	Notwithstanding anything to the contrary in this Confirmation if (i) an event of default
with respect to Counterparty occurs under the terms of the Convertible Notes as set forth in
Section 6.01 of the Indenture or (ii) Counterparty gives Dealer the notice required pursuant
to the last sentence of this paragraph, then such occurrence or the giving of such notice,
as applicable, shall constitute an Additional Termination Event applicable to the
Transaction and, with respect to such Additional Termination Event, (A) Counterparty shall
be deemed to be the sole Affected Party, (B) the Transaction shall be the sole Affected
Transaction and (C) Dealer shall be the party entitled to designate an Early Termination
Date pursuant to Section 6(b) of the Agreement (which Early Termination Date shall
correspond in the case of a Repurchase Event (as defined below), if applicable, to a payment
date under Section 6(d)(ii) of the Agreement occurring within a commercially reasonable
period of time (as determined by Dealer in a commercially reasonable manner in consultation
with counsel with regard to legal, regulatory or commercial issues arising in connection
with any related hedging or hedge unwind activities) after the date of payment with respect
to the Convertible Notes, if applicable, for such Repurchase Event) and determine the amount
payable pursuant to Section 6(e) of the Agreement; provided that in the case of a Repurchase
Event, the Transaction shall be subject to termination only in respect of a number of
Options (the “Affected Number of Options”), equal to the lesser of (A) the number of
Convertible Notes that cease to be outstanding in connection with or as a result of such
Repurchase Event, as the case may be, and (B) the number of Options then outstanding. For
the avoidance of doubt, in determining the amount payable in respect of such Affected
Transaction pursuant to Section 6 of the Agreement in connection with a Repurchase Event,
the Calculation Agent shall assume that the Convertible Notes subject to such Repurchase
Event shall not have been repurchased and remain outstanding. Counterparty shall notify
Dealer promptly following the occurrence of any Repurchase Event; provided that Counterparty
agrees to initiate a Repurchase Event only if Counterparty represents to Dealer at the time
it takes action to so initiate such Repurchase Event that it is not in possession of any
material nonpublic information with respect to Counterparty or the Shares.
	 
	 	 	 	“Repurchase Event” means that (i) any Convertible Notes are repurchased (whether in
connection with or as a result of a fundamental change, howsoever defined, a tender
offer or similar transaction or for any other reason) by Counterparty, (ii) any
Convertible Notes are delivered to Counterparty in exchange for delivery of any
property or assets of Counterparty (howsoever described), (iii) any principal of any
of the Convertible Notes is repaid prior to the final maturity date of the
Convertible Notes (whether following acceleration of the Convertible Notes or
otherwise), or (iv) any Convertible Notes are exchanged by or for the benefit of the
holders thereof for any other securities of Counterparty (or any other property, or
any combination thereof) pursuant to any exchange offer or similar transaction. For
the avoidance of doubt, any conversion of Convertible Notes pursuant to the terms of
the Indenture shall not constitute a Repurchase Event.
	 
	 	(ii)	 	Notwithstanding anything to the contrary in this Confirmation, the receipt by Dealer
from Counterparty, within the applicable time period set forth under “Notice of Exercise”
above, of any Notice of Exercise in respect of Options that relate to Convertible Notes as
to which additional Shares would be added to the Conversion Rate pursuant to Section 14.03
of the Indenture in connection with a “Make-Whole Fundamental Change” (as defined in the
Indenture) shall constitute an Additional Termination Event as provided in this Section
9(h)(ii). Upon receipt of any such Notice of Exercise, Dealer shall designate an Exchange
Business Day following such Additional Termination Event (which Exchange Business Day shall
in no event be earlier than the related settlement date for such Convertible Notes) as an
Early Termination Date with respect to the portion of this Transaction corresponding to a
number of Options (the “Make-Whole Conversion Options”) equal to the lesser of (A) the
number of such Options specified in such Notice of Exercise and (B) the Number of Options as
of the date Dealer designates such Early Termination Date and, as of such date, the Number
of Options shall be reduced by the

17

 

	 	 	 	number of Make-Whole Conversion Options. Any payment hereunder with respect to such
termination shall be calculated pursuant to Section 6 of the Agreement as if (1) an
Early Termination Date had been designated in respect of a Transaction having terms
identical to this Transaction and a Number of Options equal to the number of
Make-Whole Conversion Options, (2) Counterparty were the sole Affected Party with
respect to such Additional Termination Event and (3) the terminated portion of the
Transaction were the sole Affected Transaction (and, for the avoidance of doubt, in
determining the amount payable pursuant to Section 6 of the Agreement, the Calculation
Agent shall not take into account any adjustments to the Option Entitlement that
result from corresponding adjustments to the Conversion Rate pursuant to Section 14.03
of the Indenture); provided that the amount of cash deliverable in respect of such
early termination by Dealer to Counterparty shall not be greater than the product of
(x) the Applicable Percentage and (y) the excess of (I) (1) the number of Make-Whole
Conversion Options multiplied by (2) the Conversion Rate (after taking into account
any applicable adjustments to the Conversion Rate pursuant to Section 14.03 of the
Indenture) multiplied by (3) a price per Share determined by the Calculation Agent
over (II) the aggregate principal amount of such Convertible Notes, as determined by
the Calculation Agent in a commercially reasonable manner.

	 	(i)	 	Amendments to Equity Definitions.

	 	(i)	 	Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the
fourth line thereof the word “or” after the word “official” and inserting a comma therefor,
and (2) deleting the semi-colon at the end of subsection (B) thereof and inserting the
following words therefor “or (C) at Dealer’s option, the occurrence of any of the events
specified in Section 5(a)(vii)(1) through (9) of the ISDA Master Agreement with respect to
that Issuer.”
	 
	 	(ii)	 	Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “either
party may elect” with “Dealer may elect” and (2) replacing “notice to the other party” with
“notice to Counterparty” in the first sentence of such section.

	 	(j)	 	No Set-off. Each party waives any and all rights it may have to set off obligations arising
under the Agreement and the Transaction against other obligations between the parties, whether
arising under any other agreement, applicable law or otherwise.
	 
	 	(k)	 	Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events.
If in respect of the Transaction, an amount is payable by Dealer to Counterparty (i) pursuant to
Section 12.7 or Section 12.9 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the
Agreement (any such amount, a “Payment Obligation”), Counterparty may request Dealer to satisfy the
Payment Obligation by the Share Termination Alternative (as defined below) (except that
Counterparty shall not have the right to make such an election in the event of (I) a
Nationalization, Insolvency, Merger Event or Tender Offer, in each case, in which the consideration
to be paid to holders of Shares consists solely of cash, (II) a Merger Event or Tender Offer that
is within Counterparty’s control, or (III) an Event of Default in which Counterparty is the
Defaulting Party or a Termination Event in which Counterparty is the Affected Party, other than an
Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the
Agreement or a Termination Event of the type described in Section 5(b) of the Agreement in each
case that resulted from an event or events outside Counterparty’s control) and shall give
irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no
later than 12:00 p.m. (New York City time) on the Merger Date, the Tender Offer Date, the
Announcement Date (in the case of Nationalization, Insolvency or Delisting), the Early Termination
Date or date of cancellation, as applicable; provided that if Counterparty does not validly request
Dealer to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have
the right, in its sole discretion, to satisfy its Payment Obligation by the Share Termination
Alternative, notwithstanding Counterparty’s election to the contrary.

18

 

	 	 	 

	Share Termination Alternative:

	 	If applicable, Dealer shall deliver to Counterparty the
Share Termination Delivery Property on, or within a
commercially reasonable period of time after, the
date when the relevant Payment Obligation would
otherwise be due pursuant to Section 12.7 or 12.9 of
the Equity Definitions or Section 6(d)(ii) and 6(e) of
the Agreement, as applicable (the “Share
Termination Payment Date”), in satisfaction of
such Payment Obligation in the manner reasonably
requested by Counterparty free of payment.
	 
	 	 
	Share Termination Delivery Property:

	 	A number of Share Termination Delivery Units, as
calculated by the Calculation Agent, equal to the
Payment Obligation divided by the Share
Termination Unit Price. The Calculation Agent shall
adjust the Share Termination Delivery Property by
replacing any fractional portion of a security therein
with an amount of cash equal to the value of such
fractional security based on the values used to
calculate the Share Termination Unit Price.
	 
	 	 
	Share Termination Unit Price:

	 	The value to Dealer of property contained in one
Share Termination Delivery Unit, as determined by
the Calculation Agent in its discretion by
commercially reasonable means and notified by the
Calculation Agent to Dealer at the time of
notification of the Payment Obligation. For the
avoidance of doubt, the parties agree that in
determining the Share Termination Delivery Unit
Price the Calculation Agent may consider the
purchase price paid in connection with the purchase
of Share Termination Delivery Property.
	 
	 	 
	Share Termination Delivery Unit:

	 	One Share or, if a Merger Event has occurred and a
corresponding adjustment to the Transaction has been
made, a unit consisting of the number or amount of
each type of property received by a holder of one
Share (without consideration of any requirement to
pay cash or other consideration in lieu of fractional
amounts of any securities) in such Merger Event, as
determined by the Calculation Agent.
	 
	 	 
	Failure to Deliver:

	 	Applicable
	 
	 	 
	Other applicable provisions:

	 	If Share Termination Alternative is applicable, the
provisions of Sections 9.8, 9.9 and 9.11 (as modified
above) of the Equity Definitions and the provisions
set forth opposite the caption “Representation and
Agreement” in Section 2 will be applicable as if
Physical Settlement were applicable.

	 	(l)	 	Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating
to the Transaction. Each party (i) certifies that no representative, agent or attorney of either
party has represented, expressly or otherwise, that such other party would not, in the event of
such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that
it and the

19

 

	 	 	 	other party have been induced to enter into the Transaction, as applicable, by, among other things,
the mutual waivers and certifications provided herein.

	 	(m)	 	Registration. Counterparty hereby agrees that if, in the good faith reasonable judgment
of Dealer based on the advice of counsel, the Shares (“Hedge Shares”) acquired by Dealer for the
purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market
by Dealer without registration under the Securities Act, Counterparty shall, at its election,
either (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make
available to Dealer an effective registration statement under the Securities Act and enter into an
agreement, in form and substance satisfactory to Dealer, substantially in the form of an
underwriting agreement for a registered secondary offering of substantially similar size; provided,
however, that if Dealer, in its sole reasonable discretion, is not satisfied with access to due
diligence materials, the results of its due diligence investigation, or the procedures and
documentation for the registered offering referred to above, then clause (ii) or clause (iii) of
this paragraph shall apply at the election of Counterparty, (ii) in order to allow Dealer to sell
the Hedge Shares in a private placement, enter into a private placement agreement substantially
similar to private placement purchase agreements customary for private placements of equity
securities of substantially similar size, in form and substance satisfactory to Dealer (in which
case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are
necessary, in its reasonable judgment, to compensate Dealer for any discount from the public market
price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase
the Hedge Shares from Dealer at the Relevant Price on such Exchange Business Days, and in the
amounts, requested by Dealer.
	 
	 	(n)	 	Tax Disclosure. Effective from the date of commencement of discussions concerning the
Transaction, Counterparty and each of its employees, representatives, or other agents may disclose
to any and all persons, without limitation of any kind, the tax treatment and tax structure of the
Transaction and all materials of any kind (including opinions or other tax analyses) that are
provided to Counterparty relating to such tax treatment and tax structure.
	 
	 	(o)	 	Right to Extend. Dealer may postpone or add, in whole or in part, any Valid Day or Valid
Days during the Settlement Averaging Period or any other date of valuation, payment or delivery by
Dealer, with respect to some or all of the Options hereunder, if Dealer reasonably determines based
on the advice of counsel, in its discretion, that such action is reasonably necessary or advisable
to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity
conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge
unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an
affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or
self-regulatory requirements, or with related policies and procedures applicable to Dealer.
	 
	 	(p)	 	Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation
is not intended to convey to Dealer rights against Counterparty with respect to the Transaction
that are senior to the claims of common stockholders of Counterparty in any United States
bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed
to limit Dealer’s right to pursue remedies in the event of a breach by Counterparty of its
obligations and agreements with respect to the Transaction; provided, further, that nothing herein
shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than
the Transaction.
	 
	 	(q)	 	Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction
to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of
the United States Code) (the “Bankruptcy Code”), and the parties hereto to be entitled to the
protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555
and 560 of the Bankruptcy Code, (ii) a party’s right to liquidate the Transaction and to exercise
any other remedies upon the occurrence of any Event of Default under the Agreement with respect to
the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii)
each payment and delivery of cash, securities or other property hereunder to constitute a “margin
payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code.

20

 

	 	(r)	 	Notice of Certain Other Events. Counterparty
covenants and agrees that:

	 	(i)	 	promptly following the public announcement of the results of any election by the holders
of Shares with respect to the consideration due upon consummation of any consolidation, merger and
binding share exchange to which Counterparty is a party, or any sale of all or substantially all
of Counterparty’s assets, in each case pursuant to which the Shares will be converted into cash,
securities or other property, Counterparty shall give Dealer written notice of the types and
amounts of consideration that holders of Shares have elected to receive upon consummation of such
transaction or event (the date of such notification, the “Consideration Notification Date”);
provided that in no event shall the Consideration Notification Date be later than the date on
which such transaction or event is consummated; and
	 
	 	(ii)	 	promptly following any adjustment to the Convertible Notes in connection with any
Potential Adjustment Event, Merger Event or Tender Offer, Counterparty shall give Dealer written
notice of the details of such adjustment.

	 	(s)	 	Wall Street Transparency and Accountability Act. In connection with Section 739 of the
Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that
neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA
or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable
rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement,
as applicable, arising from a termination event, force majeure, illegality, increased costs,
regulatory change or similar event under this Confirmation, the Equity Definitions incorporated
herein, or the Agreement (including, but not limited to, rights arising from Change in Law,
Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as
defined in the Agreement)).
	 
	 	(t)	 	Early Unwind. In the event the sale of the “Underwritten Securities” (as defined in the
Purchase Agreement) is not consummated with the Representatives for any reason, or Counterparty
fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), in each case
by 5:00 p.m. (New York City time) on the Premium Payment Date, or such later date as agreed upon
by the parties (the Premium Payment Date or such later date, the “Early Unwind Date”), the
Transaction shall automatically terminate (the “Early Unwind”) on the Early Unwind Date and (i)
the Transaction and all of the respective rights and obligations of Dealer and Counterparty under
the Transaction shall be cancelled and terminated and (ii) each party shall be released and
discharged by the other party from and agrees not to make any claim against the other party with
respect to any obligations or liabilities of the other party arising out of and to be performed in
connection with the Transaction either prior to or after the Early Unwind Date; provided that,
other than in cases involving a breach of the Purchase Agreement by Dealer, Counterparty shall
purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its
affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer
and Counterparty represents and acknowledges to the other that, subject to the proviso included in
this Section 9(r), upon an Early Unwind, all obligations with respect to the Transaction shall be
deemed fully and finally discharged.
	 
	 	(u)	 	Payment by Counterparty. In the event that (i) an Early Termination Date occurs or is
designated with respect to the Transaction as a result of a Termination Event or an Event of
Default (other than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the
Agreement) and, as a result, Counterparty owes to Dealer an amount calculated under Section 6(e)
of the Agreement, or (ii) Counterparty owes to Dealer, pursuant to Section 12.7 or Section 12.9 of
the Equity Definitions, an amount calculated under Section 12.8 of the Equity Definitions, such
amount shall be deemed to be zero.

[Remainder
of Page Intentionally Blank]

21

 

     Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it to Deutsche Bank Securities Inc., 60 Wall Street, New York, NY
10005, or by fax to (212) 797 8974.

Very truly yours,

	 	 	 	 	 	 	 

	 	 	Deutsche Bank AG, London Branch	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lars Kestner
 

	 	 
	 	 	Authorized Signatory	 	 
	 

	 	Name:
	 	Lars Kestner	 	 
	 

	 	 	 	Managing Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael Sanderson
 

	 	 
	 	 	Authorized Signatory	 	 
	 

	 	Name:
	 	Michael Sanderson	 	 
	 

	 	 	 	Managing Director	 	 
	 
	 	 	 	 	 	 
	 	 	Deutsche Bank-Securities Inc., acting solely as

Agent in connection with the Transaction	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lars Kestner	 	 
	 

	 	 	 	 

	 	 
	 	 	Authorized Signatory	 	 
	 

	 	Name:
	 	Lars Kestner	 	 
	 

	 	 	 	Managing Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael Sanderson
 

	 	 
	 	 	Authorized Signatory	 	 
	 

	 	Name:
	 	Michael Sanderson	 	 
	 

	 	 	 	Managing Director	 	 

Accepted
and confirmed as of the
Trade Date:

Integra LifeSciences Holdings Corporation

	 	 	 	 	 

	By:
	 	/s/ Stuart M. Essig, CEO	 	 
	 

	 	 

	 	 
	Authorized Signatory 

Name: Stuart M. Essig, CEO	 	 

[DB Bond Hedge Confirmation]

	 	 	 

	Chairman of the Supervisory Board: Clemens Börsig
Management Board: Josef Ackermann (Chairman), Hugo
Bänziger, Jürgen Fitschen, Anshuman Jain, Stefan Krause,
Hermann-Josef Lamberti, Rainer Neske

	 	Deutsche Bank AG is authorized under German Banking Law
(competent authority: BaFin — Federal Financial Supervising
Authority) and regulated by the Financial Services Authority for
the conduct of UK business; a member of the London Stock
Exchange. Deutsche Bank AG is a joint
stock corporation with limited
liability incorporated in the Federal
Republic of Germany HRB No. 30 000
District Court of Frankfurt am Main;
Branch Registration in England and
Wales BR000005; Registered address: Winchester House, 1 Great Winchester
Street, London EC2N 2DB. Deutsche Bank
Group online: http://www.deutsche-bank.com

22exv10w5

Exhibit 10.5

EXECUTION VERSION

The Royal Bank of Scotland plc

c/o RBS Securities Inc.

600 Washington Blvd.

Stamford, CT 06901

June 9, 2011

	 	 	 

	To:

	 	Integra LifeSciences Holdings Corporation
	 

	 	311 Enterprise Drive
	 

	 	Plainsboro, NJ 08536
	 

	 	Attention: Treasurer
	 

	 	Telephone No.: (609) 275-0500
	 

	 	Facsimile No.: (609) 750-4264

	 	 	 

	Re:

	 	Base Warrants

     The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the Warrants issued by Integra LifeSciences Holdings Corporation (“Company”) to The
Royal Bank of Scotland plc (“Dealer”), acting through RBS Securities Inc., as its agent, as of the
Trade Date specified below (the “Transaction”). This letter agreement constitutes a “Confirmation”
as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any
previous agreements and serve as the final documentation for the Transaction.

     The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. The Transaction shall be
deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.

     Each party is hereby advised, and each such party acknowledges, that the other party has
engaged in, or refrained from engaging in, substantial financial transactions and has taken other
material actions in reliance upon the parties’ entry into the Transaction to which this
Confirmation relates on the terms and conditions set forth below.

1. This Confirmation evidences a complete and binding agreement between Dealer and Company as to
the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Company had executed an agreement in such form (but
without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election that the “Cross
Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(a) the phrase “or becoming capable at such time of being declared” shall be deleted from clause
(1) of such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (i) the default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the payment when due; and
(iii) the payment is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.”; (c) “Specified Indebtedness” will have the meaning specified in Section 14
of the Agreement, except that such term shall not include obligations in respect of deposits
received in the ordinary course of a party’s banking business; and (d) “Threshold Amount” means in
relation to Dealer, three percent (3%) of shareholders’ equity of Dealer and in relation to
Company, USD 25 million.)) on the Trade Date. In the event of any inconsistency between provisions
of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the
Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other
than the Transaction to which this Confirmation relates shall be governed by the Agreement.

2. The Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction
for purposes of the Equity Definitions. The terms of the particular Transaction to which this
Confirmation relates are as follows:

 

	 	 	 

	General Terms.
	 	 
	 
	 	 
	Trade Date:

	 	June 9, 2011
	 
	 	 
	Effective Date:

	 	The third Exchange Business Day immediately prior to the Premium Payment Date
	 
	 	 
	Warrants:

	 	Equity call warrants, each giving the holder the right to purchase a number of Shares equal to the
Warrant Entitlement at a price per Share equal to
the Strike Price, subject to the terms set forth
under the caption “Settlement Terms” below. For
the purposes of the Equity Definitions, each
reference to a Warrant herein shall be deemed to
be a reference to a Call Option.
	 
	 	 
	Warrant Style:

	 	European
	 
	 	 
	Seller:

	 	Company
	 
	 	 
	Buyer:

	 	Dealer
	 
	 	 
	Shares:

	 	The common stock of Company, par value USD 0.01
per Share (Exchange symbol “IART”)
	 
	 	 
	Number of Warrants:

	 	696,368. For the avoidance of doubt, the Number
of Warrants shall be reduced by any Warrants
exercised or deemed exercised hereunder. In no
event will the Number of Warrants be less than
zero.
	 
	 	 
	Warrant Entitlement:

	 	One Share per Warrant
	 
	 	 
	Strike Price:

	 	USD 70.05.
	 
	 	 
	 

	 	Notwithstanding anything to the contrary in the
Agreement, this Confirmation or the Equity
Definitions, in no event shall the Strike Price
be subject to adjustment to the extent that,
after giving effect to such adjustment, the
Strike Price would be less than USD 46.68, except
for any adjustment pursuant to the terms of this
Confirmation and the Equity Definitions in
connection with stock splits or similar changes
to Company’s capitalization.
	 
	 	 
	Premium:

	 	USD 4,948,000
	 
	 	 
	Premium Payment Date:

	 	June 15, 2011
	 
	 	 
	Exchange:

	 	The NASDAQ Global Select Market
	 
	 	 
	Related Exchange(s):

	 	All Exchanges
	 
	 	 
	Procedures for Exercise.
	 	 
	 
	 	 
	Expiration Time:

	 	The Valuation Time
	 
	 	 
	Expiration Dates:

	 	Each Scheduled Trading Day during the period
from, and including, the First Expiration Date
to, but excluding, the 100th Scheduled Trading
Day following the First Expiration Date shall be
an “Expiration Date” for a

2

 

	 	 	 

	 

	 	number of Warrants equal to the Daily
Number of Warrants on such date; provided that,
notwithstanding anything to the contrary in the
Equity Definitions, if any such date is a
Disrupted Day, the Calculation Agent shall (i)
make adjustments, if applicable, to the Daily
Number of Warrants or shall reduce such Daily
Number of Warrants to zero for which such day
shall be an Expiration Date and shall designate
a Scheduled Trading Day or a number of Scheduled
Trading Days as the Expiration Date(s) for the
remaining Daily Number of Warrants or a portion
thereof for the originally scheduled Expiration
Date and (ii) if the Daily Number of Warrants
for such Disrupted Day is not reduced to zero,
determine the Settlement Price for such
Disrupted Day based on transactions in the
Shares on such Disrupted Day taking into account
the nature and duration of such Market
Disruption Event on such day; and provided
further that if such Expiration Date has not
occurred pursuant to this clause as of the
eighth Scheduled Trading Day following the last
scheduled Expiration Date under the Transaction,
the Calculation Agent shall have the right to
declare such Scheduled Trading Day to be the
final Expiration Date and the Calculation Agent
shall determine its good faith estimate of the
fair market value for the Shares as of the
Valuation Time on that eighth Scheduled Trading
Day or on any subsequent Scheduled Trading Day,
as the Calculation Agent shall determine using
commercially reasonable means. Any Scheduled
Trading Day on which, as of the date hereof, the
Exchange is scheduled to close prior to its
normal close of trading shall be deemed not to
be a Scheduled Trading Day; if a closure of the
Exchange prior to its normal close of trading on
any Scheduled Trading Day is scheduled following
the date hereof, then such Scheduled Trading Day
shall be deemed to be a Disrupted Day in full.
	 
	 	 
	First Expiration Date:

	 	March 15, 2017 (or if such day is not a
Scheduled Trading Day, the next following
Scheduled Trading Day), subject to Market
Disruption Event below.
	 
	 	 
	Daily Number of Warrants:

	 	For any Expiration Date, the Number of Warrants
that have not expired or been exercised as of
such day, divided by the remaining number of
Expiration Dates (including such day), rounded
down to the nearest whole number, subject to
adjustment pursuant to the provisos to
“Expiration Dates”.
	 
	 	 
	Automatic Exercise:

	 	Applicable; and means that for each Expiration
Date, a number of Warrants equal to the Daily
Number of Warrants (as adjusted pursuant to the
terms hereof) for such Expiration Date will be
deemed to be automatically exercised at the
Expiration Time on such Expiration Date.
	 
	 	 
	Market Disruption Event:

	 	Section 6.3(a)(ii) of the Equity Definitions is
hereby amended by replacing clauses (ii) and
(iii) in their entirety with “(ii) an Exchange
Disruption, (iii) an Early Closure

3

 

	 	 	 

	 

	 	or (iv) a Regulatory Disruption; in
each case that the Calculation Agent
determines is material.”
	 
	 	 
	Regulatory Disruption:

	 	Any event that Dealer, in its
discretion based on the advice of
counsel, determines makes it
advisable with regard to any legal,
regulatory or self-regulatory
requirements or related policies and
procedures, for Dealer to refrain
from or decrease any market activity
in connection with the Transaction.
Dealer shall notify Issuer as soon as
reasonably practicable that a
Regulatory Disruption has occurred
and the Expiration Dates affected by
it.
	 
	 	 
	Valuation Terms.
	 	 
	 
	 	 
	Valuation Time:

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

	 	Each Exercise Date.
	 
	 	 
	Settlement Terms.
	 	 
	 
	 	 
	Settlement Method 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) the following is hereby inserted
after the words “apply to such
Transaction” in the seventh line of
Section 7.1 of the Equity
Definitions:
	 
	 	 
	 

	 	“and, if Cash Settlement is elected,
the percentage of Company’s
settlement obligations with respect
to such Transaction, which percentage
shall be greater than 0% and less
than or equal to 100%, that shall be
settled in cash (the “Cash
Percentage”)”;
	 
	 	 
	 

	 	(iii) Company’s election of Cash
Settlement shall be deemed to be a
representation and warranty by
Company that on the date of such
election (A) Company is not in
possession of any material non-public
information regarding Company or the
Shares, (B) Company 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 (C) the assets
of Company at their fair valuation
exceed the liabilities of Company
(including contingent liabilities),
the capital of Company is adequate to
conduct the business of Company, and
Company has the ability to pay its
debts and obligations as such debts
mature and does not intend to, or
does not believe that it will, incur
debt beyond its ability to pay as
such debts mature; (iv) the same
election of settlement method and
Cash Percentage shall apply to all
Expiration Dates hereunder
; (v) if Company elects Cash
Settlement and specifies a Cash
Percentage that is less than or equal
to 0% or greater than 100%, then the
notice delivered by Company will be
deemed to be ineffective and the
Default Settlement Method will be
deemed applicable to such Transaction
and (vi) Company may elect a Cash
Percentage only if no event of
default has occurred and is
continuing under any

4

 

	 	 	 

	 

	 	indebtedness of Company or its subsidiaries in an aggregate principal
amount of $100 million or more.
	 
	 	 
	Electing Party:

	 	Company
	 
	 	 
	Settlement Method Election Date:

	 	The third Scheduled Trading Day immediately preceding the First Expiration Date.
	 
	 	 
	Default Settlement Method:

	 	Net Share Settlement
	 
	 	 
	Cash Percentage:

	 	0%; provided, however, that if Company (i) validly delivers notice of Cash
Settlement hereunder and (ii) in such notice validly elects a Cash Percentage
greater than 0% and less than or equal to 100%, the Cash Percentage shall equal
the percentage specified as such in such notice.
	 
	 	 
	Net Share Settlement:

	 	On the relevant Settlement Date, Company shall deliver to Dealer a number of
Shares equal to the Share Delivery Quantity for such Settlement Date to the
account specified hereto free of payment through the Clearance System and pay
to Dealer an amount of cash in USD the Fractional Share Amount for such
Settlement Date. For purposes of determining any dividends or distributions
payable in respect of such Shares, Dealer shall be treated as the holder of
record of such Shares at the time of delivery of such Shares or, if earlier, at
5:00 p.m. (New York City time) on such Settlement Date.
	 
	 	 
	Share Delivery Quantity:

	 	For any Settlement Date, a number of Shares, as calculated by the Calculation
Agent, equal to the product of (i) one minus the Cash Percentage, expressed as
a fraction, and (ii) the Net Share Settlement Amount for such Settlement Date
divided by the Settlement Price on the Valuation Date for such Settlement Date,
rounded down to the nearest whole number (for any Settlement Date, the fraction
of a share eliminated by such rounding, the “Share Fraction” for such
Settlement Date).
	 
	 	 
	Fractional Share Amount:

	 	An amount of cash in USD equal to the product of (i) the Share Fraction for
such Settlement Date and (ii) the Settlement Price on the Valuation Date for
such Settlement Date.
	 
	 	 
	Net Share Settlement Amount:

	 	For any Settlement Date, an amount equal to the product of (i) the Number of
Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the
Strike Price Differential for the relevant Valuation Date and (iii) the Warrant
Entitlement.
	 
	 	 
	Cash Settlement:

	 	If Cash Settlement is applicable, then, on the relevant Settlement Date,
Company shall (i) pay to Dealer an amount of cash in USD equal to sum of (A)
the product of (x) the Cash Percentage and (y) the Net Share Settlement Amount
for such Settlement Date and (B) the Fractional Share Amount, if any, for such
Settlement Date and (ii) deliver to Dealer a number of Shares equal to the
Share Delivery Quantity for such Settlement Date to the account specified
hereto free of payment through the Clearance System. The

5

 

	 	 	 

	 

	 	provisions opposite Net Share Settlement above shall apply to any Shares delivered pursuant
to clause (ii) of the immediately preceding sentence.
	 
	 	 
	Settlement Price:

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

	 	As determined pursuant to Section 9.4 of the Equity Definitions, subject to Section 9(k)(i) hereof.
	 
	 	 
	Other Applicable Provisions:

	 	If Net Share Settlement is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as
modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical
Settlement were applicable.
	 
	 	 
	Representation and Agreement:

	 	Notwithstanding Section 9.11 of the Equity Definitions, the parties acknowledge that any Shares
delivered to Dealer may be, upon delivery, subject to restrictions and limitations arising from
Company’s status as issuer of the Shares under applicable securities laws.
	 
	 	 
	3. Additional Terms applicable to the Transaction.
	 
	 	 
	Adjustments applicable
to the Transaction:
	 	 
	 
	 	 
	Method of Adjustment:

	 	Calculation Agent Adjustment.  For the avoidance of doubt, in making any adjustments under
the Equity Definitions, the Calculation Agent may make adjustments, if any, to any one or more of the Strike Price, the Number of Warrants, the
Daily Number of Warrants and the Warrant Entitlement.  Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether
or not extraordinary, shall be governed by Section 9(f) of this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity Definitions.

6

 

	 	 	 

	Extraordinary Events
applicable to the
Transaction:
	 
	 	 
	New Shares:

	 	Section 12.1(i) of the Equity Definitions is hereby
amended (a) by deleting the text in clause (i) thereof in
its entirety (including the word “and” following clause
(i)) and replacing it with the phrase “publicly quoted,
traded or listed (or whose related depositary receipts
are publicly quoted, traded or listed) on any of the New
York Stock Exchange, The NASDAQ Global Select Market or
The NASDAQ Global Market (or their respective
successors)” and (b) by inserting immediately prior to
the period the phrase “and (iii) of an entity or person
organized under the laws of the United States, any State
thereof or the District of Columbia that also becomes
Company under the Transaction following such Merger Event
or Tender Offer”.
	 
	 	 
	Consequence of Merger Events:
	 	 
	 
	 	 
	Merger Event:

	 	Applicable; provided that if an event occurs that
constitutes both a Merger Event under Section 12.1(b) of
the Equity Definitions and an Additional Termination
Event under Section 9(h)(ii)(B) of this Confirmation,
Dealer may elect, in its commercially reasonable
judgment, whether the provisions of Section 12.1(b) of
the Equity Definitions or Section 9(h)(ii)(B) will apply.
	 
	 	 
	Share-for-Share:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	Share-for-Other:

	 	Cancellation and Payment (Calculation Agent Determination)
	 
	 	 
	Share-for-Combined:

	 	Cancellation and Payment (Calculation Agent
Determination); provided that Dealer may elect, in its
commercially reasonable judgment, Component Adjustment
(Calculation Agent Determination).
	 
	 	 
	Consequence of Tender Offers:
	 	 
	 
	 	 
	Tender Offer:

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

	 	Modified Calculation Agent Adjustment
	 
	 	 
	Share-for-Other:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	Share-for-Combined:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	Announcement Event:

	 	If an Announcement Date occurs in respect of a Merger
Event or Tender Offer (such occurrence or any subsequent
announcement relating to the same subject matter, an
“Announcement Event”), then on the earliest

7

 

	 	 	 

	 

	 	of the Expiration Date,
Early Termination Date
or other date of
cancellation (the
“Announcement Event
Adjustment Date”) in
respect of each
Warrant, the
Calculation Agent will
determine the economic
effect on such Warrant
of the Announcement
Event (regardless of
whether the
Announcement Event
actually results in a
Merger Event or Tender
Offer, and taking into
account such factors as
the Calculation Agent
may determine,
including, without
limitation, changes in
volatility, expected
dividends, stock loan
rate or liquidity
relevant to the Shares
or the Transaction
whether prior to or
after the Announcement
Event or for any period
of time, including,
without limitation, the
period from the
Announcement Event to
the relevant
Announcement Event
Adjustment Date). If
the Calculation Agent
determines that such
economic effect on any
Warrant is material,
then on the
Announcement Event
Adjustment Date for
such Warrant, the
Calculation Agent shall
make such adjustment to
the exercise,
settlement, payment or
any other terms of such
Warrant as the
Calculation Agent
determines in its reasonable discretion
is appropriate to
account for such
economic effect, which
adjustment shall be
effective immediately
prior to the exercise,
termination or
cancellation of such
Warrant, as the case
may be. For the
avoidance of doubt, if
more than one
Announcement Event
occurs before the
Announcement Event
Adjustment Date, such
adjustment shall take
into account each such
Announcement Event.
	 
	 	 
	Announcement Date:

	 	The definition of “Announcement Date”
in Section 12.1 of the Equity
Definitions is hereby amended by (i)
replacing the words “a firm” with the
word “any” in the second and fourth
lines thereof, (ii) replacing the word
“leads to the” with the words “, if
completed, would lead to a” in the
third and the fifth lines thereof,
(iii) replacing the words “voting
shares” with the word “Shares” in the
fifth line thereof, and (iv) inserting
the words “by any entity” after the
word “announcement” in the second and
the fourth lines thereof.
	 
	 	 
	Nationalization, Insolvency or
Delisting:

	 	Cancellation and Payment (Calculation
Agent Determination); provided that, in
addition to the provisions of Section
12.6(a)(iii) of the Equity Definitions,
it will also constitute a Delisting if
the Exchange is located in the United
States and the Shares are not
immediately re-listed, re-traded or
re-quoted on any of the New York Stock
Exchange, The NASDAQ Global Select
Market or The NASDAQ Global Market (or
their respective successors); if the
Shares are immediately re-listed,
re-traded or re-quoted on any of the
New York Stock Exchange, The NASDAQ
Global Select Market or The NASDAQ
Global Market (or their respective
successors), such exchange or quotation
system shall thereafter be deemed to be
the Exchange.
	 
	 	 
	Additional Disruption Events:
	 	 

8

 

	 	 	 

	Change in Law:

	 	Applicable; provided that (i) Section 12.9(a)(ii) of
the Equity Definitions is hereby amended by replacing
the parenthetical beginning after the word “regulation”
in the second line thereof with the words “(including,
for the avoidance of doubt and without limitation, (x)
any tax law or (y) adoption or promulgation of new
regulations authorized or mandated by existing
statute)” and (ii) Section 12.9(a)(ii)(X) of the Equity
Definitions is hereby amended by replacing the word
“Shares” with the phrase “Hedge Positions.”
	 
	 	 
	Failure to Deliver:

	 	Not Applicable
	 
	 	 
	Insolvency Filing:

	 	Applicable
	 
	 	 
	Hedging Disruption:

	 	Applicable; provided that:
	 
	 	 
	 

	 	(i)    Section 12.9(a)(v) of the
Equity Definitions is hereby amended by inserting the
following two phrases at the end of such Section; 

“For
the avoidance of doubt, the term “equity price risk”
shall be deemed to include, but shall not be limited
to, stock price and volatility risk. And, for the
further avoidance of doubt, any such transactions or
assets referred to in phrases (A) or (B) above must be
available on commercially reasonable pricing terms.”;
and

	 
	 	 
	 

	 	(ii)    Section 12.9(b)(iii) of the
Equity Definitions is hereby amended by inserting in
the third line thereof, after the words “to terminate
the Transaction”, the words “or a portion of the
Transaction affected by such Hedging
Disruption”.

	 
	 	 
	Increased Cost of Hedging:

	 	Applicable
	 
	 	 
	Loss of Stock Borrow:

	 	Applicable
	 
	 	 
	Maximum Stock Loan Rate:

	 	200 basis points
	 
	 	 
	Increased Cost of Stock Borrow:

	 	Applicable
	 
	 	 
	Initial Stock Loan Rate:

	 	25 basis points
	 
	 	 
	Hedging Party:

	 	For all applicable Additional Disruption Events, Dealer.
	 
	 	 
	Determining Party:

	 	For all applicable Extraordinary Events, Dealer.
	 
	 	 
	Non-Reliance:

	 	Applicable
	 
	 	 
	Agreements and Acknowledgments Regarding Hedging Activities:

	 	Applicable
	 
	 	 
	Additional Acknowledgments:

	 	Applicable
	 
	 	 
	4. Calculation Agent.

	 	Dealer, whose judgments, determinations and
calculations shall be made in good faith and in a
commercially

9

 

	 	 	 

	 

	 	reasonable manner. Following any determination or calculation by the
Calculation Agent hereunder, upon a written request by Company, the Calculation
Agent will provide to Company by e-mail to the e-mail address provided by
Company in such written request a report (in a commonly used file format for
the storage and manipulation of financial data) displaying in reasonable detail
the basis for such calculation, it being understood that the Calculation Agent
shall not be obligated to disclose any proprietary models used by it for such
calculation.

	5.	 	Account Details.

	 	(a)	 	Account for payments to Company:

Bank Name: Wells Fargo Bank

ABA #: 121000248

Beneficiary: First Clearing, LLC

Account #: 4122023377

FFC Account Name: Integra LifeSciences Holdings Corp

FFC Account Number: 8595-0713

Account for delivery of Shares from Company:

American Stock Transfer & Trust Co LLC

Transfer Agent # 2941

Account # 10249
	 
	 	(b)	 	Account for payments to Dealer:

Chase Bank, New York

BIC: CHASUS33

ABA # 021000021

A/C Name: RBS Securities Inc.

BIC: GRNWUS33

A/C: 066615674

Account for delivery of Shares to Dealer:

To be provided by Dealer.

	6.	 	Offices.

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

The Royal Bank of Scotland plc

c/o RBS Securities Inc.

600 Washington Blvd.

Stamford, CT 06901

	7.	 	Notices.

	 	(a)	 	Address for notices or communications to Company:

10

 

	 	 	 	Integra LifeSciences Holdings Corporation

311 Enterprise Drive

Plainsboro, NJ 08536

Attention: Treasurer

Telephone No.: (609) 275-0500

Facsimile No.: (609) 750-4264
	 
	 	(b)	 	Address for notices or communications to Dealer:
	 
	 	 	 	The Royal Bank of Scotland plc

c/o RBS Securities Inc.

600 Washington Blvd.

Stamford, CT 06901

Attn: Legal Department (Tam Beattie)

Telephone: (203) 897-6086

Facsimile: (203) 873-4571

Email: Tamerlaine.Beattie@rbs.com

With a copy to:

The Royal Bank of Scotland plc

c/o RBS Global Banking & Markets

280 Bishopsgate

London EC2M 4RB

	8.	 	Representations and Warranties of Company.
	 
	 	 	Each of the representations and warranties of Company set forth in Section 3 of the Purchase
Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Company and the
representatives of the Initial Purchasers party thereto (the “Representatives”), is true and
correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that no
such representation or warranty, other than the representations and warranties set forth in
Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of
Default under Section 5(a)(iv) of the Agreement. Company hereby further represents and warrants
to Dealer on the date hereof, on and as of the Premium Payment Date and, in the case of the
representations in Section 8(d), at all times until termination of the Transaction, that:

	 	(a)	 	Company has all necessary corporate power and authority to execute, deliver and perform
its obligations in respect of the Transaction; such execution, delivery and performance have
been duly authorized by all necessary corporate action on Company’s part; and this
Confirmation has been duly and validly executed and delivered by Company and constitutes its
valid and binding obligation, enforceable against Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally, and subject,
as to enforceability, to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in
a proceeding at law or in equity) and except that rights to indemnification and contribution
hereunder may be limited by federal or state securities laws or public policy relating
thereto.
	 
	 	(b)	 	Neither the execution and delivery of this Confirmation nor the incurrence or performance
of obligations of Company hereunder will conflict with or result in a breach of the
certificate of incorporation or by-laws (or any equivalent documents) of Company, or any
applicable law or regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument to which Company or any of
its subsidiaries is a party or by which Company or any of its subsidiaries is bound or to
which Company or any of its subsidiaries is subject, or constitute a default under, or
result in the creation of any lien under, any such agreement or instrument.

11

 

	 	(c)	 	No consent, approval, authorization, or order of, or filing with, any governmental agency
or body or any court is required in connection with the execution, delivery or performance
by Company of this Confirmation, except such as have been obtained or made and such as may
be required under the Securities Act of 1933, as amended (the “Securities Act”) or state
securities laws.
	 
	 	(d)	 	A number of Shares equal to the Maximum Number of Shares (as defined below) (the “Warrant
Shares”) have been reserved for issuance by all required corporate action of Company. The
Warrant Shares have been duly authorized and, when delivered against payment therefor (which
may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms
of the Warrants following the exercise of the Warrants in accordance with the terms and
conditions of the Warrants, will be validly issued, fully-paid and non-assessable, and the
issuance of the Warrant Shares will not be subject to any preemptive or similar rights.
	 
	 	(e)	 	Company is not and will not be required to register as an “investment company” as such
term is defined in the Investment Company Act of 1940, as amended.
	 
	 	(f)	 	Company is an “eligible contract participant” (as such term is defined in Section 1a(12)
of the Commodity Exchange Act, as amended, other than a person that is an eligible contract
participant under Section 1a(12)(C) of the Commodity Exchange Act).
	 
	 	(g)	 	Each of Company and its officers and directors is not, on the date hereof, in possession
of any material non-public information with respect to Company or the Shares.

	9.	 	Other Provisions.

	 	(a)	 	Opinions. Company shall deliver to Dealer an opinion of counsel, dated as of the
Trade Date, with respect to the matters set forth in Sections 8(a) through (d) of this
Confirmation. Delivery of such opinion to Dealer shall be a condition precedent for the
purpose of Section 2(a)(iii) of the Agreement with respect to each obligation of Dealer
under Section 2(a)(i) of the Agreement.
	 
	 	(b)	 	Repurchase Notices. Company shall, on any day on which Company effects any
repurchase of Shares, promptly give Dealer a written notice of such repurchase (a
“Repurchase Notice”) on such day if following such repurchase, the number of outstanding
Shares on such day, subject to any adjustments provided herein, is (i) less than 24,264,547
(in the case of the first such notice) or (ii) thereafter more than 3,192,382 less than the
number of Shares included in the immediately preceding Repurchase Notice. Company agrees to
indemnify and hold harmless Dealer and its affiliates and their respective officers,
directors, employees, affiliates, advisors, agents and controlling persons (each, an
“Indemnified Person”) from and against any and all losses (including losses relating to
Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a
Section 16 “insider”, including without limitation, any forbearance from hedging activities
or cessation of hedging activities and any losses in connection therewith with respect to
the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable
attorney’s fees), joint or several, that an Indemnified Person actually may become subject
to, as a result of Company’s failure to provide Dealer with a Repurchase Notice on the day
and in the manner specified in this paragraph, and to reimburse, within 30 days, upon
written request, each of such Indemnified Persons for any reasonable legal or other expenses
incurred in connection with investigating, preparing for, providing testimony or other
evidence in connection with or defending any of the foregoing. If any suit, action,
proceeding (including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against the Indemnified Person, such Indemnified Person shall
promptly notify Company in writing, and Company, upon request of the Indemnified Person,
shall retain counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others Company may designate in such proceeding and shall pay the
fees and expenses of such counsel related to such proceeding. Company shall not be liable
for any settlement of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff, Company agrees to
indemnify any Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Company shall not, without the prior written consent of

12

 

	 	 	 	the Indemnified Person, effect any settlement of any pending or threatened proceeding in
respect of which any Indemnified Person is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person.
If the indemnification provided for in this paragraph is unavailable to an Indemnified Person
or insufficient in respect of any losses, claims, damages or liabilities referred to therein,
then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder,
shall contribute to the amount paid or payable by such Indemnified Person as a result of such
losses, claims, damages or liabilities. The remedies provided for in this paragraph are not
exclusive and shall not limit any rights or remedies that may otherwise be available to any
Indemnified Person at law or in equity. The indemnity and contribution agreements contained in
this paragraph shall remain operative and in full force and effect regardless of the
termination of the Transaction.
	 
	 	(c)	 	Regulation M. Company is not on the Trade Date engaged in a distribution, as such
term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), of any securities of Company, other than a distribution meeting the
requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M.
Company shall not, until the second Scheduled Trading Day immediately following the
Effective Date, engage in any such distribution.
	 
	 	(d)	 	No Manipulation. Company is not entering into the Transaction to create actual
or apparent trading activity in the Shares (or any security convertible into or exchangeable
for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or
any security convertible into or exchangeable for the Shares) or otherwise in violation of
the Exchange Act.
	 
	 	(e)	 	Transfer or Assignment. Company may not transfer any of its rights or
obligations under the Transaction without the prior written consent of Dealer. Dealer may,
without Company’s consent, transfer or assign all or any part of its rights or obligations
under the Transaction to any third party. If at any time at which (A) the Section 16
Percentage exceeds 7.5%, (B) the Warrant Equity Percentage exceeds 14.5%, or (C) the Share
Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in
clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its
commercially reasonable efforts to effect a transfer or assignment of Warrants to a third
party on pricing terms reasonably acceptable to Dealer and within a time period reasonably
acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may
designate any Exchange Business Day as an Early Termination Date with respect to a portion
of the Transaction (the “Terminated Portion”), such that following such partial termination
no Excess Ownership Position exists. In the event that Dealer so designates an Early
Termination Date with respect to a Terminated Portion, a payment shall be made pursuant to
Section 6 of the Agreement as if (1) an Early Termination Date had been designated in
respect of a Transaction having terms identical to the Transaction and a Number of Warrants
equal to the number of Warrants underlying the Terminated Portion, (2) Company were the sole
Affected Party with respect to such partial termination and (3) the Terminated Portion were
the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section
9(j) shall apply to any amount that is payable by Company to Dealer pursuant to this
sentence as if Company was not the Affected Party). The “Section 16 Percentage” as of any
day is the fraction, expressed as a percentage, (A) the numerator of which is the number of
Shares that Dealer and each person subject to aggregation of Shares with Dealer under
Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or
indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act
and rules promulgated thereunder) and (B) the denominator of which is the number of Shares
outstanding. The “Warrant Equity Percentage” as of any day is the fraction, expressed as a
percentage, (A) the numerator of which is the sum of (1) the product of the Number of
Warrants and the Warrant Entitlement and (2) the aggregate number of Shares underlying any
other warrants purchased by Dealer from Company, and (B) the denominator of which is the
number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that
Dealer and any person whose ownership position would be aggregated with that of

13

 

	 	 	 	Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation,
regulatory order or organizational documents or contracts of Company that are, in each case,
applicable to ownership of Shares (“Applicable Restrictions”), owns, beneficially owns,
constructively owns, controls, holds the power to vote or otherwise meets a relevant
definition of ownership under any Applicable Restriction, as determined by Dealer in its
reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the
minimum number of Shares that could give rise to reporting or registration obligations (except
for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing
obligations applicable as of the date hereof) or other requirements (including obtaining prior
approval from any person or entity) of a Dealer Person, or could result in an adverse effect
on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its
reasonable discretion, minus (B) 1% of the number of Shares outstanding. 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, or make or receive any payment in
cash, to or from Company, Dealer may designate any of its affiliates to purchase, sell,
receive or deliver such Shares or other securities, or make or receive such payment in cash,
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 Company
to the extent of any such performance.
	 
	 	(f)	 	Dividends. If at any time during the period from and including the Effective
Date, to and including the last Expiration Date, an ex-dividend date for a cash dividend
occurs with respect to the Shares (an “Ex-Dividend Date”), then the Calculation Agent will
adjust any of the Strike Price, Number of Warrants and/or Daily Number of Warrants to
preserve the fair value of the Warrants to Dealer after taking into account such dividend.
	 
	 	(g)	 	Role of Agent. THE ROYAL BANK OF SCOTLAND PLC HAS ENTERED AS PRINCIPAL TO THE
TRANSACTION AND IS COMPANY’S COUNTERPARTY HERETO. THE ROYAL BANK OF SCOTLAND PLC IS NOT
REGISTERED AS A BROKER-DEALER UNDER THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED.
THE PARTIES ACKNOWLEDGE THAT RBS SECURITIES INC. HAS ACTED AS AGENT FOR THE PARTIES IN
CONNECTION WITH THE TRANSACTION. TO THE EXTENT RBS SECURITIES INC. HAS ACTED AS AGENT IN
CONNECTION WITH THE TRANSACTION, ITS OBLIGATIONS ARE STRICTLY LIMITED TO THE DELIVERY OF ANY
CASH AND SECURITIES THAT IT ACTUALLY RECEIVES FROM THE ROYAL BANK OF SCOTLAND PLC OR
COMPANY, AS THE CASE MAY BE, OR DELIVERS TO THE ROYAL BANK OF SCOTLAND PLC OR COMPANY. RBS
SECURITIES INC. HAS NO OBLIGATIONS HEREUNDER, BY GUARANTY, ENDORSEMENT OR OTHERWISE, WITH
RESPECT TO PERFORMANCE OF THE ROYAL BANK OF SCOTLAND PLC’S OR COMPANY’S OBLIGATIONS
HEREUNDER.
	 
	 	(h)	 	Additional Provisions.

	 	(i)	 	Amendments to the Equity Definitions:

	 	(A)	 	Section 11.2(a) of the Equity Definitions is hereby amended by deleting the
words “a diluting or concentrative” and replacing them with the words “an”; and adding
the phrase “or Warrants” at the end of the sentence.
	 
	 	(B)	 	Section 11.2(c) of the Equity Definitions is hereby amended by (x) replacing
the words “a diluting or concentrative” with “an”, (y) adding the phrase “or Warrants”
after the words “the relevant Shares” in the same sentence and (z) deleting the phrase
“(provided that no adjustments will be made to account solely for changes in
volatility, expected dividends, stock loan rate or liquidity relative to the relevant
Shares)” and replacing it with the phrase “(and, for the avoidance of doubt,
adjustments may be made to account solely for changes in

14

 

	 	 	 	volatility, expected dividends, stock loan rate or liquidity relative to the relevant
Shares).”
	 
	 	(C)	 	Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the
words “a diluting or concentrative” and replacing them with the word “a material”; and
adding the phrase “or Warrants” at the end of the sentence.
	 
	 	(D)	 	Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting
from the fourth line thereof the word “or” after the word “official” and inserting a
comma therefor, and (2) deleting the semi-colon at the end of subsection (B) thereof and
inserting the following words therefor “or (C) at Dealer’s option, the occurrence of any
of the events specified in Section 5(a)(vii) (1) through (9) of the ISDA Master Agreement
with respect to that Issuer.”
	 
	 	(E)	 	Section 12.9(b)(iv) of the Equity Definitions is hereby amended by: (x) deleting
(1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and
(3) the phrase “in each case” in subsection (B); and (y) deleting the phrase “neither the
Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares
or” in the penultimate sentence.
	 
	 	(F)	 	Section 12.9(b)(v) of the Equity Definitions is hereby amended by:

	 	(x)	 	adding the word “or” immediately before subsection “(B)” and deleting the
comma at the end of subsection (A); and
	 
	 	(y)	 	(1) deleting subsection (C) in its entirety, (2) deleting the word “or”
immediately preceding subsection (C) and (3) deleting the penultimate sentence in
its entirety and replacing it with the sentence “The Hedging Party will determine
the Cancellation Amount payable by one party to the other.”

	 	(ii)	 	Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one
of the following events, with respect to the Transaction, (1) Dealer shall have the right to
designate such event an Additional Termination Event and designate an Early Termination Date
pursuant to Section 6(b) of the Agreement, (2) Company shall be deemed the sole Affected
Party with respect to such Additional Termination Event and (3) the Transaction shall be
deemed the sole Affected Transaction:

	 	(A)	 	A “person” or “group” within the meaning of Section 13(d) of the Exchange Act,
other than Company, its subsidiaries and its and their employee benefit plans, files a
Schedule TO or any schedule, form or report under the Exchange Act disclosing that such
person or group has become the “beneficial owner,” as defined in Rule 13d-3 under the
Exchange Act, of the common equity of Company representing more than 50% of the voting
power of such common equity.
	 
	 	(B)	 	The consummation of (I) any recapitalization, reclassification or change of the
Shares (other than changes resulting from a subdivision or combination) as a result of
which the Shares would be converted into, or exchanged for, stock, other securities,
other property or assets, (II) any share exchange, consolidation or merger of Company
pursuant to which the Shares will be converted into cash, securities or other property,
other than a merger of Company solely for the purpose of changing Company’s jurisdiction
of incorporation, that results in a

15

 

	 	 	 	reclassification, conversion or exchange of then outstanding Shares solely into shares of
common stock of the surviving entity, or (III) any sale, lease or other transfer in one
transaction or a series of transactions of all or substantially all of the consolidated
assets of Company and its subsidiaries, taken as a whole, to any person other than one of
Company’s subsidiaries; provided, however, that a transaction described in clause (II)
pursuant to which one or more holders of Company’s common equity entitled to vote
generally in elections of directors immediately prior to such transaction have the
entitlement to exercise, directly or indirectly, 50% or more of the total voting power of
all classes of Company’s common equity entitled to vote generally in elections of
directors of the continuing or surviving person immediately after giving effect to such
transaction shall not constitute an Additional Termination Event pursuant to this clause
(B).
	 
	 	(C)	 	Default by Company or any subsidiary of Company in the payment when due,
after the expiration of any applicable grace period, of principal of, or premium, if
any, or interest on, recourse indebtedness for money borrowed in the aggregate
principal amount then outstanding of $25.0 million or more, or acceleration of
Company’s or any subsidiary of Company’s recourse indebtedness for money borrowed in
the aggregate principal amount of $25.0 million or more so that it becomes due and
payable before the date on which it would otherwise have become due and payable, if
such default is not cured or waived, or such acceleration is not rescinded, as the
case may be.
	 
	 	(D)	 	A final judgment for the payment of $25.0 million or more (excluding any
amounts covered by insurance) rendered against Company or any of its subsidiaries,
which judgment is not discharged or stayed within 60 days after (I) the date on which
the right to appeal thereof has expired if no such appeal has commenced, or (II) the
date on which all rights to appeal have been extinguished.
	 
	 	(E)	 	Dealer, despite using commercially reasonable efforts, is unable or
reasonably determines that it is impractical or illegal, to hedge its exposure with
respect to the Transaction in the public market without registration under the
Securities Act or as a result of any legal, regulatory or self-regulatory requirements
or related policies and procedures (whether or not such requirements, policies or
procedures are imposed by law or have been voluntarily adopted by Dealer).

	 	 	 	Notwithstanding the foregoing, a transaction or transactions described in clauses (A) or
(B) above shall not constitute an Additional Termination Event if at least 90% of the
consideration received or to be received by the holders of the Shares, excluding cash
payments for fractional shares and cash payments made in respect of dissenters’ appraisal
rights, in connection with such transaction or transactions consists of shares of common
stock, ordinary shares, American depositary receipts or American depositary shares that are
listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or
The NASDAQ Global Market (or any of their respective successors) or will be so listed or
quoted when issued or exchanged in connection with such transaction or transactions

	 	(i)	 	No Collateral or Set-off. Notwithstanding any provision of the Agreement or any
other agreement between the parties to the contrary, the obligations of Company hereunder
are not secured by any collateral. Each party waives any and all rights it may have to set
off obligations arising under the Agreement and the Transaction against other obligations
between the parties, whether arising under any other agreement, applicable law or otherwise.

16

 

	 	(j)	 	Alternative Calculations and Payment on Early Termination and on Certain Extraordinary
Events. If, in respect of the Transaction, an amount is payable by Company to Dealer, (A)
pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (B) pursuant to
Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Company shall
have the right, in its sole discretion, to satisfy the Payment Obligation by the Share
Termination Alternative (as defined below) (except that Company shall not have the right to
make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or
Tender Offer in which the consideration to be paid to holders of Shares consists solely of
cash, (II) a Merger Event or Tender Offer that is within Company’s control, or (III) an
Event of Default in which Company is the Defaulting Party or a Termination Event in which
Company is the Affected Party, other than an Event of Default of the type described in
Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the
type described in Section 5(b) of the Agreement, in each case that resulted from an event or
events outside Company’s control) and shall give irrevocable telephonic notice to Dealer,
confirmed in writing within one Scheduled Trading Day, no later than 5:00 p.m. (New York
City time) on the Merger Date, Tender Offer Date, Announcement Date (in the case of a
Nationalization, Insolvency or Delisting), Early Termination Date or date of cancellation,
as applicable; provided that if Company does not validly elect to satisfy the Payment
Obligation by the Share Termination Alternative, Dealer shall have the right to require
Company to satisfy its Payment Obligation by the Share Termination Alternative.

	 	 	 

	Share Termination Alternative:

	 	If applicable, Company shall deliver
to Dealer the Share Termination
Delivery Property on the date (the
“Share Termination Payment Date”) on
which the Payment Obligation would
otherwise be due pursuant to Section
12.7 or Section 12.9 of the Equity
Definitions or Section 6(d)(ii) of
the Agreement, as applicable, subject
to Section 9(k)(i) below, in
satisfaction, subject to Section
9(k)(ii) below, of the relevant
Payment Obligation, in the manner
reasonably requested by Dealer free
of payment.
	 
	 	 
	Share Termination Delivery Property:

	 	A number of Share Termination
Delivery Units, as calculated by the
Calculation Agent, equal to the
relevant Payment Obligation divided
by the Share Termination Unit Price.
The Calculation Agent shall adjust
the amount of Share Termination
Delivery Property by replacing any
fractional portion of a security
therein with an amount of cash equal
to the value of such fractional
security based on the values used to
calculate the Share Termination Unit
Price (without giving effect to any
discount pursuant to Section
9(k)(i)).
	 
	 	 
	Share Termination Unit Price:

	 	The value to Dealer of property
contained in one Share Termination
Delivery Unit on the date such Share
Termination Delivery Units are to be
delivered as Share Termination
Delivery Property, as determined by
the Calculation Agent in its
discretion by commercially reasonable
means. In the case of a Private
Placement of Share Termination
Delivery Units that are Restricted
Shares (as defined below), as set
forth in Section 9(k)(i) below, the
Share Termination Unit Price shall be
determined by the discounted price
applicable to such Share Termination
Delivery Units. In the case of a
Registration Settlement of Share
Termination Delivery Units that are
Restricted Shares (as defined below)
as set forth in Section 9(k)(ii)
below, the Share Termination Unit
Price shall be the Settlement Price
on the Merger Date, Tender Offer
Date, Announcement Date (in the case
of a Nationalization,

17

 

	 	 	 

	 

	 	Insolvency or Delisting), Early Termination Date or date of
cancellation, as applicable. The Calculation Agent shall notify
Company of the Share Termination Unit Price at the time of
notification of such Payment Obligation to Company or, if
applicable, at the time the discounted price applicable to the
relevant Share Termination Units is determined pursuant to Section
9(k)(i).
	 
	 	 
	Share Termination Delivery Unit:

	 	In the case of a Termination Event, Event of Default Additional
Disruption Event or Delisting, one Share or, in the case of Nationalization, Insolvency,
Tender Offer or Merger Event, a unit consisting of the number or amount of each type of
property received by a holder of one Share (without consideration of any requirement to pay
cash or other consideration in lieu of fractional amounts of any securities) in such
Nationalization, Insolvency, Tender Offer or Merger Event. If such Nationalization,
Insolvency, Tender Offer or
Merger Event involves a choice of consideration to be received by
holders, such holder shall be deemed to have elected to receive
the maximum possible amount of cash.
	 
	 	 
	Failure to Deliver:

	 	Inapplicable
	 
	 	 
	Other applicable provisions:

	 	If Share Alternative Termination is
applicable, the provisions of Sections
9.1(c), 9.8, 9.9, 9.11 (as modified below),
9.12 and 10.5 of the Equity Definitions will
be applicable as if Physical Settlement were
applicable.

	 	(k)	 	Registration/Private Placement Procedures. If, in the reasonable judgment of Dealer
based on the advice of counsel, following any delivery of Shares or Share Termination Delivery
Property to Dealer hereunder, such Shares or Share Termination Delivery Property would be in the
hands of Dealer subject to any applicable restrictions with respect to any registration or
qualification requirement or prospectus delivery requirement for such Shares or Share Termination
Delivery Property pursuant to any applicable federal or state securities law (including, without
limitation, any such requirement arising under Section 5 of the Securities Act as a result of such
Shares or Share Termination Delivery Property being “restricted securities”, as such term is
defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share
Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act)
(such Shares or Share Termination Delivery Property, “Restricted Shares”), then delivery of such
Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of
Company, unless Dealer waives the need for registration/private placement procedures set forth in
(i) and (ii) below. Notwithstanding the foregoing, solely in respect of any Daily Number of
Warrants exercised or deemed exercised on any Expiration Date, Company shall elect, prior to the
first Settlement Date for the First Expiration Date, a Private Placement Settlement or Registration
Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election
shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or
clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis
commencing after the final Settlement Date for such Warrants. The Calculation Agent shall make
reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a
single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered
hereunder.

	 	(i)	 	If Company elects to settle the Transaction pursuant to this clause (i) (a “Private
Placement Settlement”), then delivery of Restricted Shares by Company shall be effected in
accordance with customary private placement procedures for placements of equity securities of
substantially similar size reasonably acceptable to Dealer; provided that Company may not
elect a Private Placement Settlement if, on the date of its election,

18

 

	 	 	 	it has taken, or caused to be taken, any action that would make unavailable either the
exemption pursuant to Section 4(2) of the Securities Act for the sale by Company to
Dealer (or any affiliate designated by Dealer) of the Restricted Shares or the
exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales
of the Restricted Shares by Dealer (or any such affiliate of Dealer). The Private
Placement Settlement of such Restricted Shares shall include customary
representations, covenants, blue sky and other governmental filings and/or
registrations, indemnities to Dealer, due diligence rights (for Dealer or any
designated buyer of the Restricted Shares by Dealer), opinions and certificates, and
such other documentation as is customary for private placements of equity securities
of substantially similar size, all reasonably acceptable to Dealer. In the case of a
Private Placement Settlement, Dealer shall determine the appropriate discount to the
Share Termination Unit Price (in the case of settlement of Share Termination Delivery
Units pursuant to Section 9(j) above) or any Settlement Price (in the case of
settlement of Shares pursuant to Section 2 above) applicable to such Restricted Shares
in a commercially reasonable manner and appropriately adjust the number of such
Restricted Shares to be delivered to Dealer hereunder. Notwithstanding the Agreement
or this Confirmation, the date of delivery of such Restricted Shares shall be the
Exchange Business Day following notice by Dealer to Company, of such applicable
discount and the number of Restricted Shares to be delivered pursuant to this clause
(i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set
forth in the previous sentence and not be due on the Share Termination Payment Date
(in the case of settlement of Share Termination Delivery Units pursuant to Section
9(j) above) or on the Settlement Date for such Restricted Shares (in the case of
settlement in Shares pursuant to Section 2 above).
	 
	 	(ii)	 	If Company elects to settle the Transaction pursuant to this clause (ii) (a
“Registration Settlement”), then Company shall promptly (but in any event no later than the
beginning of the Resale Period) file and use its reasonable best efforts to make effective
under the Securities Act a registration statement or supplement or amend an outstanding
registration statement in form and substance reasonably satisfactory to Dealer, to cover the
resale of such Restricted Shares in accordance with customary resale registration
procedures, including covenants, conditions, representations, underwriting discounts (if
applicable), commissions (if applicable), indemnities due diligence rights, opinions and
certificates, and such other documentation as is customary in underwriting agreements for
equity resales of substantially similar size, all reasonably acceptable to Dealer. If
Dealer, in its reasonable discretion, is not satisfied with such procedures and
documentation Private Placement Settlement shall apply. If Dealer is satisfied with such
procedures and documentation, it shall sell the Restricted Shares pursuant to such
registration statement during a period (the “Resale Period”) commencing on the Exchange
Business Day following delivery of such Restricted Shares (which, for the avoidance of
doubt, shall be (x) the Share Termination Payment Date in case of settlement in Share
Termination Delivery Units pursuant to Section 9(j) above or (y) the Settlement Date in
respect of the final Expiration Date for all Daily Number of Warrants) and ending on the
earliest of (i) the Exchange Business Day on which Dealer completes the sale of all
Restricted Shares or, in the case of settlement of Share Termination Delivery Units, a
sufficient number of Restricted Shares so that the realized net proceeds of such sales
equals or exceeds the Payment Obligation (as defined above), (ii) the date upon which all
Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar provisions
then in force) or Rule 145(d)(2) (or any similar provision then in force) under the
Securities Act and (iii) the date upon which all Restricted Shares may be sold or
transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force)
or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act. If the
Payment Obligation exceeds the realized net proceeds from such resale, Company shall
transfer to Dealer by the open of the regular trading session on the Exchange on the
Exchange Trading Day immediately following the last day of the Resale Period the amount of
such excess (the “Additional Amount”) in cash or in a number of Shares (“Make-whole Shares”)
in an

19

 

	 	 	 	amount that, based on the Settlement Price on the last day of the Resale Period (as if
such day was the “Valuation Date” for purposes of computing such Settlement Price),
has a dollar value equal to the Additional Amount. The Resale Period shall continue to
enable the sale of the Make-whole Shares. If Company elects to pay the Additional
Amount in Shares, the requirements and provisions for Registration Settlement shall
apply. This provision shall be applied successively until the Additional Amount is
equal to zero. In no event shall Company deliver a number of Restricted Shares greater
than the Maximum Number of Shares.
	 
	 	(iii)	 	Without limiting the generality of the foregoing, Company agrees that any Restricted
Shares delivered to Dealer, as purchaser of such Restricted Shares, (A) may be transferred by
and among Dealer and its affiliates and Company shall effect such transfer without any
further action by Dealer and (B) after the period of 6 months from the Trade Date (or 1 year
from the Trade Date if, at such time, informational requirements of Rule 144(c) under the
Securities Act are not satisfied with respect to Company) has elapsed after any Settlement
Date or Share Termination Payment Date, as applicable, for such Restricted Shares, Company
shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any
legends referring to any such restrictions or requirements from such Restricted Shares upon
request by Dealer (or such affiliate of Dealer) to Company or such transfer agent, without
any 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).
	 
	 	(iv)	 	If the Private Placement Settlement or the Registration Settlement shall not be effected
as set forth in clauses (i) or (ii), as applicable, then failure to effect such Private
Placement Settlement or such Registration Settlement shall constitute an Event of Default
with respect to which Company shall be the Defaulting Party.

	 	(l)	 	Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Dealer may
not exercise any Warrant hereunder or be entitled to take delivery of any Shares deliverable
hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder, to the
extent (but only to the extent) that, after such receipt of any Shares upon the exercise of such
Warrant or otherwise hereunder, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share
Amount would exceed the Applicable Share Limit. Any purported delivery hereunder shall be void and
have no effect to the extent (but only to the extent) that, after such delivery, (i) the Section 16
Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. If
any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this
provision, Company’s obligation to make such delivery shall not be extinguished and Company shall
make such delivery as promptly as practicable after, but in no event later than one Business Day
after, Dealer gives notice to Company that, after such delivery, (i) the Section 16 Percentage
would not exceed 7.5%, and (ii) the Share Amount would not exceed the Applicable Share Limit.
	 
	 	(m)	 	Share Deliveries. Company acknowledges and agrees that, to the extent the holder of
this Warrant is not then an affiliate and has not been an affiliate for 90 days (it being
understood that Dealer will not be considered an affiliate under this paragraph solely by reason of
its receipt of Shares pursuant to the Transaction), and otherwise satisfies all holding period and
other requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or
Share Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1
year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not
satisfied with respect to Company) shall be eligible for resale under Rule 144 of the Securities
Act and Company agrees to promptly remove, or cause the transfer agent for such Shares or Share
Termination Delivery Property, to remove, any legends referring to any restrictions on resale under
the Securities Act from the Shares or Share Termination Delivery Property. Company further agrees
that any delivery of Shares or Share Termination Delivery Property prior to the date

20

 

	 	 	 	that is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time,
informational requirements of Rule 144(c) are not satisfied with respect to Company), may be
transferred by and among Dealer and its affiliates and Company shall effect such transfer
without any further action by Dealer. Notwithstanding anything to the contrary herein,
Company agrees that any delivery of Shares or Share Termination Delivery Property shall be
effected by book-entry transfer through the facilities of DTC, or any successor depositary,
if at the time of delivery, such class of Shares or class of Share Termination Delivery
Property is in book-entry form at DTC or such successor depositary. Notwithstanding anything
to the contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any
successor rule are amended, or the applicable interpretation thereof by the Securities and
Exchange Commission or any court change after the Trade Date, the agreements of Company
herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of
Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery
of the relevant Shares or Share Termination Delivery Property.

	 	(n)	 	Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating
to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other
party has represented, expressly or otherwise, that such other party would not, in the event of
such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that
it and the other party have been induced to enter into the Transaction, as applicable, by, among
other things, the mutual waivers and certifications provided herein.
	 
	 	(o)	 	Tax Disclosure. Effective from the date of commencement of discussions concerning the
Transaction, Company and each of its employees, representatives, or other agents may disclose to
any and all persons, without limitation of any kind, the tax treatment and tax structure of the
Transaction and all materials of any kind (including opinions or other tax analyses) that are
provided to Company relating to such tax treatment and tax structure.
	 
	 	(p)	 	Maximum Share Delivery.

	 	(i)	 	Notwithstanding any other provision of this Confirmation, the Agreement or the
Equity Definitions, in no event will Company at any time be required to deliver a number
of Shares greater than two times the Number of Shares (the “Maximum Number of Shares”)
to Dealer in connection with the Transaction.

	 	(ii)	 	In the event Company shall not have delivered to Dealer the full number of Shares
or Restricted Shares otherwise deliverable by Company to Dealer pursuant to the terms of
the Transaction because Company has insufficient authorized but unissued Shares (such
deficit, the “Deficit Shares”), Company shall be continually obligated to deliver, from
time to time, Shares or Restricted Shares, as the case may be, to Dealer until the full
number of Deficit Shares have been delivered pursuant to this Section 9(p)(ii), when,
and to the extent that, (A) Shares are repurchased, acquired or otherwise received by
Company or any of its subsidiaries after the Trade Date (whether or not in exchange for
cash, fair value or any other consideration), (B) authorized and unissued Shares
reserved for issuance in respect of other transactions prior to such date that prior to
the relevant date become no longer so reserved or (C) Company additionally authorizes
any unissued Shares that are not reserved for other transactions; provided that in no
event shall Company deliver any Shares or Restricted Shares to Dealer pursuant to this
Section 9(p)(ii) to the extent that such delivery would cause the aggregate number of
Shares and Restricted Shares delivered to Dealer to exceed the Maximum Number of
Shares. Company shall immediately notify Dealer of the occurrence of any of the foregoing
events (including the number of Shares subject to clause (A), (B) or (C) and the
corresponding number of Shares or Restricted Shares, as the case may be, to be
delivered) and promptly deliver such Shares or Restricted Shares, as the case may be,
thereafter.

21

 

	 	(q)	 	Right to Extend. Dealer may postpone, in whole or in part, any Expiration Date or any
other date of valuation or delivery with respect to some or all of the relevant Warrants (in which
event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with
respect to one or more Expiration Dates) if Dealer determines, in its commercially reasonable
judgment based on the advice of counsel, that such extension is reasonably necessary or advisable
to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity
conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge
unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an
affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or
self-regulatory requirements, or with related policies and procedures applicable to Dealer.
	 
	 	(r)	 	Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation
is not intended to convey to Dealer rights against Company with respect to the Transaction that are
senior to the claims of common stockholders of Company in any United States bankruptcy proceedings
of Company; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to
pursue remedies in the event of a breach by Company of its obligations and agreements with respect
to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit
Dealer’s rights in respect of any transactions other than the Transaction.
	 
	 	(s)	 	Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction
to be a
“securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of
the United States Code) (the “Bankruptcy Code”), and the parties hereto to be entitled to the
protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 546(e),
546(g), 555 and 560 of the Bankruptcy Code, (ii) a party’s right to liquidate the Transaction
and to exercise any other remedies upon the occurrence of any Event of Default under the
Agreement with respect to the other party to constitute a “contractual right” as described in
the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other
property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer”
as defined in the Bankruptcy Code.
	 
	 	(t)	 	Wall Street Transparency and Accountability Act. In connection with Section 739 of the
Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that
neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA
or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable
rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement,
as applicable, arising from a termination event, force majeure, illegality, increased costs,
regulatory change or similar event under this Confirmation, the Equity Definitions incorporated
herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging
Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in
the Agreement)).
	 
	 	(u)	 	Early Unwind. In the event the sale of the “Underwritten Securities” (as defined in the
Purchase Agreement) is not consummated with the Representatives for any reason, or Company fails to
deliver to Dealer opinions of counsel as required pursuant to Section 9(a), in each case by 5:00
p.m. (New York City time) on the Premium Payment Date, or such later date as agreed upon by the
parties (the Premium Payment Date or such later date the “Early Unwind Date”), the Transaction
shall automatically terminate (the “Early Unwind”), on the Early Unwind Date and (i) the
Transaction and all of the respective rights and obligations of Dealer and Company under the
Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged
by the other party from and agrees not to make any claim against the other party with respect to
any obligations or liabilities of the other party arising out of and to be performed in connection
with the Transaction either prior to or after the Early Unwind Date; provided that, other than in
cases involving a breach of the Purchase Agreement by Dealer, Company shall purchase from Dealer on
the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection
with the Transaction at the then prevailing market price. Each of Dealer and Company represents and
acknowledges to the other that, subject to the proviso included in this

22

 

	 	 	 	Section 9(u), upon an Early Unwind, all obligations with respect to the Transaction shall be
deemed fully and finally discharged.
	 
	 	(v)	 	Payment by Dealer. In the event that (i) an Early Termination Date occurs or is
designated with respect to the Transaction as a result of a Termination Event or an Event of
Default (other than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the
Agreement) and, as a result, Dealer owes to Company an amount calculated under Section 6(e) of the
Agreement, or (ii) Dealer owes to Company, pursuant to Section 12.7 or Section 12.9 of the Equity
Definitions, an amount calculated under Section 12.8 of the Equity Definitions, such amount shall
be deemed to be zero.

[Remainder of Page Intentionally Blank]

23

 

     Please confirm that the foregoing correctly sets forth the terms of our agreement by
executing this Confirmation and returning it to The Royal Bank of Scotland plc, c/o RBS Securities
Inc., 600 Washington Blvd., Stamford, CT 06901, Attn: Legal Department (Tam Beattie), or by fax to:
(203) 873-4571, with copy to The Royal Bank of Scotland plc, c/o RBS Global Banking & Markets, 280
Bishopsgate, London EC2M 4RB, Attn: Swap Administration, or by fax to: +44 (0) 20 7085 5050.

Very truly yours,

	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	 	 	THE ROYAL BANK OF SCOTLAND PLC	 	 
	 
	 	 	 	 	 	 
	 	 	By: RBS Securities Inc., as its agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert McKillip	 	 
	 

	 	Name:
	 	 

Robert McKillip
	 	 
	 

	 	Title:
	 	Managing Director	 	 

	 	 	 	 	 

	Accepted and confirmed

as of the Trade Date: 6/9/11	 	 
	 
	 	 	 	 
	Integra LifeSciences Holdings Corporation	 	 
	 
	 	 	 	 
	By:
	 	/s/ Nora Brennan	 	 
	 

	 	 

	 	 
	Authorized Signatory	 	 
	Name: 
	 	Nora Brennan	 	 

[RBS Warrant Confirmation]

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