EX-10.4: CONFIRMATION OF OTC WARRANT TRANSACTION

 

 

 

 

 

 

 

September 9, 2008

September 9, 2008 subject to cancellation of the OTC Warrant Transaction prior to 5:00 p.m. (New York City time) on such date by the Dealer. In the event of such cancellation, any payments previously made hereunder, including the Premium, shall be returned to the person making such payment. In addition, Counterparty shall reimburse Dealer for any costs or expenses (including market losses) relating to the unwinding of its hedging activities in connection with the Transaction (including any loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position).

 

European

 

Call

 

Counterparty

 

Dealer

 

Shares of Common Stock, $0.50 par value, of Counterparty (Security Symbol: “MYL”).

 

11,261,265

 

For any day, the unexercised Number of Warrants on such day divided by the remaining number of Expiration Dates (including such day) and rounded down to the nearest whole number, with the balance of the Number of Warrants exercised on the final Expiration Date.

 

One (1) Share per Warrant

 

 $ 20.00

 

 $16,320,000

 

The Effective Date; provided that no cancellation of the Transaction has occurred prior to 5:00 p.m. (New York City time) on such date by Dealer.

 

New York Stock Exchange

 

All Exchanges

 

A Scheduled Trading Day that has a scheduled closing time for its regular trading session at 4:00 p.m. (New York City time) or the then standard closing time for regular trading on the Exchange and is not a Disrupted Day.

 

 

 

11:59 p.m. (New York City time).

 

The 80 consecutive Full Exchange Business Days beginning on and including December 15, 2015 each shall be the Expiration Date for a number of Warrants equal to the Daily Number of Warrants on such date. For the avoidance of doubt, the aggregate number of Expiration Dates hereunder shall not be affected by the occurrence of a Disrupted Day or other circumstance that causes a Scheduled Trading Day not to be a Full Exchange Business Day.

Each Expiration Date shall be an Exercise Date for a number of Warrants equal to the Daily Number of Warrants on such date. The Warrants shall not be exercised prior to the first such Exercise Date.

 

Applicable; provided that Section 3.4(a) of the Equity Definitions shall apply to Net Physical Settlement; and provided further that, unless all Warrants have been previously exercised hereunder, a number of Warrants for each Expiration Date equal to the Daily Number of Warrants for such Expiration Date shall be deemed to be automatically exercised.

 

Address:               Mylan Inc.

1500 Corporate Drive

Canonsburg, PA 15317

Attention:            Edward J. Borkowski, Chief Financial Officer

Facsimile No.:     (724)  ###-###-####

Telephone No.:    (724)  ###-###-####

 

 

 

Each Exercise Date

 

 

 

For each Valuation Date, the Rule 10b-18 Dollar Volume Weighted Average Price of the Shares (“ VWAP ”) calculated from 9:45 a.m. to 3:45 p.m., as observed under the heading Bloomberg “VWAP” on Bloomberg page MYL.N <equity> VAP (or any successor thereto) (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); provided that, if the scheduled weekday closing time of the Exchange for any Valuation Date is later than 4:00 p.m. (without regard to after hours or any other trading outside of the regular trading session hours) the VWAP shall be calculated for such Valuation Date from 9:45 a.m. until 15 minutes prior to such later closing time of the Exchange.

 

Section 6.3(a) of the Equity Definitions is hereby amended by replacing clause (ii) in its entirety with “(ii) an Exchange Disruption, or” and inserting immediately following clause (iii) the phrase “; in each case that the Calculation Agent determines is material.”

 

Net Physical Settlement only.

 

Counterparty shall deliver to Dealer on the Settlement Date a number of Shares (the “ Delivered Shares ”) equal to the Share Delivery Quantity; provided that in the event that the number of Shares calculated comprises any fractional Share, only whole Shares shall be delivered and an amount in cash equal to the value of such fractional share shall be payable by the Counterparty to Dealer in lieu of such fractional Share. If, in the reasonable opinion of Dealer or Hedging Party based on advice of counsel, for any reason, the Shares deliverable upon Net Physical Settlement would not be immediately freely transferable by Dealer under Rule 144(b)(1) under the Securities Act of 1933, as amended (the “ Securities Act ”), then Dealer or Hedging Party may elect to either (x) accept delivery of such Shares notwithstanding any restriction on transfer or (y) have the provisions set forth under “ Registration/Private Placement ” below apply,

mutatis mutandis.

For each Exercise Date, a number of Shares, as calculated by the Calculation Agent, equal to the Net Physical Settlement Amount for such Exercise Date divided by the Settlement Price on the Valuation Date in respect of such Exercise Date plus an amount in cash in lieu of any fractional shares (based on the applicable Settlement Price).

 

For any Exercise Date, an amount equal to the product of (i) the Number of Warrants being exercised on the relevant Exercise Date, (ii) the Strike Price Differential for such Exercise Date and (iii) the Warrant Entitlement.

 

For any Valuation Date, (i) if the Settlement Price is greater than the Strike Price, an amount equal to the excess of such Settlement Price over the Strike Price for such Valuation Date or (ii) if such Settlement Price is less than or equal to the Strike Price, zero.

 

Settlement with respect to each Exercise Date shall occur on the third (3rd) Full Exchange Business Day following the final Valuation Date; provided that Dealer or Hedging Party shall have the right to request by prior written notice to Counterparty a Settlement Date with respect to any Exercise Date and the related Share Delivery Quantity that is three (3) Full Exchange Business Days following such Exercise Date. Such request shall not unreasonably be denied.

Notwithstanding anything herein or in the Agreement to the contrary, the number of Shares that may be delivered at settlement by Counterparty shall not exceed 18,972,416 Shares at any time, as adjusted by Calculation Agent to account for any subdivision, stock-split, stock combination, reclassification or similar dilutive or anti-dilutive event with respect to the Shares and as such number may be increased by operation of the provisions set forth below opposite the caption “Increases in Maximum Deliverable Share Amount ” (“ Maximum Deliverable Share
Amount ”).

 

Counterparty represents and warrants that the number of Available Shares as of the Trade Date is greater than the Maximum Deliverable Share Amount. Counterparty covenants and agrees that (i) Counterparty shall not take any action of corporate governance or otherwise to reduce the number of Available Shares below the Maximum Deliverable Share and (ii) Counterparty shall use its reasonable efforts to cause the number of Available Shares at all times to be greater than the Maximum Deliverable Share Amount.

 

For this purpose, “ Available Shares ” means the number of Shares Counterparty currently has authorized (but not issued and outstanding) less the maximum number of Shares that may be required to be issued by Counterparty in connection with stock options, convertibles, and other commitments of Counterparty that may require the issuance or delivery of Shares in connection therewith (other than the Transaction and any amendment thereto or new confirmation evidencing the issuance by Counterparty to Dealer of additional warrants within 30 days of September 3, 2008).

 

Following the Trade Date, Counterparty agrees to use its commercially reasonable efforts seek approval from its shareholders (including, without limitation, to seek such approval at its annual meeting of shareholders in 2009 and, if needed, the annual meeting of shareholders for each following calendar year) to increase the number of authorized but unissued Shares such that the number of Available Shares shall be equal to at least two times the Number of

Warrants that remain unexercised (the “2x Condition ”). Upon Counterparty obtaining such approval for such an increase, the Maximum Deliverable Share Amount shall automatically increase to two times the aggregate Number of Warrants that remain unexercised. Counterparty further agrees that following the Trade Date and until the 2x Condition is satisfied, 30% of the increase in the number of authorized but unissued Shares and/or Shares that are held in treasury that results from any of the events described in clause (i), (ii) or (iii) below shall be reserved solely for delivery in connection with the Transaction, and the Maximum Deliverable Share Amount shall be increased in each case by one-half of the number of such additional authorized but unissued Shares. Until the 2x Condition has been satisfied, Counterparty shall notify Buyer no later than the third Business Day of each month of the occurrence during the immediately preceding month of any of the events described in clause (i), (ii) or (iii) below if the aggregate effect of such events would be to increase the number of additional but authorized Shares by at least 10,000 Shares (including the number of additional authorized but unissued Shares). In the event Counterparty shall not have delivered the full number of Shares otherwise deliverable under the Transaction as a result of the “ Limitations on Net Physical Settlement by Counterparty ” set forth above (the resulting deficit, the “ Deficit Shares ”), Counterparty shall be continually obligated to deliver, from time to time (and, for the avoidance of doubt, irrespective of any early termination or cancellation of the relevant Transaction or the expiration of the relevant Warrants) until the full number of Deficit Shares have been delivered pursuant to this paragraph, Shares when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by Counterparty or any of its subsidiaries (including, without limitation, pursuant to the settlement or termination of any Share option or other derivative transactions) after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date which prior to the relevant date become no longer so reserved and (iii) Counterparty additionally authorizes any unissued Shares that are not reserved for other transactions. Until the full number of Deficit Shares has been delivered pursuant to this paragraph, Counterparty shall immediately notify Buyer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be delivered) and promptly deliver such Shares thereafter.

 

 

 

If at any time during the period from and including the Trade Date, to and including the date on which Counterparty has fully performed its obligations to deliver Shares hereunder, an ex-dividend date for a cash dividend occurs with respect to the Shares (an “ Ex-Dividend Date ”), and that dividend is different from the Regular Dividend on a per Share basis, then the Calculation Agent will, in its reasonable discretion, adjust the Strike Price, the Number of Warrants, the Daily Number of Warrants, the Warrant Entitlement and any other variable it deems appropriate to preserve the fair value of the Warrants after taking into account such dividend and any corresponding adjustment to the Regular Dividend.

 

Initially USD $0.00 per Share per quarter in respect of the Shares. In the event that, in any quarter, a regular quarterly Ex-Dividend Date occurs for which the amount of the corresponding cash dividend is different (the “ New Dividend Amount ”) from the Regular Dividend or no Ex-Dividend Date occurs (in which case the New Dividend Amount shall be zero), then following the adjustment by the Calculation Agent pursuant to “Dividends” above, the Regular Dividend

shall equal the New Dividend Amount.

Any dividend other than Regular Dividends. For the avoidance of doubt, if more than one Ex-Dividend Date occurs in a quarter, the Calculation Agent shall designate any cash dividend other than a Regular Dividend as an Extraordinary Dividend and will, in its reasonable discretion, adjust the Strike Price, the Number of Warrants, the Daily Number of Warrants, the Warrant Entitlement and any other variable it deems appropriate to preserve the fair value of the Warrants after taking into account such Extraordinary Dividend.

 

 

 

Calculation Agent Adjustment

 

 

 

(a) Share-for-Share: Modified Calculation Agent Adjustment

 

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

 

(c) Share-for-Combined: Cancellation and Payment (Calculation Agent Determination); provided that the Calculation Agent may elect Component Adjustment for all or part of the Transaction.

 

 

Applicable

 

(a) Share-for-Share: Modified Calculation Agent Adjustment

 

(b) Share-for-Other: Modified Calculation Agent Adjustment

 

(c) Share-for-Combined: Modified Calculation Agent Adjustment

 

With respect to any Extraordinary Events hereunder, upon the occurrence of Cancellation and Payment in whole or in part, the parties agree that the amount to be paid, in accordance with the Equity Definitions, shall constitute a Transaction Early Termination Amount, subject to satisfaction by the payment or delivery of Shares or cash as set forth in the Early Termination section below.

 

If, in respect of any Merger Event to which Modified Calculation Agent Adjustment applies, the adjustments to be made in accordance with Section 12.2(e)(i) of the Equity Definitions would result in the Counterparty being different from the issuer of the Shares, then with respect to such Merger Event, as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity Definitions, Dealer, Hedging Party and the Counterparty shall, prior to the Merger Date, have entered into such documentation containing representations, warranties and agreements relating to securities law and other issues as requested by Dealer or Hedging Party that Dealer or Hedging Party has determined, in its reasonable discretion, to be reasonably necessary or appropriate to allow Dealer or Hedging Party to continue as a party to the Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions, and to preserve its hedging or hedge unwind activities in connection with the Transaction in a manner compliant with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer or Hedging Party, and if such conditions are not

met or if the Calculation Agent determines that no adjustment that it could make under Section 12.2(e)(i) of the Equity Definitions will produce a commercially reasonable result, then the consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall apply.

 

Cancellation and Payment (Calculation Agent Determination) (subject to satisfaction by payment or delivery of Shares or cash as set forth in “Early Termination” below). In addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange.

 

 

 

Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions shall be amended by inserting (i) at the end of the fifth line thereof the following phrase: “(or GS)”, (ii) at the end of clause (X) the following phrase: “(or, in the case of GS, a Hedging Party Related Transaction)”; and (iii) in clause (Y), immediately following the words “such Transaction”, the following phrase: “(or, in the case of GS, a Hedging Party Related Transaction).”

 

Goldman Sachs International or any of its affiliates to which Goldman Sachs International assigns its rights and obligations under a Hedging Party Related Transaction.

 

A transaction between GS and Dealer or its affiliate evidenced by a confirmation that refers to the Transaction.

 

Not Applicable

 

Applicable

 

Applicable; provided that Section 12.9(a)(v) of the Equity Definitions is hereby amended by inserting at the end of clause (A) the following phrase: “(or a Hedging Party Related Transaction).”

 

Not Applicable

 

Applicable; provided that Section 12.9(a)(vii) of the Equity Definitions is hereby amended by inserting in the third line thereof following the words “such Transaction” the following phrase: “(or a Hedging Party Related Transaction); provided further that, Section 12.9(b)(iv) of the Equity Definitions .is hereby amended by deleting the text from and including “(A)” to and including “(B)” and by deleting the words “in each case”.

 

1.00%

 

Applicable; provided that it shall be a condition to Counterparty’s right to make the election described in clause (C) of Section 12.9(b)(v) of the Equity Definitions that on the date of such election, none of Counterparty, its directors, executive officers, or any person controlling, or exercising influence over, its

decision to make such election is in possession of any material non-public information with respect to Counterparty or the Shares; provided further that, if Counterparty timely makes the election described in clause (A) or (B) of Section 12.9(b)(v) of the Equity Definitions, Counterparty shall thereafter remain entitled, subject to the foregoing condition, to terminate the Transaction pursuant to Section 12.9(b)(v)(C) of the Equity Definitions upon five Scheduled Trading Days’ notice to Dealer; and provided further that, Section 12.9(b)(v) of the Equity Definitions is hereby amended by deleting the text from and including “(X)” to and including “(Y)” and that Section 12.9(a)(viii) of the Equity Definitions is hereby amended by inserting in the second line thereof following the words “such Transaction” the following phrase “(or a Hedging Party Related Transaction).”

 

0.25%

 

GS; provided that, notwithstanding anything herein to the contrary, from and after the first day following the payment date in respect of any Early Termination Date under the Hedging Party Related Transaction, (such day, the “ Related Transaction Termination Date ”), Dealer shall be the Hedging Party.

 

GS; provided that, notwithstanding anything herein to the contrary, from and after the first day following any Related Transaction Termination Date, Dealer shall be the Determining Party.

 

Applicable

 

Applicable

 

Applicable

 

 

 

If Counterparty would be obligated to pay cash to Dealer pursuant to the terms of this Agreement due to an event or circumstance outside Counterparty’s control (or, subject to Hedging Party’s consent not to be unreasonably withheld or delayed, an event within Counterparty’s control) without having had the right (other than pursuant to this paragraph) to elect to deliver Shares in satisfaction of such payment obligation, then Counterparty may elect, by giving irrevocable telephonic notice to Dealer and Hedging Party (followed by written confirmation thereof within 24 hours), to deliver to Dealer a number of Shares (whether registered or unregistered) having a cash value equal to the amount of such payment obligation. Such number of Shares to be delivered shall be the number of Shares, determined by the Calculation Agent, sufficient for Dealer to realize the cash equivalent of such payment obligation from proceeds of the sale of such number of Shares over a reasonable period of time taking into account any applicable discount (determined in a commercially reasonable manner) to reflect any restrictions on transfer as well as the market value of the Shares. Settlement relating to any delivery of Shares pursuant to this paragraph shall occur within a reasonable period of time. The number of Shares delivered pursuant to this paragraph shall not exceed the Maximum Deliverable Share Amount and shall be subject to the provisions under “Registration/Private Placement” hereof regarding Proceeds Amount and the provisions set forth in subsection (c) under “Additional Agreements, Representations and Covenants of Counterparty, Etc.” below. If the event giving rise to such payment obligation

has resulted in holders of Shares receiving property (including cash) in exchange for Shares, then Counterparty shall satisfy its obligation pursuant to this paragraph by delivering such property; provided that if such event involves a choice of consideration, Dealer shall be entitled to receive the respective amounts of each type of property comprised in such consideration that holders of Shares in the aggregate are entitled to receive.

 

Notwithstanding any provision to the contrary, upon the designation of an Early Termination Date or the occurrence of Cancellation and Payment in whole or in part hereunder (except in the case of 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 (x) Event of Default of the type described in Section 5(a)(iii), (v), (vi) or (vii) of the Master Agreement or (y) a Termination Event of the type described in Section 5(b)(i), (ii), (iii), (iv), or (v) of the Master Agreement that in the case of either (x) or (y) resulted from an event or events outside Counterparty’s control), Counterparty’s payment obligation in respect of this Transaction (the “ Transaction Early Termination Amount ”) may, at the option of Counterparty, be satisfied by the delivery of a number of Shares equal to the Transaction Early Termination Amount divided by the Termination Price (“ Early Termination Stock Settlement ”); provided, however, that Counterparty must notify Dealer and Hedging Party of its election of Early Termination Stock Settlement by the close of business on the day that is two Exchange Business Days following the day that the notice designating the Early Termination Date, or notice that an Extraordinary Event has resulted in the cancellation or termination of the Transaction in whole or in part, is effective; provided further, however, that in no event shall Counterparty be required to deliver to Dealer a number of Shares greater than the Maximum Deliverable Share Amount. “ Termination Price ” means the market value per Share on the date that Shares are delivered in connection with such Early Termination Date, as determined by the Calculation Agent in a commercially reasonable manner taking into account any applicable discount to reflect any restrictions on transfer.

 

A number of Shares calculated as being due in respect of any Early Termination Stock Settlement will be deliverable on the third Clearance System Business Day following the date that notice specifying the number of Shares deliverable is effective; provided that, if Counterparty is delivering Shares as a result of a Merger Event, Tender Offer, Nationalization or Insolvency, the Settlement Date for such delivery will be immediately prior to the effective date or settlement date for such event and Dealer shall be entitled to receive the type of consideration that a holder of Shares at such time would be entitled to receive (and references herein to Shares shall be deemed to refer to such consideration, as applicable); provided that if such event involves a choice of consideration, Dealer shall be entitled to receive the respective amounts of each type of property (including cash) comprised in such consideration that holders of Shares in the aggregate are entitled to receive. Section 6(d)(i) of the Agreement is hereby amended by adding the following words after the word “paid” in the fifth line thereof: “or any delivery is to be made, as applicable.” The number of Shares delivered pursuant Early Termination Stock Settlement shall not exceed the Maximum Deliverable Share Amount and shall be subject to the provisions under “Registration/Private Placement” hereof regarding Proceeds Amount and the provisions set forth in subsection (c) under “Additional Agreements, Representations and Covenants of Counterparty, Etc.” below.

 

On or prior to the Early Termination Date or date on which notice that an Extraordinary Event has resulted in the cancellation or termination of the

Transaction in whole or in part is effective, as applicable, if Early Termination Stock Settlement is elected and if so requested by Dealer or Hedging Party upon advice of counsel, Counterparty shall comply with the provisions set forth below opposite the caption “Registration/Private Placement”.

 

If the provisions under this heading “Registration/Private Placement” apply, Counterparty shall (subject to its right to make the election described in the immediately succeeding paragraph) (A) afford Dealer and Hedging Party (or an affiliate of Hedging Party designated by Hedging Party) a reasonable opportunity to conduct a due diligence investigation with respect to Counterparty that is customary in scope for underwritten offerings of equity securities; (B) enter into a registration rights agreement with Dealer and Hedging Party (a “ Registered Settlement ”) in form and substance reasonably acceptable to Dealer which agreement (“ Registration Rights Agreement ”) will contain among other things, reasonable customary representations and warranties and indemnification, restrictions on sales during “blackout dates” as provided for in the Registration Rights Agreement and shall satisfy the conditions contained therein; and (C) promptly file and use its commercially reasonable efforts to obtain the effectiveness a Registration Statement pursuant to Rule 415 under the Securities Act. If and when such Registration Statement shall have been declared effective by the Securities and Exchange Commission, Counterparty shall have made available to Dealer and Hedging Party such Prospectuses as Dealer may reasonably request to comply with the applicable prospectus delivery requirements for the resale by Dealer and Hedging Party of such number of Shares as Dealer or Hedging Party shall specify (or, if greater, the number of Shares that Counterparty shall specify). Such Registration Statement shall be effective and Prospectus shall be current until the earliest of the date on which (i) all the Delivered Shares or Shares delivered by Counterparty in connection with an Early Termination Date, as the case may be, have been sold, (ii) Dealer and Hedging Party have each advised Counterparty that it no longer requires that such Registration Statement be effective, (iii) all remaining Shares could be sold by Dealer and Hedging Party without registration pursuant to Rule 144 promulgated under the Securities Act (the “ Termination Registration Period ”) or (iv) Counterparty has provided a legal opinion of nationally recognized counsel reasonably acceptable to Dealer in form and substance reasonably acceptable to Dealer and Hedging Party (with customary assumptions and exceptions) that the Shares issuable upon exercise of these Warrants will be freely tradable under the Securities Act upon delivery to Dealer and not subject to any legend restricting transferability. It is understood that the Registration Statement and Prospectus will cover a number of Shares equal to the aggregate number of Shares (if any) reasonably estimated by Dealer and Hedging Party to be potentially deliverable by Counterparty in connection with Net Physical Settlement or Early Termination Stock Settlement hereunder, as the case may be, but in no event exceeding the Maximum Deliverable Share Amount. On each day during the Termination Registration Period Counterparty shall represent to the Dealer and Hedging Party that each of its filings under the Securities Act, the Exchange Act or other applicable securities laws that are required to be filed have been filed and that, as of the respective dates thereof and as of the date of this representation, they do not contain any untrue statement of a material fact or omission of a material fact required to be stated therein or necessary to make the statements made, in the light of the circumstances under which they were made, not misleading.

 

In lieu of a Registered Settlement, Counterparty may elect, by notice to the Dealer and Hedging Party no later than the time the relevant delivery obligation

 

(a) Counterparty shall afford Dealer and Hedging Party (or an affiliate of Hedging Party designated by Hedging Party) and any potential institutional purchaser of any Shares identified by Dealer or Hedging Party a reasonable opportunity to conduct a due diligence investigation with respect to Counterparty that is customary in scope for private placements of equity securities subject to execution of any customary confidentiality agreements;

 

(b) Counterparty shall enter into an agreement (a “ Private Placement Agreement ”) with Dealer and Hedging Party (or an affiliate of Hedging Party designated by Hedging Party) on commercially reasonable terms in connection with the private placement of such Shares (including any additional Shares pursuant to clause (c) below) by Counterparty to Dealer or an affiliate and the private resale of such shares by Dealer or such affiliate or by Hedging Party or such affiliates, substantially similar to private placement purchase agreements customary for private placements of equity securities, by a publicly reporting company (if Counterparty is a publicly reporting company at such time) to institutional purchasers, in form and substance commercially reasonably satisfactory to Dealer and Hedging Party, which Private Placement Agreement shall include provisions relating to the indemnification of, and contribution in connection with the liability of, Dealer and its affiliates, and Hedging Party and its Affiliates, shall provide for the payment by Counterparty of all expenses in connection with such resale, including all reasonable and documented fees and expenses of counsel for Dealer and counsel for Hedging Party, shall contain representations, warranties and agreements of Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales, and shall use commercially reasonable efforts to provide for the delivery of accountants’ “comfort letters” to Dealer or such affiliate, and to Hedging Party or such affiliate with respect to the financial statements and certain financial information contained in or incorporated by reference into the offering memorandum prepared for the resale of such Shares;

 

(c) Dealer and/or Hedging Party shall sell the Delivered Shares or the Shares delivered by Counterparty in connection with Early Termination Stock Settlement, as the case may be, in a commercially reasonable manner until the amount received by Dealer and Hedging Party for the sale of the Shares
(the “ Proceeds Amount ”) is equal to the Net Physical Settlement Amount or the Transaction Early Termination Amount, as applicable. Any remaining delivered Shares shall be returned to Counterparty. If the Proceeds Amount is less than the Net Physical Settlement Amount or the Transaction Early Termination Amount, as applicable, Counterparty shall promptly deliver upon notice from Dealer or Hedging Party (or an affiliate of Hedging Party designated by Hedging Party) additional Shares to Dealer until the dollar amount from the sale of such Shares by Dealer, or Hedging Party, as the case may be, equals the difference between the Net Physical Settlement Amount or the Transaction Early Termination Amount, as applicable, and the Proceeds Amount. In no event shall Counterparty be required to deliver to Dealer a number of Shares

     greater than the Maximum Deliverable Share Amount.

Notwithstanding the foregoing: (I) if Counterparty has elected to deliver Shares as described in paragraph (a) above and either (A) Counterparty does not provide for the sale of the Shares under the Registration Statement as provided in the Registration Rights Agreement, (B) the due diligence investigation referred to in clause (A) of the second preceding paragraph does not yield a result reasonably satisfactory to Dealer and Hedging Party (or an affiliate of Hedging Party designated by Hedging Party), (C) some Shares cannot be registered under the Registration Statement due to Rule 415(a)(4) under the Securities Act or (D) some Shares cannot be sold due to the application of a blackout period or the failure of the Registration Statement to become effective on or prior to the date on which the relevant delivery obligation is due, then the provisions of the preceding paragraph shall apply to the extent Counterparty has not satisfied its obligations hereunder. (II) If the preceding paragraph is applicable and Counterparty fails to satisfy its obligations under such paragraph, then Counterparty may deliver unregistered Shares of equivalent value to the Net Physical Settlement Amount or the Transaction Early Termination Amount, as applicable, (or, if applicable, the unsatisfied portion thereof). The value of any unregistered Shares so delivered shall be discounted to reflect an appropriate liquidity discount (determined by Hedging Party in a commercially reasonable manner, taking into account Hedging Party’s policies and determinations with respect to any transfer restrictions that it deems advisable, based on the advice of counsel, to observe in connection with sales of such Shares). (III) If some or all of the Delivered Shares or Shares delivered in connection with an Early Termination Stock Settlement, as applicable, cannot be used to close out stock loans in the shares of Counterparty entered into to establish or maintain short positions by Hedging Party in connection with this Transaction without a prospectus being required by applicable law to be delivered to such lender, then the value of any such Shares shall reflect the cost (determined by Hedging Party in good faith and in a commercially reasonable manner) to Hedging Party of trading Shares in order to close out its hedge position if any, and the number of Shares required to be delivered shall be adjusted accordingly. In no event shall Counterparty be required to (i) top-up the delivery in cash or (ii) deliver to Dealer a number of Shares greater than the Maximum Deliverable Share Amount.

 

Counterparty represents and agrees that it has complied, and will comply, in connection with this Transaction and all related or contemporaneous sales and purchases of Shares, with the applicable provisions of the Securities Act, the Exchange Act and the rules and regulations promulgated thereunder, including, without limitation, Rule 10b-5 and 13e and Regulation M under the Exchange Act.

 

Each party acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act by virtue of Section 4(2) thereof. Accordingly, each party represents and warrants to the other party that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act and (iii) the disposition of the Transaction is restricted under this Confirmation, the Securities Act and state securities laws.

Counterparty further represents and warrants to Buyer and GS:

(a) Counterparty is not entering into this Transaction to create

actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares);

 

(b) Counterparty represents and acknowledges with Buyer and GS that as of the date hereof and without limiting the generality of Section 13.1 of the Equity Definitions, Dealer or GS is not making any representations or warranties with respect to the treatment of the Transaction under FASB Statements 149, 150 or 157, EITF Issue No. 00-19 (or any successor issue statements), under FASB’s Liabilities & Equity Project or under any other accounting standards or guidance;

 

(c) Counterparty is not, and after giving effect to the Transaction contemplated hereby, will not be, an “investment company” as such term is defined in the Investment Company Act of 1940, as amended;

 

(d) As of the Trade Date and each date on which a payment of cash is made by Counterparty hereunder, (i) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty, including contingent liabilities; (ii) the capital of Counterparty is adequate to conduct its business; and (iii) Counterparty has the ability to pay its debts and other obligations as such obligations mature and does not intend to, or believe that it will, incur debt or other obligations beyond its ability to pay as such obligations mature.

 

Account for payments to Counterparty:

Account Name:    Mylan Laboratories Inc.

Bank Name:           Huntington National Bank

ABA #:                  44000024

A/C #:                    1411114335

Swift code:            HUNTUS33

 

Account for payments to Dealer:

To be advised

 

Counterparty agrees that, in respect of any Shares delivered to Dealer, such Shares shall be, upon such delivery, duly and validly authorized, issued and outstanding, fully paid and non-assessable and subject to no adverse claims of any other party. The issuance of such Shares does not and will not require the consent, approval, authorization, registration or qualification of any government authority, except such as shall have been obtained on or before the delivery date of any Shares or as may be required in connection with any Registration Statement filed with respect to any Shares.

 

In the event of Counterparty’s bankruptcy, Dealer’s rights in connection with this Transaction shall not exceed those rights held by common shareholders. For the avoidance of doubt, the parties acknowledge and agree that Dealer’s rights with respect to any other claim arising from this Transaction prior to Counterparty’s bankruptcy shall remain in full force and effect and shall not be otherwise abridged or modified in connection herewith.

Each party waives any and all rights it may have to set-off, whether arising under any agreement, applicable law or otherwise.

 

Neither party may transfer its rights or delegate its obligations under this Transaction without the prior written consent of the other party, except that Dealer, after payment in full of the Premium, may assign its rights and delegate its obligations hereunder, in whole or in part, to any other person (an " Assignee ”) with the prior consent of the Counterparty (such consent not to be unreasonably withheld or delayed). In addition, Dealer may assign and delegate its rights and obligations under this Transaction to any subsidiary of Wells Fargo & Co (an “ Assignee ”) by notice specifying the effective date of such transfer (“ Transfer Effective Date ”) and including an (i) executed acceptance and assumption by the Assignee of such rights and obligations; provided that Counterparty will not, as a result of such transfer, be required to pay to the Assignee an amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) of the Agreement (except in respect of interest under Section 2(e), 6(d)(ii), or 6(e)) greater than the amount in respect of which Counterparty would have been required to pay to Dealer in the absence of such transfer; and (ii) the Assignee will not, as a result of such transfer, be required to withhold or deduct on account of a Tax under Section 2(d)(i) of the Agreement (except in respect of interest under Section 2(e), 6(d)(ii), or 6(e)) an amount in excess of that which Dealer would have been required to withhold or deduct in the absence of such transfer, unless the Assignee would be required to make additional payments pursuant to Section 2(d)(i)(4) of the Agreement corresponding to such excess.

 

On the Transfer Effective Date, (a) Dealer shall be released from all obligations and liabilities arising under this Transaction; and (b) the assigned and delegated rights and obligations under this Transaction shall cease to be a Transaction under the Agreement and shall be deemed to be a Transaction under an ISDA form of Master Agreement (Multicurrency-Cross Border) and Schedule substantially in the form of the Agreement but amended to reflect the name of the Assignee and the address for notices and any amended representations under Part 2 of the Agreement as may be specified in the notice of transfer.

 

Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities to or from Counterparty, Dealer may designate any of its affiliates, or Hedging Party, in which event Hedging Party may designate any of its affiliates, to purchase, sell, receive or deliver such Shares or other securities and otherwise to perform Dealer’s obligations in respect of this 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.

 

Upon a transfer under this provision, GS (if then the Calculation Agent and Hedging Party) shall remain the Calculation Agent and Hedging Party.

 

Counterparty agrees to indemnify Dealer, GS, their respective Affiliates and their respective directors, officers, agents and controlling parties (each such person being an “ Indemnified Party ”) from and against any and all losses, claims, damages and liabilities, joint and several, to which such Indemnified Party may become subject because of a breach of any representation or covenant hereunder, in the Agreement or any other agreement relating to the Agreement or Transaction and will reimburse Indemnified Party for all reasonable expenses (including reasonable legal fees and expenses) as they are incurred in connection with the investigation of, preparation for, or defense of, any pending or threatened claim or any action or proceeding arising therefrom, whether or

not such Indemnified Party is a party thereto. Seller will not be liable under the foregoing Indemnity provision to the extent that any loss, claim, damage, liability or expense is found in a final judgment by a court to have resulted from Dealer’s gross negligence or willful misconduct.

 

Dealer or GS 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 or GS determines, in its commercially reasonable judgment, that such extension is reasonably necessary or appropriate to preserve Dealer’s or GS’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer or GS to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer or GS 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.

Counterparty, and

Dealer

Counterparty

 

Counterparty

Address:

Attention:

 

 

Facsimile No.:

Telephone No.:

Address:

Attention:

 

 

 

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Address: