Exhibit 10.2

CONTRIBUTION AGREEMENT

AMONG

LONE STAR TECHNOLOGIES, INC.,

WELSPUN PIPES, INC.

AND

WELSPUN-LONE STAR TUBULARS LLC

Dated as of December 20, 2006

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

 

 

ARTICLE 1

 

DEFINITIONS

 

1

 

 

 

 

 

1.1

 

Defined Terms

 

1

 

 

 

 

 

ARTICLE 2

 

CONTRIBUTION

 

4

 

 

 

 

 

2.1

 

Contribution by Lone Star

 

4

 

 

 

 

 

2.2

 

Contribution by Welspun

 

4

 

 

 

 

 

ARTICLE 3

 

CLOSING

 

4

 

 

 

 

 

3.1

 

Closing Date

 

4

 

 

 

 

 

ARTICLE 4

 

DELIVERABLES

 

5

 

 

 

 

 

4.1

 

Items to Be Delivered by Welspun

 

5

 

 

 

 

 

4.2

 

Items to Be Delivered by Lone Star

 

5

 

 

 

 

 

4.3

 

Items to Be Delivered by the Company

 

5

 

 

 

 

 

ARTICLE 5

 

REPRESENTATIONS AND WARRANTIES OF WELSPUN

 

6

 

 

 

 

 

5.1

 

Existence and Good Standing

 

6

 

 

 

 

 

5.2

 

Authorization of Agreement

 

6

 

 

 

 

 

5.3

 

Conflicts; Consents of Third Parties

 

6

 

 

 

 

 

ARTICLE 6

 

REPRESENTATIONS AND WARRANTIES OF LONE STAR

 

7

 

 

 

 

 

6.1

 

Existence and Good Standing

 

7

 

 

 

 

 

6.2

 

Authorization of Agreement

 

7

 

 

 

 

 

6.3

 

Conflicts; Consents of Third Parties

 

8

 

 

 

 

 

ARTICLE 7

 

COVENANTS

 

8

 

 

 

 

 

7.1

 

Other Actions

 

8

 

 

 

 

 

ARTICLE 8

 

CONDITIONS TO CLOSING

 

8

 

 

 

 

 

8.1

 

Conditions Precedent to Obligations of Welspun

 

8

 

 

 

 

 

8.2

 

Conditions Precedent to Obligations of Lone Star

 

9

 

 

 

 

 

ARTICLE 9

 

TERMINATION

 

10

 

 

 

 

 

9.1

 

Termination of Agreement

 

10

 

 

 

 

 

9.2

 

Procedure for Termination

 

11

 

 

 

 

 

9.3

 

Effect of Termination

 

11

 

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Page

 

 

 

 

 

ARTICLE 10

 

INDEMNIFICATION

 

11

 

 

 

 

 

10.1

 

Survival of Representations, Warranties and Covenants

 

11

 

 

 

 

 

10.2

 

Indemnification

 

12

 

 

 

 

 

10.3

 

Indemnification Procedures

 

13

 

 

 

 

 

10.4

 

Indemnification for Breaches of Representations and Warranties

 

14

 

 

 

 

 

10.5

 

Transfer Taxes

 

14

 

 

 

 

 

ARTICLE 11

 

MISCELLANEOUS

 

15

 

 

 

 

 

11.1

 

Waiver of Default

 

15

 

 

 

 

 

11.2

 

Amendment

 

15

 

 

 

 

 

11.3

 

No Third Party Rights

 

15

 

 

 

 

 

11.4

 

Severability

 

15

 

 

 

 

 

11.5

 

Binding Effect; Assignment

 

15

 

 

 

 

 

11.6

 

Headings

 

16

 

 

 

 

 

11.7

 

Word Meanings

 

16

 

 

 

 

 

11.8

 

Counterparts

 

16

 

 

 

 

 

11.9

 

Entire Agreement

 

16

 

 

 

 

 

11.10

 

Arbitration

 

16

 

 

 

 

 

11.11

 

Governing Law

 

17

 

 

 

 

 

11.12

 

Notices

 

17

 

 

 

 

 

11.13

 

Expenses

 

18

 

 

 

 

 

11.14

 

Further Assurances

 

18

 

 

 

 

 

Schedules

 

 

 

 

 

 

 

 

 

Schedule 5.2(b)

 

 

Approvals

 

 

Schedule 5.3

 

 

Consents

 

 

Schedule 6.2(b)

 

 

Approvals

 

 

Schedule 6.3

 

 

Consents

 

 

 

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CONTRIBUTION AGREEMENT

THIS CONTRIBUTION AGREEMENT (this “Agreement”) is made and entered into as of
the 20th day of December, 2006, by and among Lone Star Technologies, Inc., a
Delaware corporation (“Lone Star”), Welspun Pipes, Inc., a Delaware corporation
(“Welspun”), and Welspun-Lone Star Tubulars LLC, a Delaware limited liability
company (the “Company”).  Each of Lone Star and Welspun are periodically
referred to herein as a “Member” and collectively as the “Members.”

WHEREAS, Lone Star and Welspun have caused the Company to be formed on
December 19, 2006, as a limited liability company under the Act (the “Act”);

WHEREAS, Lone Star owns 40% and Welspun owns 60% of the outstanding interest in
the Company; and

WHEREAS, upon the terms and subject to the conditions contained in this
Agreement, Lone Star and Welspun desire to make certain contributions to the
Company, and the Company desires to accept such contributions from Lone Star and
Welspun;

NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

1.1           Defined Terms.

As used herein, the following terms shall have the following meanings, unless
the context otherwise requires:

“Act” means the Delaware Limited Liability Company Act, Title 6, Chapter 18,
Delaware Code Annotated as it may be amended from time to time, and any
successor to such Act.

“Actions” means any suit, action, claim, hearing, administrative action, demand
letter, investigation by any Governmental Authority, notice of violation, or
proceeding arising out of any violation or alleged violation of any Law, breach
or alleged breach of any Contract or violation or alleged violation relating to
any Person.

“Affiliate” of a specified person (the “Specified Person”) means any Person (a)
who, directly or indirectly, controls, is controlled by, or is under common
control with the Specified Person, (b) who, directly or indirectly, owns or
controls more than fifty percent (50%) of the Specified Person’s outstanding
voting securities or equity interests, (c) of whom the Specified Person,
directly or indirectly, owns or controls more than fifty percent (50%) of the
outstanding voting securities or equity interests or (d) who has the right,
directly or indirectly, to appoint or elect more than fifty percent (50%) of the
Specified Person’s board of directors or equivalent managing body.

“Agreement” has the meaning set forth in the introductory paragraph hereof.

“Ancillary Agreement” means each of the JV Agreement, the Mutual Services
Agreement, the Lone Star Trademark License and the Welspun Trademark License.

“Arbitration” has the meaning set forth in Section 11.10 hereof.

“Business Day” shall have the meaning set forth in the JV Agreement.

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“Capital Contribution” means the total amount of cash, property, services
rendered, a promissory note or other obligation to contribute cash or property
or perform services, or other valuable consideration contributed to the Company
by each Member pursuant to the terms of this Agreement.  Any reference in this
Agreement to the Capital Contribution of a Member shall include the Capital
Contribution made by any predecessor holder of the Interest of that Member.

“Certificate of Formation” means the Certificate of Formation of the Company, as
amended or restated from time to time, filed with the Secretary of State of
Delaware.

“Charter Documents” means the limited liability company agreement, limited
partnership agreement, certificate or articles of incorporation, certificate of
formation, certificate of limited partnership, by-laws, articles of association
or other governing documents, as applicable, of the Person in question, as may
be in effect from time to time.

“Closing” has the meaning set forth in Section 3.1 hereof.

“Closing Date” has the meaning set forth in Section 3.1 hereof.

“Company” has the meaning set forth in the introductory paragraph hereof.

“Confidentiality Agreement” means the Mutual Confidentiality and Non-Disclosure
Agreement, dated June 22, 2006, between Lone Star and Welspun Parent.

“Contract” means any contract, agreement, instrument, commitment or other
binding arrangement, whether written or oral.

“Governmental Authority” means any authority, regulatory or administrative
agency, commission, department, board, bureau, agency, instrumentality or court
of the United States of America or any other nation or sovereign state, any
federal, bilateral, or multilateral governmental authority, any state,
possession, territory, county, district, city, or other governmental unit or
subdivision, and any branch, agency, or judicial body of any of the foregoing.

“JV Agreement” means that certain Limited Liability Company Agreement, dated as
of the date hereof, by and between Lone Star and Welspun.

“Knowledge” is deemed to include knowledge, information and belief which a party
would have if the party had made all reasonable enquiries and includes the
knowledge, information and belief of its directors, officers and employees.

“Interest” refers to all of a Member’s rights and interests in the Company in
such Member’s capacity as a Member, all as provided in the Certificate of
Formation, this Agreement and the Act.

“Law” means any statute, law, treaty, ordinance, rule, regulation, instrument,
directive, decree, permit, agreement, Order or injunction of or with any
Governmental Authority, and includes, without limitation, rules or regulations
of any regulatory or self-regulatory authority compliance with which is required
by Law.

“LCIA” has the meaning set forth in Section 11.10 hereof.

“Legal Proceedings” means any judicial, administrative or arbitral actions,
suits, proceedings (public or private), claims or governmental proceedings.

“Liability” means any debt, loss, damage, adverse claim, adverse Action, fines,
penalties, liability or obligation (whether direct or indirect, known or
unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued,
matured or unmatured, determined or determinable, disputed or undisputed,
liquidated or unliquidated, or due or to become due, and whether in contract,
tort, strict liability or otherwise), and including

2

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all costs and expenses relating thereto (including all fees, disbursements and
expenses of legal counsel, experts, engineers and consultants and costs of
investigation).

 “Lone Star” has the meaning set forth in the introductory paragraph hereof.

“Lone Star Indemnified Parties” has the meaning set forth in Section 10.2(a)
hereof.

“Lone Star Trademark License” means the Lone Star Trademark License, dated as of
the date hereof, between Lone Star and the Company.

“Loss” and “Losses” have the meaning set forth in Section 10.2(a) hereof.

“Material Adverse Effect” has the meaning set forth in the JV Agreement.

“Members” means Lone Star and Welspun.

“Mutual Services Agreement” means the Mutual Services Agreement, dated as of the
date hereof, between Lone Star and Welspun Parent.

“Net Cash Flow” has the meaning set forth in the JV Agreement.

“Notice” means a writing, containing the information required by this Agreement
to be communicated to a party, delivered or sent in the manner set forth in
Section 11.12 hereof.

“Order” means any writ, judgment, decree, injunction or similar order of any
Governmental Authority.

“Permits” means any approvals, authorizations, consents, licenses, permits or
certificates of a Governmental Authority.

“Person” means any individual, partnership, limited liability company,
corporation, cooperative, joint venture, trust, estate or other entity.

“Property” means all properties and assets that the Company may own or otherwise
have an interest in from time to time.

“Sole Arbitrator” has the meaning set forth in Section 11.10 hereof.

“Specified Person” has the meaning set forth in the definition of Affiliate.

“Survival Period” has the meaning set forth in Section 10.1 hereof.

“Third Party Claim” has the meaning set forth in Section 10.3(b) hereof.

“Transfer Taxes” has the meaning set forth in Section 10.5 hereof.

“UNCITRAL” has the meaning set forth in Section 11.10 hereof.

“Welspun” has the meaning set forth in the introductory paragraph hereof.

“Welspun Capital Contributions Obligations” has the meaning set forth in
Section 11.15 hereof.

 “Welspun Indemnified Parties” has the meaning set forth in Section 10.2(b)
hereof.

“Welspun Parent” has the meaning set forth in Section 11.15 hereof.

“Welspun Trademark License” means the Welspun Trademark License, dated as of the
date hereof, between Welspun Parent and the Company.

3

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ARTICLE 2

CONTRIBUTION

2.1           Contribution by Lone Star.

(a)           At the Closing, upon the terms and subject to the conditions
contained herein, Lone Star shall contribute $4,000,000 in cash, in immediately
available funds, to the Company; provided, however, that Lone Star’s cash
contribution payable at Closing may be reduced or eliminated as provided in
Section 3.2(a)(i) of the JV Agreement.

(b)           In addition, Lone Star commits to make the Capital Contributions
in cash as required by Section 3.2(b) of the JV Agreement, subject to the terms
and conditions of the JV Agreement.

2.2           Contribution by Welspun.

(a)           At the Closing, upon the terms and subject to the conditions
contained herein, Welspun shall contribute $6,000,000 in cash, in immediately
available funds, to the Company; provided, however, that Welspun’s cash
contribution payable at Closing may be reduced or eliminated as provided in
Section 3.2(a)(ii) of the JV Agreement.

(b)           In addition, Welspun commits to make the Capital Contributions in
cash as required by Section 3.2(b) of the JV Agreement, subject to the terms and
conditions of the JV Agreement.

ARTICLE 3

CLOSING

3.1           Closing Date.  The closing of the transactions contemplated by
this Agreement (the “Closing”) shall take place at the offices of Weil, Gotshal
& Manges LLP, 200 Crescent Court, Suite 300, Dallas, Texas 75201 at 10:00 a.m.
(Dallas, Texas time) on the later of: (i) December 26, 2006 and (ii) the third
(3rd) Business Day after the conditions set forth in Article 8 hereof have been
satisfied or waived by the party entitled to do so, or at such other date, time
and/or place as may mutually be agreed upon by the parties hereto.  The date on
which the Closing is held is referred to in this Agreement as the “Closing
Date.”

4

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ARTICLE 4

DELIVERABLES

4.1           Items to Be Delivered by Welspun.  Simultaneously with the
Closing, Welspun shall deliver or transfer or cause to be delivered or
transferred, as the case may be:

(a)           a duly executed JV Agreement; and

(b)           the Capital Contribution required by Section 2.2(a);

(c)           the Closing certificate referred to in Section 8.2(c);

(d)           to the Company, a duly executed Mutual Services Agreement;

(e)           to the Company, a duly executed Welspun Trademark License; and

(f)            a properly completed and executed IRS Form W-9.

4.2           Items to Be Delivered by Lone Star.  Simultaneously with the
Closing, Lone Star shall deliver or cause to be delivered:

(a)           a duly executed JV Agreement;

(b)           the Capital Contribution required by Section 2.1(a);

(c)           the Closing certificate referred to in Section 8.1(c);

(d)           to the Company, a duly executed Mutual Services Agreement;

(e)           to the Company, a duly executed Lone Star Trademark License; and

(f)            a properly completed and executed IRS Form W-9.

4.3           Items to Be Delivered by the Company.  Simultaneously with the
Closing, the Company shall deliver or transfer or cause to be delivered or
transferred, as the case may be:

(a)           a duly executed Mutual Services Agreement;

(b)           to Welspun Parent, a duly executed Welspun Trademark License; and

(c)           to Lone Star, a duly executed Lone Star Trademark License.

5

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ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF WELSPUN

Welspun hereby represents and warrants to Lone Star that:

5.1           Existence and Good Standing.  Welspun is validly existing and in
good standing under the Laws of Delaware and is duly qualified to do business in
all jurisdictions where it is so required to qualify, except where the failure
to be so qualified would not have a Material Adverse Effect.  Welspun Parent is
validly existing under the Laws of India and is duly qualified to do business in
all jurisdictions where it is so required to qualify, except where the failure
to be so qualified would not have a Material Adverse Effect.

5.2           Authorization of Agreement.

(a)           Each of Welspun and Welspun Parent has all requisite corporate
power and authority to enter into this Agreement and the Ancillary Agreements to
which it is a party, and each of Welspun and Welspun Parent has all requisite
corporate power and authority to perform all of its respective obligations under
this Agreement and the Ancillary Agreements, in each case, to which it is a
party.  Each of Welspun Parent and Welspun has taken all corporate action
necessary to authorize the execution, delivery and performance of this Agreement
and the Ancillary Agreements to which it is a party.

(b)           The execution and delivery of this Agreement and the Ancillary
Agreements to which Welspun and Welspun Parent is a party does not require
Welspun or Welspun Parent to obtain any approval or consent of, or make any
notice to or filing with, any Person or Governmental Authority, other than
approvals, consents, notices and filings obtained or made prior to the date
hereof or as listed on Schedule 5.2(b) hereto.

(c)           Following execution and delivery by the parties hereto or thereto,
this Agreement and each of the Ancillary Agreements to which Welspun and Welspun
Parent is a party will constitute the legal, valid and binding obligations of
Welspun and Welspun Parent, as applicable, enforceable in accordance with their
terms, subject to (i) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar Laws relating to or affecting the
rights of creditors generally, or (ii) limitations imposed by applicable Law or
equitable principles upon the enforceability of any of the remedies, covenants
or other provisions of this Agreement or such Ancillary Agreements and upon the
availability of injunctive relief or other equitable remedies.

5.3           Conflicts; Consents of Third Parties.  Subject to obtaining any
consents or approvals or making any notice or filing referred to on Schedule 5.3
hereto and except for the Permits listed on Schedule 5.3, the execution,
delivery and performance of this Agreement or any of the Ancillary Agreements to
which Welspun and Welspun Parent is a party does not conflict with or result in
a violation of (i) the Charter Documents of Welspun or Welspun Parent, (ii) any
Law or Order applicable to Welspun, Welspun Parent or any of their respective
assets and properties or, (iii) currently or with the

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passage of time, any Contract or Permit to which Welspun or Welspun Parent is a
party or by which any of the properties or assets of Welspun or Welspun Parent
are bound.  There are no Actions pending or, to the Knowledge of Welspun and
Welspun Parent, threatened against Welspun or Welspun Parent relating to or
affecting Welspun, Welspun Parent or any of their respective assets and
properties that could reasonably be expected to result in the issuance of an
Order (i) restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any of
the Ancillary Agreements to which Welspun or Welspun Parent is a party or
(ii) that would be likely to result in a Material Adverse Effect.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF LONE STAR

Lone Star hereby represents and warrants to Welspun that:

6.1           Existence and Good Standing.  Lone Star is validly existing and in
good standing under the Laws of Delaware and is duly qualified to do business in
all jurisdictions where it is so required to qualify, except where the failure
to be so qualified would not have a Material Adverse Effect.

6.2           Authorization of Agreement.

(a)           Lone Star has all requisite corporate power and authority to enter
into this Agreement and the Ancillary Agreements and Lone Star has all requisite
corporate power and authority to perform all of its respective obligations under
this Agreement and the Ancillary Agreements to which Lone Star is a party.  Lone
Star has taken all corporate action necessary to authorize the execution,
delivery and performance of this Agreement and the Ancillary Agreements to which
Lone Star is a party.

(b)           The execution and delivery of this Agreement and the Ancillary
Agreements to which Lone Star is a party does not require Lone Star to obtain
any approval or consent of, or make any notice to or filing with, any Person or
Governmental Authority, other than approvals, consents, notices and filings
obtained or made prior to the date hereof or as listed on Schedule 6.2(b)
hereto.

(c)           Following execution and delivery by the parties hereto or thereto,
this Agreement and each of the Ancillary Agreements to which Lone Star is a
party will constitute Lone Star’s legal, valid and binding obligations,
enforceable in accordance with their terms, subject to (i) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
Laws relating to or affecting the rights of creditors generally or (ii)
limitations imposed by applicable Law or equitable principles upon the
enforceability of any of the remedies, covenants or other provisions of this
Agreement or such Ancillary Agreements and upon the availability of injunctive
relief or other equitable remedies.

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6.3           Conflicts; Consents of Third Parties.  Subject to obtaining any
consents or approvals or making any notice or filing referred to on Schedule 6.3
hereto, the execution, delivery and performance of this Agreement or any of the
Ancillary Agreements to which Lone Star is a party does not conflict with or
result in a violation of (i) the Charter Documents of Lone Star, (ii) any Law or
Order applicable to Lone Star or any of its assets and properties or (iii) any
Contract or Permit to which Lone Star is a party or by which any of the
properties or assets of Lone Star are bound.  There are no Actions pending or,
to the Knowledge of Lone Star, threatened against Lone Star relating to or
affecting Lone Star’s assets and properties that could reasonably be expected to
result in the issuance of an Order (i) restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated by this Agreement or any of the Ancillary Agreements to which Lone
Star is a party or (ii) that would be likely to result in a Material Adverse
Effect.

ARTICLE 7

COVENANTS

7.1           Other Actions.  Each party hereto shall use its commercially
reasonable efforts to (i) take all actions necessary or appropriate to
consummate the transactions contemplated by this Agreement and (ii) cause the
fulfillment at the earliest practicable date of all of the conditions to their
respective obligations to consummate the transactions contemplated by this
Agreement.

ARTICLE 8

CONDITIONS TO CLOSING

8.1           Conditions Precedent to Obligations of Welspun.  The obligations
of Welspun to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, prior to or on the Closing Date, of each of the
following conditions (any or all of which may be waived expressly in writing by
Welspun in whole or in part to the extent permitted by applicable Law):

(a)           each of the representations and warranties of Lone Star contained
herein qualified as to materiality shall be true and correct, and all
representations and warranties of Lone Star contained herein not qualified as to
materiality shall be true and correct in all material respects, at and as of the
Closing Date with the same effect as though those representations and warranties
had been made again at and as of that date; it being understood that, to the
extent any such representation or warranty was made as of a specified date, the
same shall continue on the Closing Date to be true and correct as of the
specified date;

(b)           Lone Star shall have performed and complied in all material
respects with all obligations and covenants required by this Agreement to be
performed or complied with by Lone Star on or prior to the Closing Date;

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(c)           Welspun shall have been furnished with certificates (dated the
Closing Date and in form and substance reasonably satisfactory to Welspun)
executed by the chief executive officer of Lone Star certifying as to the
fulfillment of the conditions specified in Sections 8.1(a) and 8.1(b);

(d)           Lone Star shall have executed and/or delivered to Welspun at the
Closing all of the documents required to be executed and/or delivered by it
pursuant to Section 4.2;

(e)           the Company shall have executed and delivered or caused to be
delivered to Welspun at the Closing all of the documents required to be executed
and delivered by the Company pursuant to Section 4.3; and

(f)            no Legal Proceedings shall have been instituted or threatened or
claim or demand made against Lone Star, the Company or Welspun seeking to
restrain or prohibit or obtain substantial damages with respect to the
consummation of the transactions contemplated hereby, and there shall not be in
effect any Order by a Governmental Authority of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby.

8.2           Conditions Precedent to Obligations of Lone Star.  The obligations
of Lone Star to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, prior to or on the Closing Date, of each of the
following conditions (any or all of which may be waived expressly in writing by
Lone Star in whole or in part to the extent permitted by applicable Law):

(a)           each of the representations and warranties of Welspun contained
herein qualified as to materiality shall be true and correct, and each of the
representations and warranties of Welspun contained herein not qualified as to
materiality shall be true and correct in all material respects, at and as of the
Closing Date with the same effect as though those representations and warranties
had been made again at and as of that date; it being understood that, to the
extent any such representation or warranty was made as of a specified date, the
same shall continue on the Closing Date to be true and correct as of the
specified date;

(b)           Welspun shall have performed and complied in all material respects
with all obligations and covenants required by this Agreement to be performed or
complied with by Welspun on or prior to the Closing Date;

(c)           Lone Star shall have been furnished with a certificate (dated the
Closing Date and in form and substance reasonably satisfactory to Lone Star)
executed by an officer of Welspun certifying as to the fulfillment of the
conditions specified in Sections 8.2(a) and 8.2(b);

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(d)           Welspun shall have executed and/or delivered to the Lone Star at
the Closing all of the documents required to be executed and/or delivered by
Welspun pursuant to Section 4.1;

(e)           the Company shall have executed and delivered or caused to be
delivered to Lone Star at the Closing all of the documents required to be
executed and delivered by the Company pursuant to Section 4.3; and

(f)            no Legal Proceedings shall have been instituted or threatened or
claim or demand made against Lone Star, the Company or Welspun seeking to
restrain or prohibit or obtain substantial damages with respect to the
consummation of the transactions contemplated hereby, and there shall not be in
effect any Order by a Governmental Authority of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby.

ARTICLE 9

TERMINATION

9.1           Termination of Agreement.  This Agreement may only be terminated
prior to the Closing as follows:

(a)           by the written agreement of Lone Star and Welspun;

(b)           by either Lone Star or Welspun if the Closing shall not have
occurred on or prior to December 31, 2006; provided that the terminating party
is not in material breach of its obligations under this Agreement;

(c)           by either Lone Star or Welspun if there shall be in effect a final
non-appealable Order restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby;

(d)           by Lone Star, if Welspun or Welspun Parent becomes insolvent,
makes a general assignment for the benefit of creditors, suffers or permits the
appointment of a receiver for its business or assets, becomes subject to any
proceeding under any bankruptcy or insolvency Law, or winds up or liquidates,
voluntarily or otherwise;

(e)           by Welspun, if Lone Star becomes insolvent, makes a general
assignment for the benefit of creditors, suffers or permits the appointment of a
receiver for its business or assets, becomes subject to any proceeding under any
bankruptcy or insolvency Law, or winds up or liquidates, voluntarily or
otherwise;

(f)            by either Lone Star or Welspun if, prior to the Closing Date, the
other party (or its guarantor) is in material breach of any representation,
warranty,

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covenant or agreement herein contained and such breach shall not have been cured
within ten (10) days after the date a Notice of default is delivered to the
counterparty by the party claiming such material default; provided, however,
that the right to terminate this Agreement pursuant to this Section 9.1(f) shall
not be available to any party who is in material breach of this Agreement at the
time Notice of termination is delivered; or

(g)           by either Lone Star or Welspun, if the JV Agreement is terminated.

9.2           Procedure for Termination.  The termination of this Agreement
pursuant to Section 9.1(b) — 9.1(g) shall be effectuated by the delivery of a
written Notice of such termination from the party terminating this Agreement to
the other party.

9.3           Effect of Termination.  If this Agreement is terminated in
accordance with Section 9.1 and the transactions contemplated hereby are not
consummated:

(a)           Each party shall redeliver all documents, work papers and other
materials of the other party hereto, and all copies of any such materials,
relating to the transactions contemplated hereby, whether obtained before or
after the execution hereof, to the party furnishing the same.

(b)           Neither party hereto shall have any Liability or further
obligation to the other party to this Agreement resulting from such termination
except: (i) that Article 11 and this Section 9.3 shall remain in full force and
effect and the parties shall have the obligations stated therein, and (ii) no
party waives any claim or right for damages against a breaching party to the
extent that such termination results from the breach by a party hereto of any of
its representations, warranties, covenants or agreements set forth herein.

(c)           The Confidentiality Agreement shall survive any termination of
this Agreement and nothing in this Article 9 shall relieve the parties of their
obligations under the Confidentiality Agreement.

ARTICLE 10

INDEMNIFICATION

10.1         Survival of Representations, Warranties and Covenants.

The representations and warranties of the parties contained in this Agreement or
any certificate delivered pursuant hereto shall survive the Closing through and
including the second anniversary of the Closing Date; provided, however, that
the representations and warranties (a) of Welspun set forth in Section 5.1
(existence and good standing) and Section 5.2 (authorization of agreement) shall
survive the Closing indefinitely, (b) of Lone Star set forth in Section 6.1
(existence and good standing) and Section 6.2 (authorization of agreement) shall
survive the Closing indefinitely (in each case, the “Survival Period”);
provided, however, that any obligations under Sections 10.2(a)(i) and

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10.2(b)(i) shall not terminate with respect to any Losses as to which the Person
to be indemnified shall have given Notice (stating in reasonable detail the
basis of the claim for indemnification) to the indemnifying party in accordance
with Section 10.3 before the termination of the applicable Survival Period.

10.2         Indemnification.

(a)           Subject to Sections 10.1 and 10.4, Welspun hereby agrees to
indemnify and hold Lone Star and its Affiliates and their respective directors,
officers, employees, stockholders, agents, attorneys, representatives,
successors and assigns (collectively, the “Lone Star Indemnified Parties”)
harmless from and against, and pay to the applicable Lone Star Indemnified
Parties the amount of, any and all losses, liabilities, claims, obligations,
deficiencies, demands, judgments, damages (including incidental and
consequential damages), interest, fines, penalties, claims, suits, Actions,
causes of action, assessments, awards, costs and expenses (including costs of
investigation and defense and attorneys’ and other professionals’ fees), or any
diminution in value, whether or not involving a Third Party Claim (individually,
a “Loss” and, collectively, “Losses”):

(i)            based upon, attributable to or resulting from the failure of any
of the representations or warranties made by Welspun in this Agreement to be
true and correct in all respects at and as of the date hereof and at and as of
the Closing Date; or

(ii)           based upon, attributable to or resulting from the breach of any
covenant or other agreement on the part of Welspun under this Agreement.

(b)           Subject to Section 10.1 and 10.4, Lone Star hereby agrees to
indemnify and hold Welspun and its Affiliates and their respective directors,
officers, employees, stockholders, partners, members, agents, attorneys,
representatives, successors and permitted assigns (collectively, the “Welspun
Indemnified Parties”) harmless from and against, and pay to the applicable
Welspun Indemnified Parties the amount of, any and all Losses:

(i)            based upon, attributable to or resulting from the failure of any
of the representations or warranties made by Lone Star in this Agreement to be
true and correct in all respects at the date hereof and as of the Closing Date;
or

(ii)           based upon, attributable to or resulting from the breach of any
covenant or other agreement on the part of Lone Star under this Agreement.

(c)           The right to indemnification or any other remedy based on
representations, warranties, covenants and agreements in this Agreement shall
not be affected by any investigation conducted at any time, or any Knowledge
acquired (or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, with respect to
the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant or agreement.  The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any such covenant or agreements, will not affect the

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right to indemnification or any other remedy based on such representations,
warranties, covenants and agreements.

10.3         Indemnification Procedures.

(a)           A claim for indemnification for any matter not involving a Third
Party Claim may be asserted by Notice to the party from whom indemnification is
sought; provided, however, that failure to so notify the indemnifying party
shall not preclude the indemnified party from any indemnification which it may
claim in accordance with this Article 10.

(b)           In the event that any Legal Proceedings shall be instituted or
that any claim or demand shall be asserted by any third party in respect of
which indemnification may be sought under Section 10.2 hereof (regardless of the
limitations set forth in Section 10.4) (“Third Party Claim”), the indemnified
party shall promptly cause Notice of the assertion of any Third Party Claim of
which it has knowledge which is covered by this indemnity to be forwarded to the
indemnifying party.  The failure of the indemnified party to give reasonably
prompt Notice of any Third Party Claim shall not release, waive or otherwise
affect the indemnifying party’s obligations with respect thereto except to the
extent that the indemnifying party can demonstrate actual loss and prejudice as
a result of such failure.  Subject to the provisions of this Section 10.3(b),
the indemnifying party shall have the right, at its sole expense, to be
represented by counsel of its choice, which must be reasonably satisfactory to
the indemnified party, and to defend against, negotiate, settle or otherwise
deal with any Third Party Claim which relates to any Losses indemnified against
by it hereunder; provided that the indemnifying party shall have acknowledged in
writing to the indemnified party its unqualified obligation to indemnify the
indemnified party as provided hereunder.  If the indemnifying party elects to
defend against, negotiate, settle or otherwise deal with any Third Party Claim
which relates to any Losses indemnified against by it hereunder, it shall within
five (5) days of the indemnified party’s Notice of the assertion of such Third
Party Claim (or sooner, if the nature of the Third Party Claim so requires)
notify the indemnified party of its intent to do so; provided that the
indemnifying party must conduct its defense of the Third Party Claim actively
and diligently thereafter in order to preserve its rights in this regard.  If
the indemnifying party elects not to defend against, negotiate, settle or
otherwise deal with any Third Party Claim which relates to any Losses
indemnified against by it hereunder, fails to notify the indemnified party of
its election as herein provided or contests its obligation to indemnify the
indemnified party for such Losses under this Agreement, the indemnified party
may defend against, negotiate, settle or otherwise deal with such Third Party
Claim.  If the indemnified party defends any Third Party Claim, then the
indemnifying party shall reimburse the indemnified party for the expenses of
defending such Third Party Claim upon submission of periodic bills.  If the
indemnifying party shall assume the defense of any Third Party Claim, the
indemnified party may participate, at its own expense, in the defense of such
Third Party Claim; provided, however, that such indemnified party shall be
entitled to participate in any such defense with separate counsel at the expense
of the indemnifying party if (i) so requested by the indemnifying party to
participate or (ii) in the reasonable opinion of counsel to the

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indemnified party a conflict or potential conflict exists between the
indemnified party and the indemnifying party that would make such separate
representation advisable; and provided, further, that the indemnifying party
shall not be required to pay for more than one such counsel (plus any
appropriate local counsel) for all indemnified parties in connection with any
Third Party Claim.  Each party hereto agrees to provide reasonable access to
each other party to such documents, personnel and information as may reasonably
by requested in connection with the defense, negotiation or settlement of any
such Third Party Claim.  Notwithstanding anything in this Section 10.3(b) to the
contrary, neither the indemnifying party nor the indemnified party shall,
without the written consent of the other party, settle or compromise any Third
Party Claim or permit a default or consent to entry of any judgment unless the
claimant (or claimants) and such party provide to such other party an
unqualified release from all Liability in respect of the Third Party Claim.  If
the indemnifying party makes any payment on any Third Party Claim, the
indemnifying party shall be subrogated, to the extent of such payment, to all
rights and remedies of the indemnified party to any insurance benefits or other
claims of the indemnified party with respect to such Third Party Claim.

(c)           After any final decision, judgment or award shall have been
rendered by a Governmental Authority of competent jurisdiction and the
expiration of the time in which to appeal therefrom, or a settlement shall have
been consummated, or the indemnified party and the indemnifying party shall have
arrived at a mutually binding agreement, in each case with respect to any Third
Party Claim hereunder, the indemnified party shall forward to the indemnifying
party Notice of any sums due and owing by the indemnifying party pursuant to
this Agreement with respect to such matter and the indemnifying party shall pay
all of such remaining sums so due and owing to the indemnified party by wire
transfer of immediately available funds within five (5) Business Days after the
date of such Notice.

(d)           At the sole discretion of Lone Star or Welspun, as the case may
be, if it is the indemnified party, it may elect to recover all or any portion
of such sums that are due and owing from the Net Cash Flow due to either Lone
Star or Welspun, as the case may be, under Section 4.3 of the JV Agreement or
cash distributions upon dissolution under Section 9.3 of the JV Agreement.

10.4         Indemnification for Breaches of Representations and Warranties.

For purposes of determining the failure of any representations or warranties to
be true and correct, the breach of any covenants or agreements, and calculating
Losses hereunder any materiality or Material Adverse Effect qualifications in
the representations, warranties, covenants and agreements shall be disregarded.

10.5         Transfer Taxes.

All transfer, documentary, sales, use, stamp, registration, real property
transfer and other similar taxes and fees (including any penalties and interest)
incurred in connection with this Agreement or the transactions contemplated
hereby, including the acquisition by Lone Star or the transfer by Lone Star to
the Company of real property (“Transfer

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Taxes”) will be borne by the Company, regardless of the person liable for such
Transfer Taxes under applicable Law.

ARTICLE 11

MISCELLANEOUS

11.1         Waiver of Default.

No consent or waiver, express or implied, by any party hereto with respect to
any breach or default by another party hereunder shall be deemed or construed to
be a consent or waiver with respect to any other breach or default by any party
of the same provision or any other provision of this Agreement.  Failure on the
part of a party to complain of any act or failure to act of another party or to
declare such party in default shall not be deemed or constitute a waiver by a
party of any rights hereunder.

11.2         Amendment.

This Agreement shall not be altered, modified or changed except by an amendment
approved in writing by Welspun and Lone Star.

11.3         No Third Party Rights.

None of the provisions contained in this Agreement shall be for the benefit of
or enforceable by any third parties, including creditors of the Company.  The
parties hereto expressly retain any and all rights to amend this Agreement as
herein provided.

11.4         Severability.

In the event any provision of this Agreement is held to be illegal, invalid or
unenforceable to any extent, the legality, validity and enforceability of the
remainder of this Agreement shall not be affected thereby and shall remain in
full force and effect and shall be enforced to the greatest extent permitted by
law.

11.5         Binding Effect; Assignment.

This Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns.  No assignment of this
Agreement or of any rights or obligations hereunder may be made by any of the
parties hereto without the prior written consent of the other parties hereto and
any attempted assignment without the required consents shall be void; provided,
however, that either Welspun or Lone Star may assign this Agreement to any of
their respective controlled Affiliates without prior written consent so long as
(i) such assignment does not hinder or delay the Closing, (ii) the party
assigning this Agreement or any of its Liabilities hereunder shall remain liable
hereunder notwithstanding such assignment and (iii) the other parties hereto
shall be provided with prompt Notice of such assignment.  If Welspun or its
assignee is the assigning party, Welspun Parent acknowledges and agrees to waive
its rights to notice and consent of such assignment and acknowledges and agrees
that such assignment shall not impact the guaranty set forth in Section 11.15,
which shall remain in full force and effect.

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11.6         Headings.

The headings of the articles and sections of this Agreement are for convenience
only and shall not be considered in construing or interpreting any of the terms
or provisions hereof.

11.7         Word Meanings.

(a)           The words such as “herein,” “hereinafter,” “hereof,” and
“hereunder” refer to this Agreement as a whole and not merely to a subdivision
in which such words appear unless the context otherwise requires.  The word
“including” or any variation thereof means (unless the context of its usage
otherwise requires) “including, without limitation” and shall not be construed
to limit any general statement that it follows to the specific or similar items
or matters immediately following it.

(b)           The singular shall include the plural, and vice versa, unless the
context otherwise requires.

(c)           Any reference in this Agreement to $ shall mean U.S. dollars.  All
monetary amounts referenced herein shall be, unless otherwise specifically
referenced, U.S. dollar amounts.

(d)           When calculating the period of time before which, within which or
following which any act is to be done or step taken pursuant to this Agreement,
the date that is the reference date in calculating such period shall be
excluded.  If the last day of such period is a non-Business Day, the period in
question shall end on the next succeeding Business Day.

11.8         Counterparts.

This Agreement may be executed in several counterparts, all of which together
shall constitute one agreement binding on all parties hereto, notwithstanding
that all the parties have not signed the same counterpart.

11.9         Entire Agreement.

This Agreement, together with all schedules and exhibits hereto, the Ancillary
Agreements and the Confidentiality Agreement contain the entire agreement
between the parties and supersedes all prior writings or agreements with respect
to the subject matter hereof.

11.10       Arbitration.

Except as provided in this Section 11.10, any dispute arising out of or relating
to this Agreement or the breach, termination or validity hereof shall be
resolved exclusively by binding arbitration (the “Arbitration”) conducted before
a single arbitrator (the “Sole Arbitrator”) in London, England, pursuant to the
United Nations Commission on International Trade Law (“UNCITRAL”) rules and
administered by the London Court of International Arbitration (“LCIA”).  The
language of the arbitration shall be English.  Each Person involved in such
arbitration shall pay its own legal fees and expenses in

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connection with any such arbitration and the Persons involved therein shall
share equally the fees and expenses of the LCIA and the Sole Arbitrator.  The
Sole Arbitrator shall be an attorney mutually agreed upon by the parties to the
Arbitration or, if no agreement can be reached, to be determined by the LCIA. 
All Arbitration proceedings and sessions shall be private and confidential, and
no one other than the parties and their legal representatives may attend without
the consent of the parties or by Order of the Sole Arbitrator.  All information
disclosed in the course of any and all Arbitration proceedings and sessions
shall be maintained in strict confidence except to the extent disclosure of any
such information is required by Law.  The prevailing party shall be entitled to
any appropriate relief (including monetary damages, if any), as well as
reimbursement of all its actual costs (including Sole Arbitrator’s fees and fees
payable to the LCIA) and attorneys’ fees from the opposing party or parties. 
The decision of the Sole Arbitrator, and any award pursuant thereto, shall be
final, binding and conclusive on the Persons involved therein and not be
appealable on the merits.  Final judgment on any such decision and any award may
be entered by a court of competent jurisdiction.  Notwithstanding the foregoing,
this Section 11.10 shall not prohibit any Person from pursuing equitable relief
(including immediate, preliminary and permanent injunctive relief) to which it
may be entitled in any court of competent jurisdiction in order to preserve the
status quo pending resolution of the dispute at issue.

11.11       Governing Law.

This Agreement, the rights and obligations of the parties under this Agreement,
and any claim or controversy directly or indirectly based upon or arising out of
this Agreement or the transactions contemplated by this Agreement (whether based
upon contact, tort or any other theory), including all matters of construction,
validity and performance, shall be governed by and construed in accordance with
the internal Laws of the State of Delaware, without regard to any conflict of
laws provision that would require the application of the Law of any other
jurisdiction.

11.12       Notices.

All notices and other communications under this Agreement shall be in writing
and shall be deemed given (i) when delivered personally by hand (with written
confirmation of receipt), (ii) when sent by facsimile (with written confirmation
of transmission) or (iii) one Business Day following the day sent by overnight
courier (with written confirmation of receipt), in each case at the following
addresses and facsimile numbers (or to such other address or facsimile number as
a party may have specified by notice given to the other party pursuant to this
provision):

If to Lone Star, to:

Lone Star Technologies, Inc.
15660 N. Dallas Pkwy., Suite 500
Dallas, TX 75248
United States of America
Facsimile:  +1 972-770-6471
Attn:  General Counsel

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With a copy to:

Weil, Gotshal & Manges LLP
200 Crescent Court, Suite 300
Dallas, Texas 75201
Facsimile:  +1 214-746-7777
Attn: Mary R. Korby

If to Welspun, to:

Welspun Pipes, Inc.
c/o Welspun Gujarat Stahl Rohren Limited
Village Vadadla
Taluka Vagra
Dahej Road
Dist. Bharuch
Gujarat, India
Facsimile: +91 22 2490-8020/21
Attn: Executive Director

With a copy to:

Majmudar & Co.
96 Free Press House

Free Press Journal Road

Nariman Point

Mumbai (Bombay) 400 021

India
Facsimile: +91 22 6630-7252
Attn: Akil Hirani

11.13       Expenses.

Except as otherwise expressly provided in this Agreement, each Member will bear
and be responsible for costs and expenses incurred by it in connection with the
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby.

11.14       Further Assurances.

Lone Star and Welspun each agree to execute and deliver such other documents or
agreements and to take such other action as may be reasonably necessary or
desirable for the implementation of this Agreement and the consummation of the
transactions contemplated hereby.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
written above.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.

 

LONE STAR TECHNOLOGIES, INC.

 

 

 

 

 

 

 

 

By:

/s/ Rhys J. Best

 

 

 

 

Name:

Rhys J. Best

 

 

 

Title:

Chairman/CEO

 

SIGNATURE PAGE TO
CONTRIBUTION AGREEMENT

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THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.

 

WELSPUN PIPES, INC.

 

 

 

 

 

 

 

 

By:

/s/ Akhil Jindal

 

 

 

 

Name:

Akhil Jindal

 

 

 

Title:

Authorized Signatory

 

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THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.

 

WELSPUN-LONE STAR TUBULARS LLC

 

 

 

 

 

 

 

 

By:

/s/ Nikhil Amin

 

 

 

 

Name: Nikhil Amin

 

 

 

Title: Acting President

 

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