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                                                                   Exhibit 10.12

                             DRESSER-RAND GROUP INC.

                              STOCKHOLDER AGREEMENT

     This Stockholder Agreement (this "Agreement") is made and entered into
effective as of October __, 2004, by and among Dresser-Rand Group Inc., a
Delaware corporation (the "Company"), Dresser-Rand Holdings, LLC (formerly known
as First Reserve Acquisitions LLC), a Delaware limited liability company ("First
Reserve", together with any other stockholder who may from time to time be made
party to this Agreement pursuant to Section 7.10 and designated an "Investor" by
the Company the "Investors"), and any employees or consultants of the Company
who are or hereafter may from time to time be made party to this Agreement
pursuant to Section 7.10 and designated as a "Management Stockholder" by the
Company (the "Management Stockholders"). The Management Stockholders and the
Investors are collectively referred to as the "Stockholders".

                                    RECITALS

     WHEREAS, the Stockholders desire to set forth certain understandings with
respect to their holdings of shares of the Company's common stock, par value
$0.01 per share (the "Common Stock"), as set forth herein.

     NOW, THEREFORE, in consideration of the foregoing recital, the mutual
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

1.   MANAGEMENT RIGHTS.

     1.1 Election of Directors. The Board of Directors of the Company (the
"Board") shall be comprised initially of one individual, ___________. The Board
may adjust from time to time by resolution the number of directors comprising
the Board. First Reserve shall be entitled to nominate each of the individuals
to serve on the Board, and each Stockholder agrees to vote all shares of Common
Stock or other capital stock of the Company held by such Stockholder in favor of
such nominee(s) being elected to the Board.

     1.2 Restricted Actions. Notwithstanding anything in this Agreement, the
Company shall not, directly or indirectly, and shall cause each of its
"significant subsidiaries", as such term is defined in Rule 1-02(w) of
Regulation S-X under the Exchange Act (each, a "Material Subsidiary"), not to,
directly or indirectly, take any of the following actions (each a "Restricted
Action") unless, in addition to any other consents or approvals that may be
required to effect such Restricted Action, First Reserve shall have approved
such Restricted Action in its sole discretion in its capacity as a stockholder
of the Company. A "Restricted Action" shall mean any of the following events:

          (a) any incurrence of indebtedness in excess of $2,500,000;


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          (b) any acquisition or sale of assets (other than acquisitions or
sales of inventory in the ordinary course of business) involving expenditures,
proceeds, or assumption of debt in excess of one percent of sales during any
twelve (12)-month period (aggregating any such transactions on a rolling basis
during such period), or acquisition of another business (either by merger,
combination or asset or equity purchase) or any equity of another entity;

          (c) any grant of guarantees of third party indebtedness for borrowed
money, the grant of guarantees of third party obligations outside of the
ordinary course of business or in excess of $2,500,000 in the ordinary course of
business, or the extension, refinancing, or material modification of the terms
of such guarantees;

          (d) entering into any line of business or activities other than the
manufacture and service of rotating equipment or activities ancillary thereto;

          (e) any merger, consolidation, sale of all or substantially all of the
assets, liquidation (partial or complete), or dissolution of the Company or a
Material Subsidiary;

          (f) any declaration of dividends;

          (g) making any material tax election;

          (h) the approval of an annual capital expenditure and operating budget
and approval of any material amendment to such budget

          (i) the issuance of additional Common Stock or any other equity
interest in the Company or any Material Subsidiary or the issuance of any right
to acquire any other equity interest in (or instrument convertible into equity
interests in) the Company or any Material Subsidiary, other than pursuant to a
stock option plan or stock option agreement approved by the Company's Board;

          (j) any deferral of a demand registration under Section 2.2(e);

          (k) any giving or withholding of consent to a transfer under Section
3.1;

          (l) any approval or disapproval of any Permitted Transfer under
Section 3.6;

          (m) entering into any employment contract with, or changing the
compensation (including any bonus payment) of, any senior officer of the Company
or any Material Subsidiary, including the President or CEO of the Company or any
Material Subsidiary or any officer or other employee who directly reports to the
President or CEO of the Company or any Material Subsidiary; and

          (n) any amendment to the Certificate of Incorporation or comparable
organizational documents of any Material Subsidiary.


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     1.3 Fiduciary Duties. For purposes of clarification, each Stockholder and
Optionholder (as defined in Section 7.10) agrees that, without limiting the
fiduciary duties of members of the Board appointed by First Reserve to act in
the best interests of the Company, First Reserve shall have no implied or
express duty to the Company or to any other Stockholder or Optionholder with
respect to its decision to approve or not approve any Restricted Action as a
result of this Agreement, and may act in its role as a stockholder accordingly.
Each Stockholder and Optionholder further acknowledges that the scope of the
duty of loyalty imposed under the Delaware General Corporation Law on First
Reserve and its designees shall be defined and limited as follows.

          (a) Certain Potential Conflicts. Each Stockholder and Optionholder
acknowledges that:

               (i) Any FRC Affiliate (as defined below) may engage in material
     business transactions with the Company;

               (ii) directors, officers, and/or employees of any FRC Affiliate
     may serve as directors, officers, and/or employees of the Company or its
     subsidiaries;

               (iii) one or more FRC Affiliates may now or in the future engage
     in the same or similar lines of business or other business activities as
     those in which the Company or its subsidiaries may engage; and

               (iv) one or more FRC Affiliates may exercise a controlling
     influence over certain of the business, policy and strategic decisions of
     the Company and its subsidiaries.

               (v) For purposes of this Agreement,

                    (A) the term "FRC Affiliate" means each of First Reserve;
               First Reserve Corporation ("FRC"); First Reserve Fund IX, L.P.;
               First Reserve Fund X, L.P.; any other investment funds managed or
               advised, directly or indirectly, by FRC (including funds formed
               after the date hereof), and any subsidiaries, affiliates, or
               direct or indirect general partners of any of the foregoing
               entities.

                    (B) the term "affiliate" means with respect to any person,
               any other person directly or indirectly controlling, controlled
               by or under common control with such person. For purposes of the
               foregoing definition, the term "controls" "is controlled by" or
               "is under common control with" means the power to direct or cause
               the direction of the management and policies of a person or
               entity, whether through the ownership of voting securities, by
               contract or otherwise.

          (b) Limitation of Liability. To the fullest extent permitted by law,
neither any FRC Affiliate nor any director, officer or employee of any FRC
Affiliate who


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may serve as an officer, director and/or employee of the Company and/or its
subsidiaries shall be liable to the Company or its subsidiaries:

               (i) by reason of any business decision or transaction undertaken
     by any FRC Affiliate which may be adverse to the interests of the Company
     or its subsidiaries;

               (ii) by reason of any activity undertaken by any FRC Affiliate or
     by any other person in which any FRC Affiliate may have an investment or
     other financial interest which is in competition with the Company or its
     subsidiaries; or

               (iii) without limiting the effect of Section 144 of the Delaware
     General Corporation Law, by reason of any transaction with any FRC
     Affiliate, or any transaction in which any FRC Affiliate shall have a
     financial interest, unless the party seeking to assert such liability shall
     bear the burden of proving, by clear and convincing evidence, that such
     transaction was not fair to the Company at the time it was authorized by
     the Board or a committee thereof; and

          (c) Competing Activities. Except as otherwise expressly provided in a
written agreement between the Company and an FRC Affiliate:

               (i) any FRC Affiliate and its officers, directors, agents,
     shareholders, members, partners, affiliates and subsidiaries, may engage or
     invest in, independently or with others, any business activity of any type
     or description, including without limitation those that might be the same
     as or similar to the Company's business. Without limiting the foregoing,
     the Stockholders acknowledge that FRC Affiliates (including First Reserve)
     may from time to time compete, directly or indirectly, with the Company,
     and that any such FRC Affiliate may in its sole discretion pursue such
     competing business without disclosure of such competition to the Company);

               (ii) none of the Company, any subsidiary of the Company nor any
     other stockholder of the Company shall have any right in or to such
     business activities or ventures or to receive or share in any income or
     proceeds derived therefrom; and

               (iii) to the extent required by applicable law in order to
     effectuate the purpose of this provision, the Company shall have no
     interest or expectancy, and specifically renounces any interest or
     expectancy, in any such business activities or ventures.

          (d) Corporate Opportunities.

               (i) A "Company Opportunity" shall mean an investment or business
     opportunity or prospective economic advantage in which the Company or its
     subsidiaries or any Investor or Management Stockholder could, but for the
     provisions of this Agreement, have an interest or expectancy. Except as set
     forth below in Section 1.3(d)(ii), (A) if any FRC Affiliate or, any of its
     officers,


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     directors, agents, stockholders, members, partners, affiliates or
     subsidiaries acquires knowledge of, or an interest or an expectancy in, a
     Company Opportunity, none of the Company, its subsidiaries, nor any
     Investor or Management Stockholder shall have any interest or expectancy,
     and the Company, each Investor and each Management Stockholder hereby
     renounces, any interest or expectancy, in such Company Opportunity; and (B)
     no such FRC Affiliate nor any of its officers, directors, agents,
     stockholders, members, partners, affiliates or subsidiaries shall (1) have
     a duty to communicate or present such a Company Opportunity to the Company
     or its subsidiaries or (2) be deemed to have breached any fiduciary duty as
     a stockholder, director, or officer of the Company or otherwise by pursuing
     or acquiring such Company Opportunity for itself or not communicating
     information regarding such Company Opportunity to the Company.

               (ii) Notwithstanding the provisions of clause 1.3(d)(ii)(i), the
     Company does not renounce any interest or expectancy it may have in any
     Company Opportunity that is or was (A) offered to any person who is both
     (1) an officer or director of an FRC Affiliate and (2) an officer, director
     or employee of the Company, if such opportunity is expressly offered to
     such person in his or her capacity as an officer or employee of the
     Company; or (B) first identified by an FRC Affiliate solely through the
     disclosure of information made by or on behalf of the Company.

               (iii) Neither the alteration, amendment or repeal of this Section
     1.3 nor the adoption of any provision or amendment of the Certificate of
     Incorporation of the Company inconsistent with this Section 1.3 shall
     eliminate or reduce the effect of this Section 1.3 in respect of any matter
     occurring, or any cause of action, suit or claim that, but for this Section
     1.3, would accrue or arise prior to such alteration, amendment, repeal or
     adoption.

2.   REGISTRATION RIGHTS.

     2.1  Definitions. For purposes of this Section 2:

          (a) Registration. The terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act of 1933, as amended
(the "Securities Act"), and the declaration or ordering of effectiveness of such
registration statement.

          (b) Registrable Securities. The term "Registrable Securities" means
all shares of Common Stock now beneficially owned or hereinafter acquired by a
Stockholder, and any equity of the Company or other entity acquired in exchange
for shares of Common Stock. Notwithstanding the foregoing, "Registrable
Securities" shall exclude (i) any Registrable Securities sold by a person in a
transaction in which rights under this Section 2 are not assigned in accordance
with this Agreement, including any Registrable Securities sold by a Stockholder
in a public offering, whether sold pursuant to Rule 144 promulgated under the
Securities Act, or in a registered offering, or


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otherwise and (ii) following an initial public offering of the Common Stock, any
shares of Common Stock held by a Management Stockholder unless such Management
Stockholder is an Affiliate of the Company and the Board determines in good
faith that the Common Stock held by such Management Stockholder would be subject
to restrictions on resale.

          (c) Holder. For purposes of this Section 2, the term "Holder" means
any Stockholder owning of record Registrable Securities or any permitted
assignee of record of such Registrable Securities to whom rights under this
Section 2 have been duly assigned in accordance with this Agreement.

          (d) SEC. The term "SEC" means the U.S. Securities and Exchange
Commission.

     2.2  Demand Registration.

          (a) Request by First Reserve. If the Company shall receive a written
request from First Reserve that the Company file a registration statement under
the Securities Act covering the registration of Registrable Securities pursuant
to this Section 2.2 (a "Demand Notice"), then the Company shall, within ten (10)
business days of the receipt of a Demand Notice, give written notice of such
request ("Request Notice") to all Holders and, in addition to complying with its
obligations under Section 2.3, shall use its best efforts to effect, as soon as
practicable, the registration under the Securities Act of all Registrable
Securities that First Reserve requests to be registered in the Demand Notice,
subject only to the limitations of this Section 2.2 and the rights of other
Holders pursuant to Section 2.3. Notwithstanding the prior sentence, the Company
shall not be obligated to effect any such registration if the Company has,
within the three (3) month period preceding the date of such request, already
effected a registration under the Securities Act pursuant to (i) this Section
2.2, or (ii) Section 2.3 in which First Reserve participated, other than a
registration from which all or a portion of the Registrable Securities of First
Reserve were excluded pursuant to the provisions of Section 2.3(b).

          (b) Underwriting. If First Reserve intends to distribute the
Registrable Securities covered by its request by means of an underwritten
offering, then it shall so advise the Company as a part of the Demand Notice,
and the Company shall include such information in the Request Notice. In such
event, the right of any Holder to include his Registrable Securities in such
registration pursuant to the rights set forth in Section 2.3 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by First Reserve and such Holder) as provided herein.
The Company and all Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary form
with the managing underwriter or underwriters selected for such underwriting by
First Reserve. Notwithstanding any other provision of this Section 2.2 or
Section 2.3, if the Board determines, after having consulted with the managing
underwriter(s), determines in good faith that the Company should impose a
limitation of the number of securities to be underwritten, the Company shall so
advise all Holders of Registrable Securities that would otherwise be registered


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and underwritten pursuant hereto, and the Company may exclude shares of the
Registrable Securities as necessary from the registration and the underwriting,
with the number of shares to be included in the registration and the
underwriting allocated in the following manner: first to First Reserve; second
to the Company; and third to each of the other Holders requesting inclusion of
their Registrable Securities in such registration statement pursuant to Section
2.3, and among such other Holders on a pro rata basis based on the total number
of Registrable Securities then held by each such other Holder. No other
Registrable Securities may be included in the Registration Statement (other than
by the Company or by the Holders pursuant to Section 2.3) without First
Reserve's consent. If, as a result of any reduction or limitation at the request
of an underwriter, a registration effected pursuant to this Section 2.2 does not
include at least 80% of the Registrable Securities that First Reserve requested
to be registered in the Demand Notice, such registration shall not constitute a
demand for purposes of Section 2.2(d). For any Holder that is a partnership, the
Holder and the partners and retired partners (if any) of such Holder, or the
estates and family members of any such partners and retired partners and any
trusts for the benefit of any of the foregoing persons, and for any Holder that
is a corporation, the Holder and all corporations that are affiliates of such
Holder, shall be deemed to be a single "Holder," and any pro rata reduction with
respect to such "Holder" shall be based upon the aggregate amount of Registrable
Securities owned by all entities and individuals included in such "Holder, " as
defined in this sentence.

          (c) Shelf Registration. If the Company is eligible to register the
resale of Registrable Securities by Holders on Form S-3, then any registration
under Section 2.2(a) shall, if requested in the Demand Notice, be effected on
Form S-3 pursuant to Rule 415 under the Act (or its successor) on a continuous
basis for the period requested (a " Shelf Registration"). If such a Shelf
Registration is requested in the Demand Notice (such Shelf Registration, a
"Holder Shelf Registration"):

               (i) the Company shall be entitled to require that a Holder or
     Holders refrain from effecting any public sales or distributions of the
     Registrable Securities pursuant to a Holder Shelf Registration (a
     "Distribution Suspension"), if the Board reasonably determines that such
     public sales or distributions would interfere in any material respect with
     any transaction involving the Company that the Board reasonably determines
     to be material to the Company; provided, however, that in no event shall
     any one or more Distribution Suspension(s) be in effect for more than a
     total of ninety (90) days in any twelve month period. The Board shall, as
     promptly as practicable, give the Holders written notice of any
     Distribution Suspension. If the Board institutes a Distribution Suspension,
     the Company shall be required to lift that Distribution Suspension as soon
     as reasonably practicable after the Board determines public sales or
     distributions by Holders shall not interfere with any such transaction
     (and, in all events, on or before the 90 day limit set forth above).

               (ii) The Form S-3 shall provide that First Reserve and the other
     Holders participating in the Shelf Registration (collectively, the "Shelf
     Holders"), may from time to time distribute some or all of the Registrable
     Securities included in that Shelf Registration (the "Shelf Securities") by
     means of an underwritten


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     offering (a "Shelf Underwriting"). The Company may not participate in any
     such Shelf Underwriting without the prior consent of First Reserve in its
     sole discretion. Only First Reserve shall have the right to initiate a
     Shelf Underwriting with respect to Shelf Securities included in a Holder
     Shelf Registration, and each such Shelf Underwriting shall be governed by
     the terms of this Section 2.2 but shall not constitute an additional demand
     for purposes of Section 2.2(d).

               (iii) First Reserve shall provide the Company with written notice
     (a "Shelf Underwriting Request") if it wishes to distribute Shelf
     Securities pursuant to a Shelf Underwriting. Each Shelf Underwriting
     Request shall indicate the proposed timing and number of Shelf Securities
     to be sold by First Reserve pursuant to the Shelf Underwriting, and shall
     also include First Reserve's good faith judgment as to whether, given the
     proposed timing of the Shelf Underwriting, it would be reasonably
     practicable for the other Shelf Holders to participate in such Shelf
     Underwriting. The requirements of this Section 2.2(c)(iii) shall not apply
     to any Shelf Underwriting in which, in First Reserve's good faith judgment,
     it would not be reasonably practicable for the other Shelf Holders to
     participate given the proposed timing of that Shelf Underwriting (each such
     Shelf Underwriting, an "Overnight Deal"). No other Shelf Holder shall have
     a right to participate with First Reserve in any Overnight Deal. First
     Reserve shall inform each other Holder of any Overnight Deal promptly after
     its consummation.

               (iv) Within two business days of receiving a Shelf Underwriting
     Request for a Shelf Underwriting that is not an Overnight Deal, the Company
     shall give written notice (a "Shelf Notice") of such Shelf Underwriting
     Request to all other Shelf Holders. Each Shelf Holder desiring to include
     all or any part of the Shelf Securities held by such Shelf Holder in any
     such Shelf Underwriting shall within two business days after receipt of the
     Shelf Notice so notify in writing the Company and First Reserve, and in
     such notice shall inform the Company and First Reserve of the number of
     Shelf Securities such Shelf Holder (each, along with First Reserve, a
     "Participating Holder") wishes to include in such Shelf Underwriting.

               (v) The Company and all Participating Holders shall enter into an
     underwriting agreement in customary form with the managing underwriter or
     underwriters selected for such Shelf Underwriting by First Reserve. If the
     Board, after having consulted with the managing underwriter(s), determines
     in good faith that the Company should impose a limitation of the number of
     securities proposed to be included in the Shelf Underwriting, the Company
     shall so advise all Participating Holders, and the Company may exclude
     shares of the Shelf Securities as necessary from Shelf Underwriting, with
     the number of shares to be included in the Shelf Underwriting allocated in
     the following manner: first to First Reserve; and second to each of the
     other Participating Holders requesting inclusion of their Shelf Securities
     in such Shelf Underwriting, and among such other Holders on a pro rata
     basis based on the total number of Shelf Securities then held by each such
     other Participating Holder (the defined term "Participating Holder" shall
     be


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     construed for purposes of this Section 2.2(c)(v) in the same manner as the
     term "Holder" is construed in the last sentence of Section 2.2(b)).

          (d) Maximum Number of Demand Registrations. Except as set forth below,
the Company shall be obligated to effect only four (4) such registrations
pursuant to Section 2.2(a), each of which may be a Shelf Registration. A
Registration shall be effected for purposes of this Section 2.2(d) when and if a
registration statement is declared effective by the SEC and the distribution of
securities thereunder has been completed without the occurrence of any stop
order or proceeding relating thereto suspending the effectiveness of the
Registration. Notwithstanding the foregoing sentences, there shall be no limit
to the number of registrations on Form S-3 that may be requested and obtained by
First Reserve, other than demands for Shelf Registrations (each of which shall
count against the four demand registration limit).

          (e) Deferral. Notwithstanding the foregoing, if the Company shall
furnish to First Reserve a certificate signed by the President or Chief
Executive Officer of the Company stating that, in the good faith judgment of the
Board, it would be materially detrimental to the Company and its stockholders
for such registration statement to be filed, then the Company shall have the
right to defer such filing for a period of not more than ninety (90) days after
receipt of the request of First Reserve; provided that the Company may not
utilize this right more than once in any twelve (12) month period.

          (f) Expenses. All expenses incurred in connection with any
registration pursuant to this Section 2.2, including, but not limited to, all
federal and "blue sky" registration, filing and qualification fees, printer's
and accounting fees, fees and disbursements of counsel for the Company, and fees
and expenses of one counsel for the Holders (selected by First Reserve) shall be
borne by the Company. Each Holder participating in a registration pursuant to
this Section 2.2 shall bear such Holder's proportionate share (based on the
total number of Registrable Securities sold in such registration other than for
the account of the Company) of all discounts, commissions or other amounts
payable to underwriters or brokers in connection with such offering by the
Holders. Notwithstanding the foregoing, the Company shall not be required to pay
for any expenses of any registration proceeding begun pursuant to this Section
2.2 if the registration request is subsequently withdrawn at the request of
First Reserve, unless First Reserve agrees that such registration constitutes
the use by it of one (1) demand registration pursuant to this Section 2.2;
provided that if at the time of such withdrawal, First Reserve has learned of a
material adverse change in the condition, business, or prospects of the Company
not known to First Reserve at the time of its request for such registration and
has withdrawn its request for registration with reasonable promptness after
learning of such material adverse change, then the Company shall be required to
pay all such expenses and such registration shall not constitute the use of a
demand registration pursuant to this Section 2.2.

     2.3  Piggyback Registrations.

          (a) Notices. The Company shall promptly notify all Holders in writing
(a "Piggyback Notice", which may also constitute the Request Notice required
under


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Section 2.2(a)), prior to filing any registration statement under the Securities
Act for purposes of effecting an offering of securities of the Company
(including, but not limited to, registration statements relating to the initial
or secondary public offerings of securities of the Company, whether pursuant to
Section 2.2 or otherwise, but excluding registration statements relating to any
employee benefit plan or a corporate reorganization). Subject to Section 2.3(b),
the Company will afford each such Holder an opportunity to include in such
registration statement all or any part of the Registrable Securities then held
by such Holder. Each Holder desiring to include in any such registration
statement all or any part of the Registrable Securities held by such Holder
shall within ten (10) days after receipt of the Piggyback Notice so notify the
Company in writing, and in such notice shall inform the Company of the number of
Registrable Securities such Holder wishes to include in such registration
statement. If a Holder decides not to include all of its Registrable Securities
in any such registration statement, such Holder shall nevertheless continue to
have the right to include any Registrable Securities in any subsequent
registration statement or registration statements as may be filed by the Company
with respect to offerings of its securities, all upon the terms and conditions
set forth in this Agreement.

          (b) Underwriting. If a registration statement referred to in the
Piggyback Notice is for an underwritten offering, then the Company shall so
advise the Holders. In such event, the right of any such Holder to include
Registrable Securities in such a Registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting as provided herein. All Holders
proposing to distribute their Registrable Securities through such underwriting
shall enter into an underwriting agreement in customary form with the managing
underwriter or underwriters selected for such underwriting. Notwithstanding any
other provision of this Agreement, if the Board, after having consulted with the
managing underwriter(s), determines in good faith that the Company should impose
a limitation of the number of shares to be underwritten, then the Company shall
so advise all Holders of Registrable Securities that would otherwise be
registered and underwritten pursuant hereto, and the Company may exclude shares
of the Registrable Securities from the registration and the underwriting, and
the number of shares that will be included in the registration and the
underwriting shall be allocated as set forth in Section 2.2, or, if the
underwriting is not pursuant to Section 2.2, shall be allocated first to the
Company, and second, to each of the Holders requesting inclusion of their
Registrable Securities in such registration statement on a pro rata basis based
on the total number of Registrable Securities then held by each such Holder. If
any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company and the
underwriter(s), delivered at least ten (10) business days prior to the effective
date of the registration statement. Any Registrable Securities excluded or
withdrawn from such underwriting shall be excluded and withdrawn from the
registration. The defined term "Holder" shall be construed for purposes of this
Section 2.3(b) in the same manner as set forth in the last sentence of Section
2.2(b)).

          (c) Expenses. All expenses incurred in connection with a registration
pursuant to this Section 2.3 (excluding underwriters' and brokers' discounts and


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commissions relating to shares sold by the Holders), including, without
limitation all federal and "blue sky" registration, filing and qualification
fees, printers' and accounting fees, fees and disbursements of counsel for
Holders (selected by First Reserve, or, if First Reserve is not participating in
such offering, selected with the consent of First Reserve by participating
Holders holding a majority of Registrable Securities being registered), and fees
and disbursements of counsel for the Company, shall be borne by the Company.
Each Holder participating in a registration pursuant to this Section 2.3 shall
bear such Holder's proportionate share (based on the total number of Registrable
Securities sold in such registration other than for the account of the Company)
of all discounts, commissions or other amounts payable to underwriters or
brokers in connection with such offering by the Holders.

          (d) Not Demand Registration. Registration pursuant to this Section 2.3
shall not be deemed to be a demand registration as described in Section 2.2,
unless First Reserve specifically elects otherwise in writing. There shall be no
limit on the number of times the Holders may request registration of Registrable
Securities under this Section 2.3.

          (e) Withdrawal Right. Notwithstanding any provision contained in this
Section 2.3 to the contrary, the Company shall have the right to terminate or
withdraw any registration statement initiated by it (other than in response to a
Holder Notice under Section 2.2) prior to the effectiveness of such registration
statement whether or not any Holder has elected to include his Registrable
Securities in such registration statement.

          (f) Shelf Registrations. In the event the registration commenced by
the Company pursuant to this Section 2.3 was not commenced pursuant to a Demand
Notice and is a Shelf Registration (any such Shelf Registration, a "Company
Shelf Registration"): (i) the Company and any Holders requesting inclusion of
their Registrable Securities in such registration pursuant to Section 2.3(a)
shall comply with the provisions of Section 2.2(c); (ii) the piggy-back rights
of the Holders and the other provisions of Section 2.3 shall apply to both the
Company Shelf Registration and any Shelf Underwriting initiated from time to
time by the Company or First Reserve to distribute some or all of the
Registrable Securities included in a Company Shelf Registration; and (iii) for
purposes of Section 2.3, any such Shelf Underwriting shall be deemed to be a
registration for an underwritten offering commenced by the Company pursuant to
Section 2.3; provided that (A) the piggy-back rights with respect to a Shelf
Underwriting shall not apply to all Holders, but shall be limited to the
applicable Shelf Holders that have elected to participate in a Company Shelf
Registration; and (B) each Shelf Holder may only attempt to include in the Shelf
Underwriting the Shelf Securities beneficially owned by such Shelf Holder (and
may not include in the Shelf Underwriting any Registrable Securities that are
not Shelf Securities). Notwithstanding anything contained in Section 2.2(c), the
Company (along with First Reserve) shall have the right to initiate a Shelf
Underwriting to distribute Registrable Securities included in a Company Shelf
Registration, and the Company shall be deemed a Shelf Holder for purposes of any
Shelf Underwriting initiated by First Reserve with respect to Registrable
Securities included in the Company Shelf Registration.


                                       11
<PAGE>
     2.4 Lock-ups. With respect to any underwritten offering in which the
Company or First Reserve is selling securities pursuant to Section 2.2 or 2.3
(including, but not limited to, the Company's initial public offering and any
Shelf Underwriting), beginning on (a) the effective date of a registration
statement filed by the Company pursuant to Section 2.2 or 2.3 (in the case of a
registration statement other than a Shelf Registration) or (b) the date of the
underwriting agreement executed in connection with a Shelf Underwriting (each an
"Effective Date"), other than as provided in the last sentence of this Section
2.4, each Stockholder and Optionholder, whether or not such Person is
participating in such offering, and the Company each agree to not (i) effect any
issuance, sale, transfer, assignment, pledge, conveyance (including, without
limitation, taking any short position in), or repurchase of Common Stock (or any
securities of the Company exchangeable or convertible into Common Stock) for a
period of 90 days after the Effective Date (the "Lock-up Period") or such longer
time (not to exceed an additional 90 days) as requested by the underwriters for
such offering and agreed to by First Reserve in its sole discretion; and (ii)
the Company agrees to not file with the SEC any other registration statement, or
any supplement or amendment to a previously filed shelf registration statement,
from the Effective Date until the later of the expiration of the Lock-up Period
or the completion of the period of distribution of any underwritten offering.
Each Stockholder and Optionholder and the Company agree to enter into customary
lock-up agreements with an underwriter consistent with the terms of this Section
2.4. The restrictions in this Section 2.4 shall not prevent the Company from
filing with the SEC registration statements relating to any employee benefit
plan, corporate reorganization, or issuance of debt that is not convertible into
equity, and shall not apply to (X) the Registrable Securities to be sold under
any underwritten offering contemplated by Section 2.2 or 2.3; (Y) any shares of
Common Stock issued by the Company upon the exercise of an option or warrant or
the conversion of a security outstanding on the Effective Date; or (Z) any
shares of Common Stock issued or options to purchase Common Stock granted
pursuant to employee benefit plans of the Company existing as of the Effective
Date.

     2.5 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities under this Agreement the Company
shall, as expeditiously as reasonably possible:

          (a) Registration Statement. Subject to the provisions of Section
2.2(e), prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use its best efforts to cause such registration
statement to become effective and to keep any such registration statement
(including any Shelf Registration) effective for so long as required by the
Securities Act to complete the distribution, provided however that in no event
shall the Company be required to keep a registration statement effective for
greater than two years.

          (b) Amendments and Supplements. Prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement.


                                       12
<PAGE>
          (c) Prospectuses. Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them that are included in such registration.

          (d) Blue Sky. Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.

          (e) Underwriting. In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement in usual
and customary form (including indemnification provisions), with the managing
underwriter(s) of such offering. Each Holder participating in such underwriting
shall also enter into and perform its obligations under such an agreement.

          (f) Notification. Notify each Holder of Registrable Securities covered
by such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing. In addition, the Company shall promptly notify each Holder and each
underwriter, broker, dealer and placement agent participating in any offering or
sale or other distribution of securities covered by such registration statement
of the issuance or threatened issuance of any order suspending the registration
or qualification of any Registrable Securities covered by such registration
statement for disposition in any jurisdiction; use its commercially reasonable
efforts to prevent the issuance of any such threatened order and, if any such
order is issued, use its commercially reasonable efforts to obtain the lifting
or withdrawal of such order at the earliest possible moment and promptly notify
each Holder and each such underwriter, broker, dealer and placement agent of any
lifting or withdrawal.

          (g) Opinion and Comfort Letter. Furnish, at the request of any Holder
requesting registration of Registrable Securities (but only if such Holder is
First Reserve or an FRC Affiliate) or of any underwriter in connection herewith,
on the date or dates requested by such Holder (but only if such Holder is First
Reserve or an FRC Affiliate), (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and to First
Reserve or an FRC Affiliate requesting registration of Registrable Securities
and (ii) a "comfort" letter dated as of such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by


                                       13
<PAGE>
independent certified public accountants to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities.

          (h) Road Shows. To the extent reasonably requested by First Reserve,
cause the appropriate members of the management and employees of the Company to
participate in meetings, diligence sessions, and road shows.

          (i) Maintenance of Listed Status. Following its initial public
offering, the Company shall use its best efforts to (i) cause all Registrable
Securities to be listed on the securities exchange or automated quotation system
on which the Company's Common Stock is initially listed; and (ii) to maintain
its status as a listed company on such exchange or quotation system. In the
event the Company should be de-listed from such exchange or quotation system,
the Company shall use its best efforts to regain its status as a listed company
on such exchange or quotation system as promptly as is reasonably possible.

          (j) Additional Actions. Take all other actions which are reasonably
necessary or which may be reasonably requested by First Reserve or any
underwriter, broker, dealer or placement agent participating in any offering or
sale or other distribution of securities covered by such registration statement
to effect the registration and qualification of the Registrable Securities
covered by such registration statement and to facilitate the disposition thereof
in accordance with the respective plans of distribution of the selling Holders.

     2.6 Indemnification. In the event any Registrable Securities are included
in a registration statement under Sections 2.2 or 2.3:

          (a) By the Company. To the extent permitted by law, the Company will
indemnify and hold harmless each selling Holder, the partners, officers and
directors of each such Holder, any underwriter (as determined in the Securities
Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Securities Act or the Securities Exchange
Act of 1934, as amended, (the "Exchange Act"), against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"):

               (i) any untrue statement or alleged untrue statement of a
     material fact contained in such registration statement, including any
     preliminary prospectus or final prospectus contained therein or any
     amendments or supplements thereto;


                                       14
<PAGE>
               (ii) the omission or alleged omission to state therein a material
     fact required to be stated therein, or necessary to make the statements
     therein not misleading, or

               (iii) any violation or alleged violation by the Company of the
     Securities Act, the Exchange Act, any federal or state securities law or
     any rule or regulation promulgated under the Securities Act, the Exchange
     Act or any federal or state securities law in connection with the offering
     covered by such registration statement;

and the Company will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability or action; provided that the indemnity
agreement contained in this subsection 2.6(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld, nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling person of any such person.

          (b) By Selling Holders. To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its directors, each
of its officers who have signed the registration statement, each person, if any,
who controls the Company within the meaning of the Securities Act, any
underwriter and any other Holder selling securities under such registration
statement or any of such other Holder's partners, directors or officers or any
person who controls such Holder within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages or liabilities (joint or
several) to which the Company or any such director, officer, controlling person,
underwriter or other such Holder, partner or director, officer or controlling
person of such other Holder may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written
information furnished by such Holder concerning such Holder expressly for use in
connection with such registration; and each such Holder will reimburse any legal
or other expenses reasonably incurred by the Company or any such director,
officer, controlling person, underwriter or other Holder, partner, officer,
director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action:
provided that the indemnity agreement contained in this subsection 2.6(b) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Holder, which consent shall not be unreasonably withheld; and provided, further,
that the total amounts payable in indemnity by a Holder under this Section
2.6(b) in respect of


                                       15
<PAGE>
any Violation shall not exceed the net proceeds received by such Holder in the
registered offering out of which such Violation arises.

          (c) Notice. Promptly after receipt by an indemnified party under this
Section 2.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.6, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided that an indemnified party shall have the
right to retain its own counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential conflict of interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall relieve such indemnifying party of
liability to the indemnified party under this Section 2.6 to the extent the
indemnifying party is prejudiced as a result thereof, but the omission so to
deliver written notice to the indemnified party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 2.6.

          (d) Defect Eliminated in Final Prospectus. The foregoing indemnity
agreements of the Company and Holders are subject to the condition that, insofar
as they relate to any Violation made in a preliminary prospectus but eliminated
or remedied in the amended prospectus on file with the SEC at the time the
registration statement in question becomes effective or the amended prospectus
filed with the SEC pursuant to SEC Rule 424(b) (the "Final Prospectus"), such
indemnity agreement shall not inure to the benefit of any person if a copy of
the Final Prospectus was timely furnished to the indemnified party, was not
furnished to the person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the Securities Act, and the
furnishing of such Final Prospectus as so required would have eliminated
liabilities under the Securities Act or the Exchange Act.

          (e) Contribution. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
either (i) any Holder exercising rights under this Agreement, or any controlling
person of any such Holder, makes a claim for indemnification pursuant to this
Section 2.6 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 2.6 provides
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any such selling Holder or any such controlling
person in circumstances for which indemnification is provided under this Section
2.6; then, and in each such case, the Company and such Holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such Holder
is responsible for the


                                       16
<PAGE>
portion represented by the percentage that the public offering price of its
Registrable Securities offered by and sold under the registration statement
bears to the public offering price of all securities offered by and sold under
such registration statement, and the Company and other selling Holders are
responsible for the remaining portion; provided that, in any such case: (A) no
such Holder will be required to contribute any amount in excess of the public
offering price of all such Registrable Securities offered and sold by such
Holder pursuant to such registration statement; (B) no person or entity guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person or entity who
was not guilty of such fraudulent misrepresentation, and (C) in determining
relative fault, due consideration shall be given to the source of any written
information furnished by a Holder concerning such Holder expressly for use in
connection with such registration

          (f) Survival. The obligations of the Company and Holders under this
Section 2.6 shall survive until the earlier of (i) the one year anniversary of
the expiration of all applicable statutes of limitation or extensions of such
statutes or (ii) the termination of First Reserve Fund IX, L.P. or First Reserve
Fund X, L.P. (whichever is later).

     2.7 Furnish Information. The selling Holders, as a condition to their
participation in any registration or offering contemplated by this Section 2,
agree to furnish to the Company such information regarding themselves, the
Registrable Securities held by them, and the intended method of disposition of
such securities as shall be reasonably requested by the Company or otherwise
required to timely effect the Registration of their Registrable Securities.

     2.8 Rule 144 Reporting; S-3 Eligibility. With a view to making available
the benefits of certain rules and regulations of the SEC which may at any time
permit the sale of "Restricted Securities" (used herein as defined in Rule 144
under the Securities Act) to the public without registration, and to be eligible
to use Form S-3, the Company agrees to:

          (a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times during
which the Company is subject to the reporting requirements of the Exchange Act;

          (b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at all times during which the Company is subject to such reporting
requirements); and

          (c) so long as any Holders own any Restricted Securities, to furnish
to such holder forthwith upon request a written statement by the Company as to
its compliance with the reporting requirements of said Rule 144 and with regard
to the Securities Act and the Exchange Act (at all times during which the
Company is subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company and other information in the possession of or reasonably
obtainable by the Company as such holder of the


                                       17
<PAGE>
Registrable Securities may reasonably request in availing itself of any rule or
regulation of the SEC allowing such holder to sell any such securities without
registration.

     2.9 Impact of Merger. In the event the Company merges with or into another
entity or undergoes a similar transaction, the terms of this Section 2 shall
apply to any equity received by the Holders in connection with the merger or
similar transaction in exchange for the Common Stock or other Registrable
Securities held by such Holders immediately prior to the consummation of the
merger or similar transaction.

     2.10 Termination of Registration Rights. Other than any Holder that is an
FRC Affiliate, no Holder shall have any rights under Sections 2.2 or 2.3 with
respect to any Registrable Securities held by such Holder if, in the reasonable
opinion of counsel to the Company, addressed to such Holder, all such
Registrable Securities then held by such Holder could be sold under Rule 144
promulgated under the Securities Act in a single transaction.

3.   SALES BY STOCKHOLDERS.

     3.1 General Restrictions and Notification Requirements.

          (a) Restrictions on Transfers. No Stockholder shall sell, transfer,
assign, pledge, convey, encumber, gift, or otherwise dispose, whether directly,
indirectly, by merger, operation of law, transfer of any ownership interest in
such Stockholder or its beneficial owners or otherwise (collectively,
"Transfer") any shares of the capital stock of the Company now held or hereafter
acquired ("Stock") without the consent of the Board, except for Permitted
Transfers (as defined in Section 3.6) and Transfers in accordance with the
applicable procedures of this Section 3. In addition to the foregoing
restrictions, except for Permitted Transfers, no Management Stockholder shall
Transfer any Stock prior to October 31, 2009 without the consent of the Board.
Any Transfer or attempted Transfer of Stock in violation of this Section 3 shall
be null and void and without effect, and the Company shall not record any such
purported Transfer on its books or treat any transferee of Stock involved in
such purported Transfer as the owner of such Stock.

          (b) Notice of Sales. Except for Permitted Transfers and Compelled
Transfers (as defined in Section 3.5), if any Stockholder (the "Seller")
proposes to Transfer any Stock, then the Seller shall promptly give written
notice (the "Sale Notice") to the Company and the other Stockholders at least
thirty (30) days prior to the proposed closing of such sale or transfer. In
addition to any requirements of Section 3.2, the Sale Notice shall describe in
reasonable detail the proposed Transfer including, without limitation, the
number of shares of Stock to be sold or transferred, the nature of the Transfer,
the consideration to be paid, the proposed closing date, and, if known, the name
and address of each prospective purchaser or transferee.

     3.2 Right of First Refusal. If at any time a Seller (other than First
Reserve) receives a bona fide offer from any person (an "Offering Party") to
purchase shares of Stock or any interest therein held by such Seller (a
"Purchase Offer") that such Seller


                                       18
<PAGE>
wishes to accept, the Seller shall cause such Purchase Offer to be reduced to
writing and a true copy shall be attached to the Sale Notice. In such an event,
the Sale Notice shall contain an irrevocable offer to sell such Stock to the
Company and First Reserve at a purchase price equal to the price contained in,
and on the same terms and conditions of, the Purchase Offer; provided that the
Company or First Reserve may pay cash to the Seller in an amount equal to the
then-current fair market value of any portion of such offer constituting
non-cash consideration offered by the Offering Party in the Purchase Offer. At
any time within ten (10) days after the date of receipt by the Company of the
Sale Notice, the Company may elect to purchase all or any portion of the Stock
covered by the Purchase Offer at the same price and on the same terms and
conditions as the Purchase Offer, and at any time prior to the latest date
specified for closing in the Purchase Offer. If at the end of such ten (10) day
period the Company has not elected to purchase all Stock covered by such
Purchase Offer, the Seller shall redeliver the Sale Notice to all other
Stockholders along with a statement as to the number of shares of Stock to be
purchased by the Company (if any). Within ten (10) days after receipt by First
Reserve of such redistributed Sale Notice, First Reserve, by providing notice to
the Seller, may elect to purchase all or part of any remaining Stock covered by
the Purchase Offer at the same price and on the same terms and conditions as the
Purchase Offer, at any time within the latest date specified for closing in the
Purchase Offer. This Section 3.2 shall not apply to any Permitted Transfer or to
a Transfer pursuant to Section 3.5.

     3.3 Co-Sale Right. If (a) a Seller other than First Reserve has received a
Purchase Offer and not all of the Stock covered by such Purchase Offer has been
purchased pursuant to Section 3.2, or (b) if First Reserve wishes to Transfer
Stock other than a Transfer to an FRC Affiliate or a Transfer resulting in an
exercise by First Reserve of the Compelled Transfer rights set forth in Section
3.5, then the Seller or First Reserve, as the case may be, shall deliver the
Sale Notice (the "Final Notice") to the other Stockholders. If the Final Notice
is sent by a Seller other than First Reserve, it shall include a statement as to
the number of shares of Stock to be purchased pursuant to Section 3.2 (if any).
Subject to the terms and conditions of this Section 3.3, the Stockholders who
are not Sellers (the "Co-Sale Stockholders") shall each have the right,
exercisable upon written notice to the Seller within ten (10) days after receipt
of the Final Notice, to participate in such sale of Stock on the same terms and
conditions as set forth in the Final Notice, up to the total number of shares of
Stock for each Co-Sale Stockholder equal to the product of (a) the total number
of shares included in the Final Notice; multiplied by (b) a quotient found by
dividing the total number of shares owned by such Co-Sale Stockholder by the
total number of shares owned by the Seller, such Co-Sale Stockholder, and all
other Co-Sale Stockholders that are participating in the sale of Stock pursuant
to this Section 3.3. To the extent any Co-Sale Stockholders exercise such right
of participation (each such Co-Sale Stockholder, a "Participating Stockholder"),
the number of shares of Stock that the Seller may sell in the transaction shall
be correspondingly reduced by the aggregate number of shares included in the
transaction by all Participating Stockholders. Each Participating Stockholder
shall effect its participation in the sale by promptly delivering to Seller for
transfer to the prospective purchaser one or more certificates, properly
endorsed for transfer, which represent the number of shares of Stock which such
Participating Stockholder elects to sell. The Seller will use his, her, or its
best efforts to obtain the agreement of the prospective


                                       19
<PAGE>
transferee(s) to the participation of the Participating Stockholders in the
contemplated transfer and will not transfer any Stock to the prospective
transferee(s) if such transferee(s) refuses to allow the sale to the
Participating Stockholders, or refuses to become a party to this Agreement. This
Section 3.3 shall not apply to any Permitted Transfer or to a Transfer covered
by Section 3.5.

     3.4 Further Sales. To the extent the Company, First Reserve and the Co-Sale
Stockholders do not exercise their rights under Sections 3.2 or 3.3 with respect
to the sale of Stock subject to the Notice or the Final Notice, the Seller may,
not later than sixty (60) days following delivery to the Company and the
Stockholders of the Final Notice, conclude a transfer of the Stock covered by
the Final Notice on terms and conditions equal to those described in the Final
Notice. Any proposed transfer on terms and conditions other than those described
in the Final Notice or any proposed transfer of any Stock by the Seller after
such sixty day period shall again be subject to the co-sale rights and first
refusal rights of the Stockholders and shall require compliance by the Seller
with the procedures described in this Section 3. Notwithstanding the foregoing,
no transfer of the Stock shall be effective unless such transferee agrees to be
bound by the terms of this Agreement as a Stockholder.

     3.5 Rights to Compel Transfer.

          (a) If First Reserve or any FRC Affiliate propose to make a Transfer
to any person or entity who is not an FRC Affiliate immediately prior to such
Transfer, then First Reserve shall have the right, exercisable as set forth
below, to require each of the other Stockholders and each of the Optionholders
(the "Remaining Stockholders") to Transfer an equivalent pro-rata portion of the
Common Stock and any securities convertible or exercisable into Common Stock
(the "Stock Rights") then owned by such Remaining Stockholders (such pro-rata
portion, the "Transfer Stock") to the proposed transferee (the "Acquirer") for
the same consideration per share as is being paid to First Reserve and on the
same terms as are applicable to First Reserve (the "Compelled Transfer"). If the
Remaining Stockholders are compelled to Transfer shares under this Section 3.5
in connection with a merger, consolidation or reorganization of the Company, the
Remaining Stockholders agree to vote all Stock and Stock Rights in favor of
approving such merger, consolidation or reorganization and, to the extent
requested by First Reserve, become a party to any applicable agreement of
merger, consolidation or reorganization; provided that any liabilities or
obligations of the Stockholders and Optionholders under such agreement shall be
several, and not joint or joint and several, and shall be borne pro rata by
First Reserve and the Remaining Stockholders in relation to the Stock and Stock
Rights then owned by them and shall be limited to an amount no greater than the
amount of proceeds received by such Remaining Stockholder. The purchase price
for each vested Stock Right in any such Transfer shall equal the "spread"
between the exercise price for such vested Stock Right and the purchase price
per share of Stock. The terms and conditions other than the consideration to be
received by the Remaining Stockholders for Stock and vested Stock Rights sold
pursuant to this Section 3.5 shall be as set forth in the applicable purchase
agreement between First Reserve and the Acquirer, merger agreement to which the
Company is a party, or other agreement effecting such Transfer. Upon the
consummation of any such Transfer and subject to the


                                       20
<PAGE>
terms of any agreements related to such Stock Rights, any unvested Stock Rights
shall automatically be terminated and any transaction involving such unvested
Stock Rights shall be void and of no effect. In addition, if the Company
proposes to sell all or a substantial portion of its assets in a transaction
consented to by First Reserve and such transaction is submitted to the
Stockholders for approval, each Stockholder agrees to vote all Stock and Stock
Rights in favor of such transaction.

          (b) First Reserve shall cause the terms of the Compelled Transfer to
be reduced to writing and shall provide a written notice (the "Compelled
Transfer Notice") of such Compelled Transfer to the Remaining Stockholders. The
Compelled Transfer Notice shall contain written notice of the exercise by First
Reserve of its rights pursuant to Section 3.5(a), setting forth the
consideration to be paid by the Acquirer for each type of Stock and Stock Right
and the other terms and conditions of the Compelled Transfer. Within fifteen
(15) days following the date of receipt of the Compelled Transfer Notice, each
of the Remaining Stockholders shall deliver to First Reserve certificates
representing the Stock and instruments representing Stock Rights owned by such
Remaining Stockholder and any requested proxies, duly endorsed, together with
all other documents required to be executed in connection with such Compelled
Transfer or, if such delivery is not permitted by applicable law, an
unconditional agreement to deliver such certificates pursuant to this Section
3.5(b) at the closing for such Compelled Transfer against delivery to such
Remaining Stockholder of the consideration therefore. Such certificates shall be
held by First Reserve in escrow for the benefit of the appropriate Remaining
Stockholder. In the event that a Remaining Stockholder should fail to deliver
such certificates as aforesaid and the Compelled Transfer is consummated, (i)
the Company shall cause the books and records of the Company to show that such
Stock and Stock Rights are bound by the provisions of this Section 3.5(b) and
that such Stock and Stock Rights shall be transferred only to the Acquirer (on
the terms of the Compelled Transfer) upon surrender for Transfer by the
Remaining Stockholder thereof; (ii) the Company shall be entitled to withhold
funds payable to the Remaining Stockholder with respect to such Stock and Stock
Rights until such time as they are surrendered; and (iii) notwithstanding
Section 5.2, any and all rights of such Remaining Stockholder under this
Agreement may be amended or terminated without the consent of such Remaining
Stockholder.

          (c) If, within 180 days (or such longer period not exceeding 210 days
as may be necessary to comply with any applicable provisions of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or to obtain
other required regulatory approval) after First Reserve gives the Compelled Sale
Transfer Notice, it has not completed the sale of all the Transfer Stock, First
Reserve shall return to each of the Remaining Stockholders all certificates
representing Stock and Stock Rights that such Remaining Stockholders delivered
for sale pursuant hereto, and all the restrictions on sale or other disposition
contained in this Agreement with respect to such Stock and Stock Rights and the
Stock owned by First Reserve shall again be in effect.

          (d) Upon the consummation of the Compelled Transfer, First Reserve
shall give notice thereof to the Remaining Stockholders, and shall (or shall
cause the Acquirer to) remit to each of the Remaining Stockholders a net amount
with respect to


                                       21
<PAGE>
the Stock and Stock Rights of such Remaining Stockholders sold pursuant thereto,
after deducting of a pro rata portion of any out-of-pocket fees and expenses
(including attorney fees) incurred by First Reserve in connection with the
Compelled Transfer, and shall furnish such other evidence of the completion and
time of completion of such sale or other disposition and the terms thereof as
may be reasonably requested by such Remaining Stockholders.

     3.6 Permitted Transfers. The following shall be considered "Permitted
Transfers," and not subject to the restrictions of this Section 3: (a) Transfers
approved in advance by the Board; (b) Transfers by an FRC Affiliate to any other
FRC Affiliate or to the partners of First Reserve; (c) Transfers by a Management
Stockholder to another Management Stockholder, to First Reserve or an FRC
Affiliate or by an Investor to an Affiliate of such Investor, in each case with
the prior approval of the Board, which shall not be unreasonably withheld; (d)
Transfers by a Stockholder for bona fide estate planning purposes with the
consent of the Board, which shall not be unreasonably withheld; (e) Transfers by
will or by intestate succession; or (f) any Transfer made in connection with a
registered offering under, or a sale pursuant to Rule 144 promulgated under, the
Securities Act. Notwithstanding the foregoing, no Transfer pursuant to items (a)
- (e) of this Section 3.6 shall be consummated unless and until the proposed
transferee agrees in writing to become a party to and be bound by the provisions
of this Agreement as a Stockholder (such writing, a "Joinder Agreement"). Upon
consummation of any Permitted Transfer, the transferring Stockholder shall send
to the Company and all other Stockholders a notice of the Permitted Transfer,
indicating the number of shares of Stock transferred, the date of the transfer,
and the names and addresses of the transferees, along with a copy of the Joinder
Agreement (other than with respect to any transfers made pursuant to item (f),
for which no Joinder Agreement is required from the Transferree(s)).

     3.7 Effect of Initial Public Offering or Change in Control. The provisions
of Sections 3.1, 3.2, 3.3, 3.5 and Section 4 shall cease to apply following an
initial public offering of the Common Stock. The provisions of Section 3.1 and
Section 4 shall cease to apply following a Change in Control. For these purposes
a Change in Control means (a) a transaction or series of related transactions in
which any Person acquires voting equity interests in the Company representing
50% of more of the voting power of the voting equity interests (other than FRC
Affiliates or Affiliates of the Company); (b) any merger, consolidation,
amalgamation, recapitalization or similar transaction of the Company that
results in any Person other than FRC Affiliates or Affiliates of the Company
acquiring more than 50% of the voting power of the Company or its successor in
such merger, consolidation, amalgamation, recapitalization or similar
transaction; or (c) a transaction or series of related transactions involving
the sale, transfer or other disposition of all of the assets of the Company and
its subsidiaries, taken as a whole, to one or more persons or entities that are
not, immediately prior to such sale, transfer or other disposition, FRC
Affiliates or Affiliates of the Company.


                                       22
<PAGE>
4.   REPURCHASE OF SHARES.

     4.1 Optional Repurchase Upon Termination of Employment or Consultancy. Each
Management Stockholder agrees that the Company shall have the right (but not the
obligation) to repurchase all or part of the Stock and vested Stock Rights of
the Company held by such Management Stockholder (the "Repurchase Shares") at the
Repurchase Price (as such term is defined below in Section 4.2) upon the
termination of the employment or consulting relationship of such Management
Stockholder (a "Terminated Stockholder") prior to an Initial Public Offering
under the following circumstances:

          (a) a termination by the Company or the Subsidiary that employs the
Terminated Stockholder at any time "for cause;" or

          (b) the voluntarily resignation of the Terminated Stockholder other
than a termination for "good reason" (but only if such Terminated Stockholder is
party to an effective employment or consulting agreement with the Company or one
of its Subsidiaries that provides for "good reason" termination by such
Terminated Stockholder); or

          (c) death, disability, a termination by the Company or the Subsidiary
that employs the Terminated Stockholder other than "for cause" or a voluntary
resignation of the Terminated Stockholder for "good reason" (but only if such
Terminated Stockholder is party to an effective employment or consulting
agreement with the Company or one of its Subsidiaries that provides for "good
reason" termination by such Terminated Stockholder).

     4.2 Definitions. For purposes of this Section 4, the following definitions
apply:

          (a) The term "Repurchase Price" shall be defined as the fair market
value of the Repurchase Shares, as determined in the good faith judgment of the
Board. The fair market value shall be determined using the same method of
valuation that First Reserve uses for purposes of reporting to its limited
partners. "Fair market value" shall be determined with a discount of 25% applied
to Repurchase Shares representing a minority ownership position (and without any
discount attributable to lack of liquidity of the Repurchase Shares), unless
such determination is made in connection with a valuation under Section 4.1(c),
or after 15 years from the date of this Agreement, under Section 4.1(b). The
Board shall determine the fair market value of the Repurchase Shares as of the
last day of the month in which the employment of the Terminated Stockholder is
terminated. Vested Stock Rights (including unvested Stock Rights that become
vested as a result of such termination) shall be valued as set forth in this
Section 4.2(a); and

          (b) The term "for cause" shall mean any termination resulting from:
(i) the Terminated Stockholder's continued failure to follow reasonable
directions of the Board for a period of ten days after the Board has provided
written notice to such employee specifying such directions, (ii) the Terminated
Stockholder's conviction of, or the entering by such employee of a plea of
guilty or nolo contendere to, a felony charge or crime involving moral
turpitude, (iii) the Terminated Stockholder engaging in


                                       23
<PAGE>
fraudulent or criminal activity (whether or not prosecuted) against the Company
or any subsidiary or affiliate of the Company, (iv) any misconduct by the
Terminated Stockholder that has caused or is reasonably likely to cause a
material financial loss to the Company, (v) a material violation of any
provisions of any agreement between the Terminated Stockholder and the Company
or an affiliate or subsidiary of the Company, including any
employment/consulting agreement or the Company's employee manual or code of
conduct, (vi) receipt by the Terminated Stockholder of any kickback or rebate of
any fee or expense paid by the Company, (vii) the use of illegal drugs, the
persistent excessive use of alcohol or engaging in any other activity that
materially impairs the Terminated Stockholder's ability to perform his duties
hereunder or results in conduct that could bring the Company or any of its
subsidiaries or affiliates into substantial public disgrace or disrepute, (viii)
excessive absenteeism by the Terminated Stockholder not related to permanent
disability, or (ix) any dishonesty by the Terminated Stockholder to the Company
or an affiliate or subsidiary of the Company. The term "disability" shall mean a
long-term disability within the meaning of the company-sponsored long-term
disability insurance program then applicable to the Terminated Stockholder (or
in the absence of such program, as determined by the Board in good faith).
Notwithstanding the foregoing definitions, the term "for cause" or "disability"
shall instead be defined as set forth in any management, employment or
consulting agreement, as the case may be, between the Company or one of its
Subsidiaries and the Terminated Stockholder, as shall "good reason" (where
applicable).

          (c) Procedure for Repurchase. In the event the Company elects to
purchase the Repurchase Shares, the Company shall deliver written notice of such
intention to the Terminated Stockholder on or prior to the last day of the third
full calendar month following the month in which the employment/consultant
relationship of the Terminated Stockholder was terminated (the "Notice of
Repurchase"). Upon delivery of the Notice of Repurchase, the Terminated
Stockholder shall promptly transfer and deliver to the Company the number of
Repurchase Shares specified in the Notice of Repurchase, and the Company shall
pay the Repurchase Price for such Repurchase Shares in cash or immediately
available funds within ten (10) days of delivery of the Repurchase Shares. The
purchase of the Repurchase Shares shall be deemed to have occurred upon delivery
of the Repurchase Price, notwithstanding any failure by the Terminated
Stockholder to deliver share certificates representing the Repurchase Shares or
any dispute regarding the Repurchase Price.

     4.3 Disputes as to Repurchase Price. (a) Any dispute regarding the price to
be paid for the Repurchase Shares shall be resolved in the manner set forth in
Section 4.3(b). In the event of any such dispute, pending its resolution, the
Terminated Stockholder will irrevocably transfer the Repurchase Shares to the
Company as set forth in Section 4.2(b) and the Company shall pay the Repurchase
Price for the Repurchase Shares (as determined by the Board) within ten (10)
business days of the Notice of Repurchase. The Company shall pay the difference,
if any, between the Repurchase Price determined by the Board and the Repurchase
Price determined by the procedures outlined in Section 4.3(b) upon a final
determination of the Repurchase Price, together with interest on any such
difference at the "prime lending rate" charged by the Company's primary
commercial lender.


                                       24
<PAGE>
          (b) Should any Terminated Stockholder (the "Challenging Stockholder")
desire to challenge the determination by the Board as to Repurchase Price, such
Challenging Stockholder may, within five (5) days of receiving such notification
from the Company of the Repurchase Price, notify the Company that such
Stockholder wishes to challenge said determination, which notice shall include
the valuation asserted by the Challenging Stockholder, and retain Morgan Stanley
& Co., or such other investment banking firm selected by the Challenging
Stockholder and approved by the Board in its sole discretion, to determine the
Repurchase Price. The investment bank selected shall be empowered solely to
chose between the Repurchase Price determined by the Board and the Repurchase
Price asserted by the Challenging Stockholder. The decision of said investment
bank shall be delivered in writing to the Board not more than fourteen (14) days
after its retention. The cost and expense of the investment bank shall be paid
by the Company if the Board's Repurchase Price is not chosen by such investment
bank, and shall be paid by the Challenging Stockholder if the Board's Repurchase
Price is so chosen. Failure of a Stockholder to exercise its right to challenge
a valuation shall be deemed to be an acceptance of the Board's Repurchase Price.

     4.4 Unvested Stock Rights. Any unvested Stock Right shall not be
repurchased pursuant to this Section 4 and, except as otherwise provided in the
agreement or instrument pursuant to which such Stock right was granted, shall
terminate upon termination of Employment.

5.   ASSIGNMENT, AMENDMENT AND TERMINATION.

     5.1 Assignment. Notwithstanding anything herein to the contrary:

          (a) Registration Rights. The registration rights of First Reserve
under Section 2 of this Agreement may be assigned in connection with any
Transfers made by First Reserve; provided that no party may be assigned any of
the foregoing rights unless (i) the Company is given written notice by the
assigning party at the time of such assignment stating the name and address of
the assignee and identifying the securities of the Company as to which the
rights in question are being assigned and (ii) any such assignee shall have
agreed to be subject to all the terms and conditions of this Agreement,
including without limitation the provisions of this Section 5.

          (b) Voting Rights. The voting rights under Section 1 of this Agreement
may be assigned by First Reserve to another FRC Affiliate.

          (c) Repurchase Rights. The Company may assign its rights under Section
4 to First Reserve or another FRC Affiliate.

     5.2 Amendment of Rights; Termination.

          (a) Amendment. Subject to Section 7.10, any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or prospectively)
with the written consent of Stockholders holding not less than a majority of the
outstanding shares of Common Stock held by Stockholders. Notwithstanding the
foregoing, but subject to


                                       25
<PAGE>
Section 3.5(b), no provision of this Agreement may be amended or waived if a
particular Stockholder (or discrete group of Stockholders) would be materially
and disproportionately (vis a vis other Stockholders) prejudiced thereby, unless
such Stockholder (or a majority of shares of such group of Stockholders)
consents in writing to such amendment or waiver; provided that the addition of
any Investor or Management Stockholder as a Stockholder and the amendment of
this Agreement in connection therewith shall not be deemed to materially
prejudice any Investor or Management Stockholder or group of Investors or
Management Stockholders so long as any such amendments do not provide (i) any
such new Investor with any rights or privileges under this Agreement other than
rights which are on parity with or subordinate to those of First Reserve or any
other Investor contained in this Agreement as of the date hereof,
notwithstanding the fact such rights may be senior to those of Management
Stockholders; or (ii) any such new Management Stockholders with any rights or
privileges under this Agreement other than rights which are on parity with or
subordinate to those of Management Stockholders contained in this Agreement as
of the date hereof. Any amendment or waiver effected in accordance with this
Section 5.2 shall be binding upon the Stockholders, each Holder, each permitted
successor or assignee of such Stockholder or Holder and the Company; provided
that subject to Section 3.5(b), the rights under Section 2 shall terminate only
as set forth in Section 2.

          (b) Termination. This Agreement may be terminated (i) with the written
consent of Stockholders holding not less than a majority of the outstanding
shares of Common Stock held by Stockholders; provided that if such termination
is in connection with any transaction which would have resulted in a Management
Stockholder having rights under Sections 2.3 or 3.3, or First Reserve having
rights under Sections 3.2 or 3.5, the Management Stockholders or First Reserve,
notwithstanding the termination, shall be entitled to exercise any rights
provided to them under such Sections; or (ii) with the consent of a majority of
the outstanding shares of Common Stock held by Investors, and a majority of the
outstanding shares of Common Stock held by Management Stockholders, voting
separately as a class.

6.   LEGEND.

     Each certificate representing shares of capital stock of the Company now or
hereafter owned by a Stockholder shall be endorsed with the following legend:

     THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
     LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
     TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
     PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT
     TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY
     MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
     INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY


                                       26
<PAGE>
     REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
     ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE
     WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

     THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED
     BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN
     STOCKHOLDER AGREEMENT BY AND BETWEEN, THE STOCKHOLDER, THE CORPORATION AND
     CERTAIN HOLDERS OF SHARES OF STOCK OF THE CORPORATION. COPIES OF SUCH
     AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
     CORPORATION.

7.   GENERAL PROVISIONS.

     7.1 Notices. Except as may be otherwise provided herein, all notices,
requests, waivers and other communications made pursuant to this Agreement shall
be in writing and shall be conclusively deemed to have been duly given (a) when
hand delivered to the other party; (b) when received when sent by facsimile at
the address and number set forth below; (c) three (3) business days after
deposit in the U.S. mail with first class or certified mail receipt requested
postage prepaid and addressed to the parties as set forth below; or (d) the next
business day after deposit with a national overnight delivery service, postage
prepaid, addressed to the parties as set forth below with next-business-day
delivery guaranteed, provided that the sending party receives a confirmation of
delivery from the delivery service provider.

     To First Reserve:

     First Reserve Fund IX, L.P.
     c/o First Reserve Corporation
     600 Travis, Suite 6000
     Houston, TX 77002
     Attn: [J. Hardy Murchison]
     Fax: (713) 437-5149

     With a copy to:

     First Reserve Corporation
     One Lafayette Place
     Greenwich, CT 06830
     Attn: Thomas R. Denison
     Fax Number: (203) 661-6729

     and a copy to:


                                       27
<PAGE>

     To the Company:

     Dresser-Rand Group Inc.
     c/o First Reserve Corporation
     600 Travis, Suite 6000
     |Houston, TX 77002
     [Attn: J. Hardy Murchison]
     Fax: (713) 437-5149

     With a copy to:

     [COMPANY COUNSEL]

     And to:

     [OPERATING SUBSIDIARY]

     To any of the Management Stockholders:

     To their address of record on the books of the Company

Each person making a communication hereunder by facsimile shall promptly confirm
by telephone to the person to whom such communication was addressed each
communication made by it by facsimile pursuant hereto but the absence of such
confirmation shall not affect the validity of any such communication. A party
may change or supplement the addresses given above, or designate additional
addresses, for purposes of this Section 7.1 by giving the other parties written
notice of the new address in the manner set forth above.

     7.2 Entire Agreement; Interpretation; Termination of Prior Agreements. This
Agreement contains the entire agreement and understanding of the parties with
respect to the subject matter hereof (other than any additional restrictions on
transfer and repurchase rights contained in subscription or restricted stock
agreements, employment/consulting agreements or stock option agreements between
the Company and the Management Stockholders) and supersedes any and all prior
negotiations, correspondence, agreements, understandings, duties or obligations
between the parties respecting the subject matter of this Agreement

     7.3 Governing Law. This Agreement shall be governed by and construed
exclusively in accordance with the internal laws of the State of Delaware,
excluding that body of law relating to conflict of laws and choice of law.


                                       28
<PAGE>
     7.4 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, then such provision(s) shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if
such provision(s) were so excluded and shall be enforceable in accordance with
its terms.

     7.5 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
permitted successors and assigns, any rights or remedies under or by reason of
this Agreement.

     7.6 Successors and Assigns. Subject to the provisions of Section 5.1, the
provisions of this Agreement shall inure to the benefit of, and shall be binding
upon, the successors and permitted assigns of the parties hereto.

     7.7 Captions. The captions to sections of this Agreement have been inserted
for identification and reference purposes only and shall not be used to construe
or interpret this Agreement.

     7.8 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Facsimile signatures to this Agreement shall be
valid for all purposes.

     7.9 Voting to Effectuate Agreement. Each Stockholder party to this
Agreement agrees to vote his, her or its shares of capital stock consistent with
the terms and conditions of this Agreement. In the event of any inconsistency
between this Agreement and the Certificate of Incorporation or Bylaws of the
Company, the provisions of this Agreement shall control, and each Stockholder of
the Company shall vote his, her or its capital stock in such manner as to
effectuate any and all amendments to the Certificate of Incorporation or Bylaws
that may be necessary in order to bring the Certificate of Incorporation and
Bylaws in conformity with the provisions of this Agreement. The vote of any
Stockholder of the Company in violation of the provisions of this Agreement
shall be void and shall be ignored by the Company. In connection therewith, each
Stockholder hereby grants an irrevocable proxy with full power of substitution
to [FIRST RESERVE DIRECTOR] or [OTHER FIRST RESERVE DIRECTOR] for purposes of
voting all shares of capital stock subject to this Agreement at any meeting of
stockholders or in any action by written consent of stockholders in any manner
necessary to give effect to the provisions of this Agreement, it being
acknowledged that such proxy is coupled with an interest under this Agreement.

     7.10 New Stockholders to Become Parties. The Company shall cause each new
stockholder of the Company (including any Permitted Transferee) to become a
party to this Agreement as a "Stockholder" by executing a counterpart to this
Agreement or a written instrument agreeing to be bound by the provisions hereof
and will designate such party as an "Investor" or a "Management Stockholder," as
the case may be. The Company shall also cause any person that is granted stock
options by the Company (an "Optionholder") but who is not already a Stockholder
at the time of such grant to become a party to this Agreement by executing a
counterpart to this Agreement or a written instrument agreeing to be bound by
the provisions hereof. Each such Optionholder shall


                                       29
<PAGE>
become a Stockholder under this Agreement upon the exercise of any options, and
at such time, the Company shall make the Investor/Management Stockholder
designation described in this Section 7.10 with respect to such party. Prior to
becoming a Stockholder, each Optionholder will have no rights under this
Agreement other than those specifically set forth in this Agreement.

     7.11 Arbitration. Any controversy, dispute, or claim arising out of, in
connection with, or in relation to, the interpretation, performance or breach of
this Agreement, including, without limitation, the validity, scope, and
enforceability of this section, may at the election of any party, be solely and
finally settled by arbitration conducted in, by and in accordance with the then
existing rules for commercial arbitration of the American Arbitration
Association, or any successor organization and with the Expedited Procedures
thereof (collectively, the "Rules"). Each of the parties hereto agrees that such
arbitration shall be conducted by a single arbitrator selected in accordance
with the Rules; provided that such arbitrator shall be experienced in deciding
cases concerning the matter which is the subject of the dispute. Any of the
parties may demand arbitration by written notice to the other and to the
Arbitrator set forth in this Section 7.11 ("Demand for Arbitration"). Each of
the parties agrees that if possible, the award shall be made in writing no more
than 30 days following the end of the proceeding. Any award rendered by the
arbitrator(s) shall be final and binding and judgment may be entered on it in
any court of competent jurisdiction. Each of the parties hereto agrees to treat
as confidential the results of any arbitration (including, without limitation,
any findings of fact and/or law made by the arbitrator) and not to disclose such
results to any unauthorized person. The parties intend that this agreement to
arbitrate be valid, enforceable and irrevocable.

     7.12 Jurisdiction. In the absence of an arbitration election pursuant to
Section 7.11, the parties hereby irrevocably submit and consent to the
nonexclusive jurisdiction of the State and Federal Courts located in the Borough
of Manhattan in The City of New York in the State of New York with respect to
any action or proceeding arising out of this Agreement or any matter arising
therefrom or relating thereto. In any such action or proceeding, each
Stockholder waives personal service of the summons and complaint or other
process and papers therein and agrees that the service thereof may be made by
mail directed to such Stockholder at the address for such Stockholder provided
herein, service to be deemed complete seven (7) days after mailing, or as
permitted under the rules of either of said Courts.

                            [Signature Page Follows]


                                       30
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.

DRESSER-RAND GROUP INC.                 FIRST RESERVE

                                        DRESSER-RAND HOLDINGS, LLC


                                           BY:
                                               ---------------------------------


                                              BY:
                                                  ------------------------------


By:                                     By:
    ---------------------------------       ------------------------------------
Name:                                   Name:
      -------------------------------         ----------------------------------
Title:                                  Title:
       ------------------------------          ---------------------------------

                    [Signature Page to Stockholder Agreement]