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EXECUTION




Morgan Stanley & Co. International Limited

c/o Morgan Stanley Bank, as agent

c/o Morgan Stanley

One New York Plaza

New York, NY 10004





	 	 
	 	November 9, 2005







To: Maverick Tube Corporation

16401 Swingley Ridge Road, Ste 700

Chesterfield, Missouri 63017

Attention: Chief Financial Officer

Telephone No.:     (636) 733-1600

Facsimile No.:      (636) 733-5570




Re: Warrants




Reference:




     The purpose of this letter agreement is to confirm the terms and conditions of the Warrants
issued by Maverick Tube Corporation, a Delaware corporation (“Company”), to Morgan Stanley & Co.
International Limited (“MSIL”), represented by Morgan Stanley Bank (“MSB”), as its agent, on the
Trade Date specified below (the “Transaction”). This letter agreement constitutes a “Confirmation”
as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any
previous letter and serve as the final documentation for this Transaction.



     The definitions and provisions contained in the 1996 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.,
are incorporated into this Confirmation. In the event of any inconsistency between the Equity
Definitions and this Confirmation, this Confirmation shall govern. This Transaction shall be
deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.



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


1. This Confirmation evidences a complete and binding agreement between MSIL and Company as to the
terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement,
form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the
“Agreement”) as if MSIL and Company had executed an agreement in such form (but without any
Schedule except for (i) the election of the laws of the State of New York as the governing law,
(ii) the identification of Morgan Stanley as a Credit Support Provider with respect to MSIL and
(iii) the identification of the Guarantee of Morgan Stanley attached hereto as a Credit Support
Document with respect to MSIL) on the Trade Date. In the event of any inconsistency between
provisions of that Agreement and this Confirmation, this Confirmation will prevail for the purpose
of the Transaction to which this Confirmation relates. The parties hereby agree that no
Transaction other than the Transaction to which this Confirmation relates shall be governed by the
Agreement.




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




	 	 	 	 	 
	General Terms:	 	 
	 

	 	Trade Date:
	 	November 9, 2005






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	 	Warrants:
	 	Equity call warrants, each giving the holder
the right to purchase one Share at the
Strike Price, subject to the Settlement
Terms set forth below. For the purposes of
the Equity Definitions, each reference to a
Warrant herein shall be deemed to be a
reference to a Call Option.
	 
	 	 	 	 
	 

	 	Warrant Style:
	 	European
	 
	 	 	 	 
	 

	 	Buyer:
	 	MSIL
	 
	 	 	 	 
	 

	 	Seller:
	 	Company
	 
	 	 	 	 
	 

	 	Shares:
	 	The common stock of Company, par value USD
0.01 per Share (Exchange symbol “MVK”)
	 
	 	 	 	 
	 

	 	Number of Warrants:
	 	5,420,932, subject to adjustment as
provided herein.
	 
	 	 	 	 
	 

	 	Daily Number of Warrants:
	 	Subject to “Expiration Dates” below, for
any day, the Number of Warrants that have
not expired as of such day, divided by the
remaining number of Expiration Dates
(including such day) and rounded down to
the nearest whole number to account for any
fractional Daily Number of Warrants.
	 
	 	 	 	 
	 

	 	Warrant Entitlement:
	 	One Share per Warrant
	 
	 	 	 	 
	 

	 	Strike Price:
	 	USD 52.00
	 
	 	 	 	 
	 

	 	Premium:
	 	USD 51,318,498.00
	 
	 	 	 	 
	 

	 	Premium Payment Date:
	 	November 15, 2005
	 
	 	 	 	 
	 

	 	Exchange:
	 	The New York Stock Exchange
	 
	 	 	 	 
	 

	 	Related Exchange(s):
	 	The principal exchange(s) for options
contracts or futures contracts, if any, with
respect to the Shares
	 
	 	 	 	 
	Exercise and Valuation:	 	 
	 
	 	 	 	 
	 

	 	Expiration Time:
	 	The Valuation Time
	 
	 	 	 	 
	 

	 	Expiration Dates:
	 	Each Exchange Business Day during the
period beginning on and including the First
Expiration Date and ending on and including
the 39th Exchange Business Day following
the First Expiration Date shall be an
“Expiration Date” for a number of Warrants
equal to the Daily Number of Warrants on
such day. Notwithstanding the foregoing
and anything to the contrary in the Equity
Definitions, if a Market Disruption Event
occurs on any Expiration Date (including
the First Expiration Date), the Calculation
Agent shall make adjustments to the Daily
Number of Warrants for which such day shall
be an Expiration Date and shall designate
an Exchange Business Day or a number of
Exchange Business Days as the Expiration
Date(s) for the remaining Daily Number of
Warrants or a portion thereof for the
originally scheduled Expiration Date;
provided that if such Expiration Date has
not occurred pursuant to this sentence as
of the eighth






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	 	 	 	Exchange Business Day
following the last scheduled Expiration
Date under this Transaction, that eighth
Exchange Business Day shall be the final
Expiration Date and the Calculation Agent
shall determine its good faith estimate of
the value for the Shares as of the
Valuation Time on that eighth Exchange
Business Day or on any subsequent Exchange
Business Day as the Calculation Agent shall
determine in its sole discretion.
	 
	 	 	 	 
	 

	 	First Expiration Date:
	 	February 13, 2014 (or, if such date is not
an Exchange Business Day, the next
following Exchange Business Day), subject
to adjustment in the case of a Market
Disruption Event.
	 
	 	 	 	 
	 

	 	Automatic Exercise:
	 	Applicable; and means that, unless
previously exercised hereunder, a number of
Warrants for each Expiration Date equal to
the Daily Number of Warrants (as adjusted
pursuant to the terms hereof) for such
Expiration Date will be deemed to be
automatically exercised.
	 
	 	 	 	 
	 

	 	Market Disruption Event:
	 	Section 4.3(a)(ii) is hereby amended by
adding after the words “or Share Basket
Transaction,” in the first line thereof the
phrase “a failure by the Exchange or
Related Exchange to open for trading during
its regular trading session or” and
replacing the phrase “during the one-half
hour period that ends at the relevant
Valuation Time” with the phrase “at any
time during the regular trading session on
the Exchange or any Related Exchange,
without regard to after hours or any other
trading outside of the regular trading
session hours”.
	 
	 	 	 	 
	Valuation applicable to each Warrant:	 	 
	 
	 	 	 	 
	 

	 	Valuation Time:
	 	At the close of trading of the regular
trading session on the Exchange; provided
that if the regular trading session is
extended, the Calculation Agent shall
determine the Valuation Time in its
reasonable discretion.
	 
	 	 	 	 
	 

	 	Valuation Date:
	 	Each Exercise Date.
	 
	 	 	 	 
	Settlement Terms applicable to the Tran	 	saction:
	 
	 	 	 	 
	 

	 	Method of Settlement:
	 	Company shall be entitled to elect to have
either (i) Cash Settlement or (ii) Net
Share Settlement apply to the settlement of
the Warrants by written notice to MSIL
given no later than the 5th Exchange
Business Day prior to the First Expiration
Date; provided that the same Method of
Settlement shall apply to all exercises and
deemed exercises of Warrants. If Company
does not timely elect a Method of
Settlement, Net Share Settlement will apply.
	 
	 	 	 	 
	 

	 	Cash Settlement:
	 	If Cash Settlement is applicable, on each
relevant Settlement Date, Company shall
deliver to MSIL an amount of cash equal to
the sum of, for each Valuation Date that
occurred during the calendar week
immediately prior to such Settlement Date,
the Cash Settlement Amount for such
Valuation Date.






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	 	Net Share Settlement:
	 	If Net Share Settlement is applicable, on
each relevant Settlement Date, Company
shall deliver to MSIL the Delivery
Requirement for such Settlement Date to the
account specified herein, free of payment
through the Clearance System.
	 
	 	 	 	 
	 

	 	Delivery Requirement:
	 	For any Settlement Date, (i) a number of
Shares (rounded down to the nearest whole
Share), as calculated by the Calculation
Agent, equal to the sum of, for each
Valuation Date that occurred during the
calendar week immediately prior to such
Settlement Date, (A) the Cash Settlement
Amount for such Valuation Date divided by
(B) the Settlement Price on such Valuation
Date and (ii) cash in lieu of any
fractional shares (based on such Settlement
Price).
	 
	 	 	 	 
	 

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

	 	Strike Price Differential:
	 	(a) If the Settlement Price for any
Valuation Date is greater than the Strike
Price, an amount equal to the excess of
such Settlement Price over the Strike
Price; or
	 
	 	 	 	 
	 

	 	 	 	(b) If such Settlement Price is less than
or equal to the Strike Price, zero.
	 
	 	 	 	 
	 

	 	Settlement Price:
	 	For any Valuation Date, the per Share
volume-weighted average price as displayed
under the heading “Bloomberg VWAP” on
Bloomberg page MVK <equity> AQR (or any
successor thereto) in respect of the period
from 9:30 a.m. to 4:00 p.m. (New York City
time) on such Valuation Date (or if such
volume-weighted average price is
unavailable, the market value of one Share
on such Valuation Date, as determined by
the Calculation Agent). Notwithstanding
anything to the contrary in the Equity
Definitions, if there is a Market
Disruption Event on any Valuation Date,
then the Calculation Agent shall determine
the Settlement Price for such Valuation
Date on the basis of its good faith
estimate of the market value for the
relevant Shares on such Valuation Date.
	 
	 	 	 	 
	 

	 	Settlement Date:
	 	The first Exchange Business Day of each
calendar week shall be the Settlement Date
in respect of each Valuation Date that
occurred during the prior calendar week.
	 
	 	 	 	 
	 

	 	Failure to Deliver:
	 	Inapplicable
	 
	 	 	 	 
	Other Applicable Provisions:	 	The provisions of Sections 6.6, 6.7, 6.8,
6.9 and 6.10 of the Equity Definitions will
be applicable to the extent Net Share
Settlement is applicable, except that all
references in such provisions to
“Physically-Settled” shall be read as
references to “Net Share Settled”. “Net
Share Settled” in relation to any Warrant
means that Net Share Settlement is
applicable to such Warrant.






3. Additional Terms applicable to the Transaction:




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	Adjustments applicable to the Warrants:	 	 
	 
	 	 	 	 
	 

	 	Method of Adjustment:
	 	Calculation Agent Adjustment. For avoidance
of doubt, in making any adjustments under the
Equity Definitions, the Calculation Agent may
adjust the Strike Price, the Number of
Warrants, the Daily Number of Warrants and
the Warrant Entitlement. Notwithstanding the
foregoing, any cash dividends or
distributions, whether or not extraordinary,
shall be governed by Section 9(l) of this
Confirmation and not by Section 9.1(c) of the
Equity Definitions.
	Extraordinary Events applicable to the Transaction:	 	 
	 
	 	 	 	 
	 

	 	Consequence of Merger Events	 	 
	 
	 	 	 	 
	 

	 	(a) Share-for-Share:
	 	Alternative Obligation; provided that the
Calculation Agent will determine if the
Merger Event affects the theoretical value of
the Transaction and, if so, MSIL in its sole
discretion may elect to make adjustments to
the Strike Price and any other term necessary
to reflect the characteristics (including
volatility, dividend practice, borrow cost,
policy and liquidity) of the New Shares.
Notwithstanding the foregoing, Cancellation
and Payment shall apply in the event the New
Shares are not publicly traded on a United
States national securities exchange or quoted
on the NASDAQ National Market.
	 
	 	 	 	 
	 

	 	(b) Share-for-Other:
	 	Cancellation and Payment
	 
	 	 	 	 
	 

	 	(c) Share-for-Combined:
	 	Cancellation and Payment
	 
	 	 	 	 
	 

	 	Nationalization or Insolvency:
	 	Cancellation and Payment
	 
	 	 	 	 
	4. Calculation Agent:	 	MSIL






	 	 	 	 	 	 	 	 	 
	5. Account Details:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	(a)	 	Account for payments to Company:	 	 
	 

	 	 	 	Bank Name:
	 	JPMorgan Chase Bank	 	 
	 

	 	 	 	ABA No.:
	 	021 000 021	 	 
	 

	 	 	 	Account Name:
	 	Maverick Tube Corporation	 	 
	 

	 	 	 	Account No.:
	 	323-326641	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Account for delivery of Shares from Company:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	To be advised.	 	 






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	 	 	(b)	 	Account for payments to MSIL:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Citibank, N.A.	 	 
	 	 	 	 	ABA# 021-000-089	 	 
	 	 	 	 	A/C Morgan Stanley Bank	 	 
	 	 	 	 	A/C No. 30440939	 	 
	 	 	 	 	For further credit to Customer Account 33AC0030	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Account for delivery of Shares to MSIL:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	To be advised.	 	 






6. Offices:



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



The Office of MSIL for the Transaction is:



Morgan Stanley & Co. International Limited

c/o Morgan Stanley Bank

c/o Morgan Stanley

One New York Plaza

4th Floor

New York, NY 10004



7. Notices: For purposes of this Confirmation:





	 	(a)	 	Address for notices or communications to Company:




Maverick Tube Corporation

16401 Swingley Ridge Road, Ste 700

Chesterfield, Missouri 63017

Attention: Chief Financial Officer

Telephone No.: (636) 733-1600

Facsimile: (636) 733-5570




	 	(b)	 	Address for notices or communications to MSIL:




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Morgan Stanley & Co. International Limited

c/o Morgan Stanley Bank

c/o Morgan Stanley

One New York Plaza

4th Floor

New York, NY 10004

Attn: Fred Gonfiantini

Telephone No: (212) 276-2427

Facsimile No: (212) 507-0724


With a copy to:

Legal Department

Morgan Stanley & Co. Incorporated

1585 Broadway

38th Floor

New York, NY 10036

Attn: Anthony Cicia

Telephone No: (212) 761-3452

Facsimile No: (212) 507-4338



8. Representations and Warranties of Company



The representations and warranties of Company set forth in Section 3 of the Agreement and Section 1
of the Purchase Agreement (the “Purchase Agreement”) dated as of the Trade Date between Company and
Morgan Stanley & Co. Incorporated (“MS&Co.”) are true and correct and are hereby deemed to be
repeated to MSIL as if set forth herein. Company hereby further represents and warrants to MSIL
that:





	 	(a)	 	Company has all necessary corporate power and authority to execute, deliver and
perform its obligations in respect of this Transaction; such execution, delivery and
performance have been duly authorized by all necessary corporate action on Company’s
part; and this Confirmation has been duly and validly executed and delivered by Company
and constitutes its valid and binding obligation, enforceable against Company in
accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally, and subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in equity) and
except that rights to indemnification and contribution hereunder may be limited by
federal or state securities laws or public policy relating thereto.






	 	(b)	 	Neither the execution and delivery of this Confirmation nor the incurrence or
performance of obligations of Company hereunder will conflict with or result in a
breach of the certificate of incorporation or by-laws (or any equivalent documents) of
Company, or any applicable law or regulation, or any order, writ, injunction or decree
of any court or governmental authority or agency, or any agreement or instrument to
which Company or any of its subsidiaries is a party or by which Company or any of its
subsidiaries is bound or to which Company or any of its subsidiaries is subject, or
constitute a default under, or result in the creation of any lien under, any such
agreement or instrument, or breach or constitute a default under any agreements and
contracts of Company or its significant subsidiaries filed as exhibits to Company’s
Annual Report on Form 10-K for the year ended December 31, 2004, as updated by any
subsequent filings.






	 	(c)	 	No consent, approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required in connection with the execution,
delivery or performance by Company of this Confirmation, except such as have been
obtained or made and such as may be required under the Securities Act of 1933, as
amended (the “Securities Act”) or state securities laws.




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	 	(d)	 	The Shares of Company initially issuable upon exercise of the Warrant by the
net share settlement method (the “Warrant Shares”) have been reserved for issuance by
all required corporate action of Company. The Warrant Shares have been duly authorized
and, when delivered against payment therefor (which may include Net Share Settlement in
lieu of cash) and otherwise as contemplated by the terms of the Warrant following the
exercise of the Warrant in accordance with the terms and conditions of the Warrant,
will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant
Shares will not be subject to any preemptive or similar rights.






	 	(e)	 	Company is an “eligible contract participant” (as such term is defined in
Section 1(a)(12) of the Commodity Exchange Act, as amended (the “CEA”) because one or
more of the following is true:
	 
	 	 	 	Company is a corporation, partnership, proprietorship, organization, trust or other
entity and:






	 	(A)	 	Company has total assets in excess of USD 10,000,000;
	 
	 	(B)	 	the obligations of Company hereunder are guaranteed, or
otherwise supported by a letter of credit or keepwell, support or other
agreement, by an entity of the type described in Section 1a(12)(A)(i) through
(iv), 1a(12)(A)(v)(I), 1a(12)(A)(vii) or 1a(12)(C) of the CEA; or
	 
	 	(C)	 	Company has a net worth in excess of USD 1,000,000 and has
entered into this Agreement in connection with the conduct of Company’s
business or to manage the risk associated with an asset or liability owned or
incurred or reasonably likely to be owned or incurred by Company in the conduct
of Company’s business.






	 	(f)	 	Each of Company and its affiliates is not, on the date hereof, in possession of
any material non-public information with respect to Company.
	 
	 	(g)	 	Company is an “accredited investor” (as such term is defined in Section
2(a)(15)(ii) of the Securities Act).
	 
	 	(h)	 	Company’s financial condition is such that it has no need for liquidity with
respect to its investment in the Transaction and no need to dispose of any portion
thereof to satisfy any existing or contemplated undertaking or indebtedness.
	 
	 	(i)	 	Company’s investments in and liabilities in respect of the Transaction, which
it understands are not readily marketable, are not disproportionate to its net worth,
and it is able to bear any loss in connection with the Transaction, including the loss
of its entire investment in the Transaction.
	 
	 	(j)	 	Company understands no obligations of MSIL to it hereunder will be entitled to
the benefit of deposit insurance and that such obligations will not be guaranteed by
any affiliate of MSIL or any governmental agency.
	 
	 	(k)	 	Company is capable of assessing the merits of and understanding (on its own
behalf or through independent professional advice), and understands and accepts, the
terms, conditions and risks of the Transaction.





9. Other Provisions:





	 	(a)	 	Opinions. Company shall deliver to MSIL an opinion of counsel, dated
as of the Trade Date, with respect to the matters set forth in Sections 8(a) through
(d) of this Confirmation.




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	 	(b)	 	Amendment. If the Initial Purchasers party to the Purchase Agreement
exercise their right to purchase additional Convertible Notes as set forth therein,
then, at the discretion of Company, MSIL and Company will either enter into a new
confirmation or amend this Confirmation to provide for such increase in Convertible
Notes (but on pricing terms acceptable to MSIL and Company) (such additional
confirmation or amendment to this Confirmation to provide for the payment by MSIL to
Company of the additional premium related thereto).
	 
	 	(c)	 	No Reliance, etc. Each party represents that (i) it is entering into
the Transaction evidenced hereby as principal (and not as agent or in any other
capacity); (ii) neither the other party nor any of its agents are acting as a fiduciary
for it; (iii) it is not relying upon any representations except those expressly set
forth in the Agreement or this Confirmation; (iv) it has not relied on the other party
for any legal, regulatory, tax, business, investment, financial, and accounting advice,
and it has made its own investment, hedging, and trading decisions based upon its own
judgment and not upon any view expressed by the other party or any of its agents; and
(v) it is entering into this Transaction with a full understanding of the terms,
conditions and risks thereof and it is capable of and willing to assume those risks.
	 
	 	(d)	 	Share De-listing Event. If at any time during the period from and
including the Trade Date, to and including the final Valuation Date, the Shares cease
to be listed or quoted on the Exchange for any reason (other than a Merger Event as a
result of which all of the property underlying the Warrants consists of shares of
common stock that are listed or quoted on The New York Stock Exchange, The American
Stock Exchange or the NASDAQ National Market (or their respective successors) (the
“Successor Exchange”)) and are not immediately re-listed or quoted as of the date of
such de-listing on the Successor Exchange (a “Share De-listing”), then Cancellation and
Payment (as defined in Section 9.6 of the Equity Definitions, treating the
“Announcement Date” as the date of first public announcement that the Share De-listing
will occur and the “Merger Date” as the date of the Share De-listing) shall apply, and
the date of the de-listing shall be deemed the date of termination for purposes of
calculating any payment due from one party to the other in connection with the
cancellation of this Transaction. If the Shares are immediately re-listed on a
Successor Exchange upon their de-listing from the Exchange, this Transaction shall
continue in full force and effect, provided that the Successor Exchange shall be deemed
to be the Exchange for all purposes hereunder. In addition, the Calculation Agent
shall make any adjustments it deems necessary to the terms of the Transaction in
accordance with Calculation Agent Adjustment method as defined under Section 9.1(c) of
the Equity Definitions. For the avoidance of doubt, in no event will a Share
De-listing result in an obligation of MSIL to make a payment to Company.
	 
	 	(e)	 	Repurchase Notices. Company shall, on any day on which Company effects
any repurchase of Shares (other than any repurchase of Shares effected through MS&Co.
during the 30 days immediately following the Trade Date), promptly give MSIL a written
notice of such repurchase (a “Repurchase Notice”) on such day if, following such
repurchase, the “Share Ratio” (as defined herein) as determined on such day exceeds by
1% or more the Share Ratio specified in the immediately preceding Repurchase Notice
(or, in the case of the first Repurchase Notice, the Share Ratio as of the Trade Date,
adjusted to account for any repurchase of Shares effected through MS&Co. during the 30
days immediately following the Trade Date). The “Share Ratio” as of any day is equal
to (x) the number of outstanding Warrants on such day multiplied by the Warrant
Entitlement divided by (y) the number of outstanding Shares on such day. Company
agrees to indemnify and hold harmless MSIL and its affiliates and their respective
officers, directors, employees, affiliates, advisors, agents and controlling persons
(each, an “Indemnified Person”) from and against any and all losses (including losses
relating to MSIL’s hedging activities as a consequence of becoming, or of the risk of
becoming, a Section 16 “insider”, including without limitation, any forbearance from
hedging activities or cessation of hedging activities and any losses in connection
therewith with respect to this Transaction), claims, damages, judgments, liabilities
and expenses (including reasonable attorney’s fees), joint or several, which an
Indemnified Person may become subject to, as a result of Company’s failure to




9









 






	 	 	 	provide MSIL with a Repurchase Notice on the day and in the manner specified in this
Section 9(e), and to reimburse, within 30 days, upon written request, each of such
Indemnified Persons for any reasonable legal or other expenses incurred in
connection with investigating, preparing for, providing testimony or other evidence
in connection with or defending any of the foregoing. If any suit, action,
proceeding (including any governmental or regulatory investigation), claim or demand
shall be brought or asserted against the Indemnified Person, such Indemnified Person
shall promptly notify Company in writing, and Company, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person and any others Company may designate in
such proceeding and shall pay the fees and expenses of such counsel related to such
proceeding. Company shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if there
be a final judgment for the plaintiff, Company agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Company shall not, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Person is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims that
are the subject matter of such proceeding on terms reasonably satisfactory to such
Indemnified Person. If the indemnification provided for in this paragraph (e) is
unavailable to an Indemnified Person or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then Company under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result of
such losses, claims, damages or liabilities. The remedies provided for in this
paragraph (e) are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any Indemnified Person at law or in equity. The indemnity
and contribution agreements contained in this paragraph (e) shall remain operative
and in full force and effect regardless of the termination of this Transaction.
	 
	 	(f)	 	Regulation M. Company was not on the Trade Date and is not on the date
hereof engaged in a distribution, as such term is used in Regulation M under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any securities of
Company, other than a distribution meeting the requirements of the exception set forth
in Rules 101(b)(10) and 102(b)(7) of Regulation M. Company shall not, until the fifth
Exchange Business Day immediately following the Trade Date, engage in any such
distribution.
	 
	 	(g)	 	No Manipulation. Company is not entering into this Transaction to
create actual or apparent trading activity in the Shares (or any security convertible
into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the
price of the Shares (or any security convertible into or exchangeable for the Shares).
	 
	 	(h)	 	Board Authorization. Company represents that it is entering into the
Transaction, solely for the purposes stated in the board resolution authorizing this
Transaction and in its public disclosure. Company further represents that there is no
internal policy, whether written or oral, of Company that would prohibit Company from
entering into any aspect of this Transaction, including, but not limited to, the
issuance of Shares to be made pursuant hereto.
	 
	 	(i)	 	Transfer or Assignment. Company may not transfer any of its rights or
obligations under this Transaction without the prior written consent of MSIL. MSIL may
transfer or assign all or any portion of its rights or obligations under this
Transaction with the consent of Company, which consent shall not be unreasonably
withheld; provided that MSIL may transfer or assign all or any portion of its rights
or obligations under this Transaction without the consent of Company (x) to any
affiliate of MSIL or (y) if MSIL in its sole discretion determines that its “beneficial
ownership” (within the meaning of Section 16 of the Exchange Act and rules promulgated
thereunder) exceeds 8% of Company’s outstanding Shares, to the extent necessary to
reduce its “beneficial ownership” to 7.5%; provided, further, that MSIL shall promptly
notify Company of




10









 






	 	 	 	any such transfer or assignment. If (x) MSIL in its sole discretion determines that
its “beneficial ownership” exceeds 9% of Company’s outstanding Shares, (y) in its
sole discretion, MSIL is unable after its commercially reasonable efforts to effect
a transfer or assignment on pricing terms and within a time period reasonably
acceptable to MSIL that would reduce its “beneficial ownership” to 7.5% or less and
(z) the number of outstanding Shares is less than 30,000,000 (adjusted by the
Calculation Agent as appropriate for any Potential Adjustment Event or Merger
Event), MSIL may designate any Exchange Business Day as an Early Termination Date
with respect to a portion (the “Terminated Portion”) of this Transaction, such that
its “beneficial ownership” following such partial termination will be equal to or
less than 9%. In the event that MSIL so designates an Early Termination Date with
respect to a portion of this Transaction, a payment shall be made pursuant to
Section 6 of the Agreement as if (i) an Early Termination Date had been designated
in respect of a Transaction having terms identical to this Transaction and a Number
of Warrants equal to the Terminated Portion, (ii) Company shall be the sole Affected
Party with respect to such partial termination and (iii) such Transaction shall be
the only Terminated Transaction. Notwithstanding any other provision in this
Confirmation to the contrary requiring or allowing MSIL to purchase, sell, receive
or deliver any shares or other securities to or from Company, MSIL may designate any
of its affiliates to purchase, sell, receive or deliver such shares or other
securities and otherwise to perform MSIL’s obligations in respect of this
Transaction and any such designee may assume such obligations. MSIL shall be
discharged of its obligations to Company to the extent of any such performance.






	 	(j)	 	Damages. Neither party shall be liable under Section 6.10 of the
Equity Definitions for special, indirect or consequential damages, even if informed of
the possibility thereof.






	 	(k)	 	Early Unwind. In the event the sale of Convertible Notes is not
consummated with the initial purchasers for any reason by the close of business in New
York on November 15, 2005 or such later date as agreed upon by the parties (November
15, 2005 or such later date as agreed upon being the “Early Unwind Date”), this
Transaction shall automatically terminate (the “Early Unwind”), on the Early Unwind
Date and (i) the Transaction and all of the respective rights and obligations of MSIL
and Company under the Transaction shall be cancelled and terminated and (ii) each party
shall be released and discharged by the other party from and agrees not to make any
claim against the other party with respect to any obligations or liabilities of the
other party arising out of and to be performed in connection with the Transaction
either prior to or after the Early Unwind Date; provided that if the failure to
consummate the sale of the Convertible Notes results from a failure of any condition
set forth in Section 5 of the Purchase Agreement, Company shall reimburse MSIL for any
costs or expenses (including market losses) relating to the unwinding of its hedging
activities in connection with the Transaction (including any loss or cost incurred as a
result of its terminating, liquidating, obtaining or reestablishing any hedge or
related trading position). The amount of any such reimbursement shall be determined by
MSIL in its sole good faith discretion. MSIL shall notify Company of such amount,
including reasonable detail regarding its determination of such amount, and Company
shall pay such amount in immediately available funds on the Early Unwind Date. MSIL and
Company represent and acknowledge to the other that, subject to the proviso included in
this Section, upon an Early Unwind, all obligations with respect to the Transaction
shall be deemed fully and finally discharged.
	 
	 	(l)	 	Dividends. If at any time during the period from and including the
Trade Date, to but excluding the Expiration Date, an ex-dividend date for a cash
dividend occurs with respect to the Shares (an “Ex-Dividend Date”) and that dividend is
greater than the Regular Dividend on a per Share basis, then the Calculation Agent will
adjust the Strike Price, the Number of Warrants, the Daily Number of Warrants and the
Warrant Entitlement to preserve the fair value of the Warrant to MSIL after taking into
account such dividend. “Regular Dividend” shall mean USD 0.00 per Share per quarter.
	 
	 	(m)	 	Role of Agent. Each party agrees and acknowledges that:




11









 






	 	 	 	(i) MSB is acting as agent for both parties but does not guarantee the performance
of either party. Neither MSIL nor Company shall contact the other with respect to
any matter relating to the Transaction without the direct involvement of MSB, (ii)
MSIL is not a member of the Securities Investor Protection Corporation, (iii) MSB,
MSIL and Company each hereby acknowledges that any transactions by MSIL or MSB in
the Shares will be undertaken by MSIL as principal for its own account; and (iv) all
of the actions to be taken by MSIL and MSB in connection with the Transaction,
including but not limited to any exercise of any Warrants, shall be taken by MSIL or
MSB independently and without any advance or subsequent consultation with Company;
and (v) MSB is hereby authorized to act as agent for Company only to the extent
required to satisfy the requirements of Rule 15a-6 under the Exchange Act in respect
of the Warrants described hereunder.
	 
	 	(n)	 	Additional Provisions.
	 
	 	 	 	(i) The first paragraph of Section 9.1(c) of the Equity Definitions is hereby
amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified as
the Method of Adjustment in the Confirmation of a Share Option Transaction, then
following the declaration by the Issuer of the terms of any Potential Adjustment
Event, the Calculation Agent will determine whether such Potential Adjustment Event
has a material effect on the theoretical value of the relevant Shares or Warrants
and, if so, will (i) make appropriate adjustment(s), if any, to any one or more
of:’ and, the sentence immediately preceding Section 9.1(c)(ii) is hereby amended by
deleting the words “diluting or concentrative”.
	 
	 	 	 	(ii) Section 9.1(e)(vi) of the Equity Definitions is hereby amended by deleting the
words “other similar” between “any” and “event”; deleting the words “diluting or
concentrative” and replacing them with “material”; and adding the following words at
the end of the sentence “or Warrants”.
	 
	 	 	 	(iii) Section 9.6(a)(ii) of the Equity Definitions is hereby amended by (1)
deleting from the third line thereof the word “or” after the word “official” and
inserting a comma therefor, and (2) deleting the period at the end of subsection
(ii) thereof and inserting the following words therefor “or (C) at MSIL’s option,
the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9)
of the ISDA Master Agreement with respect to that Issuer.”
	 
	 	 	 	(iv) Notwithstanding Section 9.7 of the Equity Definitions, everything in the first
paragraph of Section 9.7(b) of the Equity Definitions after the words “Calculation
Agent” in the third line through the remainder of such Section 9.7 shall be deleted
and replaced with the following:
	 
	 	 	 	“based on an amount representing the Calculation Agent’s determination in a
commercially reasonable manner of the fair value to Buyer of an option with terms
that would preserve for Buyer the economic equivalent of any payment or delivery
(assuming satisfaction of each applicable condition precedent) by the parties in
respect of the relevant Transaction that would have been required after that date
but for the occurrence of the Merger Event, Nationalization, Insolvency or Share
De-listing, as the case may be. The Calculation Agent shall provide the parties,
upon request, a notice containing reasonable detail regarding its calculation of
such amount. If Company reasonably disputes the amount of such calculation by 5:00
p.m. New York time on the third Exchange Business Day following receipt of notice
thereof, each party shall use its reasonable efforts to resolve expeditiously such
dispute. If MSIL and Company do not reach agreement (any calculation so agreed by
the parties or determined in accordance with this paragraph being referred to as an
“Agreed Calculation”), Company may require that the calculations made by the
Calculation Agent be submitted to an independent review. In such event, MSIL and
Company shall appoint promptly and jointly three independent leading dealers in the
relevant market each to review the Calculation Agent’s calculation in which case:
(1) if at least two of the three dealers agree with the Calculation Agent’s
calculation, the Agreed Calculation shall be such calculation, or (2) if fewer than
two of the three dealers agree with the Calculation Agent’s calculation, the Agreed
Calculation shall be the arithmetic mean of the calculations




12









 






	 	 	 	provided by the appointed dealers; provided that if fewer than three appointed
dealers provide a calculation, then MSIL and Company agree to appoint promptly and
jointly such number of additional dealers such that MSIL and Company shall receive
three calculations. If, after reasonable attempt, MSIL and Company do not receive
three calculations, the Agreed Calculation shall be as mutually agreed in good faith
by MSIL and Company in accordance with market practice by reference to calculations
made by independent leading dealers in the relevant market. The Agreed Calculation
reached in accordance with such process shall be conclusive and binding absent
manifest error.”






	 	(o)	 	No Collateral or Setoff. Notwithstanding any provision of the
Agreement or any other agreement between the parties to the contrary, the obligations
of Company hereunder are not secured by any collateral. Obligations under this
Transaction shall not be set off by Company against any obligations of MSIL, whether
arising under the Agreement, this Confirmation, under any other agreement between the
parties hereto, by operation of law or otherwise. Any provision in the Agreement with
respect to the satisfaction of Company’s payment obligations to the extent of MSIL’s
payment obligations to Company in the same currency and in the same Transaction
(including, without limitation Section 2(c) thereof) shall not apply to Company and,
for the avoidance of doubt, Company shall fully satisfy such payment obligations
notwithstanding any payment obligation to Company by MSIL in the same currency and in
the same Transaction. In calculating any amounts under Section 6(e) of the Agreement,
notwithstanding anything to the contrary in the Agreement, (1) separate amounts shall
be calculated as set forth in such Section 6(e) with respect to (a) this Transaction
and (b) all other Transactions, and (2) such separate amounts shall be payable pursuant
to Section 6(d)(ii) of the Agreement, subject to the Share Termination Alternative.
	 
	 	(p)	 	Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events. If, in respect of this Transaction, an amount is payable by
Company to MSIL, (i) pursuant to Section 9.7 of the Equity Definitions (except in the
event of a Nationalization or Insolvency or a Merger Event, in each case in which the
consideration to be paid to holders of Shares consists solely of cash) or (ii) pursuant
to Section 6(d)(ii) of the Agreement (except in the event of an Event of Default in
which Company is the Defaulting Party or a Termination Event in which Company is the
Affected Party, other than an Event of Default of the type described in Section
5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the
type described in Section 5(b)(i), (ii), (iii), (iv), (v) or (vi) of the Agreement, in
each case resulting from an event or events outside Company’s control) (a “Payment
Obligation”), Company may, in its sole discretion, satisfy any such Payment Obligation
by the Share Termination Alternative (as defined below) and shall give irrevocable
telephonic notice to MSIL, confirmed in writing within one Currency Business Day, no
later than 12:00 p.m. New York local time on the Merger Date, the date of the
occurrence of the Nationalization or Insolvency, the date of the Share De-listing or
the Early Termination Date, as applicable; provided that if Company does not validly
elect to satisfy its Payment Obligation by the Share Termination Alternative, MSIL
shall nevertheless have the right, in its sole discretion, to require Company to
satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding
Company’s election to the contrary or lack of election. In calculating any amounts
under Section 6(e) of the Agreement, notwithstanding anything to the contrary in the
Agreement, (1) separate amounts shall be calculated as set forth in Section 6(e) with
respect to (i) this Transaction and (ii) all other Transactions, and (2) such separate
amounts shall be payable pursuant to Section 6(d)(ii) of the Agreement, subject to, in
the case of clause (1)(i), the Share Termination Alternative right hereunder.





	 	 	 
	Share Termination Alternative:

	 	If applicable, Company shall
deliver to MSIL the Share
Termination Delivery Property on
the date when the Payment
Obligation would otherwise be due
pursuant to Section 9.7 of the
Equity Definitions or Section
6(d)(ii) and 6(e) of the Agreement,
as applicable (the “Share
Termination Payment






13









 






	 	 	 
	 

	 	Date”), subject
to paragraph (q)(i) below, in
satisfaction, subject to paragraph
(q)(ii) below, of the Payment
Obligation in the manner reasonably
requested by MSIL free of payment.
	 
	 	 
	Share Termination Delivery Property:

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

	 	The value to MSIL of property
contained in one Share Termination
Delivery Unit on the date such
Share Termination Delivery Units
are to be delivered as Share
Termination Delivery Property, as
determined by the Calculation Agent
in its discretion by commercially
reasonable means and notified by
the Calculation Agent to Company at
the time of notification of the
Payment Obligation. In the case of
a Private Placement Settlement of
Share Termination Delivery Units
that are Restricted Shares (as
defined below) as set forth in
paragraph (q)(i) below, the Share
Termination Unit Price shall be
determined by the discounted price
applicable to such Share
Termination Delivery Units. In the
case of a Registered Settlement of
Share Termination Delivery Units
that are Restricted Shares (as
defined below) as set forth in
paragraph (q)(ii) below, the Share
Termination Unit Price shall be the
Settlement Price on the Merger
Date, the date of the occurrence of
the Nationalization or Insolvency,
the date of the Share De-listing or
the Early Termination Date, as
applicable.
	 
	 	 
	Share Termination Delivery Unit:

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

	 	Inapplicable






14









 






	 	 	 
	Other applicable provisions:

	 	If the Share Termination
Alternative is applicable, the
provisions of Sections 6.6, 6.7,
6.8, 6.9 and 6.10 (as modified
above) of the Equity Definitions
will be applicable, except that all
references in such provisions to
“Physically-Settled” shall be read
as references to “Share Termination
Settled” and all references to
“Shares” shall be read as
references to “Share Termination
Delivery Units”. “Share
Termination Settled” in relation to
this Transaction means that the
Share Termination Alternative is
applicable to this Transaction.







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






	 	(i)	 	If Company elects to settle the Transaction pursuant to this
clause (i) (a “Private Placement Settlement”), then delivery of Restricted
Shares by Company shall be effected in customary private placement procedures
with respect to such Restricted Shares reasonably acceptable to MSIL; provided
that Company may not elect a Private Placement Settlement if, on the date of
its election, it has taken, or caused to be taken, any action that would make
unavailable either the exemption pursuant to Section 4(2) of the Securities Act
for the sale by Company to MSIL (or any affiliate designated by MSIL) of the
Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of
the Securities Act for resales of the Restricted Shares by MSIL (or any such
affiliate of MSIL). The Private Placement Settlement of such Restricted Shares
shall include customary representations, covenants, blue sky and other
governmental filings and/or registrations, indemnities to MSIL, due diligence
rights (for MSIL or any designated buyer of the Restricted Shares by MSIL),
opinions and certificates, and such other documentation as is customary for
private placement agreements, all reasonably acceptable to MSIL. In the case
of a Private Placement Settlement, MSIL shall determine the appropriate
discount to the Share Termination Unit Price (in the case of settlement of
Share Termination Delivery Units pursuant to paragraph (p) above) or any
Settlement Price (in the case of settlement of Shares pursuant to Section 2
above) applicable to such Restricted Shares in a commercially reasonable manner
and




15









 







	 	 	 	appropriately adjust the amount of such Restricted Shares to be delivered to
MSIL hereunder; provided that in no event shall such number be greater than
6,234,072 (the “Maximum Amount”). Notwithstanding the Agreement or this
Confirmation, the date of delivery of such Restricted Shares shall be the
Exchange Business Day following notice by MSIL to Company of such applicable
discount and the number of Restricted Shares to be delivered pursuant to
this clause (i). For the avoidance of doubt, delivery of Restricted Shares
shall be due as set forth in the previous sentence and not be due on the
Share Termination Payment Date (in the case of settlement of Share
Termination Delivery Units pursuant to paragraph (p) above) or on the
Settlement Date for such Restricted Shares (in the case of settlement of
Shares pursuant to Section 2 above).
	 
	 	 	 	In the event Company shall not have delivered the full number of Restricted
Shares otherwise applicable as a result of either the proviso above or the
last sentence of clause (ii) below relating to the Maximum Amount (such
deficit, the “Deficit Restricted Shares”), Company shall be continually
obligated to deliver, from time to time until the full number of Deficit
Restricted Shares have been delivered pursuant to this paragraph, Restricted
Shares when, and to the extent, that (i) Shares are repurchased, acquired or
otherwise received by Company or any of its subsidiaries after the Trade
Date (whether or not in exchange for cash, fair value or any other
consideration), (ii) authorized and unissued Shares reserved for issuance in
respect of other transactions prior to such date which prior to the relevant
date become no longer so reserved and (iii) Company additionally authorizes
and unissued Shares that are not reserved for other transactions. Company
shall immediately notify MSIL of the occurrence of any of the foregoing
events (including the number of Shares subject to clause (i), (ii) or (iii)
and the corresponding number of Restricted Shares to be delivered) and
promptly deliver such Restricted Shares thereafter.
	 
	 	 	 	In the event of a Private Placement Settlement, the Net Share Settlement
Amount or the Payment Obligation, respectively, shall be deemed to be the
Net Share Settlement Amount or the Payment Obligation, respectively, plus an
additional amount (determined from time to time by the Calculation Agent in
its commercially reasonable judgment) attributable to interest that would be
earned on such Net Share Settlement Amount or the Payment Obligation,
respectively, (increased on a daily basis to reflect the accrual of such
interest and reduced from time to time by the amount of net proceeds
received by MSIL as provided herein) at a rate equal to the open Federal
Funds Rate plus the Spread for the period from, and including, such
Settlement Date or the date on which the Payment Obligation is due,
respectively, to, but excluding, the related date on which all the
Restricted Shares have been sold and calculated on an Actual/360 basis. The
foregoing provision shall be without prejudice to MSIL’s rights under the
Agreement (including, without limitation, Sections 5 and 6 thereof).
	 
	 	 	 	As used in this Section 9(q)(i), “Spread” means, with respect to any Net
Share Settlement Amount or Payment Obligation, respectively, the credit
spread over the applicable overnight rate that would be imposed if MSIL were
to extend credit to Company in an amount equal to such Net Share Settlement
Amount or Payment Obligation, all as determined by the Calculation Agent
using its commercially reasonable judgment as of the related Settlement Date
or the date on which the Payment Obligation is due, respectively.
Commercial reasonableness shall take into consideration all factors deemed
relevant by the Calculation Agent, which are expected to include, among
other things, the credit quality of Company (and any relevant affiliates) in
the then-prevailing market and the credit spread of similar companies in the
relevant industry and other companies having a substantially similar credit
quality.
	 
	 	(ii)	 	If Company elects to settle the Transaction pursuant to this
clause (ii) (a “Registration Settlement”), then Company shall promptly (but in
any event no later than the beginning




16









 






	 	 	 	of the Resale Period) file and use its reasonable best efforts to make
effective under the Securities Act a registration statement or supplement or
amend an outstanding registration statement in form and substance reasonably
satisfactory to MSIL, to cover the resale of such Restricted Shares in
accordance with customary resale registration procedures, including
covenants, conditions, representations, underwriting discounts (if
applicable), commissions (if applicable), indemnities due diligence rights,
opinions and certificates, and such other documentation as is customary for
equity resale underwriting agreements, all reasonably acceptable to MSIL.
If MSIL, in its sole reasonable discretion, is not satisfied with such
procedures and documentation, Private Placement Settlement shall apply. If
MSIL is satisfied with such procedures and documentation, it shall sell the
Restricted Shares pursuant to such registration statement during a period
(the “Resale Period”) commencing on the Exchange Business Day following
delivery of such Restricted Shares (which, for the avoidance of doubt, shall
be (x) any Settlement Date in the case of an exercise of Warrants prior to
the first Expiration Date pursuant to Section 2 above, (y) the Share
Termination Payment Date in case of settlement of Share Termination Delivery
Units pursuant to paragraph (p) above or (z) the Settlement Date in respect
of the final Expiration Date for all Daily Number of Warrants) and ending on
the earliest of (i) the Exchange Business Day on which MSIL completes the
sale of all Restricted Shares or, in the case of settlement of Share
Termination Delivery Units, a sufficient number of Restricted Shares so that
the realized net proceeds of such sales exceed the Payment Obligation (as
defined above), (ii) the date upon which all Restricted Shares have been
sold or transferred pursuant to Rule 144 (or similar provisions then in
force) or Rule 145(d)(1) or (2) (or any similar provision then in force)
under the Securities Act and (iii) the date upon which all Restricted Shares
may be sold or transferred by a non-affiliate pursuant to Rule 144(k) (or
any similar provision then in force) or Rule 145(d)(3) (or any similar
provision then in force) under the Securities Act. If the Payment
Obligation exceeds the realized net proceeds from such resale, Company shall
transfer to MSIL by the open of the regular trading session on the Exchange
on the Exchange Trading Day immediately following the last day of the Resale
Period the amount of such excess (the “Additional Amount”) in cash or in a
number of Restricted Shares (“Make-whole Shares”) in an amount that, based
on the Settlement Price on the last day of the Resale Period (as if such day
was the “Valuation Date” for purposes of computing such Settlement Price),
has a dollar value equal to the Additional Amount. The Resale Period shall
continue to enable the sale of the Make-whole Shares. If Company elects to
pay the Additional Amount in Restricted Shares, the requirements and
provisions for Registration Settlement shall apply. This provision shall be
applied successively until the Additional Amount is equal to zero. In no
event shall Company deliver a number of Restricted Shares greater than the
Maximum Amount.






	 	(iii)	 	Without limiting the generality of the foregoing, Company
agrees that any Restricted Shares delivered to MSIL, as purchaser of such
Restricted Shares, (i) may be transferred by and among MSIL and its affiliates
and Company shall effect such transfer without any further action by MSIL and
(ii) after the minimum “holding period” within the meaning of Rule 144(d) under
the Securities Act has elapsed after any Settlement Date for such Restricted
Shares, Company shall promptly remove, or cause the transfer agent for such
Restricted Shares to remove, any legends referring to any such restrictions or
requirements from such Restricted Shares upon delivery by MSIL (or such
affiliate of MSIL) to Company or such transfer agent of seller’s and broker’s
representation letters customarily delivered by MSIL in connection with resales
of restricted securities pursuant to Rule 144 under the Securities Act, without
any further requirement for the delivery of any certificate, consent,
agreement, opinion of counsel, notice or any other document, any transfer tax
stamps or payment of any other amount or any other action by MSIL (or such
affiliate of MSIL).





17









 











	 	 	 	If the Private Placement Settlement or the Registration Settlement shall not be
effected as set forth in clauses (i) or (ii), as applicable, then failure to effect
such Private Placement Settlement or such Registration Settlement shall constitute
an Event of Default with respect to which Company shall be the Defaulting Party.
	 
	 	(r)	 	Limit on Beneficial Ownership. Notwithstanding any other provisions
hereof, MSIL may not exercise any Warrant hereunder, and Automatic Exercise shall not
apply with respect thereto, to the extent (but only to the extent) that such receipt
would result in MSIL directly or indirectly beneficially owning (as such term is
defined for purposes of Section 13(d) of the Exchange Act) at any time in excess of
9.0% of the outstanding Shares. Any purported delivery hereunder shall be void and
have no effect to the extent (but only to the extent) that such delivery would result
in MSIL directly or indirectly so beneficially owning in excess of 9.0% of the
outstanding Shares. If any delivery owed to MSIL hereunder is not made, in whole or in
part, as a result of this provision, Company’s obligation to make such delivery shall
not be extinguished and Company shall make such delivery as promptly as practicable
after, but in no event later than one Exchange Business Day after, MSIL gives notice to
Company that such delivery would not result in MSIL directly or indirectly so
beneficially owning in excess of 9.0% of the outstanding Shares.






	 	(s)	 	Share Deliveries. Company acknowledges and agrees that, to the extent
the holder of this Warrant is not then an affiliate and has not been an affiliate for
90 days (it being understood that MSIL will not be considered an affiliate under this
Section 9(s) solely by reason of its receipt of Shares pursuant to this Transaction),
and otherwise satisfies all holding period and other requirements of Rule 144 of the
Securities Act applicable to it, any delivery of Shares or Share Termination Delivery
Property hereunder at any time after two years from the Premium Payment Date shall be
eligible for resale under Rule 144(k) of the Securities Act and Company agrees to
promptly remove, or cause the transfer agent for such Shares or Share Termination
Delivery Property, to remove, any legends referring to any restrictions on resale under
the Securities Act from the Shares or Share Termination Delivery Property. Company
further agrees, for any delivery of Shares or Share Termination Delivery Property
hereunder at any time after one year from the Premium Payment Date but within 2 years
of the Premium Payment Date, to the extent the holder of this Warrant then satisfies
the holding period and other requirements of Rule 144 of the Securities Act, to
promptly remove, or cause the transfer agent for such Shares or Share Termination
Delivery Property to remove, any legends referring to any such restrictions or
requirements from such Shares or Share Termination Delivery Property. Such Shares or
Share Termination Delivery Property will be de-legended upon delivery by MSIL (or such
affiliate of MSIL) to Company or such transfer agent of customary seller’s and broker’s
representation letters in connection with resales of restricted securities pursuant to
Rule 144 of the Securities Act, without any further requirement for the delivery of any
certificate, consent, agreement, opinion of counsel, notice or any other document, any
transfer tax stamps or payment of any other amount or any other action by MSIL (or such
affiliate of MSIL). Company further agrees that any delivery of Shares or Share
Termination Delivery Property prior to the date that is one year from the Premium
Payment Date, may be transferred by and among MSIL and its affiliates and Company shall
effect such transfer without any further action by MSIL. Notwithstanding anything to
the contrary herein, Company agrees that any delivery of Shares or Share Termination
Delivery Property shall be effected by book-entry transfer through the facilities of
DTC, or any successor depositary, if at the time of delivery, such class of Shares or
class of Share Termination Delivery Property is in book-entry form at DTC or such
successor depositary. Notwithstanding anything to the contrary herein, to the extent
the provisions of Rule 144 of the Securities Act or any successor rule are amended, or
the applicable interpretation thereof by the Securities and Exchange Commission or any
court change after the Trade Date, the agreements of Company herein shall be deemed
modified to the extent necessary, in the opinion of outside counsel of Company, to
comply with Rule 144 of the Securities Act, including Rule 144(k) as in effect at the
time of delivery of the relevant Shares or Share Termination Delivery Property.




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	 	(t)	 	Hedging Disruption Event. The occurrence of a Hedging Disruption Event
will constitute an Additional Termination Event under the Agreement permitting MSIL to
terminate the Transaction, with Company as the sole Affected Party and the Transaction
as the sole Affected Transaction.
	 
	 	 	 	“Hedging Disruption Event” means, with respect to MSIL, as determined in its
reasonable discretion, the inability or impracticality, due to market illiquidity,
illegality, lack of hedging transactions or creditworthy market participants or
other similar events, to establish, re-establish or maintain any transactions
necessary or advisable to hedge, directly or indirectly, the equity price risk of
entering into and performing under the Transaction on terms including costs
reasonable to MSIL or an affiliate in its reasonable discretion, including the event
that at any time MSIL reasonably concludes that it or any of its affiliates are
unable to establish, re-establish or maintain a full hedge of its position in
respect of the Transaction through share borrowing arrangements on terms including
costs deemed reasonable to MSIL in its reasonable discretion. For the avoidance of
doubt, the parties hereto agree that if (i) MSIL reasonably determines that it is
unable to borrow Shares to hedge its exposure with respect to the Transaction at a
stock loan rebate rate equal to or in excess of the Federal Funds Rate minus 150
basis points; or (ii) the prevailing stock loan rebate rate for the Shares, as
determined by the Calculation Agent, is less than the Federal Funds Rate minus 150
basis points, an Additional Termination Event under the Agreement shall occur with
Company as the sole Affected Party and the Transaction as the sole Affected
Transaction.
	 
	 	 	 	“Federal Funds Rate” means, for any day, the rate on such day for Federal Funds, as
published by Telerate on page 129, titled Federal Funds Rate, under the column,
“Open”; provided that if any such day is not a New York business day, the Federal
Funds Rate for such day shall be the Federal Funds Rate for the immediately
preceding New York business day.
	 
	 	(u)	 	Governing Law. New York law.
	 
	 	(v)	 	Waiver of Jury Trial. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in respect of any
suit, action or proceeding relating to this Transaction. Each party (i) certifies that
no representative, agent or attorney of the other party has represented, expressly or
otherwise, that such other party would not, in the event of such a suit, action or
proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the
other party have been induced to enter into this Transaction, as applicable, by, among
other things, the mutual waivers and certifications provided herein.





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     Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it by facsimile to the address provided in the Notices section of
this Confirmation.



	 	 	 	 	 	 
	 	Very truly yours,
	 	 	 

Morgan Stanley & Co. International Limited

 	 
	 	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	Name: 	 
	 	 	 

Morgan Stanley Bank, as agent

 	 
	 	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	Name: 	 
	 



Accepted and confirmed

as of the Trade Date:




Maverick Tube Corporation




	 	 	 	 	 
	By:	 	 	 	 
	 	 	 	 	 
	Authorized Signatory	 	 
	Name:	 	 







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[FORM OF MORGAN STANLEY GUARANTEE]





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