Document:

Exhibit 10.1 to St. Jude Medical, Inc. Form 8-K dated April 19, 2007

Exhibit 10.1 

EXECUTION VERSION 

St. Jude Medical, Inc. 

$1.0 BILLION AGGREGATE PRINCIPAL AMOUNT

1.22% CONVERTIBLE SENIOR DEBENTURES

DUE 2008

PURCHASE AGREEMENT

dated April 19, 2007

Banc of America Securities LLC

Purchase
Agreement

April 19, 2007

BANC OF
AMERICA SECURITIES LLC

9 West 57th Street

New York , NY 10019

          As
Representative of the several Initial Purchasers

Ladies and
Gentlemen:

          Introductory.
St. Jude Medical, Inc., a Minnesota corporation (the “Company”), proposes to
issue and sell to the several purchasers named in Schedule A (the
“Initial Purchasers”) $1.0 billion in aggregate principal amount of its 1.22%
Convertible Senior Debentures due 2008 (the “Firm Debentures”). In addition,
the Company has granted to the Initial Purchasers an option to purchase up to
an additional $200 million in aggregate principal amount of its 1.22%
Convertible Senior Debentures due 2008 (the “Optional Debentures”), as provided
in Section 2. The Firm Debentures and, if and to the extent such option is
exercised, the Optional Debentures are collectively called the “Debentures.”
Banc of America Securities LLC (“BAS”) has agreed to act as representative of
the several Initial Purchasers (in such capacity, the “Representative”) in
connection with the offering and sale of the Debentures. 

          To
the extent there are no additional Initial Purchasers listed on Schedule A
other than you, the terms “Representative” and “Initial Purchasers” as used
herein shall mean you, as Initial Purchaser. The term “Initial Purchasers”
shall mean either the singular or plural as the context requires.

          The
Debentures will be convertible on the terms, and subject to the conditions, set
forth in the Indenture (as defined below) into cash and shares of common stock,
par value $0.10 per share, of the Company (the “Common Stock”), if any. As used
herein, “Conversion Shares” means the Common Stock, if any, to be received by
the holders of the Debentures upon conversion of the Debentures pursuant to the
terms of the Debentures and certain preferred stock purchase rights attached to
such Common Stock. The Debentures will be issued pursuant to an indenture (the
“Indenture”) to be dated as of April 25, 2007, between the Company and U.S.
Bank National Association, as trustee (the “Trustee”). 

          The
Debentures will be offered and sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended, (the “Securities Act”)
and the rules and regulations of the Securities and Exchange Commission (the
“Commission”) thereunder, in reliance upon an exemption therefrom.

          Holders
of the Debentures (including the Initial Purchasers and their direct and
indirect transferees) will be entitled to the benefits of a Registration Rights
Agreement, dated the Closing 

Date (as
defined in Section 2(b)), between the Company and the Initial Purchasers (the
“Registration Rights Agreement”), pursuant to which the Company will agree to
file or have on file with the Commission a shelf registration statement
pursuant to Rule 415 under the Securities Act (the “Registration Statement”)
covering the resale of the Debentures and the Conversion Shares, and to use its
reasonable best efforts to cause the Registration Statement to be declared
effective, if such registration statement is not an “automatic shelf
registration statement” (as defined in Rule 405 under the Securities Act),
within the time period specified in the Registration Rights Agreement. This
Agreement, the Indenture, the Debentures and the Registration Rights Agreement
are referred to herein collectively as the “Operative Documents.”

          The
Company understands that the Initial Purchasers propose to make an offering of
the Debentures on the terms and in the manner set forth herein and in the
Preliminary Offering Memorandum (as defined below) and the Final Offering
Memorandum (as defined below) and agrees that the Initial Purchasers may
resell, subject to the conditions set forth herein, all or a portion of the
Debentures to purchasers (the “Subsequent Purchasers”) at any time after the
date of this Agreement. The Debentures are to be offered and sold to or through
the Initial Purchasers without being registered with the Commission under the
Securities Act in reliance upon exemptions therefrom. 

          The
Company has prepared an offering memorandum, dated the date hereof, setting
forth information concerning the Company, the Debentures, the Registration
Rights Agreement and the Common Stock, in form and substance reasonably
satisfactory to the Initial Purchasers. As used in this Agreement, the term
“Offering Memorandum” means, collectively, the preliminary offering memorandum
dated as of April 19, 2007 (the “Preliminary Offering Memorandum”) and the
offering memorandum dated the date hereof (the “Final Offering Memorandum”),
each as then amended or supplemented by the Company. As used herein, each of
the terms “Offering Memorandum,” “Preliminary Offering Memorandum” and “Final
Offering Memorandum” shall include in each case the documents filed by the Company
with the Commission pursuant to the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and incorporated or deemed to be incorporated by
reference therein. The term “Disclosure Package” shall mean (i) the Preliminary
Offering Memorandum, as amended and supplemented as of the Applicable Time (as
defined in Section 1(f)) and (ii) the term sheet attached as Exhibit C
hereto. 

          The
Company hereby confirms its agreements with the Initial Purchasers as follows:

          SECTION 1. Representations,
Warranties and Covenants of the Company.

          The
Company hereby represents, warrants and covenants to each Initial Purchaser as
follows:

          (a)
No Registration. Assuming the
accuracy of the representations and warranties of the Initial Purchasers
contained in Section 6 and their compliance with the agreements set forth
therein, it is not necessary, in connection with the issuance and sale of the
Debentures to the Initial Purchasers, the offer, resale and delivery of the
Debentures by the Initial Purchasers and the conversion of the Debentures into
cash and Conversion Shares, if any, in each case in the manner contemplated by
this Agreement, the Indenture, the Disclosure Package and the Final Offering
Memorandum, to register the Debentures or the Conversion Shares under the
Securities

2

Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended (the
“Trust Indenture Act”).

          (b)
No Integration. None of the Company or any of its
subsidiaries has, directly or through any agent, sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any “security”
(as defined in the Securities Act) that is or will be integrated with the sale
of the Debentures or the Conversion Shares in a manner that would require
registration under the Securities Act of the Debentures or the Conversion
Shares.

          (c)
Rule 144A. No securities of the same class (within the meaning of Rule 144A(d)(3)
under the Securities Act) as the Debentures are listed on any national
securities exchange registered under Section 6 of the Exchange Act, or quoted
on an automated inter-dealer quotation system.

          (d)
Exclusive Agreement. The Company has not paid or agreed to pay to
any person any compensation for soliciting another person to purchase the
Debentures of the Company (except as permitted in this Agreement).

          (e)
Offering Memoranda. The Company hereby confirms that it has
authorized the use of the Disclosure Package, including the Preliminary Offering
Memorandum, and the Final Offering Memorandum in connection with the offer and
sale of the Debentures by the Initial Purchasers. Each document, if any, filed
or to be filed pursuant to the Exchange Act and incorporated by reference in
the Disclosure Package or the Final Offering Memorandum complied or will comply
when it is filed in all material respects with the Exchange Act and the rules
and regulations of the Commission thereunder. The Preliminary Offering
Memorandum, at the date thereof, did not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. At the date of this Agreement, the Closing Date and on
any Subsequent Closing Date (as defined in Section 2(c)), the Final Offering
Memorandum did not and will not (and any amendment or supplement thereto, at
the date thereof, at the Closing Date and on any Subsequent Closing Date, will
not) contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that
the Company makes no representation or warranty as to information contained in
or omitted from the Preliminary Offering Memorandum or the Final Offering
Memorandum in reliance upon and in conformity with written information
furnished to the Company by or on the behalf of the Initial Purchasers specifically
for inclusion therein, it being understood and agreed that the only such
information furnished to the Company by or on the behalf of the Initial
Purchasers consists of the information set forth on Schedule B hereto. 

          (f) Disclosure Package. The Disclosure Package as
of 1:14 am
(Eastern time) on April 20, 2007 (the “Applicable Time”) will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that the Company makes no representation or
warranty as to information contained in or omitted from the Disclosure Package
in reliance upon and in conformity with written information furnished to the
Company by or on the behalf of the Initial Purchasers specifically for
inclusion therein, it being understood 

3

and agreed that the only such information furnished to the Company by
or on the behalf of the Initial Purchasers consists of the information set
forth on Schedule B hereto. 

          (g)
Statements
in Offering Memorandum. The
statements in each of the Disclosure Package and the Final Offering Memorandum
under the headings “Description of Capital Stock” and “Material U.S. Federal
Income Tax Considerations” and in the Company’s Form 10-K for the year ended
December 30, 2006 (the “2006 10-K”) under the caption “Item 3: Legal
Proceedings,” insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, fairly present and summarize, in
all material respects, the matters referred to therein. 

          (h)
Offering Materials Furnished to Initial
Purchasers. The Company has
delivered to the Representative copies of the materials contained in the Disclosure
Package and will deliver the Final Offering Memorandum, each as amended or
supplemented, in such quantities and at such places as the Representative has
reasonably requested for each of the Initial Purchasers.

          (i)
Distribution of Offering Material by the
Company. The Company has not distributed and will not distribute,
prior to the later of the last Subsequent Closing Date (as defined below) and
the completion of the Initial Purchasers’ distribution of the Debentures, any
offering material in connection with the offering and sale of the Debentures
other than the Disclosure Package and the Final Offering Memorandum.

          (j)
Authorization of the Purchase Agreement.
This Agreement has been duly authorized, executed and delivered by the Company.

          (k)
Authorization of the Indenture. The Indenture has been duly authorized by the
Company and, upon the effectiveness of the Registration Statement, will be
qualified under the Trust Indenture Act; on the Closing Date, the Indenture
will have been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery thereof by the Trustee, will constitute a
legally valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by
general equitable principles; and, on the Closing Date, the Indenture will
conform in all material respects to the description thereof contained in the
Disclosure Package and the Final Offering Memorandum.

          (l)
Authorization of the Debentures.
The Debentures have been duly authorized by the Company; when the Debentures
are executed, authenticated and issued in accordance with the terms of the
Indenture and delivered to and paid for by the Initial Purchasers pursuant to
this Agreement on the Closing Date or any Subsequent Closing Date, as the case
may be (assuming due authentication of the Debentures by the Trustee), such
Debentures will constitute legally valid and binding obligations of the
Company, entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by
general equitable principles; and the Debentures will conform in all material
respects to the description thereof contained in the Disclosure Package and the
Final Offering Memorandum.

4

          (m)
Authorization of the Conversion Shares.
The Conversion Shares have been duly authorized and reserved and, when issued
upon conversion of the Debentures in accordance with the terms of the
Debentures and the Indenture, will be validly issued, fully paid and
non-assessable, and the issuance of any such shares will not be subject to any
preemptive or similar rights.

          (n)
Authorization of the Registration Rights
Agreement. The Registration Rights Agreement has been duly
authorized by the Company, and, on the Closing Date, will have been duly
executed and delivered by the Company. 

          (o)
No Material Adverse Change.
Except as otherwise disclosed in the Disclosure Package, subsequent to the
respective dates as of which information is given in the Disclosure Package:
(i) there has been no material adverse change, or any development that could
reasonably be expected to result in a material adverse change in the condition,
financial or otherwise, or in the earnings, business, properties, operations
or, to the knowledge of the Company, in the business prospects, whether or not
arising from transactions in the ordinary course of business, of the Company
and its subsidiaries, considered as one entity (any such change is called a
“Material Adverse Change”); (ii) neither the Company nor any of its
subsidiaries have entered into any transactions or agreements, other than in
the ordinary course of business or as are disclosed in the Disclosure Package
and the Final Offering Memorandum, which are material with respect to the
Company and its subsidiaries considered as one entity; and (iii) there has been
no dividend or distribution of any kind declared, paid or made by the Company
or, except for dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock.

          (p)
Independent Accountants. Ernst
& Young LLP, who have expressed their opinion with respect to the financial
statements (which term as used in this Agreement includes the related notes
thereto) and supporting schedules included or incorporated by reference in the
Disclosure Package and the Final Offering Memorandum, are independent
registered public accountants with respect to the Company as required by the
Securities Act and the Exchange Act and the applicable rules and regulations
thereunder.

          (q)
Preparation of the Financial Statements.
The financial statements of the Company included in the 2006 10-K and
incorporated by reference in the Disclosure Package and the Final Offering
Memorandum present fairly the consolidated financial position of the Company
and its consolidated subsidiaries as of and at the dates indicated and the
results of their operations and cash flows for the periods specified. The
supporting schedules of the Company included in the 2006 10-K and incorporated
by reference in the Disclosure Package and the Final Offering Memorandum
present fairly the information required to be stated therein. Such financial
statements and supporting schedules comply as to form with the applicable
accounting requirements of Regulation S-X, as promulgated by the Commission
(“Regulation S-X”), and have been prepared in conformity with generally
accepted accounting principles as applied in the United States applied on a
consistent basis throughout the periods involved, except as may be expressly
stated in the related notes thereto. The financial data set forth in each of
the Disclosure Package and the Final Offering Memorandum under the caption
“Capitalization” fairly present 

5

the
information set forth therein on a basis consistent with that of the audited
financial statements incorporated by reference in the Disclosure Package and
the Final Offering Memorandum. 

          (r)
Incorporation and Good Standing of the
Company and its Subsidiaries. The Company does not own or control,
directly or indirectly, any corporation, association or other entity other than
the subsidiaries listed in documents furnished to you by the Company. The
subsidiaries listed in Schedule C hereto are the only significant
subsidiaries (as defined in Rule 1-02(w) of Regulation S-X) of the Company (the
“Significant Subsidiaries”). Each of the Company and its Significant
Subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing (as applicable) under the laws of the jurisdiction
of its incorporation and has corporate power and authority to own or lease, as
the case may be, and operate its properties and to conduct its business as
described in the Disclosure Package and the Final Offering Memorandum and, in the
case of the Company, to enter into and perform its obligations under this
Agreement. Each of the Company and each subsidiary is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing would
not, individually or in the aggregate, result in a material adverse effect on
the financial condition or earnings, business or operations of the Company and
its subsidiaries, considered as one entity (a “Material Adverse Effect”). All
of the issued and outstanding shares of capital stock of each subsidiary have
been duly authorized and validly issued, are fully paid and nonassessable and
are owned by the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance or claim.

          (s)
Capitalization and Other Capital Stock
Matters. The authorized, issued and outstanding capital stock of the
Company is as set forth in each of the Disclosure Package and the Final
Offering Memorandum under the caption “Capitalization” (other than for
subsequent issuances, if any, pursuant to employee benefit plans as described
in the Disclosure Package and the Final Offering Memorandum or upon exercise of
outstanding options or warrants described in the Disclosure Package and the
Final Offering Memorandum). The Common Stock (including the Conversion Shares)
conforms in all material respects to the description thereof contained in each
of the Disclosure Package and the Final Offering Memorandum. All of the issued
and outstanding shares of Common Stock have been duly authorized and validly
issued, are fully paid and nonassessable and have been issued in compliance
with federal and state securities laws. None of the outstanding shares of
Common Stock were issued in violation of any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase securities of the
Company. There are no authorized or outstanding options, warrants, preemptive
rights, rights of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any capital
stock of the Company or any of its Significant Subsidiaries other than those
described in the Disclosure Package and the Final Offering Memorandum. The
description of the Company’s stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, set forth or
incorporated by reference in each of the Disclosure Package and the Final
Offering Memorandum constitutes, in all material respects, a fair summary of
the information required to be shown with respect to such plans, arrangements,
options and rights. 

6

          (t)
Non-Contravention of Existing Instruments;
No Further Authorizations or Approvals Required. Neither the Company
nor any of its subsidiaries is (i) in violation or in default (or, with the
giving of notice or lapse of time, would be in default) (“Default”) under its
charter or by-laws, (ii) in Default under any indenture, mortgage, loan or
credit agreement, deed of trust, note, contract, franchise, lease or other
agreement, obligation, condition, covenant or instrument to which the Company
or such subsidiary is a party or by which it may be bound (including, without
limitation, Getz Bros. Co. Ltd.’s 1.019% Yen-denominated Guaranteed Senior
Notes due 2010 or the related Note Purchase Agreement dated as of May 1, 2003,
the Company’s Multi-Year $1.0 billion Credit Agreement, dated as of December
13, 2006, with a consortium of lenders and the Company’s Three-Month $700
million Interim Liquidity Facility, dated as of January 25, 2007, with Bank of
America, N.A.), or to which any of the property or assets of the Company or any
of its subsidiaries is subject (each, an “Existing Instrument”), or (iii) in
violation of any statute, law, rule, regulation, judgment, order or decree of
any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or such
subsidiary or any of its properties, as applicable, except with respect to
clauses (ii) and (iii) of this paragraph only, for such Defaults or violations
as would not, individually or in the aggregate, have a Material Adverse Effect.

          The
Company’s execution, delivery and performance of the Operative Documents and
consummation of the transactions contemplated thereby, by the Disclosure
Package and by the Final Offering Memorandum (i) have been duly authorized by
all necessary corporate action and will not result in any Default under the
charter or by-laws of the Company or any subsidiary, (ii) will not conflict
with or constitute a breach of, or Default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, or require the consent of
any other party to, any Existing Instrument and (iii) will not result in any
violation of any statute, law, rule, regulation, judgment, order or decree
applicable to the Company or any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its subsidiaries or any of its
or their properties, except, with respect to clauses (ii) and (iii) of this
paragraph only, such conflicts, breaches, Defaults, liens, charges,
encumbrances, consents or violations that would not result in a Material
Adverse Effect. 

          No
consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or agency is
required for the Company’s execution, delivery and performance of the Operative
Documents and consummation of the transactions contemplated thereby, by the
Disclosure Package and by the Final Offering Memorandum, except (i) with respect
to the transactions contemplated by the Registration Rights Agreement, as may
be required under the Securities Act, the Trust Indenture Act and the rules and
regulations promulgated thereunder and (ii) such as may be required under
applicable securities or blue sky laws of any state or foreign jurisdiction and
such as may be required by the National Association of Securities Dealers, Inc.
(the “NASD”).

          (u)
No Material Actions or Proceedings.
Except as otherwise disclosed in the Disclosure Package and the Final Offering
Memorandum, there are no legal or
governmental actions, suits or proceedings pending or, to the knowledge of the
Company, threatened (i) against the Company or any of its subsidiaries which if
determined adversely to the Company or such 

7

subsidiary, would reasonably be expected to have a Material Adverse
Effect or adversely affect the consummation of the transactions contemplated by
this Agreement.

          (v)
Labor
Matters. No labor
dispute with the employees of the Company or any of its subsidiaries exists or,
to the knowledge of the Company, is threatened or imminent, except as would not
have a Material Adverse Effect.

          (w)
Intellectual Property Rights.
Except as set forth in the Disclosure Package and the Final Offering Memorandum
and as would not have a Material Adverse Effect, the Company and its
subsidiaries own, possess, license or have other rights to use, on reasonable
terms, all patents, patent applications, trade and service marks, trade and
service mark registrations, trade names, copyrights, licenses, inventions,
trade secrets, technology, know-how and other intellectual property
(collectively, the “Intellectual Property”) necessary for the conduct of the
Company’s business as now conducted or as described in each of the Disclosure
Package and the Final Offering Memorandum. Except as set forth in the
Disclosure Package and the Final Offering Memorandum or as would not,
individually or in the aggregate, have a Material Adverse Effect (a) no party
has been granted an exclusive license to use any portion of such Intellectual
Property owned by the Company; (b) there is no infringement by third parties of
any such Intellectual Property owned by or exclusively licensed to the Company;
(c) there is no pending or threatened action, suit, proceeding or claim by
others challenging the Company’s rights in or to any Intellectual Property; (d)
there is no pending or, to the knowledge of the Company, threatened action,
suit, proceeding or claim by others challenging the validity or scope of any
such Intellectual Property; and (e) there is no pending or, to the knowledge of
the Company, threatened action, suit, proceeding or claim by others that the
Company’s business as now conducted infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of others.

          (x)
All Necessary Permits, etc. The
Company and each subsidiary possess such valid and current licenses,
certificates, authorizations or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct their
respective businesses, except where the failure to possess such licenses,
certificates, authorizations or permits would not have a Material Adverse
Effect, and neither the Company nor any subsidiary has received any notice of
proceedings relating to the revocation or modification of, or non-compliance
with, any such license, certificate, authorization or permit which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
could have a Material Adverse Effect.

          (y)
Title to Properties. The Company
and each of its subsidiaries has good and marketable title to all the
properties and assets reflected as owned in the financial statements referred
to in Section 1(q) above (or elsewhere in the Disclosure Package and the Final
Offering Memorandum), in each case free and clear of any security interests,
mortgages, liens, encumbrances, equities, claims and other defects, except such
as are described in the Disclosure Package and the Final Offering Memorandum or
such as do not and would not, individually or in the aggregate, have a Material
Adverse Effect. The real property, improvements, equipment and personal
property held under lease by the Company or any subsidiary are held under valid
and enforceable leases, except such as are described in the Disclosure Package
and the Final Offering 

8

Memorandum or
such as do not and would not, individually or in the aggregate, have a Material
Adverse Effect.

          (z)
Tax Law Compliance. The Company
and its consolidated subsidiaries have filed all federal, state, local and
foreign income and franchise tax returns required to be filed by them in a
timely manner and have paid all taxes required to be paid by any of them and,
if due and payable, any related or similar assessment, fine or penalty levied
against any of them, except for any taxes, assessments, fines or penalties as
may be being contested in good faith and by appropriate proceedings, except as
would not have a Material Adverse Effect. The Company has made appropriate
provisions in the applicable financial statements referred to in Section 1(q)
above in respect of all federal, state, local and foreign income and franchise
taxes for all current or prior periods as to which the tax liability of the
Company or any of its consolidated subsidiaries has not been finally
determined.

          (aa)
Company Not an “Investment Company”.
The Company is not, and after
receipt of payment for the Debentures and the application of the proceeds
thereof as contemplated under the caption “Use of Proceeds” in each of the
Disclosure Package and the Final Offering Memorandum will not be, required to
register as an “investment company” within the meaning of the Investment
Company Act of 1940, as amended (the “Investment Company Act”).

          (bb)
Compliance with Reporting Requirements. The Company is subject to and in compliance
in all material respects with the reporting requirements of Section 13 or
Section 15(d) of the Exchange Act.

          (cc)
Insurance. Except as otherwise
disclosed in the Disclosure Package and the Final Offering Memorandum, each of
the Company and its Significant Subsidiaries are insured by recognized,
financially sound and reputable institutions with policies in such amounts and
with such deductibles and covering such risks as are deemed by the Company to
be customary for their businesses including, but not limited to, policies
covering real and personal property owned or leased by the Company and its
Significant Subsidiaries against theft, damage, destruction, acts of vandalism
and earthquakes. All such policies are in full force and effect. The Company
and its Significant Subsidiaries are in compliance with the terms of such policies
and instruments in all material respects. Other than in the ordinary course of
business or as set forth in the Disclosure Package and the Final Offering
Memorandum, and except as would not have a Material Adverse Effect, (i) there
are no claims by the Company or any of its subsidiaries under any such policy
or instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause, and (ii) neither the Company
nor any such subsidiary has been refused any insurance coverage sought or
applied for. The Company has no reason to believe that it or any subsidiary
will not be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted. 

          (dd)
No
Restrictions on Dividends.
No subsidiary or joint venture of the Company (other than any joint
venture listed in documents furnished to you by the Company) is currently
prohibited, directly or indirectly, from paying any dividends to the Company,
from making any other distribution on such subsidiary’s capital stock, from
repaying to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary’s 

9

property or
assets to the Company or any other subsidiary of the Company, except as
described in or contemplated by the Disclosure Package and the Final Offering
Memorandum.

          (ee)
No Price Stabilization or Manipulation.
The Company has not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Debentures or the Conversion
Shares to facilitate the sale or resale of the Debentures; provided, however,
that this paragraph shall not apply to any stabilization activities conducted
by the Initial Purchasers, who shall remain solely responsible for such
activities.  

          (ff)
Related Party Transactions. There
are no material related-party transactions involving the Company or any
subsidiary or any other person that are not described in the Disclosure Package
or the Final Offering Memorandum.

          (gg) No General Solicitation. None of the Company
or any of its affiliates
(as defined in Rule 501(b) of Regulation D under the Securities Act
(“Regulation D”)), has, directly or through an agent, engaged in any form of
general solicitation or general advertising in connection with the offering of
the Debentures or the Conversion Shares (as those terms are used in Rule 502(c)
of Regulation D) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act; the Company has not entered into
any contractual arrangement with respect to the distribution of the Debentures
or the Conversion Shares except for this Agreement, and the Company will not
enter into any such arrangement except for the Registration Rights Agreement
and as may be contemplated thereby.

          (hh)
Internal
Controls and Procedures.
The Company maintains (i) effective internal control over financial reporting
as defined in Rule 13a-15 under the Securities Exchange Act of 1934, as
amended, and (ii) a system of internal accounting controls sufficient to
provide reasonable assurance that (A) transactions are executed in
accordance with management’s general or specific authorizations;
(B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (C) access to assets is
permitted only in accordance with management’s general or specific
authorization; and (D) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.

          (ii)
No Material Weakness in Internal Controls. Except as disclosed in the
Disclosure Package and the Final Offering Memorandum, since the end of the
Company’s most recent audited fiscal year, there has been (i) no material
weakness in the Company’s internal control over financial reporting (whether or
not remediated) and (ii) no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting.

          (jj)
No
Unlawful Contributions or Other Payments. Except as otherwise disclosed in the Disclosure Package and the
Final Offering Memorandum, neither the Company nor any of its subsidiaries nor,
to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would
result in a violation by such persons of the FCPA (as defined below),

10

 including, without limitation,
making use of the mails or any means or instrumentality of interstate commerce
corruptly in furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any “foreign official” (as
such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the
FCPA and the Company, its subsidiaries and, to the knowledge of
the Company, its affiliates have conducted their businesses in compliance with
the FCPA and have instituted and maintain policies and procedures designed to
ensure, and which are reasonably expected to continue to ensure, continued
compliance therewith. “FCPA” means Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder.

          (kk)
No
Conflict with Money Laundering Laws. The operations of the Company and its subsidiaries are and
have been conducted at all times in compliance in all material respects with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all applicable jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines issued,
administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.

          (ll)
No
Conflict with OFAC Laws. Neither
the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company or any of
its subsidiaries is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity,
for the purpose of financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC.

          (mm)
Compliance with Environmental Laws.
Except as otherwise disclosed in the Disclosure Package and the Final Offering
Memorandum (i) neither the Company nor any of its subsidiaries is in violation
of any federal, state, local or foreign law, regulation, order, permit or other
requirement relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, “Materials of Environmental Concern”), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern (collectively,
“Environmental Laws”), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations required
for the operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company or any of its subsidiaries received any written
communication, whether from a 

11

governmental
authority, citizens group, employee or otherwise, that alleges that the Company
or any of its subsidiaries is in violation of any Environmental Law, except as
would not, individually or in the aggregate, have a Material Adverse Effect;
(ii) there is no claim, action or cause of action filed with a court or
governmental authority, no investigation with respect to which the Company has
received written notice, and no written notice by any person or entity alleging
potential liability for investigatory costs, cleanup costs, governmental
responses costs, natural resources damages, property damages, personal
injuries, attorneys’ fees or penalties arising out of, based on or resulting
from the presence, or release into the environment, of any Material of
Environmental Concern at any location owned, leased or operated by the Company
or any of its subsidiaries, now or in the past (collectively, “Environmental
Claims”), pending or, to the knowledge of the Company, threatened against the
Company or any of its subsidiaries or any person or entity whose liability for
any Environmental Claim the Company or any of its subsidiaries has retained or
assumed either contractually or by operation of law, except as would not,
individually or in the aggregate, have a Material Adverse Effect; (iii) to the
best of the Company’s knowledge, there are no past, present or anticipated
future actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge, presence or
disposal of any Material of Environmental Concern, that reasonably could result
in a violation of any Environmental Law, require expenditures to be incurred
pursuant to Environmental Law, or form the basis of a potential Environmental
Claim against the Company or any of its subsidiaries or against any person or
entity whose liability for any Environmental Claim the Company or any of its subsidiaries
has retained or assumed either contractually or by operation of law, except as
would not, individually or in the aggregate, have a Material Adverse Effect;
and (iv) neither the Company nor any of its subsidiaries is subject to any
pending or threatened proceeding under Environmental Law to which a
governmental authority is a party and which is reasonably likely to result in
monetary sanctions of $100,000 or more.

          (nn) ERISA Compliance. None of
the following events has occurred or exists: (i) a failure to fulfill the
obligations, if any, under the minimum funding standards of Section 302 of the
United States Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and the regulations and published interpretations thereunder with
respect to a Plan (as defined below), determined without regard to any waiver
of such obligations or extension of any amortization period; (ii) an audit or
investigation by the Internal Revenue Service, the U.S. Department of Labor,
the Pension Benefit Guaranty Corporation or any other federal or state
governmental agency or any foreign regulatory agency with respect to the
employment or compensation of employees by any member of the Company that could
have a Material Adverse Effect on the Company; (iii) any breach of any
contractual obligation, or any violation of law or applicable qualification
standards, with respect to the employment or compensation of employees by any
member of the Company that could have a Material Adverse Effect. None of the
following events has occurred or is reasonably likely to occur: (i) a material
increase in the aggregate amount of contributions required to be made to all
Plans in the current fiscal year of the Company compared to the amount of such
contributions made in the Company’s most recently completed fiscal year; (ii) a
material increase in the Company’s “accumulated post-retirement benefit
obligations” (within the meaning of Statement of Financial Accounting Standards
106) compared to the amount of such obligations in the Company’s most recently
completed fiscal year; (iii) any event or condition giving rise to a liability
under Title IV of 

12

ERISA that
could have a Material Adverse Effect; or (iv) the filing of a claim by one or
more employees or former employees of the Company related to their employment
that could have a Material Adverse Effect. For purposes of this paragraph, the
term “Plan” means a plan (within the meaning of Section 3(3) of ERISA) subject
to Title IV of ERISA with respect to which any member of the Company may have
any liability.

          (oo)
Brokers. There is no broker,
finder or other party that is entitled to receive from the Company any
brokerage or finder’s fee or other fee or commission as a result of any
transactions contemplated by this Agreement.

          (pp)
No Outstanding Loans or Other Indebtedness.
There are no outstanding loans, advances (except normal advances for business
expenses in the ordinary course of business) or guarantees or indebtedness by
the Company to or for the benefit of any of the officers or directors of the
Company, except as disclosed in the Disclosure Package and the Final Offering
Memorandum.

          (qq)
Sarbanes-Oxley Compliance. The Company and, to the knowledge
of the Company, its directors and officers are, and have been, in material
compliance with the applicable provisions of the Sarbanes-Oxley Act of 2002 and
the rules and regulations promulgated in connection therewith.

          (rr)
Statistical
and Market Related Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and
market-related data included in each of the Disclosure Package and the Final
Offering Memorandum is not based on or derived from sources which the Company
believes are reliable and accurate in all material respects; it being
understood, however, that the Company has not conducted any independent
investigation of the accuracy thereof.

          Any
certificate signed by an officer of the Company and delivered to the Representative
or to counsel for the Initial Purchasers shall be deemed to be a representation
and warranty by the Company to each Initial Purchaser as to the matters set
forth therein.

          SECTION 2. Purchase,
Sale and Delivery of the Debentures. 

          (a)
The Firm Debentures. The Company
agrees to issue and sell to the several Initial Purchasers the Firm Debentures
upon the terms herein set forth. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Initial Purchasers agree, severally and
not jointly, to purchase from the Company the respective aggregate principal
amount of Firm Debentures set forth opposite their names on Schedule A
at a purchase price of 99.600% of the aggregate principal amount thereof.

          (b)
The Closing Date. Delivery of the
Firm Debentures to be purchased by the Initial Purchasers and payment therefor
shall be made at the offices of Davis Polk & Wardwell, 450 Lexington
Avenue, New York, NY, 10017(or
such other place as may be agreed to by the Company and the Representative) at
9:00 a.m. New York time, on April 25, 2007, or such other 

13

time and date
as may be agreed by the Company and the Representative (the time and date of
such closing are called the “Closing Date”).

          (c)
The Optional Debentures; the Subsequent
Closing Date. In addition, on the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Company hereby grants an option to the
several Initial Purchasers to purchase, severally and not jointly, up to $200
million in aggregate principal amount of Optional Debentures from the Company
at the same price as the purchase price to be paid by the Initial Purchasers
for the Firm Debentures. The option granted hereunder may be exercised at any
time and from time to time upon notice by the Representative to the Company,
which notice may be given at any time within a 13 day period beginning on the
date of this Agreement; provided that such notice shall specify a Subsequent
Closing Date (as defined below) that is no later than 12 days after the Closing
Date. Such notice shall set forth (i) the amount (which shall be an integral
multiple of $1,000 in aggregate principal amount) of Optional Debentures as to
which the Initial Purchasers are exercising the option, (ii) the names and
denominations in which the Optional Debentures are to be registered and (iii)
the time, date and place at which such Debentures will be delivered (which time
and date may be simultaneous with, but not earlier than, the Closing Date; and
in such case the term “Closing Date” shall refer to the time and date of
delivery of certificates for the Firm Debentures and the Optional Debentures).
Each time and date of delivery, if subsequent to the Closing Date, is called a
“Subsequent Closing Date” and shall be determined by the Representative and
shall not be earlier than three nor later than five full business days after
delivery of such notice of exercise and any such Subsequent Closing Date shall
occur no later than 12 days after the Closing Date. If any Optional Debentures
are to be purchased, each Initial Purchaser agrees, severally and not jointly,
to purchase the number of Optional Debentures (subject to such adjustments to
eliminate fractional Debentures as the Representative may determine) that bears
the same proportion to the total principal amount of Optional Debentures to be
purchased as the aggregate principal amount of Firm Debentures set forth on Schedule
A opposite the name of such Initial Purchaser bears to the total principal
amount of Firm Debentures.  

          (d)
Payment for the Debentures.
Payment for the Debentures shall be made at the Closing Date (and, if
applicable, at any Subsequent Closing Date) by wire transfer of immediately
available funds to the order of the Company.

          It
is understood that the Representative has been authorized, for its own account
and the accounts of the several Initial Purchasers, to accept delivery of and
receipt for, and make payment of the purchase price for, the Firm Debentures
and any Optional Debentures the Initial Purchasers have agreed to purchase.
BAS, individually and not as the Representative of the Initial Purchasers, may
(but shall not be obligated to) make payment for any Debentures to be purchased
by any Initial Purchaser whose funds shall not have been received by the
Representative by the Closing Date or any Subsequent Closing Date, as the case
may be, for the account of such Initial Purchaser, but any such payment shall
not relieve such Initial Purchaser from any of its obligations under this
Agreement.

          (e)
Delivery of the Debentures. The
Company shall deliver, or cause to be delivered, to the Representative for the
accounts of the several Initial Purchasers the Firm Debentures at the

14

 Closing Date, against the irrevocable release
of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The Company shall also deliver, or cause to be
delivered, to the Representative for the accounts of the several Initial
Purchasers, the Optional Debentures the Initial Purchasers have agreed to
purchase at the Closing Date or any Subsequent Closing Date, as the case may
be, against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. Delivery of the Debentures
shall be made through the facilities of The Depository Trust Company unless the
Representative shall otherwise instruct. Time shall be of the essence, and
delivery at the time and place specified in this Agreement is a further
condition to the obligations of the Initial Purchasers.

          SECTION 3. Covenants
of the Company. 

          The
Company covenants and agrees with each Initial Purchaser as follows:

          (a)
Representative’s Review of Proposed
Amendments and Supplements. During such period beginning on the
Applicable Time and ending on the date which is the earlier of nine months after
the Applicable Time or the completion of the resale of the Debentures by the
Initial Purchasers (as notified by the Initial Purchasers to the Company),
prior to amending or supplementing the Disclosure Package or the Final Offering
Memorandum (including any amendment or supplement through incorporation by
reference of any report filed under the Exchange Act), the Company shall
furnish to the Representative for review a copy of each such proposed amendment
or supplement, and the Company shall not print, use or distribute such proposed
amendment or supplement to which the Representative reasonably objects.

          (b)
Amendments and Supplements to the Disclosure
Package, the Final Offering Memorandum and Other Securities Act Matters.
If, at any time prior to the earlier
of nine months after the Applicable Time or the completion of the resale of the
Debentures by the Initial Purchasers (as notified by the Initial Purchasers to
the Company), any event or development shall occur or condition exist as a result
of which it is necessary to amend or supplement the Disclosure Package or the
Final Offering Memorandum in order that the Disclosure Package or the Final
Offering Memorandum will not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time the Disclosure
Package or the Final Offering Memorandum is delivered to a purchaser, not
misleading, or if in the opinion of the Representative or counsel for the
Initial Purchasers it is otherwise necessary to amend or supplement the
Disclosure Package or the Final Offering Memorandum to comply with law, the
Company shall promptly notify the Initial Purchasers and prepare, subject to
Section 3(a) hereof, and furnish at its own expense to the Initial Purchasers
and to dealers, such amendments or supplements as may be necessary to the
Disclosure Package or the Final Offering Memorandum so that the statements in
the Disclosure Package or the Final Offering Memorandum as so amended or
supplemented will not, in the light of the circumstances existing at the
time the Disclosure Package or the Final Offering Memorandum is delivered to a
purchaser, be misleading or so that the Disclosure Package or the Final
Offering Memorandum, as amended or supplemented, will comply with law.

          (c)
Copies of the Offering Memorandum.
The Company agrees to furnish to the
Representative, without charge, until the earlier of nine months after the
Applicable Time or the 

15

completion of the resale of the Debentures by the Initial Purchasers
(as notified by the Initial Purchasers to the Company) as many copies of the
Disclosure Package and the Final Offering Memorandum and any amendments and
supplements thereto as the Representative may reasonably request.

          (d)
Blue Sky Compliance. The Company
shall cooperate with the Representative and counsel for the Initial Purchasers,
as the Initial Purchasers may reasonably request from time to time, to qualify
or register the Debentures for sale under (or obtain exemptions from the
application of) the state securities or blue sky laws or Canadian provincial
securities laws of those jurisdictions designated by the Representative, shall
comply with such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the
Debentures. The Company shall not be required to qualify as a foreign
corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where
it would be subject to taxation as a foreign corporation. The Company will
advise the Representative promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Debentures for
offering, sale or trading in any jurisdiction or any initiation or threat of
any proceeding for any such purpose, and in the event of the issuance of any
order suspending such qualification, registration or exemption, the Company
shall use its best efforts to promptly obtain the withdrawal thereof.

          (e)
Rule 144A Information. For so long as any of the Debentures are
“restricted securities” within the meaning of Rule 144(a)(3) under the
Securities Act, the Company shall provide to any holder of the Debentures or to
any prospective purchaser of the Debentures designated by any holder, upon
request of such holder or prospective purchaser, information required to be
provided by Rule 144A(d)(4) of the Securities Act if, at the time of such
request, the Company is not subject to the reporting requirements under Section
13 or 15(d) of the Exchange Act.

          (f) Legends. Each of the Debentures will bear, to
the
extent applicable, the legend set forth under the heading entitled “Transfer
Restrictions” in the Disclosure Package and the Final Offering Memorandum for
the time period and upon the other terms stated therein.

          (g)
Written Information Concerning the Offering. Without the prior written consent of the
Representative, the Company will not give to any prospective purchaser of the
Debentures or any other person not in its employ any written information
concerning the offering of the Debentures other than the Preliminary Offering
Memorandum, the term sheet attached as Exhibit C hereto, the Final Offering
Memorandum or any other offering materials prepared by or with the prior
consent of the Representative. 

          (h)
No General Solicitation. Except following the effectiveness of the
Registration Statement (as defined in the Registration Rights Agreement), the
Company will not, and will cause its subsidiaries not to, solicit any offer to
buy or offer to sell the Debentures by means of any form of general
solicitation or general advertising (as those terms are used in Rule 502(c) of
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.

16

          (i) No Integration. The Company will not, and will
cause its
subsidiaries not to, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any “security” (as defined in the Securities Act) in a
transaction that could be integrated with the sale of the Debentures in a
manner that would require the registration under the Securities Act of the
Debentures.

          (j) Information to Publishers.
Prior to the Closing Date, any
information provided by the Company to publishers of publicly available
databases about the terms of the Securities shall include a statement that the
Securities have not been registered under the Securities Act and are subject to
restrictions under Rule 144A of the Securities Act.

          (k) DTC. The Company will cooperate with the
Representative and use its best efforts
to permit the Debentures to be eligible for clearance and settlement through
The Depository Trust Company.

          (l) Rule 144 Tolling. During the period commencing
at the
Applicable Time and ending two years after the later of the Closing Date and
the last Subsequent Closing Date, if any, the Company will not, and will use
its best efforts not to permit any of its “affiliates” (as defined in Rule 144
under the Securities Act) to, resell any of the Debentures which constitute
“restricted securities” under Rule 144 that have been reacquired by any of
them.

          (m)
Use of Proceeds. The Company
shall apply the net proceeds from the sale of the Debentures sold by it in the
manner described under the caption “Use of Proceeds” in each of the Disclosure
Package and the Final Offering Memorandum.

          (n)
Transfer Agent. The Company shall engage and maintain, at
its expense, a registrar and transfer agent for the Common Stock.

          (o)
Available Conversion Shares. The Company will reserve and keep available
at all times, free of pre-emptive rights, the full number of Conversion Shares.

          (p)
Conversion Price. Between the date hereof and the Closing Date, the Company will not do or authorize
any act or thing that would result in an adjustment of the conversion price of
the Debentures.

          (q)
Listing. Prior to any issuance of
Conversion Shares, the Company will list, subject to notice of issuance, the
Conversion Shares on the New York Stock Exchange (the “NYSE”). 

          (r)
Agreement Not to Offer or Sell Additional
Securities. During the period commencing on the date hereof and
ending on the 30th day following the date of the Final Offering
Memorandum, the Company will not, without the prior written consent of BAS
(which consent may be withheld at the sole discretion of BAS), directly or indirectly, sell, offer,
contract or grant any option to sell, pledge, transfer or establish an open
“put equivalent position” or liquidate or decrease a “call equivalent position”
within the meaning of Rule 16a-1 under the Exchange Act, or otherwise dispose
of, transfer or hedge (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition of), or announce the
offering of, or file any registration statement under the Securities Act
(except for a registration statement on Form 

17

S-8) in respect of, any shares of Common Stock, options or warrants to
acquire shares of the Common Stock or securities exchangeable or exercisable
for or convertible into shares of Common Stock (other than as contemplated by
this Agreement with respect to the Debentures and as contemplated by the
Registration Rights Agreement); provided, however, that the Company may issue
shares of its Common Stock or options to purchase its Common Stock, or Common
Stock upon exercise of options, pursuant to any stock option, stock bonus,
stock purchase or other stock plan or arrangement described in the Disclosure
Package and the Final Offering Memorandum; provided, further, that the Company
may issue shares of its Common Stock in the circumstances contemplated by the
warrant transaction with the Initial Purchaser or its affiliates described in
the Disclosure Package and the Final Offering Memorandum.  

          (s)
Future
Reports to Stockholders. If
and to the extent required by applicable laws and regulations, the Company will
furnish to its stockholders as
soon as practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders’ equity and cash flows of the Company and its
consolidated subsidiaries certified by independent public accountants) and, as
soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending March 31, 2007), to make
available to its stockholders
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail.

          (t)
Future Reports to the Representative.
Unless otherwise publicly available, for the lesser of (i) three years or (ii)
so long as the Debentures are outstanding, the Company will furnish to the
Representative at 9 West 57th Street, New York, NY 10022: Attention:
Thomas Morrison: (i) as soon as practicable after the end of each fiscal year,
copies of the annual report of the Company containing the balance sheet of the
Company as of the close of such fiscal year and statements of income,
stockholders’ equity and cash flows for the year then ended and the opinion thereon
of the Company’s independent registered public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K
or other report filed by the Company with the Commission, the NASD or any
securities exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its capital stock.

          (u)
Investment Limitation. The Company
shall not invest, or otherwise use the proceeds received by the Company from
its sale of the Debentures in such a manner as would require the Company or any
of its subsidiaries to register as an investment company under the Investment
Company Act.

          (v)
No Manipulation of Price. Until
the date of completion of the resale of the Debentures by the Initial
Purchasers (as notified by the Initial Purchasers to the Company), the Company
will not take, directly or indirectly, any action designed to cause or result
in, or that has constituted or might reasonably be expected to constitute,
under the Exchange Act or otherwise, the stabilization or manipulation of the
price of any securities of the Company to facilitate the sale or resale of the
Debentures; provided, however, that this paragraph shall not apply to any
stabilization activities conducted by the Initial Purchasers, who shall remain
solely responsible for such activities. 

18

          SECTION 4. Payment of Expenses. The Company agrees
to
pay all costs, fees and expenses incurred in connection with the performance of
its obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the issuance
and delivery of the Debentures (including all printing and engraving costs),
(ii) all fees and expenses of the Trustee under the Indenture , (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Debentures to the Initial Purchasers, (iv) all fees and
expenses of the Company’s counsel, independent registered public accountants
and other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, shipping and distribution of the Disclosure Package and
the Final Offering Memorandum, and all amendments and supplements thereto, and
this Agreement, (vi) all filing fees, attorneys’ fees and expenses incurred by
the Company or the Initial Purchasers in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Debentures for offer and sale under the state securities
laws, blue sky laws or Canadian provincial securities laws, (vii) the fees and
expenses associated with listing the Conversion Shares on the NYSE, (viii) all
transportation and other expenses incurred by the Company in connection with
presentations to prospective purchasers of the Debentures and (ix) all expenses
and fees in connection with admitting the Debentures for trading in the PORTAL
Market. Except as provided in this Section 4, Section 8, Section 9 and Section
10 hereof, the Initial Purchasers shall pay their own expenses, including the
fees and disbursements of their counsel. 

          SECTION 5. Conditions of the Obligations of the Initial
Purchasers. The obligations of the several Initial Purchasers to
purchase and pay for the Debentures as provided herein on the Closing Date and,
with respect to the Optional Debentures, any Subsequent Closing Date, shall be
subject to the accuracy of the representations and warranties on the part of
the Company set forth in Section 1 hereof as of the date hereof and as of the
Closing Date as though then made and, with respect to the Optional Debentures,
as of any Subsequent Closing Date as though then made, to the accuracy of the
statements of the Company made in any certificates pursuant to the provisions
hereof, to the timely performance by the Company of its covenants and other
obligations hereunder, and to each of the following additional conditions:

          (a)
Accountants’ Comfort Letters. On
the date hereof, the Representative shall have received from Ernst & Young
LLP, independent registered public accountants for the Company, a letter dated
the date hereof addressed to the Initial Purchasers, the form of which is
attached as Exhibit A. 

          (b)
No Material Adverse Change or Ratings Agency
Change. For the period from and after the date of this Agreement and
prior to the Closing Date and, with respect to the Optional Debentures, any
Subsequent Closing Date:

	
 

	
 

	
 

	
          (i)
  in the judgment of the Representative there shall not have occurred any Material
  Adverse Change; 

	
 

	
 

	
 

	
          (ii)
  there shall not have been any change or decrease specified in the letter
  referred to in paragraph (a) of this Section 5 which is, in the sole judgment
  of the Representative, so material and adverse as to make it impractical or
  inadvisable to 

19

	
 

	
 

	
 

	
proceed with
  the offering or delivery of the Debentures as contemplated by the Disclosure
  Package and the Final Offering Memorandum; and

	
 

	
 
	
 

	
          (iii)
  there shall not have occurred any downgrading, nor shall any written notice
  have been given of any intended or potential downgrading or of any review for
  a possible change that does not indicate the direction of the possible
  change, in the rating accorded any securities of the Company or any of its
  subsidiaries by any “nationally recognized statistical rating organization”
  as such term is defined for purposes of Rule 436(g)(2) under the Securities
  Act.

          (c)
Opinion of Counsel for the Company.
On each of the Closing Date and any Subsequent Closing Date, the Representative
shall have received the favorable opinion of Dorsey & Whitney LLP, counsel
for the Company, dated such Closing Date, the form of which is attached as Exhibit
B-1, and the favorable opinion of Pamela S. Krop, General Counsel of the
Company, dated such Closing Date, the form of which is attached as Exhibit
B-2.

          (d)
Opinion of Counsel for the Initial Purchasers.
On each of the Closing Date and any Subsequent Closing Date, the Representative
shall have received the favorable opinion of Davis Polk & Wardwell, counsel
for the Initial Purchasers, dated such Closing Date, in form and substance
satisfactory to, and addressed to, the Representative, with respect to the
issuance and sale of the Debentures, the Disclosure Package, the Final Offering
Memorandum and other related matters as the Representative may reasonably
require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.

          (e)
Officers’ Certificate. On each of
the Closing Date and any Subsequent Closing Date, the Representative shall have
received a written certificate executed by the President or any Vice President
of the Company and the Chief Financial Officer or Chief Accounting Officer of
the Company, dated such Closing Date, to the effect that the signers of such
certificate have reviewed the Disclosure Package, the Final Offering
Memorandum, any amendment or supplement thereto, and this Agreement, to the
effect set forth in subsection (b)(iii) of this Section 5, and further to the
effect that:

	
 

	
 

	
 

	
          (i)
  for the period from and after the date of this Agreement and prior to such
  Closing Date or such Subsequent Closing Date, as the case may be, there has
  not occurred any Material Adverse Change;

	
 

	
 

	
 

	
          (ii)
  the representations and warranties of the Company set forth in Section 1 of
  this Agreement are true and correct in all material respects (except that, to
  the extent that such representations and warranties are qualified with
  respect to materiality, including without limitation, with respect to a
  Material Adverse Effect, such representation and warranty shall be true and
  correct) on and as of the Closing Date or the Subsequent Closing Date, as the
  case may be, with the same force and effect as though expressly made on and
  as of such Closing Date or such Subsequent Closing Date, as the case may be;
  and

20

	
 

	
 

	
 

	
          (iii)
  the Company has complied in all material respects with all the covenants and
  other agreements hereunder and satisfied all the conditions on its part to be
  performed or satisfied hereunder at or prior to such Closing Date or such
  Subsequent Closing Date, as the case may be.

          (f)
Bring-down Comfort Letter. On
each of the Closing Date and any Subsequent Closing Date, the Representative
shall have received from Ernst & Young LLP, independent registered public
accountants for the Company, a letter dated such date, in form and substance
satisfactory to the Representative, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to subsection (a) of
this Section 5, except that the specified date referred to therein for the
carrying out of procedures shall be no more than three business days prior to
the Closing Date or Subsequent Closing Date, as the case may be.

          (g)
Registration Rights Agreement. The Company and the Initial Purchasers
shall have executed and delivered the Registration Rights Agreement (in form
and substance satisfactory to the Initial Purchasers), and the Registration
Rights Agreement shall be in full force and effect.

          (h)
PORTAL Designation. The Debentures shall have been designated
PORTAL-eligible securities in accordance with the rules and regulations of the
NASD.

          (i) Additional Documents. On or
before each of the Closing Date and any Subsequent Closing Date, the Representative
and counsel for the Initial Purchasers shall have received such information,
documents and opinions as they may reasonably require for the purposes of
enabling them to pass upon the issuance and sale of the Debentures as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.

          If
any condition specified in this Section 5 is not satisfied when and as required
to be satisfied, this Agreement may be terminated by the Representative by
notice to the Company at any time on or prior to the Closing Date and, with
respect to the Optional Debentures, at any time prior to the applicable
Subsequent Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 4, Section 8, Section
9, Section 10 and Section 14 shall at all times be effective and shall survive
such termination.

          SECTION 6. Representations, Warranties and Agreements
of Initial
Purchasers

          Each
of the Initial Purchasers represents and warrants that it is a “qualified
institutional buyer”, as defined in Rule 144A (a “QIB”). Each Initial Purchaser
agrees with the Company that:

          (a)
the Debentures and the Conversion Shares have not been and will not be
registered under the Securities Act in connection with the initial offering of
the Debentures;

          (b) it has
not offered or sold, and will not offer or sell, any Debentures within the
United States or to, or for the account or benefit of, U.S. persons (x) as part
of their distribution at any time or (y) otherwise until one year after the
date of closing of the offering except in accordance with Rule
144A to persons whom it reasonably believes to be QIBs;

21

          (c) neither
it nor any person acting on its behalf has made or will make offers or sales of
the Debentures in the United States by means of any form of general
solicitation or general advertising (within the meaning of Rule 502(c) of
Regulation D) in the United States, including (i) any advertisement, article,
notice or other communication published in any newspaper, magazine or similar
medium or broadcast over television or radio, or (ii) any seminar or meeting
whose attendees have been invited by any general solicitation or general
advertising, or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act;

          (d) in
connection with each sale pursuant to Section 6(c), it has taken or will take
reasonable steps to ensure that the purchaser of such Debentures is aware that
such sale is being made in reliance on Rule 144A;

          (e) any
information provided by the Initial Purchasers to publishers of publicly
available databases about the terms of the Debentures shall include a statement
that the Debentures have not been registered under the Act and are subject to
restrictions under Rule 144A; and

          (f) it acknowledges that additional restrictions on the
offer and sale of the Debentures
and the Conversion Shares are described in the Disclosure Package and the Final Offering Memorandum.

          SECTION 7. Effectiveness of this Agreement. This
Agreement shall not become effective until the execution of this Agreement by
the parties hereto.

          SECTION 8. Reimbursement of Initial Purchasers’
Expenses.
If this Agreement is terminated by the Representative pursuant to Section 5 or
Section 12, or if the sale to the Initial Purchasers of the Debentures on the
Closing Date is not consummated because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or to comply with any
provision hereof, the Company agrees to reimburse the Representative and the
other Initial Purchasers (or such Initial Purchasers as have terminated this
Agreement with respect to themselves), severally, upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the
Representative and the Initial Purchasers in connection with the proposed
purchase and the offering and sale of the Debentures, including but not limited
to fees and disbursements of counsel, printing expenses, travel expenses,
postage, facsimile and telephone charges.

          SECTION 9. Indemnification.

          (a)
Indemnification of the Initial Purchasers.
The Company agrees to indemnify and hold harmless each Initial Purchaser, its
directors, officers, employees and agents and each person, if any, who controls
any Initial Purchaser within the meaning of the Securities Act and the Exchange
Act against any loss, claim, damage, liability or expense, as incurred, to
which such Initial Purchaser or such controlling person may become subject,
insofar as such loss, claim, damage, liability or expense (or actions in
respect thereof as contemplated below) arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Offering Memorandum, the Final Offering Memorandum or the
Disclosure Package (or any amendment or supplement to the foregoing), or the
omission or alleged omission therefrom of a material fact, in each case,
necessary in order to make the

22

statements
therein, in the light of the circumstances under which they were made, not
misleading, and to reimburse each Initial Purchaser, its officers, directors,
employees, agents and each such controlling person for any and all expenses
(including the fees and disbursements of counsel chosen by BAS) as such
expenses are reasonably incurred by such Initial Purchaser, its officers,
directors, employees, agents or such controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided,
however, that the foregoing indemnity agreement shall not apply to
any loss, claim, damage, liability or expense to the extent, but only to the
extent, arising out of or based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the
Representative expressly for use in the Preliminary Offering Memorandum, the
Final Offering Memorandum or the Disclosure Package (or any amendment or
supplement to the foregoing). The indemnity agreement set forth in this Section
9(a) shall be in addition to any liabilities that the Company may otherwise
have.

          (b)
Indemnification of the Company, its
Directors and Officers. Each
Initial Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Company, each of its directors, officers, employees and agents,
and each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act, against any loss, claim, damage, liability
or expense, as incurred, to which the Company, or any such director, officer,
employee, agent or controlling person may become subject, insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Preliminary Offering Memorandum,
the Final Offering Memorandum or the Disclosure Package (or any amendment or
supplement thereto), or arises out of or is based upon the omission or alleged
omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, and only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Preliminary Offering Memorandum, the Final Offering
Memorandum or the Disclosure Package (or any amendment or supplement to the
foregoing), in reliance upon and in conformity with written information
furnished to the Company by the Representative expressly for use therein; and
to reimburse the Company, or any such director, officer, employee, agent or
controlling person for any and all expenses (including the fees and disbursements
of counsel) as such expenses are reasonably incurred by the Company, or any
such director, officer, employee, agent or controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action. The Company hereby acknowledges
that the only information that the Initial Purchasers have furnished to the
Company expressly for use in the Preliminary Offering Memorandum, the Final
Offering Memorandum or the Disclosure Package (or any amendment or supplement
to the foregoing) are the statements set forth in Schedule B hereto. The
indemnity agreement set forth in this Section 9(b) shall be in addition to any
liabilities that each Initial Purchaser may otherwise have.

          (c)
Notifications and Other Indemnification
Procedures. Promptly after receipt by an indemnified party under
this Section 9 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party 

23

under this
Section 9, notify the indemnifying party in writing of the commencement
thereof; but the failure to so notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in
the forfeiture by the indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any liability
other than the indemnification obligation provided in paragraph (a) or (b)
above. In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that a conflict may arise between the positions of
the indemnifying party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available to it and/or
other indemnified parties that are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of such indemnifying party’s election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (other than local counsel), reasonably approved by the
indemnifying party (or by BAS in the case of Section 9(b)), representing the
indemnified parties who are parties to such action) or (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party. 

          (d)
Settlements. The indemnifying
party under this Section 9 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, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
9(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior to such
settlement being entered into, and (iii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. Notwithstanding the immediately preceding sentence, if
at any time an indemnified party shall have requested an indemnifying party to

24

reimburse the indemnified party for fees and expenses of counsel, an
indemnifying party shall not be liable for any settlement effected without its
consent if such indemnifying party (i) reimburses such indemnified party in
accordance with such request to the extent it considers such request to be
reasonable and (ii) provides written notice to the indemnified party
substantiating the unpaid balance as unreasonable, in each case prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or
proceeding in respect of which any indemnified party is or could have been a
party and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent (i) includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act, by or on behalf of any indemnified party. 

          SECTION 10. Contribution. If the
indemnification provided for in Section
9 is for any reason unavailable to or otherwise insufficient to hold harmless
an indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Initial Purchasers,
on the other hand, from the offering of the Debentures pursuant to this
Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company, on the one hand, and the Initial Purchasers, on
the other hand, in connection with the statements or omissions or alleged
statements or alleged omissions or inaccuracies in the representations and warranties
herein which resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Initial Purchasers, on the
other hand, in connection with the offering of the Debentures pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Debentures pursuant to this Agreement
(before deducting expenses) received by the Company, and the total discount
received by the Initial Purchasers bear to the aggregate initial offering price
of the Debentures. The relative fault of the Company, on the one hand, and the
Initial Purchasers, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact or any
such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company, on the one hand, or the Initial
Purchasers, on the other hand, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

          The
amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 9(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 9(c) with
respect to notice of commencement of any action shall apply if a claim for

25

contribution is to be made under this Section 10; provided, however,
that no additional notice shall be required with respect to any action for
which notice has been given under Section 9(c) for purposes of indemnification.

          The Company
and the Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 10 were determined by pro rata allocation
(even if the Initial Purchasers were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to in this Section 10.

          Notwithstanding
the provisions of this Section 10, no Initial Purchaser shall be required to
contribute any amount in excess of the purchase discount or commission received
by such Initial Purchaser in connection with the Debentures purchased by it
hereunder.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
The Initial Purchasers’ obligations to contribute pursuant to this
Section 10 are several, and not joint, in proportion to their respective commitments
as set forth opposite their names in Schedule A.  For purposes of this Section 10, each
director, officer, employee and agent of an Initial Purchaser and each person,
if any, who controls an Initial Purchaser within the meaning of the Securities
Act and the Exchange Act shall have the same rights to contribution as such
Initial Purchaser, and each director, officer, employee and agent of the
Company and each person, if any, who controls the Company within the meaning of
the Securities Act and the Exchange Act shall have the same rights to
contribution as the Company.

          Section
11.  Default of One or
More of the Several Initial Purchasers.
If, on the Closing Date or a
Subsequent Closing Date, as the case may be, any one or more of the several
Initial Purchasers shall fail or refuse to purchase Debentures that it or they
have agreed to purchase hereunder on such date, and the aggregate principal
amount of Debentures which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase does not exceed 10% of the
aggregate principal amount of the Debentures to be purchased on such date, the
other Initial Purchasers shall be obligated, severally, in the proportions that
the principal amount of Firm Debentures set forth opposite their respective
names on Schedule A bears to the aggregate principal amount of Firm
Debentures set forth opposite the names of all such non-defaulting Initial
Purchasers, or in such other proportions as may be specified by the
Representative with the consent of the non-defaulting Initial Purchasers, to
purchase the Debentures which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase on such date. If, on the
Closing Date or a Subsequent Closing Date, as the case may be, any one or more
of the Initial Purchasers shall fail or refuse to purchase Debentures and the
aggregate principal amount of Debentures with respect to which such default
occurs exceeds 10% of the aggregate principal amount of Debentures to be
purchased on such date, and arrangements satisfactory to the Representative and
the Company for the purchase of such Debentures are not made within 48 hours
after such default, this Agreement shall terminate without liability of any
party (other than a defaulting Initial Purchaser) to any other party except
that the provisions of Section 4, Section 8, Section 9 and Section 10 shall at
all times be effective and shall survive such termination.  In any such case either the Representative
or the Company shall have the right to postpone the Closing Date or a
Subsequent Closing Date, as the case may be, but in no event for longer than 

26

seven days in order that the required changes, if any, to the Final
Offering Memorandum or any other documents or arrangements may be effected.

          As used in
this Agreement, the term “Initial Purchaser” shall be deemed to include any
person substituted for a defaulting Initial Purchaser under this Section
11.  Any action taken under this Section
11 shall not relieve any defaulting Initial Purchaser from liability in respect
of any default of such Initial Purchaser under this Agreement.

          Section
12.  Termination of this
Agreement.  On or prior to the Closing Date this
Agreement may be terminated by the Representative by notice given to the Company
if at any time (i) trading or quotation in any of the Company’s securities
shall have been suspended or limited by the Commission or by the NYSE, or
trading in securities generally on the NYSE shall have been suspended or
limited, or minimum or maximum prices shall have been generally established on
any of such stock exchanges by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by any federal or New York
authority or a material disruption in commercial banking or securities
settlement or clearance services in the United States has occurred; or (iii) there shall have occurred any outbreak or
escalation of national or international hostilities or any crisis or calamity,
or any change in the United States or international financial markets, or any
substantial change or development involving a prospective substantial change in
United States’ or international political, financial or economic conditions, as
in the judgment of the Representative is material and adverse and makes it
impracticable or inadvisable to market the Debentures in the manner and on the
terms described in the Disclosure Package and the Final Offering Memorandum or
to enforce contracts for the sale of securities.  Any termination pursuant to this Section 12 shall be without
liability on the part of (a) the Company to any Initial Purchaser, except that
the Company shall be obligated to reimburse the expenses of the Representative
and the Initial Purchasers pursuant to Sections 4 and 8 hereof or (b) any Initial
Purchaser to the Company.

          Section 13.  No
Advisory or Fiduciary Responsibility.  The Company acknowledges and agrees that: (i) the purchase and
sale of the Debentures pursuant to this Agreement, including the determination
of the public offering price of the Debentures and any related discounts and
commissions, is an arm’s length commercial transaction between the Company, on
the one hand, and the several Initial Purchasers, on the other hand, and the
Company is capable of evaluating and understanding and understands and accepts
the terms, risks and conditions of the transactions contemplated by this
Agreement; (ii) in connection with each transaction contemplated hereby and the
process leading to such transaction each Initial Purchaser is and has been
acting solely as a principal and is not the financial advisor, agent or
fiduciary of the Company or its affiliates, stockholders, creditors or
employees or any other party; (iii) no
Initial Purchaser has assumed or will assume an advisory, agency or fiduciary
responsibility in favor of the Company with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether
such Initial Purchaser has advised or is currently advising the Company on
other matters) and no Initial Purchaser has any obligation to the Company with
respect to the offering contemplated hereby except the obligations expressly
set forth in this Agreement; (iv) the several Initial Purchasers and their
respective affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Company and that the several
Initial Purchasers have no obligation to disclose any of such interests by
virtue of any advisory, agency 

27

or fiduciary
relationship; and (v) the Initial Purchasers have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated
hereby and the Company has consulted its own legal, accounting, regulatory and
tax advisors to the extent it deemed appropriate.

          This
Agreement supersedes all prior agreements and understandings (whether written
or oral) between the Company and the several Initial Purchasers, or any of
them, with respect to the subject matter hereof.  

          Section
14.  Representations and
Indemnities to Survive Delivery.  The respective indemnities, contribution, agreements,
representations, warranties and other statements of the Company, of its
officers and of the several Initial Purchasers set forth in or made pursuant to
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation, or statement as to the result thereof, made by or on
behalf of any Initial Purchaser or the Company or any of its or their
directors, officers, employees, agents or any controlling person, as the case
may be, (ii) acceptance of the Debentures and payment for them hereunder or
(iii) any termination of this Agreement.

          Section
15.  Notices.  All
communications hereunder shall be in writing and shall be mailed, hand
delivered or telecopied and confirmed to the parties hereto as follows:

	
 

	
 

	
 

	
If to the Representative:

	
 

	
 

	
 

	
Banc of America Securities LLC

  9 West 57th Street

  New York,  New York  10019

  Facsimile:  (212) 933-2217

  Attention:  Syndicate Department

	
 

	
 

	
 

	
with a copy to:

	
 

	
 

	
 

	
Banc of America Securities LLC

  9 West 57th Street

  New York, New York  10019

  Facsimile:  (212) 457-3745

  Attention:  Raymond P. Ko

	
 

	
 

	
 

	
If to the Company:

	
 

	
 

	
 

	
St. Jude Medical, Inc.

  One Lillehei Plaza

  St. Paul, Minnesota 55117

  Facsimile:  (651) 481-7690

  Attention:  Corporate Secretary

          Any party
hereto may change the address for receipt of communications by giving written
notice to the others.

28

          Section
16.  Successors.  This
Agreement will inure to the benefit of and be binding upon the parties hereto,
including any substitute Initial Purchasers pursuant to Section 11 hereof, and
to the benefit of (i) the Company, its directors, officers, employees and
agents, and each person, if any, who controls the Company within the meaning of
the Securities Act and the Exchange Act, (ii) the Initial Purchasers, the
directors, officers, employees and agents of the Initial Purchasers, and each
person, if any, who controls any Initial Purchaser within the meaning of the
Securities Act and the Exchange Act and (iii) the respective successors and
assigns of any of the above, all as and to the extent  provided in this Agreement, and no other person shall acquire or
have any right under or by virtue of this Agreement.  The term “successors and assigns” shall not include a purchaser
of any of the Debentures from any of the several Initial Purchasers merely
because of such purchase. 

          Section
17.  Partial
Unenforceability.  The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof.  If any Section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.

          Section
18.  Governing Law
Provisions.  

          Governing
Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          Section
19.  General Provisions.  This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof.  This Agreement may be
executed in two or more counterparts, each one of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.  This Agreement may not be
amended or modified unless in writing by all of the parties hereto, and no
condition herein (express or implied) may be waived unless waived in writing by
each party whom the condition is meant to benefit.  The Section headings herein are for the convenience of the
parties only and shall not affect the construction or interpretation of this
Agreement.

          Each of the
parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions
hereof, including, without limitation, the indemnification provisions of
Section 9 and the contribution provisions of Section 10, and is fully informed
regarding said provisions.  Each of the
parties hereto further acknowledges that the provisions of Sections 9 and 10
hereto fairly allocate the risks in light of the ability of the parties to
investigate the Company, its affairs and its business in order to assure that
adequate disclosure has been made in the Preliminary Offering Memorandum, the
Disclosure Package and the Final Offering Memorandum (and any amendments and
supplements thereto).

29

          If the
foregoing is in accordance with your understanding of our agreement, kindly
sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding
agreement in accordance with its terms.

	
 

	
 

	
 

	
 

	
Very truly yours,

	
 

	
 

	
 

	
ST. JUDE MEDICAL, INC.

	
 

	
 

	
 

	
 

	
By: 

	
/s/ John C. Heinmiller

	
 

	
 

	

	
 

	
 

	
Name: John C. Heinmiller

	
 

	
 

	
Title: Executive Vice President and Chief Financial Officer

30

          The
foregoing Purchase Agreement is hereby confirmed and accepted by the
Representative as of the date first above written.

	
 

	
 

	
 

	
BANC OF AMERICA SECURITIES LLC

	
 

	
 

	
 

	
 

	
 

	
Acting as Representative of the

  several Initial Purchasers named in

  the attached Schedule A.

	
 

	
 

	
 

	
 

	
By: 

	
/s/ Derek Dillon

	
 

	
 

	

	
 

	
 

	
Name: Derek Dillon

	
 

	
 

	
Title: Managing Director

	
 

31

SCHEDULE A

	
 

	
 

	
 

	
 

	
 

	
Initial Purchaser

	
 

	
 

	
Aggregate 

  Principal 

  Amount of Firm 

  Debentures to be 

  Purchased

	
 

	
Banc of
  America Securities LLC

	
 

	
 

	
$1,000,000,000

	
 

	
 

	
 

	
 

	
 

	
 

	
Total

	
 

	
 

	
$1,000,000,000

	
 

	
 

	
 

	
 

	

	
 

1

SCHEDULE B

Information Furnished by the Initial
Purchasers

The seventh,
eighth, ninth, tenth, eleventh (solely with respect to the first sentence of
such paragraph), eighteenth and nineteenth paragraphs under the caption “Plan
of Distribution” in the Preliminary Offering Memorandum and the Final Offering
Memorandum. 

1

SCHEDULE
C

Significant
Subsidiaries

Pacesetter,
Inc. 

St. Jude
Medical S.C., Inc. (a/k/a “US Division”) 

SJM Puerto
Rico BV 

Getz Bros. Co.
Ltd.

Advanced
Neuromodulation Systems, Inc.

St. Jude
Medical, Cardiology Division, Inc.

St. Jude
Medical, Atrial Fibrillation Division, Inc.

SJM
International, Inc.

St. Jude
Medical Luxembourg S.a.r.l.

St. Jude
Medical Holdings B.V.

St. Jude
Medical Enterprise AB

1

EXHIBIT A

Form of Accountants’ Comfort Letter

(i)          we are independent accountants within the meaning of the
Securities Act and the applicable rules and regulations adopted by the Commission thereunder;

(ii)         we have performed an audit of the Company’s
financial statements for the years indicated in their audit report; 

(iii)        in our opinion the audited financial statements and financial statement schedules included or incorporated by reference in the Disclosure Package and the Final Offering Memorandum and reported on by them comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the related rules and regulations adopted by the Commission;

(iv)        we have not audited any financial statements of the Company as of any date or for any period subsequent to December 30, 2006. With respect to the period subsequent to December 30, 2006, we have carried out certain specified procedures (but not an examination in accordance with generally accepted auditing standards) which would not necessarily reveal matters of significance with respect to the comments set forth in such letter; read the minutes of the meetings of the shareholders, directors and audit committees of the Company and the Subsidiaries; and inquired of certain officials of the Company who have responsibility for financial and accounting matters of the Company and its subsidiaries as to transactions and events subsequent to December 30, 2006,
nothing came to our attention which caused us to believe that:

(A)        at April [   ], 2007, there
were any changes in the long-term debt of the Company and its subsidiaries or capital stock of the Company or decreases in the
shareholders’ equity of the Company as compared with the amounts shown on the December 30, 2006 consolidated balance sheet
included in the Disclosure Package and the Final Offering Memorandum, or for the period from December 31, 2006 through February
[   ], 2007 there were any decreases, as compared with the
corresponding period in the preceding year in operating profit or earnings before income taxes or in total or per share amounts of
net earnings of the Company and its subsidiaries, except in all instances for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an explanation by the Company as to the significance thereof unless said explanation
is not deemed necessary by the Representative; or 

(B)         at April [   ], 2007,
there was any change in the long-term debt of the Company and its subsidiaries of capital stock of the Company or decreases in the
shareholder’s equity of the Company as compared with the amounts shown on the December 30, 2006 consolidated balance sheet
included in the Disclosure Package and Final Offering Memorandum;

(v)         we have performed certain other specified
procedures as a result of which we determined that certain information of an accounting, financial or statistical nature (which is
limited to accounting, financial or statistical information derived from the general accounting records of the Company and its
subsidiaries) set forth in the Disclosure Package and Final Offering Memorandum agrees with the accounting records of the Company
and its subsidiaries, excluding any questions of legal interpretation.

 

 

 

A-1

EXHIBIT B-1

Form of Opinion of Dorsey & Whitney LLP,
Counsel for the Company

          References
to the Final Offering Memorandum in this Exhibit B-1 include any supplements
thereto at the Closing Date.

          (i)
The Company has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the State of Minnesota.

          (ii)
The Company has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Disclosure Package
and the Final Offering Memorandum and to enter into and perform its obligations
under the Purchase Agreement, the Registration Rights Agreement and the
Indenture.

          (iii)
The Company’s authorized equity capitalization is as set forth in the Disclosure
Package and the Final Offering Memorandum. The authorized, issued and
outstanding capital stock of the Company (including the Common Stock) conform
to the descriptions thereof set forth in the Disclosure Package and the Final
Offering Memorandum under the caption “Description of Capital Stock.” 

          (iv)
The Purchase Agreement has been duly authorized, executed and delivered by the
Company.

          (v)
The Indenture has been duly authorized, executed and delivered by the Company
and, assuming due authorization, execution and delivery of the Indenture by the
Trustee, will constitute a legally valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles; and the Indenture
conforms in all material respects to the description thereof contained in the
Disclosure Package and the Final Offering Memorandum. 

          (vi)
The Registration Rights Agreement has been duly authorized, executed and
delivered by the Company and is a legally valid and binding agreement of the
Company enforceable against the Company in accordance with its terms, except as
rights to indemnification and contribution thereunder may be limited by
applicable law and except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles. 

          (vii)
The Debentures have been duly authorized by the Company; when the Debentures
are executed, authenticated and issued in accordance with the terms of the
Indenture and delivered to and paid for by the Initial Purchasers pursuant to
the Purchase Agreement on the Closing Date or any Subsequent Closing Date, as
the case may be (assuming due authentication of the Debentures by the Trustee),
such Debentures will constitute legally valid and binding obligations of the
Company, entitled to the benefits of the Indenture and enforceable against the

B-1-1

Company in
accordance with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles; and the Debentures will conform in all material respects
to the description thereof contained in the Disclosure Package and the Final
Offering Memorandum.

          (viii)
The Conversion Shares initially issuable upon conversion of the Debentures have
been duly authorized and reserved and, when issued upon conversion of the
Debentures in accordance with the terms of the Debentures, will be validly
issued, fully paid and non-assessable.

          (ix)
Each document filed pursuant to the Exchange Act (other than the financial
statements and supporting schedules included or incorporated by reference
therein, as to which no opinion need be rendered) and incorporated or deemed to
be incorporated by reference in the Disclosure Package and the Final Offering
Memorandum complied when so filed as to form in all material respects with the
Exchange Act.

          (x)
The statements in the Disclosure Package and the Final Offering Memorandum
under the captions “Description of Capital Stock” and “Material U.S. Federal
Income Tax Considerations,” insofar as such statements constitute matters of
law, summaries of legal matters or legal proceedings, or legal conclusions,
have been reviewed by such counsel and fairly present and summarize, in all
material respects, the matters referred to therein.

          (xi)
Assuming the accuracy of the representations and warranties of the Company and
the Initial Purchasers contained in the Purchase Agreement, neither
registration of the Debentures under the Securities Act nor qualification of
the Indenture under the Trust Indenture Act is required for the offer and sale
of the Debentures by the Company to the Initial Purchasers in the manner
contemplated by the Purchase Agreement, the Disclosure Package and the Final
Offering Memorandum, it being understood that no opinion is expressed as to any
subsequent resale of a Debenture or shares of Common Stock issued upon
conversion of the Debentures.

          (xii)
No consent, approval, authorization or other order of, or registration or
filing with, any court or other governmental authority or agency, is required
for the Company’s execution, delivery and performance of the Purchase Agreement
and consummation of the transactions contemplated thereby and by the Disclosure
Package and the Final Offering Memorandum, except as required under the
Securities Act and applicable securities or blue sky laws of any state or
foreign jurisdiction and from the NASD.

          (xiii)
The execution and delivery of the Purchase Agreement by the Company and the
performance by the Company of its obligations thereunder (other than
performance by the Company of its obligations under the indemnification section
of the Purchase Agreement, as to which no opinion need be rendered) (i) have
been duly authorized by all necessary corporate action on the part of the
Company; (ii) will not result in any violation of the provisions of the charter
or by-laws of the Company; (iii) will not constitute a breach of, or Default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its subsidiaries
pursuant to, Getz Bros. Co. Ltd.’s 1.019% Yen-denominated Guaranteed Senior
Notes due 2010 or the related Note Purchase Agreement dated 

B-1-2

as of May 1,
2003 and the Company’s Multi-Year $1.0 billion Credit Agreement, dated as of
December 13, 2006, with a consortium of lenders; or (iv) will not result in any
violation of any statute, law, rule or regulation, or any judgment, order or
decree known to such counsel, applicable to the Company of any court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its properties.

          (xiv)
The Company is not, and after receipt of payment for the Debentures and the
application of the proceeds thereof as contemplated under the caption “Use of
Proceeds” in the Disclosure Package and the Final Offering Memorandum will not
be, required to register as an “investment company” within the meaning of the
Investment Company Act.

          In
addition, such counsel shall state that they have participated in conferences
with officers and other representatives of the Company, representatives of the
independent registered public accountants for the Company and representatives
of the Initial Purchasers at which the contents of the Disclosure Package and
the Final Offering Memorandum and related matters were discussed and, although
such counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the Disclosure
Package or the Final Offering Memorandum (other than as specified above), on
the basis of the foregoing, nothing has come to their attention which would
lead them to believe that (i) the Disclosure Package, as of the Applicable
Time, contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading or (ii) the
Final Offering Memorandum, as of its date or at the Closing Date or any
Subsequent Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief as to the financial statements or schedules or other financial or
related statistical data derived therefrom, included or incorporated by
reference in the Disclosure Package, the Final Offering Memorandum or any
amendments or supplements thereto).

          In
rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the General Corporation Law
of the State of Delaware, the New York Corporation Law or the federal law of
the United States, to the extent they deem proper and specified in such
opinion, upon the opinion (which shall be dated the Closing Date or any
Subsequent Closing Date, as the case may be, shall be satisfactory in form and
substance to the Initial Purchasers, shall expressly state that the Initial
Purchasers may rely on such opinion as if it were addressed to them and shall
be furnished to the Representative) of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Initial
Purchasers; provided,
however,
that such counsel shall further state that they believe that they and the
Initial Purchasers are justified in relying upon such opinion of other counsel,
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.

B-1-3

EXHIBIT B-2

Form of Opinion of General Counsel of the
Company

          References
to the Final Offering Memorandum in this Exhibit B-2 include any supplements
thereto, at the Closing Date.

          (i)
Each Significant Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing (to the extent applicable) under the laws of
the jurisdiction in which it is organized, has corporate power and authority to
own, or lease, as the case may be, and to operate its properties and to conduct
its business as described in the Disclosure Package and the Final Offering Memorandum
and is duly qualified as a foreign corporation to transact business and is in
good standing (to the extent applicable) in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing (to the extent applicable)
would not, individually or in the aggregate, have a Material Adverse Effect.

          (ii)
The Company is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the aggregate,
have a Material Adverse Effect.

          (iii)
All of the issued and outstanding capital stock of each Significant Subsidiary
of the Company has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance
or, to the best knowledge of such counsel, any pending or threatened claim.

          (iv)
All of the outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable.

          (v)
No stockholder of the Company or any other person has any preemptive right,
right of first refusal or other similar right to subscribe for or purchase
securities of the Company arising (a) by operation of the charter or by-laws of
the Company or the Minnesota Business Corporation Act or (b) to the best
knowledge of such counsel, otherwise.

          (vi)
The issuance of the Conversion Shares will not be subject to any preemptive or
similar rights arising (a) by operation of the charter or by-laws of the
Company or the Minnesota Business Corporation Act or (b) to the best knowledge
of such counsel, otherwise.

          (vii)
The statements in the 2006 10-K under the caption “Item 3: Legal Proceedings,”
insofar as such statements constitute matters of law, summaries of legal
matters or legal proceedings, or legal conclusions, have been reviewed by such
counsel and fairly present and summarize, in all material respects, the matters
referred to therein.

B-2-1

          (viii)
To the best knowledge of such counsel, there are no legal or governmental
actions, suits or proceedings pending or threatened which are required to be
disclosed in the Disclosure Package or the Final Offering Memorandum, other
than those disclosed therein.

          (ix)
The execution and delivery of the Purchase Agreement by the Company and the
performance by the Company of its obligations thereunder (other than
performance by the Company of its obligations under the indemnification section
of the Purchase Agreement, as to which no opinion need be rendered) (a) will
not result in any violation of the provisions of the charter or by-laws of any
Significant Subsidiary; (b) will not constitute a breach of, or Default under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of any of Significant Subsidiary pursuant to, (A) Getz
Bros. Co. Ltd.’s 1.019% Yen-denominated Guaranteed Senior Notes due 2010 or the
related Note Purchase Agreement dated as of May 1, 2003 and the Company’s
Multi-Year $1.0 billion Credit Agreement, dated as of December 13, 2006, with a
consortium of lenders or (B) any other Existing Instrument; or (c) will not
result in any violation of any statute, law, rule or regulation or any
judgment, order or decree known to such counsel, applicable to any Significant
Subsidiary of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over any Significant
Subsidiary or any of its properties, except with respect to clauses (b) and (c)
only, such breaches, defaults, liens, charges, encumbrances or violations that
would not result in a Material Adverse Effect.

          (x)
To the best knowledge of such counsel, neither the Company nor any Significant
Subsidiary (A) is in violation of (i) its charter or by-laws or (ii) any
statute, law, rule, judgment, regulation, order or decree applicable to the
Company or any of its Significant Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its Significant Subsidiaries or any of
its or their properties or (B) is in Default in the performance or observance
of any obligation, agreement, covenant or condition contained in any Existing
Instrument, except with respect to clauses (A)(ii) and (B) only, for such violations
or Defaults as would not, individually or in the aggregate, have a Material
Adverse Effect.

          (xi)
The Company and each Significant Subsidiary possess such valid and current
licenses, certificates, authorizations or permits issued by the appropriate
state, federal or foreign regulatory agencies or bodies necessary to conduct
their respective businesses, except where the failure to possess such licenses,
certificates, authorizations or permits would not have a Material Adverse
Effect, and neither the Company nor any Significant Subsidiary has received any
notice of proceedings relating to the revocation or modification of, or
non-compliance with, any such license, certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could have a Material Adverse Effect.

          In
addition, such counsel shall state that they have participated in conferences
with officers and other representatives of the Company, representatives of the
independent registered public accountants for the Company and representatives
of the Initial Purchasers at which the contents of the Disclosure Package and
Final Offering Memorandum and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Disclosure Package 

B-2-2

or the Final
Offering Memorandum (other than as specified above), on the basis of the
foregoing, nothing has come to their attention which would lead them to believe
that (i) the Disclosure Package, as of the Applicable Time, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (ii) the Final Offering Memorandum, as
of its date or at the Closing Date or any Subsequent Closing Date, as the case
may be, contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief as to the financial
statements or schedules or other financial or related statistical data derived
therefrom, included or incorporated by reference in the Disclosure Package, the
Final Offering Memorandum or any amendments or supplements thereto).

          In
rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the General Corporation Law
of the State of Delaware, the New York Corporation Law or the federal law of
the United States, to the extent they deem proper and specified in such
opinion, upon the opinion (which shall be dated the Closing Date or any
Subsequent Closing Date, as the case may be, shall be satisfactory in form and
substance to the Initial Purchasers, shall expressly state that the Initial
Purchasers may rely on such opinion as if it were addressed to them and shall
be furnished to the Representative) of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Initial
Purchasers; provided, however, that such counsel shall further state that they
believe that they and the Initial Purchasers are justified in relying upon such
opinion of other counsel, and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and public
officials.

B-2-3

EXHIBIT C

Term Sheet

Banc of America Securities LLC

St. Jude Medical, Inc.

1.22% Convertible Senior Debentures Due 2008

	
 

	
 

	
 

	
Issuer:

	
 

	
St. Jude Medical, Inc.

	
 

	
 

	
 

	
Title
  of securities:

	
 

	
1.22%
  Convertible Senior Debentures due 2008

	
 

	
 

	
 

	
Issue
  price:

	
 

	
100%

	
 

	
 

	
 

	
Aggregate
  principal amount offered:

	
 

	
$1.2
  billion (including the exercise of the initial purchaser’s option to purchase
  up to $200 million of additional debentures)

	
 

	
 

	
 

	
Net
  proceeds:

	
 

	
$1.194
  billion (including proceeds received from the exercise in full of the initial
  purchaser’s option to purchase additional debentures) 

	
 

	
 

	
 

	
 

	
 

	
In
  addition, the issuer will receive approximately $35 million in proceeds from
  a warrant transaction it entered into in connection with the offering.

	
 

	
 

	
 

	
Maturity:

	
 

	
December 15, 2008

	
 

	
 

	
 

	
Annual
  interest rate:

	
 

	
1.22%
  per annum

	
 

	
 

	
 

	
Interest payment dates

	
 

	
June
  15 and December 15, commencing June 15, 2007

	
 

	
 

	
 

	
Call dates:

	
 

	
None 

	
 

	
 

	
 

	
Put
  dates:

	
 

	
Holders
  may require the issuer to repurchase all or a portion of their debentures
  upon the occurrence of a fundamental change.

	
 

	
 

	
 

	
Conversion price:

	
 

	
$52.06
  (approx) per share of common stock

	
 

	
 

	
 

	
Conversion
  rate:

	
 

	
19.2101
  shares of common stock per $1,000 aggregate principal amount of debentures

	
 

	
 

	
 

	
Use
  of Proceeds:

	
 

	
Issuer
  intends to use (1) approximately $700 million of the net proceeds from this
  offering and the warrant transaction to repay indebtedness under its interim
  liquidity facility and commercial paper program incurred to finance $700
  million of share repurchases which were completed in February 2007, (2) up to
  approximately $300 million to repurchase shares of its common stock through
  one or more block trades with the initial purchaser and/or its affiliates and
  through subsequent repurchases in the open market pursuant to a new trading
  plan and (3) approximately $101 million to fund the cost of a convertible
  note hedge transaction. The remainder of the net proceeds will be used for
  general corporate purposes 

	
 

	
 

	
 

	
Settlement:

	
 

	
April 25, 2007

	
 

	
 

	
 

	
Adjustment
  to conversion rate upon a Public Acquirer Change of Control:

	
 

	
The following table sets
  forth the stock price, effective date and number of additional shares to be
  issuable per $1,000 principal amount of debentures. The maximum number of
  shares issuable per $1,000 of debentures is 23.0501:

Stock Price

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Effective Date

	
 

	
$43.38

	
 

	
$45.00

	
 

	
$47.50

	
 

	
$50.00

	
 

	
$52.06

	
 

	
$55.00

	
 

	
$60.00

	
 

	
$70.00

	
 

	
$80.00

	
 

	
$90.00

	
 

	
$100.00

	
 

	
$110.00

	
 

	
$120.00

	
 

	
$130.00

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	
19-Apr-07

	
 

	
 

	
3.84

	
 

	
3.31

	
 

	
2.63

	
 

	
2.08

	
 

	
1.70

	
 

	
1.29

	
 

	
0.81

	
 

	
0.33

	
 

	
0.16

	
 

	
0.09

	
 

	
0.06

	
 

	
0.04

	
 

	
0.03

	
 

	
0.02

	
15-Jun-07

	
 

	
 

	
3.84

	
 

	
3.28

	
 

	
2.58

	
 

	
2.02

	
 

	
1.64

	
 

	
1.23

	
 

	
0.74

	
 

	
0.29

	
 

	
0.13

	
 

	
0.07

	
 

	
0.05

	
 

	
0.04

	
 

	
0.03

	
 

	
0.02

	
15-Sep-07

	
 

	
 

	
3.84

	
 

	
3.21

	
 

	
2.48

	
 

	
1.91

	
 

	
1.53

	
 

	
1.11

	
 

	
0.64

	
 

	
0.22

	
 

	
0.09

	
 

	
0.05

	
 

	
0.04

	
 

	
0.03

	
 

	
0.02

	
 

	
0.01

	
15-Dec-07

	
 

	
 

	
3.84

	
 

	
3.17

	
 

	
2.38

	
 

	
1.78

	
 

	
1.39

	
 

	
0.97

	
 

	
0.51

	
 

	
0.15

	
 

	
0.06

	
 

	
0.03

	
 

	
0.02

	
 

	
0.02

	
 

	
0.01

	
 

	
0.01

	
15-Mar-08

	
 

	
 

	
3.84

	
 

	
3.14

	
 

	
2.26

	
 

	
1.63

	
 

	
1.23

	
 

	
0.81

	
 

	
0.37

	
 

	
0.08

	
 

	
0.02

	
 

	
0.02

	
 

	
0.01

	
 

	
0.01

	
 

	
0.01

	
 

	
0.00

	
15-Jun-08

	
 

	
 

	
3.84

	
 

	
3.11

	
 

	
2.11

	
 

	
1.44

	
 

	
1.02

	
 

	
0.60

	
 

	
0.21

	
 

	
0.01

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
15-Sep-08

	
 

	
 

	
3.84

	
 

	
3.04

	
 

	
1.93

	
 

	
1.18

	
 

	
0.73

	
 

	
0.32

	
 

	
0.03

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
15-Dec-08

	
 

	
 

	
3.84

	
 

	
3.01

	
 

	
1.84

	
 

	
0.79

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

	
 

	
0.00

C-1

          This
communication is intended for the sole use of the person to whom it is provided
by the sender.

          The
debentures and any issuer common stock issuable upon conversion of the
debentures have not been registered under the Securities Act of 1933, as
amended, or the securities laws of any other jurisdiction and may only be
offered or sold to qualified institutional buyers pursuant to Rule 144A or
pursuant to another applicable exemption.

          ANY
DISCLAIMER OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS
COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE
AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA
BLOOMBERG OR ANOTHER EMAIL SYSTEM.

C-2Exhibit 10.2 to St. Jude Medical, Inc. Form 8-K dated April 19, 2007

Exhibit 10.2 

	
 

	
 

	
 

	
 

	
 

	
April 19,
  2007

	
 

	
 

	
 

	
To:

	
 

	
St. Jude
  Medical, Inc.

	
 

	
 

	
One Lillehei
  Plaza

	
 

	
 

	
St. Paul,
  Minnesota 55117

	
 

	
 

	
Attn:
  Corporate Secretary

	
 

	
 

	
Telephone:
  651-483-2000

	
 

	
 

	
Facsimile:
  651-481-7690

	
 

	
 

	
 

	
From:

	
 

	
Bank of
  America, N.A.

	
 

	
 

	
c/o Banc of
  America Securities LLC

	
 

	
 

	
9 West 57th
  Street

	
 

	
 

	
New York, NY
  10019

	
 

	
 

	
Attn: John
  Servidio

	
 

	
 

	
Telephone:
  212-847-6527 

	
 

	
 

	
Facsimile:
  212-230-8610

	
 

	
 

	
 

	
Re:

	
 

	
Convertible Bond Hedge Transaction

	
 

	
 

	
(Transaction Reference Number:
  NY-28865)

Ladies and
Gentlemen:

          The
purpose of this communication (this “Confirmation”) is to set forth the terms
and conditions of the above-referenced transaction entered into on the Trade
Date specified below (the “Transaction”) between Bank of America, N.A.
(“BofA”)
and St. Jude Medical, Inc. (“Counterparty”). This communication
constitutes a “Confirmation” as referred to in the ISDA Master Agreement
specified below. 

          1.
This Confirmation is subject to, and incorporates, the definitions and
provisions of the 2000 ISDA Definitions (including the Annex thereto) (the “2000
Definitions”) and the definitions and provisions of the 2002 ISDA
Equity Derivatives Definitions (the “Equity Definitions”, and together with the
2000 Definitions, the “Definitions”), in each case as published by
the International Swaps and Derivatives Association, Inc. (“ISDA”).
In the event of any inconsistency between the 2000 Definitions and the Equity
Definitions, the Equity Definitions will govern. Certain defined terms used
herein have the meanings assigned to them in Indenture to be dated as of April
25, 2007 between Counterparty and U.S. Bank National Association as trustee
(the “Indenture”)
relating to the USD1,200,000,000 principal amount of 1.22% convertible senior
debentures due December 15, 2008 (the “Convertible Securities”). In the event of
any inconsistency between the terms defined in the Indenture and this
Confirmation, this Confirmation shall govern. For the avoidance of doubt,
references herein to sections of the Indenture are based on the draft of the
Indenture most recently reviewed by the parties at the time of execution of
this Confirmation. If any relevant sections of the Indenture are changed, added
or renumbered following execution of this Confirmation but prior to the
execution of the Indenture, the parties will amend this Confirmation in good
faith to preserve the economic intent of the parties. 

          This
Confirmation evidences a complete and binding agreement between BofA and
Counterparty as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall be subject to an agreement (the “Agreement”)
in the form of the 2002 ISDA Master Agreement (the “ISDA Form”) as if BofA and
Counterparty had executed an agreement in such form (without any Schedule but
with the elections set forth in this Confirmation). For the avoidance of doubt,
the Transaction shall be the only transaction under the Agreement.

          All
provisions contained in, or incorporated by reference to, the Agreement will
govern this Confirmation except as expressly modified herein. In the event of
any inconsistency between this Confirmation and either the Definitions or the
Agreement, this Confirmation shall govern.

          2.
The Transaction constitutes a Share Option Transaction for purposes of the
Equity Definitions. The terms of the particular Transaction to which this
Confirmation relates are as follows:

	
 

	
 

	
 

	
 

	
General
  Terms:

	
 

	
 

	
 

	
 

	
 

	
 

	
Trade Date:

	
 

	
April 19,
  2007

	
 

	
 

	
 

	
 

	
 

	
Effective
  Date:

	
 

	
The closing
  date of the offering of the Convertible Securities.

	
 

	
 

	
 

	
 

	
 

	
Option Type:

	
 

	
Call

	
 

	
 

	
 

	
 

	
 

	
Seller:

	
 

	
BofA

	
 

	
 

	
 

	
 

	
 

	
Buyer:

	
 

	
Counterparty

	
 

	
 

	
 

	
 

	
 

	
Shares:

	
 

	
The Common
  Stock of Counterparty, par value USD 0.10 per share (Ticker Symbol: “STJ”).

	
 

	
 

	
 

	
 

	
 

	
Number of
  Options:

	
 

	
The number
  of Convertible Securities in denominations of USD1,000 principal amount
  issued by Counterparty on the closing date for the initial issuance of the
  Convertible Securities.

	
 

	
 

	
 

	
 

	
 

	
Number of
  Shares:

	
 

	
As of any
  date, the product of the Number of Options and the Conversion Rate

	
 

	
 

	
 

	
 

	
 

	
Conversion
  Rate:

	
 

	
As defined
  in the Indenture, but without regard to any adjustments to the Conversion
  Rate pursuant to Sections 10.01(c), 10.01(d), 10.04(h) or 10.10 of the
  Indenture.

	
 

	
 

	
 

	
 

	
 

	
Premium:

	
 

	
USD101,040,000.00

	
 

	
 

	
 

	
 

	
 

	
Premium
  Payment Date:

	
 

	
April 25,
  2007.

	
 

	
 

	
 

	
 

	
 

	
Exchange:

	
 

	
New York
  Stock Exchange

	
 

	
 

	
 

	
 

	
 

	
Related
  Exchange:

	
 

	
All
  Exchanges

	
 

	
 

	
 

	
 

	
Procedures
  for Exercise:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Potential
  Exercise Dates:

	
 

	
Each
  Conversion Date.

	
 

	
 

	
 

	
 

	
 

	
Conversion
  Date:

	
 

	
Each
  “Conversion Date” as defined in the Indenture.

	
 

	
 

	
 

	
 

	
 

	
Required
  Exercise on 

	
 

	
 

	
 

	
Conversion
  Dates:

	
 

	
On each
  Conversion Date, a number of Options equal to the number of Convertible
  Securities in denominations of USD1,000 principal amount submitted for
  conversion on such Conversion Date in accordance with the terms of the
  Indenture shall be automatically exercised, subject to “Notice of Exercise”
  below.

	
 

	
 

	
 

	
 

	
 

	
Expiration
  Date:

	
 

	
December 15,
  2008

	
 

	
 

	
 

	
 

	
 

	
Automatic
  Exercise:

	
 

	
As provided
  above under “Required Exercise on Conversion Dates”.

	
 

	
 

	
 

	
 

	
 

	
Notice of
  Exercise:

	
 

	
Notwithstanding
  anything to the contrary in the Equity Definitions, in order to exercise any
  Options, Counterparty must notify BofA in writing prior to 5:00 PM, New York
  City time, on the Exchange Business Day prior to the first Exchange Business
  Day of the “Cash Settlement Period”, as defined in the Indenture, relating to
  the Convertible Securities converted on the Conversion Date occurring on the
  relevant Exercise Date of (i) the number of Options being exercised on such
  Exercise Date, (ii) the scheduled settlement date under the Indenture for the
  Convertible Securities 

2

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
converted on
  the Conversion Date corresponding to such Exercise Date and (iii) the
  applicable Specified Cash Amount (as defined in the Indenture).

	
 

	
 

	
 

	
 

	
 

	
BofA’s
  Telephone Number

	
 

	
 

	
 

	
and Telex
  and/or Facsimile Number

	
 

	
 

	
 

	
and Contact
  Details for purpose of

	
 

	
 

	
 

	
Giving
  Notice:

	
 

	
To be
  provided by BofA

	
 

	
 

	
 

	
 

	
Settlement
  Terms:

	
 

	
 

	
 

	
 

	
 

	
 

	
Settlement
  Date:

	
 

	
In respect
  of an Exercise Date occurring on a Conversion Date, the settlement date for
  the Shares and/or cash to be delivered under the Convertible Securities
  converted on such Conversion Date pursuant to Section 10.03 of the Indenture;
  provided that the Settlement
  Date will not be prior to the later of (i) the date one Settlement Cycle
  following the final day of the relevant “Cash Settlement Period”, as defined
  in the Indenture, or (ii) the Exchange Business Day immediately following the
  date on which Counterparty gives notice to BofA of such Settlement Date prior
  to 5:00 PM, New York City time.

	
 

	
 

	
 

	
 

	
 

	
Delivery
  Obligation:

	
 

	
In lieu of
  the obligations set forth in Sections 8.1 and 9.1 of the Equity Definitions,
  and subject to “Notice of Exercise” above, in respect of an Exercise Date
  occurring on a Conversion Date, BofA will deliver to Counterparty, on the
  related Settlement Date, a number of Shares and cash in lieu of fractional
  Shares and/or amount of cash in USD equal to the aggregate number of Shares
  (and cash in lieu of fractional Shares) and/or cash, as the case may be, that
  Counterparty is obligated to deliver to the holder(s) of the Convertible
  Securities converted on such Conversion Date pursuant to clauses (ii) and
  (iii) of the first sentence of Section 10.03(a) of the Indenture (the “Convertible
  Obligation”); provided
  that such obligation shall be determined (i) excluding any Shares (and cash
  in lieu of fractional Shares) and/or cash that Counterparty is obligated to
  deliver to holder(s) of the Convertible Securities as a result of any
  adjustments to the Conversion Rate pursuant to Sections 10.01(c), 10.01(d),
  10.04(h) or 10.10 of the Indenture and (ii) without regard to the election,
  if any, by Counterparty to adjust the Conversion Rate and the related
  conversion obligation pursuant to Section 10.01(d) of the Indenture.

	
 

	
 

	
 

	
 

	
 

	
Notice of
  Delivery Obligation:

	
 

	
No later
  than the Exchange Business Day immediately following the last day of the
  relevant “Cash Settlement Period”, as defined in the Indenture, Counterparty
  shall give BofA notice of the final number of Shares (and cash in lieu of
  fractional Shares) and/or cash comprising the Convertible Obligation (it
  being understood, for the avoidance of doubt, that the requirement of
  Counterparty to deliver such notice shall not limit Counterparty’s
  obligations with respect to Notice of Exercise, as set forth above, in any
  way).

	
 

	
 

	
 

	
 

	
 

	
Other
  Applicable Provisions:

	
 

	
To the
  extent BofA is obligated to deliver Shares hereunder, the provisions of
  Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except that the Representation and
  Agreement contained in Section 9.11 of the Equity Definitions shall be
  modified by excluding any representations therein relating to restrictions,
  obligations, limitations or requirements under applicable securities laws
  arising as a result of the fact that Counterparty is the Issuer of the
  Shares) 

3

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
and 9.12 of
  the Equity Definitions will be 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 Option means that BofA is
  obligated to deliver Shares hereunder.

	
 

	
 

	
 

	
 

	
 

	
Restricted
  Certificated Shares:

	
 

	
Notwithstanding
  anything to the contrary in the Equity Definitions, BofA may, in whole or in
  part, deliver Shares in certificated form representing the Number of Shares
  to be Delivered to Counterparty in lieu of delivery through the Clearance
  System. With respect to such certificated Shares, the Representation and
  Agreement contained in Section 9.11 of the Equity Definitions shall be
  modified by deleting the remainder of the provision after the word
  “encumbrance” in the fourth line thereof.

	
 

	
 

	
 

	
 

	
Share
  Adjustments:

	
 

	
 

	
 

	
 

	
 

	
 

	
Method of
  Adjustment:

	
 

	
Notwithstanding
  Section 11.2 of the Equity Definitions, upon the occurrence of any event or
  condition set forth in Section 10.04(a), (b), (c), (d) or (e) of the
  Indenture, the Calculation Agent shall make a corresponding adjustment, if
  necessary, to the terms relevant to the exercise, settlement or payment of
  the Transaction.

	
 

	
 

	
 

	
 

	
Extraordinary
  Events:

	
 

	
 

	
 

	
 

	
 

	
 

	
Merger
  Events:

	
 

	
Notwithstanding
  Section 12.1(b) of the Equity Definitions, a “Merger Event” means the
  occurrence of any event or condition set forth in Section 10.05(a) of the
  Indenture.

	
 

	
 

	
 

	
 

	
 

	
Tender
  Offer:

	
 

	
Applicable.
  Notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer”
  means the occurrence of any event or condition set forth in Section 10.04(f)
  or 10.04(g) of the Indenture.

	
 

	
 

	
 

	
 

	
 

	
Consequences
  of Merger Events and Tender Offers:

	
 

	

Notwithstanding
  Sections 12.2 and 12.3 of the Equity Definitions, upon the occurrence of a
  Merger Event or Tender Offer, the Calculation Agent shall make the
  corresponding adjustment in respect of any adjustment under the Indenture to
  any one or more of the nature of the Shares, the Number of Options, the Option
  Entitlement and any other variable relevant to the exercise, settlement or
  payment for the Transaction; provided that
  such adjustment shall be made without regard to any adjustment to the
  Conversion Rate pursuant to Sections 10.01(c), 10.01(d), 10.04(h) or 10.10 of
  the Indenture and the election, if any, by Counterparty to adjust the
  Conversion Rate and the related conversion obligation pursuant to Section
  10.01(d) of the Indenture; and provided
  further that the Calculation Agent may limit or alter any such
  adjustment referenced in this paragraph so that the fair value of the
  Transaction to BofA is not reduced as a result of such adjustment.

	
 

	
 

	
 

	
 

	
 

	
Nationalization,
  Insolvency or Delisting:

	
 

	

Cancellation
  and Payment (Calculation Agent Determination); provided that, in addition to the provisions of Section
  12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting
  if the Exchange is located in the United States and the Shares are not
  immediately re-listed, re- traded or re-quoted on
  any of the New York Stock Exchange, the American Stock Exchange or the NASDAQ
  National Market System (or their respective successors); if the Shares are
  immediately re-listed, re-traded or re-

4

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
quoted on any such exchange or
  quotation system, such exchange or quotation system shall thereafter be
  deemed to be the Exchange.

	
 

	
 

	
 

	
 

	
Additional
  Disruption Events: 

	
 

	
 

	
 

	
 

	
 

	
 

	
     (a)
  Change in Law:

	
 

	
Applicable, provided
  that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by
  inserting ”on the advice of counsel” after the words “good faith”
  and by deleting subclause (Y) of such Section. 

	
 

	
 

	
 

	
 

	
 

	
     (b)
  Failure to Deliver:

	
 

	
Applicable

	
 

	
 

	
 

	
 

	
 

	
     (c)
  Insolvency Filing:

	
 

	
Applicable

	
 

	
 

	
 

	
 

	
 

	
     (d)
  Hedging Disruption:

	
 

	
Not
  Applicable

	
 

	
 

	
 

	
 

	
 

	
     (e)
  Increased Cost of Hedging:

	
 

	
Not
  Applicable

	
 

	
 

	
 

	
 

	
Hedging
  Party:

	
 

	
For all
  applicable Additional Disruption Events, BofA

	
 

	
 

	
 

	
Determining
  Party:

	
 

	
For all
  applicable Additional Disruption Events, BofA

	
 

	
 

	
 

	
 

	
Non-Reliance:

	
 

	
Applicable

	
 

	
 

	
 

	
Agreements
  and Acknowledgments 

	
 

	
 

	
Regarding
  Hedging Activities:

	
 

	
Applicable

	
 

	
 

	
 

	
Additional
  Acknowledgments:

	
 

	
Applicable

	
 

	
 

	
 

	
3. Calculation
  Agent:

	
 

	
BofA

	
 

	
 

	
 

	
 

	
4. Account
  Details:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
BofA Payment
  Instructions:

	
 

	
Provided by Bank of
  America

	
 

	
 

	
 

	
 

	
 

	
Issuer
  Payment Instructions:

	
 

	
To be
  provided by Issuer.

	
 

	
 

	
 

	
 

	
5. Offices:

	
 

	
 

               The
Office of BofA for the Transaction is: New York

	
 

	
 

	
 

	
 

	
 

	
 

	
Bank of
  America, N.A. 

  c/o Banc of America Securities LLC 
9 West 57th Street, 40th Floor

  New York, NY 10019

	
 

	
 

	
Attention:

	
John
  Servidio 

	
 

	
 

	
Telephone:

	
212-847-6527
  

	
 

	
 

	
Facsimile:

	
212-230-8610

               The
Office of Issuer for the Transaction is: Not applicable

	
 

	
 

	
 

	
 

	
6. Notices:
  For purposes of this Confirmation:

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Address for
  notices or communications to Issuer:

	
 

	
 

	
 

	
 

	
 

	
 

	
To:

	
St. Jude
  Medical, Inc. 

  One Lillehei Plaza

  St. Paul, Minnesota 55117

	
 

	
 

	
Attn:

	
Corporate
  Secretary

5

	
 

	
 

	
 

	
 

	
 

	
 

	
Telephone:

	
651-483-2000

	
 

	
 

	
Facsimile:

	
651-481-7690

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Address for
  notices or communications to BofA:

	
 

	
 

	
 

	
 

	
 

	
 

	
To:

	
Bank of
  America, N.A.

  c/o Banc of America Securities LLC

  9 West 57th Street, 40th Floor

  New York, NY 10019

	
 

	
 

	
Attn:

	
John
  Servidio

	
 

	
 

	
Telephone:

	
212-847-6527

	
 

	
 

	
Facsimile:

	
212-230-8610

          7.
Representations, Warranties and Agreements:

          (a)
In addition to the representations and warranties in the Agreement and those
contained elsewhere herein, Counterparty represents and warrants to and for the
benefit of, and agrees with, BofA as follows:

	
 

	
 

	
 

	
          (i)
  On the Trade Date, (A) none of Counterparty and its officers and directors is
  aware of any material nonpublic information regarding Counterparty or the
  Shares and (B) all reports and other documents filed by Counterparty with the
  Securities and Exchange Commission pursuant to the Securities Exchange Act of
  1934, as amended (the “Exchange Act”) when considered as a whole
  (with the more recent such reports and documents deemed to amend inconsistent
  statements contained in any earlier such reports and documents), do not
  contain any untrue statement of a material fact or any omission of a material
  fact required to be stated therein or necessary to make the statements
  therein, in the light of the circumstances in which they were made, not
  misleading.

	
 

	
 

	
 

	
          (ii)
  (A) On the Trade Date, the Shares or securities that are convertible into, or
  exchangeable or exercisable for Shares, are not, and shall not be, subject to
  a “restricted period,” as such term is defined in Regulation M under the
  Exchange Act (“Regulation M”) and (B) Counterparty shall not engage in any
  “distribution,” as such term is defined in Regulation M, other than a
  distribution meeting the requirements of the exceptions set forth in sections
  101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business
  Day immediately following the Trade Date.

	
 

	
 

	
 

	
          (iii)
  On the Trade Date, neither Counterparty nor any “affiliate” or “affiliated
  purchaser” (each as defined in Rule 10b-18 of the Exchange Act (“Rule
  10b-18”)) shall directly or indirectly (including, without
  limitation, by means of any cash-settled or other derivative instrument)
  purchase, offer to purchase, place any bid or limit order that would effect a
  purchase of, or commence any tender offer relating to, any Shares (or an
  equivalent interest, including a unit of beneficial interest in a trust or
  limited partnership or a depository share) or any security convertible into
  or exchangeable or exercisable for Shares, except through BofA.

	
 

	
 

	
 

	
          (iv)
  Without limiting the generality of Section 13.1 of the Equity Definitions,
  Counterparty acknowledges that BofA is not making any representations or
  warranties with respect to the treatment of the Transaction under FASB
  Statements 133, as amended, or 150, EITF Issue No. 00-19 (or any successor
  issue statements) or under FASB’s Liabilities & Equity Project. 

	
 

	
 

	
 

	
          (v)
  Without limiting the generality of Section 3(a)(iii) of the Agreement, the Transaction
  will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.

	
 

	
 

	
 

	
          (vi)
  Prior to the Trade Date, Counterparty shall deliver to BofA a resolution of
  Counterparty’s board of directors authorizing the Transaction and such other
  certificate or certificates as BofA shall reasonably request.

	
 

	
 

	
 

	
          (vii)
  Counterparty is not entering into this Confirmation to create actual or
  apparent trading activity in the Shares (or any security convertible into or
  exchangeable for Shares) or to raise or depress or otherwise manipulate the
  price of the Shares (or any security convertible into or exchangeable for
  Shares) or otherwise in violation of the Exchange Act. 

6

	
 

	
 

	
 

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

	
 

	
 

	
 

	
          (ix)
  On the Trade Date (A) the assets of Counterparty at their fair valuation
  exceed the liabilities of Counterparty, including contingent liabilities, (B)
  the capital of Counterparty is adequate to conduct the business of
  Counterparty and (C) Counterparty has the ability to pay its debts and
  obligations as such debts mature and does not intend to, or does not believe
  that it will, incur debt beyond its ability to pay as such debts mature.

	
 

	
 

	
 

	
          (x)
  The representations and warranties of Counterparty set forth in Section 3 of
  the Agreement and Section 1 of the Purchase Agreement dated as of April 19,
  2007 between Counterparty and Banc of America Securities LLC (the “Purchase
  Agreement”) are true and correct and are hereby deemed to be
  repeated to BofA as if set forth herein.

	
 

	
 

	
 

	
          (xi)
  Counterparty understands no obligations of BofA to it hereunder will be
  entitled to the benefit of deposit insurance and that such obligations will
  not be guaranteed by any affiliate of BofA or any governmental agency.

	
 

	
 

	
          (b)
  Each of BofA and Counterparty agrees and represents that it is an “eligible
  contract participant” as defined in Section 1a(12) of the U.S. Commodity
  Exchange Act, as amended.

	
 

	
 

	
          (c)
  Each of BofA and Counterparty acknowledges that the offer and sale of the
  Transaction to it is intended to be exempt from registration under the
  Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section
  4(2) thereof. Accordingly, Counterparty represents and warrants to BofA that
  (i) it has the financial ability to bear the economic risk of its investment
  in the Transaction and is able to bear a total loss of its investment, (ii)
  it is an “accredited investor” as that term is defined in Regulation D as
  promulgated under the Securities Act, (iii) it is entering into the
  Transaction for its own account and without a view to the distribution or
  resale thereof, and (iv) the assignment, transfer or other disposition of the
  Transaction has not been and will not be registered under the Securities Act
  and is restricted under this Confirmation, the Securities Act and state
  securities laws.

	
 

	
 

	
          (d)
  Each of BofA and Counterparty agrees and acknowledges that BofA is a
  “financial institution,” “swap participant” and “financial participant”
  within the meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11 of
  the United States Code (the “Bankruptcy Code”). The parties hereto
  further agree and acknowledge (A) that this Confirmation is (i) a “securities
  contract,” as such term is defined in Section 741(7) of the Bankruptcy Code,
  with respect to which each payment and delivery hereunder is a “settlement
  payment,” as such term is defined in Section 741(8) of the Bankruptcy Code,
  and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of
  the Bankruptcy Code, with respect to which each payment and delivery hereunder
  is a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy
  Code, and (B) that BofA is entitled to the protections afforded by, among
  other sections, Section 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of
  the Bankruptcy Code.

	
 

	
 

	
 

	
8. Other
  Provisions:

	
 

	
 

	
          (a)
  Additional
  Termination Events. The occurrence of (i) an event of default with
  respect to Counterparty under the terms of the Convertible Securities as set
  forth in Section 6.01 of the Indenture, (ii) an Amendment Event or (iii) a
  Repayment Event shall be an Additional Termination Event with respect to
  which the Transaction is the sole Affected Transaction and Counterparty is
  the sole Affected Party and BofA shall be the party entitled to designate an
  Early Termination Date pursuant to Section 6(a) of the Agreement; provided
  that in the case of a Repayment Event the Transaction shall be subject to
  termination only in respect of the number of Convertible Securities that
  cease to be outstanding in connection with or as a result of such Repayment
  Event.

	
 

	
 

	
 

	
          “Amendment
  Event” means that Counterparty amends, modifies, supplements or
  waives any term of the Indenture or the Convertible Securities governing the
  principal amount, coupon, maturity, repurchase obligation of Counterparty,
  redemption right of Counterparty, any term relating to conversion of the
  Convertible Securities (including changes to the conversion price, conversion
  settlement dates or conversion conditions), or any term that would require
  consent of the holders of not less than 100% of the principal amount of the
  Convertible Securities to amend, in each case without the consent of BofA.

	
 

	
 

	
 

	
          “Repayment
  Event” means that (A) any Convertible Securities are repurchased
  or redeemed (whether in connection with or as a result of a change of
  control, howsoever defined, or for any other reason) by Counterparty or any
  of its subsidiaries, (B) any Convertible Securities are delivered to
  Counterparty in exchange for delivery of any property or assets of
  Counterparty or any of its subsidiaries (howsoever 

7

	
 

	
 

	
 

	
described),
  (C) any principal of any of the Convertible Securities is repaid prior to the
  final maturity date of the Convertible Securities (whether following
  acceleration of the Convertible Securities or otherwise), or (D) any
  Convertible Securities are exchanged by or for the benefit of the holders
  thereof for any other securities of Counterparty or any of its affiliates (or
  any other property, or any combination thereof) pursuant to any exchange
  offer or similar transaction; provided that, in the case of clause (B)
  and clause (D), conversions of the Convertible Securities pursuant to the
  terms of the Indenture as in effect on the date hereof shall not be Repayment
  Events.

	
 

	
 

	
          (b)
  Alternative
  Calculations and Payment on Early Termination and on Certain Extraordinary
  Events. If, subject to Section 8(j) below, BofA shall owe
  Counterparty any amount pursuant to Section 12.2 or 12.3 of the Equity
  Definitions and “Consequences of Merger Events and Tender Offers” above, or
  Sections 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of
  an Insolvency, a Nationalization, a Tender Offer or a Merger Event, in each
  case, in which the consideration or proceeds to be paid to holders of Shares
  consists solely of cash) or pursuant to Section 6(d)(ii) of the Agreement
  (except in the event of an Event of Default in which Counterparty is the
  Defaulting Party or a Termination Event in which Counterparty is the Affected
  Party, that resulted from an event or events within Counterparty’s control)
  (a “Payment
  Obligation”), Counterparty shall have the right, in its sole
  discretion, to require BofA to satisfy any such Payment Obligation by the
  Share Termination Alternative (as defined below) by giving irrevocable
  telephonic notice to BofA, confirmed in writing within one Scheduled Trading
  Day, between the hours of 9:00 A.M. and 4:00 P.M. New York City time on the
  Merger Date, Tender Offer Date, Announcement Date or Early Termination Date,
  as applicable (“Notice of Share Termination”). Upon such
  Notice of Share Termination, the following provisions shall apply on the
  Scheduled Trading Day immediately following the Merger Date, the Tender Offer
  Date, Announcement Date or Early Termination Date, as applicable:

	
 

	
 

	
 

	
Share
  Termination Alternative:

	
 

	
Applicable
  and means that BofA shall deliver to Counterparty the Share Termination
  Delivery Property on the date on which the Payment Obligation would otherwise
  be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section
  6(d)(ii) of the Agreement, as applicable (the “Share Termination Payment Date”),
  in satisfaction of the Payment Obligation. 

	
 

	
 

	
 

	
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 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
  BofA at the time of notification of the Payment Obligation. 

	
 

	
 

	
 

	
Share
  Termination Delivery Unit:

	
 

	
In the case
  of a Termination Event, Event of Default or Delisting, one Share or, in the
  case of an Insolvency, Nationalization, Merger Event or Tender Offer, 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
  Insolvency, Nationalization, Merger Event or Tender Offer. If such
  Insolvency, Nationalization, Merger Event or Tender Offer 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:

	
 

	
Applicable

	
 

	
 

	
 

	
Other
  applicable provisions:

	
 

	
If Share
  Termination Alternative is applicable, the provisions of Sections 9.8, 9.9,
  9.10, 9.11 (except that the Representation and Agreement contained in Section
  9.11 of the Equity Definitions shall be modified by excluding any
  representations therein relating to restrictions, obligations, limitations or
  requirements under applicable 

8

	
 

	
 

	
 

	
 

	
 

	
securities
  laws arising as a result of the fact that Counterparty is the Issuer of the
  Shares) and 9.12 of the Equity Definitions will be applicable, except that
  all references in such provisions to “Physically-Settled” shall be read as
  references to “settled by Share Termination Alternative” and all references
  to “Shares” shall be read as references to “Share Termination Delivery
  Units”.

	
 

	
 

	
 

          (c)
Disposition
of Hedge Shares. Counterparty hereby agrees that if, in the good
faith reasonable judgment of BofA, any Shares (the “Hedge Shares”) acquired by
BofA for the purpose of hedging its obligations pursuant to the Transaction
cannot be sold in the public market by BofA without registration under the
Securities Act (other than as a result of BofA being an affiliate, as such term
is used in the Securities Act and the rules and regulations thereunder, of
Counterparty), Counterparty shall, at its election: (i) in order to allow BofA
to sell the Hedge Shares in a registered offering, make available to BofA an
effective registration statement under the Securities Act to cover the resale
of such Hedge Shares and (A) enter into an agreement, in form and substance
satisfactory to BofA, substantially in the form of an underwriting agreement
for a registered offering, (B) provide accountant’s “comfort” letters in
customary form for registered offerings of equity securities, (C) provide
disclosure opinions of nationally recognized outside counsel to Counterparty
reasonably acceptable to BofA, (D) provide other customary opinions,
certificates and closing documents customary in form for registered offerings
of equity securities and (E) afford BofA a reasonable opportunity to conduct a
“due diligence” investigation with respect to Counterparty customary in scope
for underwritten offerings of equity securities; provided, however, that if
BofA, in its sole reasonable discretion, is not satisfied with access to due
diligence materials, the results of its due diligence investigation, or the
procedures and documentation for the registered offering referred to above,
then clause (ii) or clause (iii) of this Section 8(c) shall apply at the election
of Counterparty; (ii) in order to allow BofA to sell the Hedge Shares in a
private placement, enter into a private placement agreement substantially
similar to private placement purchase agreements customary for private
placements of equity securities, in form and substance satisfactory to BofA,
including customary representations, covenants, blue sky and other governmental
filings and/or registrations, indemnities to BofA, due diligence rights (for
BofA or any designated buyer of the Hedge Shares from BofA), opinions and
certificates and such other documentation as is customary for private
placements agreements, all reasonably acceptable to BofA (in which case, the
Calculation Agent shall make any adjustments to the terms of the Transaction
that are necessary, in its reasonable judgment, to compensate BofA for any
discount from the public market price of the Shares incurred on the sale of
Hedge Shares in a private placement); or (iii) purchase the Hedge Shares from
BofA at the VWAP Price on such Exchange Business Days, and in the amounts,
requested by BofA. “VWAP Price” means, on any Exchange Business
Day, the per Share volume-weighted average price as displayed under the heading
“Bloomberg VWAP” on Bloomberg page STJ <equity> VAP (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 Exchange Business Day (or if such volume-weighted average price
is unavailable, the market value of one Share on such Exchange Business Day, as
determined by the Calculation Agent using a volume-weighted method).

          (d)
Amendment to Equity Definitions.
The following amendment shall be made to the Equity Definitions:

	
 

	
 

	
 

	
          Section
  12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from
  the fourth line thereof the word “or” after the word “official” and inserting
  a comma therefor, and (2) deleting the semi-colon at the end of subsection
  (B) thereof and inserting the following words therefor “or (C) at BofA’s
  option, the occurrence of any of the events specified in Section 5(a)(vii)
  (1) through (9) of the ISDA Master Agreement with respect to that Issuer.”

          (e)
Repurchase
Notices. Counterparty shall, on any day on which Counterparty
effects any repurchase of Shares, promptly give BofA a written notice of such
repurchase (a “Repurchase Notice”) on such day if, following such repurchase,
the Notice Percentage as determined on such day is (i) greater than 6% and (ii)
greater by 0.5% than the Notice Percentage included in the immediately preceding
Repurchase Notice (or, in the case of the first such Repurchase Notice, greater
than the Notice Percentage as of the date hereof). The “Notice Percentage” as of any
day is the fraction, expressed as a percentage, the numerator of which is the
Number of Shares and the denominator of which is the number of Shares
outstanding on such day. In the event that Counterparty fails to provide BofA
with a Repurchase Notice on the day and in the manner specified in this Section
8(e) then Counterparty agrees to indemnify and hold harmless BofA, its
affiliates and their respective directors, officers, employees, agents and
controlling persons (BofA and each such person being an “Indemnified Party”) from and
against any and all losses, claims, damages and liabilities (or actions in
respect thereof), joint or several, to which such Indemnified Party may become
subject under applicable securities laws, including without limitation, Section
16 of the Exchange Act, relating to or arising out of such failure. If for any
reason the foregoing indemnification is unavailable to any Indemnified Party or
insufficient to hold harmless any Indemnified Party, then Counterparty shall
contribute, to the maximum extent permitted by law, to the amount paid or
payable by the 

9

Indemnified
Party as a result of such loss, claim, damage or liability. In addition,
Counterparty will reimburse any Indemnified Party for all expenses (including
reasonable counsel fees and expenses) as they are incurred (after notice to
Counterparty) in connection with the investigation of, preparation for or
defense or settlement of any pending or threatened claim or any action, suit or
proceeding arising therefrom, whether or not such Indemnified Party is a party
thereto and whether or not such claim, action, suit or proceeding is initiated
or brought by or on behalf of Counterparty. This indemnity shall survive the
completion of the Transaction contemplated by this Confirmation and any
assignment and delegation of the Transaction made pursuant to this Confirmation
or the Agreement shall inure to the benefit of any permitted assignee of BofA. 

          (f)
Transfer
and Assignment. BofA may transfer or assign its rights and
obligations hereunder and under the Agreement, in whole or in part, to (i) any
of its affiliates, (ii) any entities sponsored or organized by, or on behalf of
or for the benefit of, BofA, or (iii) any third party of substantially
equivalent credit quality, in each case without the consent of Counterparty. If
at any time at which the Equity Percentage exceeds 8%, BofA, in its discretion,
is unable to effect such a transfer or assignment after its commercially
reasonable efforts on pricing terms reasonably acceptable to BofA such that the
Equity Percentage is reduced to 8% or less, BofA may designate any Scheduled
Trading Day as an Early Termination Date with respect to a portion (the “Terminated
Portion”) of the Transaction, such that the Equity Percentage
following such partial termination will be equal to or less than 8%. In the
event that BofA so designates an Early Termination Date with respect to a
portion of the Transaction, a payment or delivery shall be made pursuant to
Section 6 of the Agreement and Section 8(b) of this Confirmation as if (i) an
Early Termination Date had been designated in respect of a Transaction having
terms identical to the Terminated Portion of the Transaction, (ii) Counterparty
shall be the sole Affected Party with respect to such partial termination and
(iii) such portion of the Transaction shall be the only Terminated Transaction.
The “Equity
Percentage” as of any day is the fraction, expressed as a
percentage, (A) the numerator of which is the sum of the number of Shares that
BofA or any of its affiliates beneficially own (within the meaning of Section
13 of the Exchange Act) on such day, other than any Shares so owned as a hedge
of the Transaction, and the Number of Shares and (B) the denominator of which
is the number of Shares outstanding on such day.

          (g)
Staggered Settlement. If the
Staggered Settlement Equity Percentage as of any Exchange Business Day during
the relevant “Cash Settlement Period,” as defined in the Indenture, is greater
than 4.5%, BofA may, by notice to Counterparty prior to any Settlement Date (a
“Nominal
Settlement Date”), elect to deliver the Shares on two or more dates
(each, a “Staggered
Settlement Date”) or at two or more times on the Nominal Settlement
Date as follows:

	
 

	
 

	
 

	
          (i)
  in such notice, BofA will specify to Counterparty the related Staggered
  Settlement Dates (each of which will be on or prior to such Nominal
  Settlement Date, but not prior to the beginning of the related “Cash
  Settlement Period”) or delivery times and how it will allocate the Shares it
  is required to deliver under “Delivery Obligation” (above) among the
  Staggered Settlement Dates or delivery times; and

	
 

	
 

	
 

	
          (ii)
  the aggregate number of Shares that BofA will deliver to Counterparty
  hereunder on all such Staggered Settlement Dates and delivery times will
  equal the number of Shares that BofA would otherwise be required to deliver
  on such Nominal Settlement Date.

          The
“Staggered
Settlement Equity Percentage” as of any day is the fraction,
expressed as a percentage, (A) the numerator of which is the sum of the number
of Shares that BofA or any of its affiliates beneficially own (within the
meaning of Section 13 of the Exchange Act) on such day, other than any Shares
so owned as a hedge of the Transaction, and the Number of Shares hereunder and
(B) the denominator of which is the number of Shares outstanding on such day.

          (h)
Disclosure.
Effective from the date of commencement of discussions concerning the
Transaction, Counterparty and each of its employees, representatives, or other
agents may disclose to any and all persons, without limitation of any kind, the
tax treatment and tax structure of the Transaction and all materials of any
kind (including opinions or other tax analyses) that are provided to
Counterparty relating to such tax treatment and tax structure.

          (i)
Designation
by BofA. Notwithstanding any other provision in this Confirmation to
the contrary requiring or allowing BofA to purchase, sell, receive or deliver
any Shares or other securities to or from Counterparty, BofA may designate any
of its affiliates to purchase, sell, receive or deliver such Shares or other
securities and otherwise to perform BofA obligations in respect of the
Transaction and any such designee may assume such obligations. BofA shall be
discharged of its obligations to Counterparty to the extent of any such
performance.

10

          (j)
Netting
and Set-off. 

	
 

	
 

	
 

	
          (i)
  If on any date cash would otherwise be payable or Shares or other property
  would otherwise be deliverable hereunder or pursuant to the Agreement or
  pursuant to any other agreement between the parties by Counterparty to BofA
  and cash would otherwise be payable or Shares or other property would
  otherwise be deliverable hereunder or pursuant to the Agreement or pursuant
  to any other agreement between the parties by BofA to Counterparty and the
  type of property required to be paid or delivered by each such party on such
  date is the same, then, on such date, each such party’s obligation to make
  such payment or delivery will be automatically satisfied and discharged and,
  if the aggregate amount that would otherwise have been payable or deliverable
  by one such party exceeds the aggregate amount that would otherwise have been
  payable or deliverable by the other such party, replaced by an obligation of
  the party by whom the larger aggregate amount would have been payable or
  deliverable to pay or deliver to the other party the excess of the larger
  aggregate amount over the smaller aggregate amount.

	
 

	
 

	
 

	
          (ii)
  In addition to and without limiting any rights of set-off that a party hereto
  may have as a matter of law, pursuant to contract or otherwise, upon the
  occurrence of an Early Termination Date, BofA shall have the right to
  terminate, liquidate and otherwise close out the Transaction and to set off
  any obligation or right that BofA or any affiliate of BofA may have to or
  against Counterparty hereunder or under the Agreement against any right or
  obligation BofA or any of its affiliates may have against or to Counterparty,
  including without limitation any right to receive a payment or delivery
  pursuant to any provision of the Agreement or hereunder. In the case of a
  set-off of any obligation to release, deliver or pay assets against any right
  to receive assets of the same type, such obligation and right shall be set off
  in kind. In the case of a set-off of any obligation to release, deliver or
  pay assets against any right to receive assets of any other type, the value
  of each of such obligation and such right shall be determined by the
  Calculation Agent and the result of such set-off shall be that the net
  obligor shall pay or deliver to the other party an amount of cash or assets,
  at the net obligor’s option, with a value (determined, in the case of a
  delivery of assets, by the Calculation Agent) equal to that of the net
  obligation. In determining the value of any obligation to release or deliver
  Shares or any right to receive Shares, the value at any time of such
  obligation or right shall be determined by reference to the market value of
  the Shares at such time, as determined by the Calculation Agent. If an
  obligation or right is unascertained at the time of any such set-off, the
  Calculation Agent may in good faith estimate the amount or value of such
  obligation or right, in which case set-off will be effected in respect of
  that estimate, and the relevant party shall account to the other party at the
  time such obligation or right is ascertained.

	
 

	
 

	
 

	
          (iii)
  Notwithstanding any provision of the Agreement (including without limitation
  Section 6(f) thereof) and this Confirmation (including without limitation
  this Section 8(j)) or any other agreement between the parties to the
  contrary, (A) Counterparty shall not net or set off its obligations under the
  Transaction, if any, against its rights against BofA under any other
  transaction or instrument; (B) BofA may net and set off any rights of BofA
  against Counterparty arising under the Transaction only against obligations
  of BofA to Counterparty arising under any transaction or instrument if such
  transaction or instrument does not convey rights to BofA senior to the claims
  of common stockholders in the event of Counterparty’s bankruptcy; and (C) in
  the event of Counterparty’s bankruptcy, BofA waives any and all rights it may
  have to set-off in respect of the Transaction, whether arising under
  agreement, applicable law or otherwise. BofA will give notice to Counterparty
  of any netting or set off effected under this provision.

          (k)
Equity
Rights. BofA acknowledges and agrees that this Confirmation is not
intended to convey to it rights with respect to the Transaction that are senior
to the claims of common stockholders in the event of Counterparty’s bankruptcy.
For the avoidance of doubt, the parties agree that the preceding sentence shall
not apply at any time other than during Counterparty’s bankruptcy to any claim
arising as a result of a breach by Counterparty of any of its obligations under
this Confirmation or the Agreement. 

          (l)
Early
Unwind. In the event the sale by Counterparty of the Convertible Securities
is not consummated with the initial purchasers pursuant to the Purchase
Agreement for any reason (other than a breach of the Purchase Agreement by BofA
or its affiliate) by the close of business in New York on April 25, 2007 (or
such later date as agreed upon by the parties, which in no event shall be later
than May 2, 2007) (April 25,
2007 or such later date being the “Early Unwind Date”), the Transaction shall
automatically terminate (the “Early Unwind”), on the Early Unwind Date
and (i) the Transaction and all of the respective rights and obligations of
BofA and Counterparty thereunder shall be cancelled and terminated and (ii)
Counterparty shall pay to BofA an amount in cash equal to the aggregate amount
of costs and expenses relating to the unwinding of BofA’s hedging activities in
respect of the Transaction (including market losses incurred in reselling any
Shares purchased by BofA or its affiliates in connection with such hedging
activities). Following such termination, cancellation and payment, each party
shall be released and discharged by the other party 

11

from and
agrees not to make any claim against the other party with respect to any
obligations or liabilities of either party arising out of and to be performed
in connection with the Transaction either prior to or after the Early Unwind
Date. BofA and Counterparty represent and acknowledge to the other that upon an
Early Unwind and following the payment referred to above, all obligations with
respect to the Transaction shall be deemed fully and finally discharged.

          (m)
Waiver of
Trial by Jury. EACH OF COUNTERPARTY AND BOFA HEREBY IRREVOCABLY
WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON
BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS OF BOFA OR ITS
AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

          (n)
Governing
Law. THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE
ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM
WITH RESPECT TO, THESE COURTS.

12

          Counterparty
hereby agrees (a) to check this Confirmation carefully and immediately
upon receipt so that errors or discrepancies can be promptly identified and
rectified and (b) to confirm that the foregoing (in the exact form
provided by BofA) correctly sets forth the terms of the agreement between BofA
and Counterparty with respect to the Transaction, by manually signing this
Confirmation or this page hereof as evidence of agreement to such terms and
providing the other information requested herein and immediately returning an
executed copy to John Servidio, Facsimile No. 212-230-8610.

	
 

	
 

	
 

	
 

	
Yours
  faithfully,

	
 

	
 

	
 

	
BANK OF
  AMERICA, N.A.

	
 

	
 

	
 

	
By:

	
/s/ Christopher Hutmaker

	
 

	
 

	

	
 

	
 

	
Name: Christopher Hutmaker

	
 

	
 

	
Title: Principal

Agreed and
Accepted By:

ST. JUDE
MEDICAL, INC. 

	
 

	
 

	
 

	
By:

	
 /s/ John C. Heinmiller

	
 

	
 

	

	
 

	
 

	
Name: John C. Heinmiller

	
 

	
 

	
Title: Executive Vice President and Chief Financial Officer

	
 

13

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