Document:

Exhibit 4.2

 

 

REGISTRATION
RIGHTS AGREEMENT

 

Dated as of
May 26, 2006

 

By and
Between

 

CAMERON
INTERNATIONAL CORPORATION,

 

as Issuer,

 

and

 

MORGAN
STANLEY & CO. INCORPORATED,

 

CITIGROUP
GLOBAL MARKETS INC.

 

and

 

J. P.
MORGAN SECURITIES INC.

 

as Initial
Purchasers

 

2.50%
Convertible Senior Notes Due 2026

 

 

REGISTRATION
RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”)
is made and entered into as of May 26, 2006, by and among Cameron
International Corporation, a Delaware corporation (the “Company”), and
Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc. and
J. P. Morgan Securities Inc. (collectively, the “Initial Purchasers”),
pursuant to that certain Purchase Agreement, dated as of May 23, 2006 (the
“Purchase Agreement”) between the Company and the Initial Purchasers.

 

In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement.  The execution of this Agreement is a condition
to the closing under the Purchase Agreement. 
The terms “herein,” “hereof,” “hereto,” “hereinafter” and similar terms,
as used in this Agreement, shall in each case refer to this Agreement as a
whole and not to any particular section, paragraph, sentence or other
subdivision of this Agreement.

 

The Company agrees with the Initial
Purchasers (i) for their benefit as Initial Purchasers and (ii) for
the benefit of the beneficial owners (including the Initial Purchasers) from
time to time of the Notes (as defined herein) and the beneficial owners from
time to time of the Underlying Common Stock (as defined herein) issued upon
conversion of the Notes (each of the foregoing a “Holder” and together
the “Holders”), as follows:

 

Section 1.               Definitions.  Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement.  As used in this Agreement,
the following terms shall have the following meanings:

 

(a)           “Affiliate”
means with respect to any specified person, an “affiliate,” as defined in Rule 144,
of such person.

 

(b)           “Amendment
Effectiveness Deadline Date” has the meaning set forth in Section 2(d) hereof.

 

(c)           “Automatic Shelf
Registration Statement” has the meaning ascribed to it in Rule 405.

 

(d)           “Business Day”
means each day on which the New York Stock Exchange is open for trading.

 

(e)           “Common
Stock” means the shares of common stock, par value $0.01 per share, of the
Company and any other shares of capital stock as may constitute “Common Stock”
for purposes of the Indenture, including the Underlying Common Stock.

 

(f)            “Conversion Rate”
has the meaning assigned to such term in the Indenture.

 

(g)           “Damages Accrual
Period” has the meaning set forth in Section 3(b) hereof.

 

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(h)           “Damages
Payment Date” means each interest payment date under the Indenture in the
case of Notes, and each June 15 and December 15 in case of the
Underlying Common Stock.

 

(i)            “Effectiveness
Deadline Date” has the meaning set forth in section 2(a) hereof.

 

(j)            “Effectiveness
Period” means a period of two years after the later of (1) the
original issuance of the Notes and (2) the last date that the Company or
any of its Affiliates was the owner of such Notes (or any predecessor thereto),
or such shorter period of time (x) as permitted by Rule 144(k) under the
Securities Act or any successor provisions thereunder or (y) that will
terminate when each of the Registrable Securities covered by the Shelf
Registration Statement ceases to be a Registrable Security.

 

(k)           “Event” has the
meaning set forth in Section 3(a) hereof.

 

(l)            “Event Date”
has the meaning set forth in Section 3(a) hereof.

 

(m)          “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.

 

(n)           “Filing Deadline
Date” has the meaning set forth in Section 2(a) hereof.

 

(o)           “Holder” has the
meaning set forth in the third paragraph of this Agreement.

 

(p)           “Indenture”
means the Indenture, dated as of May 26, 2006, between the Company and the
Trustee, pursuant to which the Notes are being issued.

 

(q)           “Initial Purchasers”
has the meaning set forth in the preamble hereto.

 

(r)            “Initial
Shelf Registration Statement” has the meaning set forth in Section 2(a) hereof.

 

(s)           “Issue Date”
means the first date of original issuance of the Notes.

 

(t)            “Liquidated
Damages Amount” has the meaning set forth in Section 3(b) hereof.

 

(u)           “Material Event” has the meaning set
forth in Section 4(l) hereof.

 

(v)           “Notes”
means the 2.50% Convertible Senior Notes due 2026 of the Company to be
purchased pursuant to the Purchase Agreement.

 

(w)          “Notice
and Questionnaire” means a written notice and questionnaire delivered to
the Company containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A to the
Offering Memorandum dated May 23, 2006 relating to the Notes.

 

2

 

(x)            “Notice
Holder” means, on any date, any Holder that has delivered a Notice and
Questionnaire to the Company on or prior to such date, so long as all of their
Registrable Securities that have been registered for resale pursuant to a
Notice and Questionnaire have not been sold in accordance with a Shelf Registration
Statement.

 

(y)           “Purchase
Agreement” has the meaning set forth in the preamble hereof.

 

(z)            “Prospectus”
means each prospectus relating to any Shelf Registration Statement, including
all supplements and amendments to such prospectus, in each case in the form
furnished pursuant to this Agreement by the Company to Holders or filed by the
Company with the SEC pursuant to Rule 424 or as part of such Shelf
Registration Statement, as the case may be, and in each case including all
materials, if any, incorporated by reference or deemed to be incorporated by
reference in such prospectus.

 

(aa)         “Record Holder”
means (i) with respect to any Damages Payment Date relating to any Notes
as to which any such Liquidated Damages Amount has accrued, the holder of record
of such Note on the record date with respect to the interest payment date under
the Indenture on which such Damages Payment Date shall occur and (ii) with
respect to any Damages Payment Date relating to the Underlying Common Stock as
to which any such Liquidated Damages Amount has accrued, the registered holder
of such Underlying Common Stock fifteen (15) days prior to such Damages Payment
Date.

 

(bb)         “Registrable
Securities” means the Notes until such Notes have been converted into the
Underlying Common Stock and, at all times the Underlying Common Stock and any
securities of the Company into or for which such Underlying Common Stock has
been converted, and any security issued with respect thereto upon any stock
dividend, split or similar event until, in the case of any such security, the
earliest of (x) the date on which such security has been effectively registered
under the Securities Act and disposed of, whether or not in accordance with the
Shelf Registration Statement and (y) the date that is two years after the later
of (1) the original issuance of the Notes and (2) the last date that
the Company or any of its Affiliates was the owner of such Notes (or any
predecessor thereto), or such shorter period of time as permitted by Rule 144(k)
under the Securities Act or any successor provisions thereunder.

 

(cc)         “Registration
Expenses” has the meaning set forth in Section 6 hereof.

 

(dd)         “Registration
Statement” means each registration statement, under the Securities Act, of
the Company that covers any of the Registrable Securities pursuant to this
Agreement, including amendments and supplements to such registration statement
and including all post-effective amendments to, all exhibits of, and all
materials incorporated by reference or deemed to be incorporated by reference
in, such registration statement, amendment or supplement. “Rule 144” means Rule 144 under the
Securities Act, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.

 

(ee)         “Rule 144A” means
Rule 144A under the Securities Act, as such rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the SEC.

 

3

 

(ff)           “Rule 405”
means Rule 405 under the Securities Act, as such rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by
the SEC.

 

(gg)         “Rule 424”
means Rule 424 under the Securities Act, as such rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by
the SEC.

 

(hh)         “Rule 430B”
means Rule 430B under the Securities Act, as such rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by
the SEC.

 

(ii)           “Rule 456”
means Rule 456 under the Securities Act, as such rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by
the SEC.

 

(jj)           “Rule 457”
means 457 under the Securities Act, as such rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the SEC.

 

(kk)         “SEC” means the
Securities and Exchange Commission.

 

(ll)           “Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder. 
“Shelf Registration Statement” has the meaning set forth in Section 2(a) hereof.

 

(mm)       “Subsequent Shelf
Registration Statement” has the meaning set forth in Section 2(b) hereof.

 

(nn)         “Suspension Notice”
has the meaning set forth in Section 4(l) hereof.

 

(oo)         “Suspension
Period” has the meaning set forth in Section 4(l) hereof.

 

(pp)         “TIA” means the
Trust Indenture Act of 1939, as amended.

 

(qq)         “Trustee means
SunTrust Bank, the Trustee under the Indenture.

 

(rr)           “Underlying Common
Stock” means the Common Stock into which the Notes are convertible or
issued upon any such conversion.

 

Section 2.
              Shelf
Registration.

 

(a)           The Company shall prepare and file or cause
to be prepared and filed with the SEC, as soon as practicable but in any event
by the date (the “Filing Deadline Date”) that is ninety (90) days after
the Issue Date, a Registration Statement for an offering to be made on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act (a 

 

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“Shelf Registration
Statement”) registering the resale from time to time by Holders thereof of
all of the Registrable Securities (the “Initial Shelf Registration Statement”).  The Initial Shelf Registration Statement
shall be on Form S-1 or S-3 or another appropriate form permitting
registration of such Registrable Securities for resale by such Holders in
accordance with the reasonable methods of distribution elected by the Holders,
approved by the Company, and set forth in the Initial Shelf Registration
Statement.  The Company shall use its
best efforts to cause the Initial Shelf Registration Statement to be declared
effective under the Securities Act as promptly as is practicable but in any
event by the date (the “Effectiveness Deadline Date”) that is two
hundred ten (210) days after the Issue Date, and to keep the Initial Shelf
Registration Statement (or any Subsequent Shelf Registration Statement)
continuously effective under the Securities Act until the expiration of the
Effectiveness Period.  At the time the
Initial Shelf Registration Statement is declared effective, each Holder that
became a Notice Holder on or prior to the date that is ten (10) Business
Days prior to such time of effectiveness shall be named as a selling
securityholder in the Initial Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of Registrable Securities in accordance with applicable law.

 

(b)           If the Initial Shelf Registration Statement
or any Subsequent Shelf Registration Statement ceases to be effective for any
reason at any time during the Effectiveness Period, the Company shall use its
best efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within thirty (30) days of such
cessation of effectiveness amend the Shelf Registration Statement in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a “Subsequent Shelf Registration Statement”).  If a Subsequent Shelf Registration Statement
is filed, the Company shall use its best efforts to cause the Subsequent Shelf
Registration Statement to become effective as promptly as is practicable after
such filing and to keep such Subsequent Shelf Registration Statement
continuously effective until the end of the Effectiveness Period.

 

(c)           The Company shall supplement and amend the
Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement, if required by the Securities Act or as
reasonably requested by the Initial Purchasers or by the Trustee on behalf of
the Holders of the Registrable Securities covered by such Shelf Registration
Statement.

 

(d)           Each Holder of Registrable Securities agrees
that if such Holder wishes to sell Registrable Securities pursuant to a Shelf
Registration Statement and related Prospectus, it will do so only in accordance
with this Section 2(d) and Section 4(l).  Each Holder of Registrable Securities wishing
to sell Registrable Securities pursuant to a Shelf Registration Statement and
related Prospectus agrees to deliver a completed and executed Notice and
Questionnaire to the Company prior to any attempted or actual distribution of
Registrable Securities under the Shelf Registration Statement; provided that
Holders of Registrable Securities shall have at least twenty (20) Business Days
from the date on 

 

5

 

which the Notice and
Questionnaire is first sent to such Holders by the Company to complete and
return the Notice and Questionnaire to the Company.  From and after the date the Initial Shelf
Registration Statement is declared effective, the Company shall, as promptly as
practicable after the date a Notice and Questionnaire is delivered, and in any
event within the later of (x) five (5) Business Days after such date or
(y) five (5) Business Days after the expiration of any Suspension Period (1) in
effect when the Notice and Questionnaire is delivered or (2) put into
effect within five (5) Business Days of such delivery date, (i) if
required by applicable law, file with the SEC a post-effective amendment to the
Shelf Registration Statement or, if required by applicable law, prepare and
file a supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that the Holder delivering such Notice and Questionnaire is named as a
selling securityholder in the Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of the Registrable Securities in accordance with applicable law
and, if the Company shall file a post-effective amendment to the Shelf
Registration Statement, use its best efforts to cause such post-effective
amendment to be declared effective under the Securities Act as promptly as is
practicable, but in any event by the date (the “Amendment Effectiveness
Deadline Date”) that is thirty (30) days after the date such post-effective
amendment is required by this clause to be filed; (ii) provide such Holder
a reasonable number of copies of any documents filed pursuant to Section 2(d)(i);
and (iii) notify such Holder as promptly as practicable after the
effectiveness under the Securities Act of any post-effective amendment filed
pursuant to Section 2(d)(i); provided, however, that notwithstanding the
foregoing the Company shall not be required to take such actions set forth in
clause (i) above until ninety (90) days after the date a prior Shelf
Registration Statement filed pursuant to a request by Holders of Registrable
Securities is declared effective; provided, that if such Notice and
Questionnaire is delivered during a Suspension Period, or a Suspension Period
is put into effect within five (5) Business Days after such delivery date,
the Company shall so inform the Holder delivering such Notice and Questionnaire
and shall take the actions set forth in clauses (i), (ii) and (iii) above
within five (5) Business Days after expiration of the Suspension Period in
accordance with Section 4(l); provided further that if under applicable
law, the Company has more than one option as to the type or manner of making
any such filing, the Company shall make the required filing or filings in the
manner or of a type that is reasonably expected to result in the earliest
availability of the Prospectus for effecting resales of Registrable
Securities.  Notwithstanding anything
contained herein to the contrary, the Company shall be under no obligation to
name any Holder that is not a Notice Holder as a selling securityholder in any
Shelf Registration Statement or related Prospectus; provided, however, that any
Holder that becomes a Notice Holder pursuant to the provisions of this Section 2(d) (whether
or not such Holder was a Notice Holder at the time the Shelf Registration
Statement was declared effective) shall be named as a selling securityholder in
the Shelf Registration Statement or related Prospectus in accordance with the
requirements of this Section 2(d).

 

(e)           Notwithstanding anything in this Agreement to
the contrary, the Company shall not be required to cause any Shelf Registration
Statement to be declared effective under the Securities Act at any time during
which there exists a Material Event that 

 

6

 

would give rise to the
issuance by the Company of a Suspension Notice if such Shelf Registration
Statement had been declared effective under the Securities Act; provided,
however, that the Company will remain subject to the liquidated damages
provisions contained in Section 3 hereto.

 

Section 3.
              Liquidated
Damages.

 

(a)           The parties hereto agree that the Holders of
Notes that are Registrable Securities (“Registrable Notes”) will suffer
damages, and that it would not be feasible to ascertain the extent of such
damages with precision, if (i) the Initial Shelf Registration Statement
has not been filed on or prior to the Filing Deadline Date, (ii) the
Initial Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to the Effectiveness Deadline Date or (iii) the
Initial Shelf Registration Statement or any Subsequent Shelf Registration
Statement is filed and declared effective but shall thereafter cease to be
effective (without being succeeded immediately by an additional registration statement
filed and declared effective) or usable for the offer and sale of Registrable
Notes for a period of time (including any Suspension Period) which shall exceed
forty-five (45) days in the aggregate in any three (3) month period or
ninety (90) days in the aggregate in any twelve (12) month period (each of the
events of a type described in any of the foregoing clauses (i) through (iii) are
individually referred to herein as an “Event,” and the Filing Deadline
Date in the case of clause (i), the Effectiveness Deadline Date in the case of
clause (ii), the date on which the duration of the ineffectiveness or
unusability of the Initial Shelf Registration Statement or Subsequent Shelf
Registration Statement in any period exceeds the number of days permitted by
clause (iii) hereof in the case of clause (iii), being referred to herein
as an “Event Date”).  Events shall
be deemed to continue until the following dates with respect to the respective
types of Events: the date the Initial Shelf Registration Statement is filed in
the case of an Event of the type described in clause (i), the date the Initial
Shelf Registration Statement is declared effective under the Securities Act in
the case of an Event of the type described in clause (ii), and the date the
Initial Shelf Registration Statement or Subsequent Shelf Registration Statement
becomes effective or usable again in the case of an Event of the type described
in clause (iii).

 

(b)           Accordingly, commencing on (and including)
any Event Date and ending on (but excluding) the next date on which there are
no Events that have occurred and are continuing (a “Damages Accrual Period”),
the Company agrees to pay, as liquidated damages and not as a penalty, an
amount (the “Liquidated Damages Amount”) at the rate described below,
payable periodically on each Damages Payment Date to Record Holders of
Registrable Notes to the extent of, for each such Damages Payment Date, accrued
and unpaid Liquidated Damages Amount to (but excluding) such Damages Payment
Date (or, if the Damages Accrual Period shall have ended prior to such Damages
Payment Date, the date of the end of the Damages Accrual Period); provided that
any Liquidated Damages Amount accrued with respect to any Note or portion
thereof called for redemption on a redemption date or converted into Underlying
Common Stock on a conversion date prior to the Damages Payment Date, shall, in
any such event, be paid instead to the Holder who submitted such Note or
portion thereof for redemption or conversion on the applicable redemption date
or conversion date, as the case may be, on 

 

7

 

such date (or promptly
following the conversion date, in the case of conversion).  The Liquidated Damages Amount shall accrue at
a rate per annum equal to one-quarter of one percent (0.25%) for the first 90-day
period from the Event Date, and thereafter at a rate per annum equal to
one-half of one percent (0.50%), of the principal amount of such Registrable
Notes.  Notwithstanding the foregoing, no
Liquidated Damages Amounts shall accrue as to any Registrable Note from and
after the earlier of (x) the date such Note is no longer a Registrable Security
and (y) expiration of the Effectiveness Period. 
The rate of accrual of the Liquidated Damages Amount with respect to any
period shall not exceed the rate provided for in this paragraph notwithstanding
the occurrence of multiple concurrent Events. 
Following the cure of all Events requiring the payment by the Company of
Liquidated Damages Amounts to the Holders of Registrable Notes pursuant to this
Section, the accrual of Liquidated Damages Amounts shall cease (without in any
way limiting the effect of any subsequent Event requiring the payment of
Liquidated Damages Amount by the Company).

 

(c)           So long as Notes remain outstanding, the
Company shall notify the Trustee within two Business Days after each and every
date on which an Event occurs in respect of which Liquidated Damages are
required to be paid.  Any amounts of Liquidated
Damages due pursuant to Section 3(b) will be payable in cash
semi-annually on each June 15 and December 15, commencing with the
first such date occurring after any such Liquidated Damages commences to
accrue, to Holders to whom regular interest is payable on such Damages Payment
Date with respect to Registrable Notes.

 

(d)           The Trustee shall be entitled, on behalf of
Holders of Notes, to seek any available remedy for the enforcement of this
Agreement, including for the payment of any Liquidated Damages Amount.  Notwithstanding the foregoing, the parties
agree that the sole damages payable for a violation of the terms of this
Agreement with respect to which liquidated damages are expressly provided shall
be such liquidated damages.

 

(e)           All of the Company’s obligations set forth in
this Section 3 that are outstanding with respect to any Registrable Note
at the time such Note ceases to be a Registrable Security shall survive until
such time as all such obligations with respect to such Note have been satisfied
in full (notwithstanding termination of this Agreement pursuant to Section 9(l)).

 

(f)            The parties hereto agree that the liquidated
damages provided for in this Section 3 constitute a reasonable estimate of
the damages that may be incurred by Holders of Registrable Notes by reason of
the failure of the Shelf Registration Statement to be filed or declared
effective or available for effecting resales of Registrable Notes in accordance
with the provisions hereof.

 

Section 4.
              Registration
Procedures.  In connection with the
registration obligations of the Company under Section 2 hereof, the
Company shall:

 

(a)           Prepare and file with the SEC a Shelf
Registration Statement in the manner provided in this agreement and use its
best efforts to cause each such Shelf Registration Statement to become
effective and remain effective as provided herein; 

 

8

 

provided that before filing
any Shelf Registration Statement or Prospectus or any amendments or supplements
thereto with the SEC, the Company shall furnish to the Initial Purchasers and
counsel for the Holders and for the Initial Purchasers (or, if applicable,
separate counsel for the Holders) copies of all such documents proposed to be
filed at least five (5) Business Days prior to such filing and use its
best efforts to reflect in each such document when so filed with the SEC such
comments as such counsel reasonably shall propose.  The Company shall not file any Registration
Statement or prospectus or any amendments or supplements thereto if the Holders
of a majority in Amount of Registrable Securities covered by such Registration
Statement shall reasonably object.  Each
Registration Statement that is or is required by this Agreement to be filed
with the SEC shall be filed on Form S-3 if the Company is then eligible to
use Form S-3 for the purposes contemplated by this Agreement, or, if the
Company is not then so eligible to use Form S-3, shall be on Form S-1
or another appropriate form that is then available to the Company for the
purposes contemplated by this Agreement. 
Each such Registration Statement that is filed on Form S-3 shall
constitute an Automatic Shelf Registration Statement if the Company is then
eligible to file an Automatic Shelf Registration Statement on Form S-3 for
the purposes contemplated by this Agreement. 
If, at the time any Registration Statement is filed with the SEC, the
Company is eligible, pursuant to Rule 430B(b), to omit, from the
prospectus that is filed as part of such Registration Statement, the identities
of selling securityholders and amounts of securities to be registered on their
behalf, then the Company shall prepare and file such Registration Statement in
a manner as to permit such omission and to allow for the subsequent filing of
such information in a prospectus pursuant to Rule 424(b) under the Securities Act in the manner
contemplated by Rule 430B(d).

 

(b)           Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration Statement as may be necessary to keep
such Shelf Registration Statement continuously effective until the expiration
of the Effectiveness Period; cause the related Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) under the Securities
Act; and use its best efforts to comply with the provisions of the Securities
Act applicable to it with respect to the disposition of all securities covered
by such Shelf Registration Statement during the Effectiveness Period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Shelf Registration Statement as so amended or such Prospectus as
so supplemented.  Subject to Section 3(a),
the Company shall be deemed not to have used its best efforts to keep a Shelf
Registration Statement effective during the Effectiveness Period if it
voluntarily takes any action that would result in selling Holders of the
Registrable Securities covered thereby not being able to sell such Registrable Securities
during that period unless such action is required by applicable law or unless
the Company complies with this Agreement, including without limitation the
provisions of Section 4(l).

 

(c)           If the third
anniversary of the initial effective date of any Registration Statement (within
the meaning of Rule 415(a)(5) under the Securities Act) shall occur
at any time during the Effectiveness Period, file with the SEC, prior to such
third anniversary, a new Registration Statement covering the Registrable Securities,
in the manner contemplated by, and in compliance with, Rule 415(a)(6), and
use its best efforts 

 

9

 

to cause such
new Registration Statement to become effective under the Securities Act as soon
as practicable, but in any event within 180 days after such third
anniversary.  Each such new Registration
Statement, if any, shall be deemed, for purposes of this Agreement, to be a
Subsequent Shelf Registration Statement.

 

(d)           If, at any time during
the Effectiveness Period, any Registration Statement shall cease to comply with
the requirements of the Securities Act with respect to eligibility for the use
of the form on which such Registration Statement was filed with the SEC (or if
such Registration Statement constituted an Automatic Shelf Registration
Statement at the time it was filed with the SEC and shall thereafter cease to
constitute an Automatic Shelf Registration Statement, or if the Company shall
have received, from the SEC, a notice, pursuant to Rule 401(g)(2) under
the Securities Act, of objection to the use of the form on which such
Registration Statement was filed with the SEC), (i) promptly give notice
to the Notice Holders and counsel for the Holders and for the Initial
Purchasers (or, if applicable, separate counsel for the Holders) and to the
Initial Purchasers and (ii) promptly file with the SEC a new Registration
Statement under the Securities Act, or a post-effective amendment to such
Registration Statement, to effect compliance with the Securities Act.  The Company shall use its best efforts to
cause such new Registration Statement or post-effective amendment to become
effective under the Securities Act as soon as practicable and shall promptly
give notice of such effectiveness to the Notice Holders and counsel for the
Holders and for the Initial Purchasers (or, if applicable, separate counsel for
the Holders) and to the Initial Purchasers. 
Each such new Registration Statement, if any, shall be deemed, for
purposes of this Agreement, to be a Subsequent Shelf Registration Statement.

 

(e)           As promptly as practicable give notice to the
Notice Holders, the Initial Purchasers and counsel for the Holders and for the
Initial Purchasers (or, if applicable, separate counsel for the Holders) (i) when
any Prospectus, Prospectus supplement, Shelf Registration Statement or
post-effective amendment to a Shelf Registration Statement has been filed with
the SEC and, with respect to a Shelf Registration Statement or any
post-effective amendment, when the same has been declared effective, (ii) of
any request, following the effectiveness of the Initial Shelf Registration
Statement under the Securities Act, by the SEC or any other federal or state
governmental authority for amendments or supplements to any Shelf Registration
Statement or related Prospectus or for additional information, (iii) of
the issuance by the SEC or any other federal or state governmental authority of
any stop order or other order suspending the effectiveness of any Shelf
Registration Statement or preventing or suspending the use of any preliminary
prospectus or other Prospectus or the initiation or threatening of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) after the effective date of any Shelf Registration Statement
filed pursuant to this Agreement of the occurrence of (but not the nature of or
details concerning) a Material Event, (vi) of the happening of any event,
the existence of any condition or any information becoming known that makes any
statement made in a Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in 

 

10

 

or amendments or supplements
to such Registration Statement, Prospectus or documents so that, in the case of
the Registration Statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and that in the
case of the Prospectus, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading and (vii) of the determination
by the Company that a post-effective amendment to a Shelf Registration
Statement will be filed with the SEC, which notice may, at the discretion of
the Company (or as required pursuant to Section 4(l)), state that it
constitutes a Suspension Notice, in which event the provisions of Section 4(l)
shall apply.

 

(f)            Use its best efforts to prevent the issuance
of, and, if issued, to obtain the withdrawal of any order suspending the
effectiveness of a Shelf Registration Statement or preventing or suspending the
use of a Prospectus or the lifting of any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction in which they have been qualified for sale, in either case at
the earliest possible moment, and provide prompt notice to each Notice Holder
and the Initial Purchasers of the withdrawal of any such order.

 

(g)           If requested by the Initial Purchasers or any
Notice Holder, as promptly as practicable incorporate in a Prospectus
supplement or post-effective amendment to a Shelf Registration Statement such
information as the Initial Purchasers, such Notice Holder or counsel for the Holders
and for the Initial Purchasers (or, if applicable, separate counsel for the
Holders) shall determine to be required to be included therein by applicable
law and make any required filings of such Prospectus supplement or such
post-effective amendment; provided that the Company shall not be required to
take any actions under this Section 4(g) that, in the written opinion
of counsel for the Company, are not in compliance with applicable law.

 

(h)           As promptly as practicable furnish to each
Notice Holder, counsel for the Holders and for the Initial Purchasers (or, if
applicable, separate counsel for the Holders) and the Initial Purchasers,
without charge, at least one (1) conformed copy of the Shelf Registration
Statement and any amendment thereto, including financial statements and
schedules, but excluding all documents incorporated or deemed to be
incorporated therein by reference and all exhibits (unless requested in writing
to the Company by such Notice Holder, such counsel or the Initial Purchasers).

 

(i)            During the Effectiveness Period, deliver to
each Notice Holder, counsel for the Holders and for the Initial Purchasers (or,
if applicable, separate counsel for the Holders) and the Initial Purchasers, in
connection with any sale of Registrable Securities pursuant to a Shelf
Registration Statement, without charge, as many copies of the Prospectus or
Prospectuses relating to such Registrable Securities (including each
preliminary prospectus) and any amendment or supplement thereto as such Notice
Holder and the Initial Purchasers may reasonably request; and the Company
hereby consents (except during such periods that a Suspension Notice is
outstanding and has not been revoked) to the use of such Prospectus or each
amendment or supplement thereto by each 

 

11

 

Notice Holder, in connection
with any offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto in the manner set forth
therein.

 

(j)            Prior to any public offering of the
Registrable Securities pursuant to the Shelf Registration Statement, use its
best efforts to register or qualify or cooperate with the Notice Holders in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the
United States as any Notice Holder reasonably requests in writing (which
request may be included in the Notice and Questionnaire); prior to any public
offering of the Registrable Securities pursuant to the Shelf Registration
Statement, use its best efforts to keep each such registration or qualification
(or exemption therefrom) effective during the Effectiveness Period in
connection with such Notice Holder’s offer and sale of Registrable Securities
pursuant to such registration or qualification (or exemption therefrom) and do
any and all other acts or things reasonably necessary or advisable to enable
the disposition in such jurisdictions of such Registrable Securities in the
manner set forth in the relevant Shelf Registration Statement and the related
Prospectus; provided that the Company will not be required to (i) qualify
as a foreign corporation or as a dealer in securities in any jurisdiction where
it would not otherwise be required to qualify but for this Agreement or (ii) take
any action that would subject it to general service of process in suits or to
taxation in any such jurisdiction where it is not then so subject.

 

(k)           Use its reasonable best efforts to cause the
Registrable Securities covered by any Shelf Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be reasonably necessary to enable the seller or sellers thereof to
consummate the disposition of such Registrable Securities, except as may be
required solely as a consequence of the nature of such selling Holder’s
business, in which case the Company will cooperate in all reasonable respects
with the filing of such Registration Statement and the granting of such
approvals.

 

(l)            Upon (A) the issuance by the SEC of a
stop order suspending the effectiveness of the Shelf Registration Statement or
the initiation of proceedings with respect to the Shelf Registration Statement
under Section 8(d) or 8(e) of the Securities Act, (B) the
occurrence of any event or the existence of any fact as a result of which any
Shelf Registration Statement shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or any Prospectus
shall contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or (C) the
occurrence or existence of any pending corporate development (a “Material
Event”) that, in the reasonable discretion of the Company, makes it
appropriate to suspend the availability of the Shelf Registration Statement and
the related Prospectus (i) in the case of clause (B) or (C) above,
subject to the next sentence, as promptly as practicable, prepare and file, if
necessary pursuant to applicable law, a post-effective amendment to such Shelf
Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference or file any other required document
that 

 

12

 

would be incorporated by
reference into such Shelf Registration Statement and Prospectus so that such
Shelf Registration Statement does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and such Prospectus
does not contain any untrue statement of a material fact or omit to state any
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 the Company may rely on information provided by each Notice
Holder with respect to such Notice Holder), as thereafter delivered to the
purchasers of the Registrable Securities being sold thereunder, and, in the
case of a post-effective amendment to a Shelf Registration Statement, subject
to the next sentence, use its best efforts to cause it to be declared effective
as promptly as is practicable, and (ii) give notice to the Notice Holders
and counsel for the Holders and for the Initial Purchasers (or, if applicable,
separate counsel for the Holders) that the availability of the Shelf
Registration Statement is suspended (a “Suspension Notice”) and, upon
receipt of any Suspension Notice, each Notice Holder agrees not to sell any
Registrable Securities pursuant to such Shelf Registration Statement until such
Notice Holder’s receipt of copies of the supplemented or amended Prospectus
provided for in clause (i) above, or until it is advised in writing by the
Company that the Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in such Prospectus.  The
Company will use its best efforts to ensure that the use of the Prospectus may
be resumed (x) in the case of clause (A) above, as promptly as is
practicable, (y) in the case of clause (B) above, as soon as, in the
reasonable judgment of the Company, the Shelf Registration Statement does not
contain any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and the Prospectus does not contain any untrue statement of a
material fact or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, and (z) in the case of clause (C) above, as soon as,
in the reasonable discretion of the Company, such suspension is no longer
appropriate.  The period during which the
availability of the Shelf Registration Statement and any Prospectus may be
suspended (the “Suspension Period”) without the Company incurring any
obligation to pay liquidated damages pursuant to Section 3 shall not
exceed forty-five (45) days in any three (3) month period and ninety (90)
days in any twelve (12) month period.

 

(m)          Make available for inspection during normal
business hours by representatives for the Notice Holders of such Registrable
Securities, and any broker-dealers, attorneys and accountants retained by such
Notice Holders, all relevant financial and other records and pertinent
corporate documents and properties of the Company and its subsidiaries, and
cause the appropriate officers, directors and employees of the Company and its
subsidiaries to make available for inspection during normal business hours all
relevant information reasonably requested by such representatives for the
Notice Holders, or any such broker-dealers, attorneys or accountants in
connection with such disposition, in each case as is customary for similar “due
diligence” examinations; provided, however, that such persons shall, at the
Company’s request, first agree in writing with the Company that any information
that is reasonably and in good faith designated by the Company in writing as
confidential at the time of delivery of such 

 

13

 

information shall be kept
confidential by such persons and shall be used solely for the purposes of
exercising rights under this Agreement, unless (i) disclosure of such
information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities, (ii) disclosure of such
information is required by law (including any disclosure requirements pursuant
to federal securities laws in connection with the filing of any Shelf
Registration Statement or the use of any Prospectus referred to in this
Agreement), (iii) such information becomes generally available to the public
other than as a result of a disclosure or failure to safeguard by any such
person or (iv) such information becomes available to any such person from
a source other than the Company and such source is not bound by a
confidentiality agreement or is not otherwise under a duty of trust to the
Company, and provided that the foregoing inspection and information gathering
shall, to the greatest extent possible, be coordinated on behalf of all the
Notice Holders and the other parties entitled thereto by the counsel referred
to in Section 6.

 

(n)           Comply with all applicable rules and
regulations of the SEC and make generally available to its securityholders
earning statements (which need not be audited) satisfying the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder (or any similar rule promulgated
under the Securities Act) no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period is a
fiscal year) commencing on the first day of the first fiscal quarter of the
Company commencing after the effective date of a Shelf Registration Statement,
which statements shall cover said 12-month periods.

 

(o)           Cooperate with each Notice Holder to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities sold pursuant to a Shelf Registration Statement, which
certificates shall not bear any restrictive legends, and cause such Registrable
Securities to be in such denominations as are permitted by the Indenture and
registered in such names as such Notice Holder may request in writing at least (2) Business
Days prior to any sale of such Registrable Securities.

 

(p)           Provide a CUSIP number for all Registrable
Securities covered by each Shelf Registration Statement not later than the
effective date of such Shelf Registration Statement and provide the Trustee and
the transfer agent for the Common Stock with certificates for the Registrable
Securities that are in a form eligible for deposit with The Depository Trust
Company.

 

(q)           Cooperate and assist in any filings required
to be made with the National Association of Securities Dealers, Inc.

 

(r)            Upon (i) the filing of the Initial
Registration Statement and (ii) the effectiveness of the Initial
Registration Statement, announce the same, in each case by release to Reuters
Economic Services, Dow Jones Corporation and Bloomberg Business News.

 

(s)           Enter into such customary agreements and take
all such other necessary actions in connection therewith (including those requested
by the holders of a majority of 

 

14

 

the Registrable Securities
being sold) in order to expedite or facilitate disposition of such Registrable
Securities.

 

(t)            Cause the Indenture to be qualified under the
TIA not later than the effective date of any Shelf Registration Statement; and
in connection therewith, cooperate with the Trustee to effect such changes to
the Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and execute, and use its best efforts to
cause the Trustee to execute, all documents as may be required to effect such
changes, and all other forms and documents required to be filed with the SEC to
enable the Indenture to be so qualified in a timely manner.

 

Section 5.
              Holder’s
Obligations.  Each Holder agrees, by acquisition
of the Registrable Securities, that no Holder of Registrable Securities shall
be entitled to sell any of such Registrable Securities pursuant to a Shelf
Registration Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with a Notice and Questionnaire as required
pursuant to Section 2(d) hereof (including the information required
to be included in such Notice and Questionnaire) and the information set forth
in the next sentence.  Each Notice Holder
agrees promptly to furnish to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Notice Holder not misleading and any other information regarding such
Notice Holder and the distribution of such Registrable Securities as the
Company may from time to time reasonably request.  Any sale of any Registrable Securities by any
Holder shall constitute a representation and warranty by such Holder that the
information relating to such Holder and its plan of distribution is as set
forth in the Prospectus delivered by such Holder in connection with such
disposition, that such Prospectus does not as of the time of such sale contain
any untrue statement of a material fact relating to or provided by such Holder
or its plan of distribution and that such Prospectus does not as of the time of
such sale omit to state any material fact relating to or provided by such
Holder or its plan of distribution necessary in order to make the statements in
such Prospectus, in the light of the circumstances under which they were made,
not misleading.

 

Section 6.
              Registration
Expenses.  The Company shall bear all fees
and expenses incurred in connection with the performance by the Company of its
obligations under this Agreement whether or not any of the Shelf Registration
Statements are declared effective.  Such
fees and expenses (“Registration Expenses”) shall include, without
limitation, (i) all registration and filing fees (including, without
limitation, fees and expenses (x) with respect to filings required to be made
with the National Association of Securities Dealers, Inc. and (y) of
compliance with federal and state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of counsel for the
Holders in connection with Blue Sky qualifications of the Registrable
Securities under the laws of such jurisdictions as the Notice Holders of a
majority of the Registrable Securities being sold pursuant to a Shelf
Registration Statement may designate), (ii) printing and word processing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities in a form eligible for deposit with The Depository Trust
Company), (iii) duplication and mailing expenses relating to copies of any
Shelf Registration Statement or Prospectus delivered to any Holders hereunder, (iv) messenger,
telephone and delivery expenses, (v) other expenses relating to the
distribution of all Registration Statements, securities sales agreements and
any other documents necessary in order to comply with this Agreement, (vi) fees
and disbursements of counsel for the Company 

 

15

 

and the fees and disbursements of one counsel for the Holders in
connection with the Shelf Registration Statement or Subsequent Shelf
Registration Statement (which counsel shall be Baker Botts L.L.P. until another
firm shall be designated pursuant to this Agreement), (vii) fees and
disbursements of the Trustee and its counsel and of the registrar and transfer
agent for the Common Stock and (viii) Securities Act liability insurance
obtained by the Company in its sole discretion. 
In addition, the Company shall pay the internal expenses of the Company
(including, without limitation, all salaries and expenses of officers and
employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing by the
Company of the Registrable Securities on any securities exchange on which
similar securities of the Company are then listed and the fees and expenses of
any person, including special experts, retained by the Company.  If the Company shall, pursuant to Rule 456(b),
defer payment of any registration fees due under the Securities Act with
respect to any Registration Statement, the Company agrees that it shall pay the
fees applicable to such Registration Statement within the time required by Rule 456(b)(1)(i) (without
reliance on the proviso to Rule 456(b)(1)(i)) and in compliance with Rule 456(b) and
Rule 457(r).

 

Section 7.
              Indemnification;
Contribution.

 

(a)           The Company agrees to indemnify, defend and
hold harmless each Holder and each person who controls any Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (each a “Holder Indemnified Party”), from and against any
loss, damage, expense, liability, judgment or claim (including reasonable legal
fees, investigation costs and other expenses) which such Holder Indemnified
Party may incur under the Securities Act, the Exchange Act or otherwise,
insofar as such loss, damage, expense, liability, judgment or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in any Shelf Registration Statement or Prospectus or in
any amendment or supplement thereto or in any preliminary prospectus, or arises
out of or is based upon any omission or alleged omission to state a material
fact required to be stated in any Shelf Registration Statement or in any
amendment or supplement thereto or necessary to make the statements therein not
misleading, or arises out of or is based upon any omission or alleged omission
to state a material fact necessary in order to make the statements made in any
Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, in the light of the circumstances under which they were made, not
misleading, except insofar as any such loss, damage, expense, liability,
judgment or claim arises out of or is based upon any untrue statement or
omission or alleged untrue statement or omission of a material fact contained
in, or omitted from, and in conformity with information furnished in writing by
or on behalf of any Holder to the Company expressly for use therein.

 

(b)           Each Holder, severally and not jointly,
agrees to indemnify, defend and hold harmless the Company, its directors and
officers and any person who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act (each, a “Company
Indemnified Party”) to the same extent as the foregoing indemnity from the
Company to each Holder Indemnified Party, but only insofar as such loss,
damage, expense, liability, judgment or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact contained 

 

16

 

in information furnished in
writing by or on behalf of such Holder to the Company expressly for use in any
Shelf Registration Statement or Prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated in
any Shelf Registration Statement or in any amendment or supplement thereto or
necessary to make the statements therein not misleading, or arises out of or is
based upon any omission or alleged omission to state a material fact necessary
in order to make the statements in any Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, in the light of the
circumstances under which they were made, not misleading, in connection with
such information.  In no event shall the
liability of any selling Holder of Registrable Securities hereunder be greater
in amount than the dollar amount of the proceeds received by such Holder upon
the sale of the Registrable Securities pursuant to the Shelf Registration
Statement giving rise to such indemnification obligation.

 

(c)           If any action, suit or proceeding (each, a “Proceeding”)
is brought against any person in respect of which indemnity may be sought
pursuant to either subsection (a) or (b) of this Section 7,
such person (the “Indemnified Party”) shall promptly notify the person
against whom such indemnity may be sought (the “Indemnifying Party”) in
writing of the institution of such Proceeding and the Indemnifying Party shall
assume the defense of such Proceeding; provided, however, that the omission to
notify such Indemnifying Party shall not relieve such Indemnifying Party from
any liability which it may have to such Indemnified Party or otherwise.  Such Indemnified Party shall have the right
to employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party unless the employment
of such counsel shall have been authorized in writing by such Indemnifying
Party in connection with the defense of such Proceeding or such Indemnifying
Party shall not have employed counsel to have charge of the defense of such
Proceeding within 30 days of the receipt of notice thereof or such Indemnified
Party shall have reasonably concluded upon the written advice of counsel that
there may be one or more defenses available to it that are different from,
additional to or in conflict with those available to such Indemnifying Party
(in which case such Indemnifying Party shall not have the right to direct that
portion of the defense of such Proceeding on behalf of the Indemnified Party,
but such Indemnifying Party may employ counsel and participate in the defense
thereof but the fees and expenses of such counsel shall be at the expense of
such Indemnifying Party), in any of which events such reasonable fees and
expenses shall be borne by such Indemnifying Party and paid as incurred (it
being understood, however, that such Indemnifying Party shall not be liable for
the expenses of more than one separate counsel in any one Proceeding or series
of related Proceedings together with reasonably necessary local counsel
representing the Indemnified Parties who are parties to such action).  An Indemnifying Party shall not be liable for
any settlement of such Proceeding effected without the written consent of such
Indemnifying Party, but if settled with the written consent of such
Indemnifying Party, such Indemnifying Party agrees to indemnify and hold
harmless an Indemnified Party from and against any loss or liability by reason
of such settlement.  Notwithstanding the
foregoing sentence, if at any time an Indemnified Party shall have requested an
Indemnifying Party to reimburse such Indemnified Party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then such
Indemnifying Party agrees that it shall be liable for any settlement of any 

 

17

 

Proceeding effected without
its written consent if (i) such settlement is entered into more than 60
Business Days after receipt by such Indemnifying Party of the aforesaid
request, (ii) such Indemnifying Party shall not have reimbursed such
Indemnified Party in accordance with such request prior to the date of such
settlement and (iii) such Indemnified Party shall have given such
Indemnifying Party at least 30 days’ prior notice of its intention to
settle.  No Indemnifying Party shall,
without the prior written consent of any Indemnified Party, effect any
settlement of any pending or threatened Proceeding in respect of which such
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding and does not include an
admission of fault, culpability or a failure to act, by or on behalf of such
Indemnified Party.

 

(d)           If the indemnification provided for in this Section 7
is unavailable to an Indemnified Party under subsections (a) and (b) of
this Section 7 in respect of any losses, damages, expenses, liabilities,
judgments or claims referred to therein, then each applicable Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such losses,
damages, expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holders on the other hand from the offering of the Registrable
Securities 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 of the Holders on
the other in connection with the statements or omissions which resulted in such
losses, damages, expenses, liabilities or claims, as well as any other relevant
equitable considerations.  The relative
fault of the Company on the one hand and of the Holders on the other shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Company or by the Holders 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,
damages, expenses, liabilities, judgments and claims referred to above shall be
deemed to include any reasonable legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any
Proceeding.

 

(e)           The Company and the Holders agree that it
would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in subsection (d) above.  Notwithstanding the provisions of this Section 7,
no Holder shall be required to contribute any amount in excess of the amount by
which the total price at which the Registrable Securities sold by it were
offered to the public exceeds the amount of any damages which it has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.  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 Holders’ respective obligations to
contribute 

 

18

 

pursuant to this Section 7
are several in proportion to the respective amount of Registrable Securities
they have sold pursuant to a Shelf Registration Statement, and not joint.  The remedies provided for in this Section 7
are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.

 

(f)            The indemnity and contribution provisions
contained in this Section 7 shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Holder or any person controlling any
Holder, or the Company, or the Company’s officers or directors or any person
controlling the Company and (iii) the sale of any Registrable Security by
any Holder.

 

Section 8.
              Information
Requirements.

 

(a)           The Company covenants that (i) it will
file the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder
in a timely manner in accordance with the requirements of the Securities Act
and the Exchange Act; and (ii) if at any time before the end of the
Effectiveness Period it is not subject to the reporting requirements of the
Exchange Act, it will cooperate with any Holder of Registrable Securities to
make available such information necessary to permit sales pursuant to Rule 144A
under the Securities Act and take such further action as any Holder of
Registrable Securities may reasonably request in writing (including, without
limitation, making such representations as any such Holder may reasonably
request), all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144, Rule 144A and
Regulation S under the Securities Act and customarily taken in connection with
sales pursuant to such exemptions.  Upon
the written request of any Holder of Registrable Securities, the Company shall
deliver to such Holder a written statement as to whether it has complied with
such filing requirements, unless such a statement has been included in the
Company’s most recent report filed with the SEC pursuant to Section 13 or Section 15(d) of
Exchange Act.  Notwithstanding the
foregoing, nothing in this Section 8 shall be deemed to require the
Company to register any of its securities (other than the Common Stock) under
any section of the Exchange Act.

 

(b)           The Company shall comply with all
requirements set forth in the instructions to Form S-1 or Form S-3,
as the case may be, in order to allow the Company to be eligible to file
registration statements on Form S-1 or Form S-3.  The Company shall use its best efforts to
remain eligible, pursuant to Rule 430B(b), to omit, from the prospectus
that is filed as part of a Registration Statement, the identities of selling
securityholders and amounts of securities to be registered on their behalf.

 

Section 9.
              Miscellaneous.

 

(a)           No Conflicting Agreements.  The Company is not, as of the date hereof, a party to, nor shall it, on
or after the date of this Agreement, enter into, any agreement 

 

19

 

with respect to its
securities that conflicts with the rights granted to the Holders of Registrable
Securities in this Agreement.  The
Company represents and warrants that the rights granted to the Holders of
Registrable Securities hereunder do not in any way conflict with the rights
granted to the holders of the Company’s securities under any other agreements.

 

(b)           Adjustments Affecting
Registrable Securities.  The Company shall not, directly or
indirectly, take any action with respect to the Registrable Securities as a
class that would adversely affect the ability of the Holders of Registrable
Securities to include such Registrable Securities in a registration undertaken
pursuant to this Agreement.

 

(c)           Amendments and
Waivers.  The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of a
majority of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of Notes deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying
Common Stock into which such Notes are or would be convertible as of the date
on which such consent is requested). 
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders of Registrable Securities may be
given by Holders of at least a majority of the Registrable Securities being
sold by such Holders pursuant to such Shelf Registration Statement; provided
that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.  Each Holder of
Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant
to this Section 9(c), whether or not any notice, writing or marking
indicating such amendment, modification, supplement, waiver or consent appears
on the Registrable Securities or is delivered to such Holder.  Each Holder may waive compliance with respect
to any obligation of the Company under this Agreement as it may apply to or be
enforced by such particular Holder.

 

(d)           Notices.  All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, by telecopier, by courier
guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand
delivery, (ii) upon confirmation, if made by telecopier, (iii) one (1) Business
Day after being deposited with such courier, if made by overnight courier or (iv) on
the date indicated on the notice of receipt, if made by first-class mail, to
the parties as follows:

 

(x)            if to a Holder of Registrable Securities, at
the most current address given by such Holder to the Company in a Notice and
Questionnaire or any amendment thereto;

 

(y)           if to the Company, to:

 

20

 

Cameron
International Corporation

1333 West Loop South, Suite 1700

Houston, Texas  77027

Attention:  William C. Lemmer

Telecopy No.:  (713) 513-3456

 

with
a copy to:

 

Porter &
Hedges, L.L.P.

700 Louisiana Street, Suite 3500

Houston, Texas  77002

Attention:  Sam Allen

Telecopy No.:  (713) 226-0235

 

(z)            if to the Initial Purchasers, to:

 

Morgan
Stanley & Co. Incorporated 

1585 Broadway

New York, New York  10036

Attention:  Syndicate Department

Telecopy No.:  (212) 296-3146

 

with
a copy to (for informational purposes only):

 

Morgan
Stanley & Co. Incorporated 

1585 Broadway

New York, New York  10036

Attention:  Syndicate Department

Telecopy No.:  (212) 296-3146to:

 

Citigroup
Global Markets Inc.

388 Greenwich Street 

New York, New York  10013

Attention:  Legal Department

Telecopy No.:  (646) 291-5366

 

and
to:

 

J.
P. Morgan Securities Inc.

277 Park Avenue, 9th Floor

New York, New York  10172

Attention:  Syndicate

Telecopy No.:  (212) 622-8358

 

21

 

with
a copy to:

 

Baker
Botts L.L.P..

910 Louisiana

Houston, Texas  77002

Attention:  David Kirkland

Telecopy No.:  (713) 229-1522

 

or to such other address as
such person may have furnished to the other persons identified in this Section 9(d) in
writing in accordance herewith.

 

(e)           Approval of Holders.  Whenever the consent or approval of Holders of a specified percentage
of Registrable Securities is required hereunder, Registrable Securities held by
the Company or its affiliates (as such term is defined in Rule 405 under
the Securities Act) (other than the Initial Purchasers or subsequent Holders of
Registrable Securities if such subsequent Holders are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.

 

(f)            Successors and
Assigns.  Any person who purchases any Registrable
Securities from the Initial Purchasers or any Holder shall be deemed, for
purposes of this Agreement, to be an assignee of the Initial Purchasers or such
Holder, as the case may be.  This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties and shall inure to the benefit of and be binding
upon each Holder of any Registrable Securities.

 

(g)           Counterparts.  This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be original and all of which taken together shall constitute one
and the same agreement.

 

(h)           Headings.  The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

 

(i)            Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.

 

(j)            Severability.  If any term, provision, covenant or restriction of this Agreement is
held to be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
thereby, and the parties hereto shall use their best efforts to find and employ
an alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction, it being
intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.

 

(k)           Entire Agreement.  This Agreement, together with the Purchase Agreement, the Notes and the
Indenture, is intended by the parties as a final expression of their agreement
and is intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter 

 

22

 

contained herein and the
registration rights granted by the Company with respect to the Registrable
Securities.  Except as provided in the
Purchase Agreement, there are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to the Registrable
Securities.  This Agreement supersedes
all prior agreements and undertakings among the parties with respect to such
registration rights.  No party hereto shall
have any rights, duties or obligations with respect to such registration rights
other than those specifically set forth in this Agreement.

 

(l)            Termination.  This Agreement and the obligations of the parties hereunder shall
terminate upon the end of the Effectiveness Period, except for any liabilities
or obligations under Section 5, 6 or 7 hereof and the obligations to make
payments of and provide for liquidated damages under Section 3(b) hereof
to the extent such damages accrue prior to the end of the Effectiveness Period,
each of which shall remain in effect in accordance with its terms.

 

[The Remainder of This Page Intentionally
Left Blank; Signature Page Follows]

 

23

 

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

 

 

	
   

  	
  CAMERON INTERNATIONAL
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Franklin Myers

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Franklin Myers

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President and

  	
   

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  	
   

  

 

 

Confirmed and accepted as of the date first above:

 

MORGAN STANLEY & CO. INCORPORATED

 

	
  By:

  	
  /s/ Carl F. Giesler, Sr.

  	
   

  
	
   

  	
  Name:

  	
  Carl F. Giesler, Sr.

  
	
   

  	
  Title:

  	
  Executive Director

  
				

 

 

CITIGROUP GLOBAL MARKETS INC.

 

	
  By:

  	
  /s/ Quinn P. Fanning

  	
   

  
	
   

  	
  Name:

  	
  Quinn P. Fanning

  
	
   

  	
  Title:

  	
  Managing Director

  
				

 

 

J. P. MORGAN SECURITIES INC.

 

	
  By:

  	
  /s/ Helen A. Carr

  	
   

  
	
   

  	
  Name:

  	
  Helen A. Carr

  
	
   

  	
  Title:

  	
  Managing Director

  
				

 

24Exhibit 10.1

 

 

CAMERON INTERNATIONAL CORPORATION

 

$500,000,000 Aggregate Principal Amount

 

2.50% Convertible Senior Notes

 

due 2026

 

PURCHASE AGREEMENT

 

 

May 23, 2006

 

 

PURCHASE AGREEMENT

 

May 23, 2006

 

MORGAN STANLEY & CO. INCORPORATED

CITIGROUP GLOBAL MARKETS INC.

J. P. MORGAN SECURITIES 

as Initial
Purchasers

c/o Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York  10036

 

Dear Sirs and Mesdames:

 

Cameron International
Corporation, a Delaware corporation (the “Company”), proposes to issue
and sell to you (the “Initial Purchasers”) $500,000,000 aggregate
principal amount of its 2.50% Convertible Senior Notes due 2026 (the “Firm
Notes”). In addition, the Company proposes to grant to the Initial
Purchasers the option to purchase from the Company up to an additional
$75,000,000 aggregate principal amount of the Company’s 2.5% Convertible Senior
Notes due 2026 (the “Additional Notes”). The Firm Notes and the
Additional Notes are herein collectively sometimes referred to as the “Notes”.

 

The Notes are to be issued
pursuant to an indenture (the “Indenture”) to be entered into at or
prior to the “time of purchase” (as defined herein), between the Company and
SunTrust Bank, as trustee (the “Trustee”). The Notes will be convertible
in accordance with their terms and the terms of the Indenture into cash and, if
applicable, shares of the common stock (the “Common Stock”) of the
Company, par value $0.01 per share (the “Shares”).

 

The Notes and the Shares
will be offered by the Company without being registered under the Securities
Act of 1933, as amended (the “Securities Act”), to persons reasonably
believed to be “qualified institutional buyers” in compliance with the
exemption from registration provided by Rule 144A under the Securities Act (“Rule
144A”).

 

The Initial Purchasers and
their direct and indirect transferees will be entitled to the benefits of a
Registration Rights Agreement to be entered into at or prior to the time of
purchase between the Company and the Initial Purchasers (the “Registration Rights
Agreement”).

 

The Company has furnished to
you, for use by you in connection with the offering of the Notes, copies of a
preliminary offering memorandum (the “Preliminary Memorandum”), and the
Company will, on or before the second business day after the date hereof,
prepare and furnish to you, for use by you in connection with the offering of
the Notes, a final offering memorandum (the “Final Memorandum” and, with
the Preliminary 

 

 

Memorandum, each a “Memorandum”), each of
which Memoranda includes or will include, among other things, a description of
the terms of the Notes and the Shares, the terms of the offering and a
description of the Company. Any reference herein to the Preliminary Memorandum,
Final Memorandum or Memorandum shall be deemed to refer to and include the
documents, if any, incorporated by reference, or deemed to be incorporated by
reference, therein (the “Incorporated Documents”), including, unless the
context otherwise requires, the documents, if any, filed as exhibits to such
Incorporated Documents. Any reference herein to the terms “amend,” “amendment”
or “supplement” with respect to the any Memorandum shall be deemed to refer to
and include the filing with the Securities and Exchange Commission (the “Commission”)
of any document under the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (collectively, the “Exchange Act”) on
or after the date of such Memorandum and deemed to be incorporated therein by
reference.

 

As used in this Agreement, “business day” shall
mean a day on which the New York Stock Exchange (the “NYSE”) is open for
trading. The terms “herein,” “hereof,” “hereto,” “hereinafter” and similar
terms, as used in this Agreement, shall in each case refer to this Agreement as
a whole and not to any particular section, paragraph, sentence or other
subdivision of this Agreement. The term “or,” as used herein, is not exclusive.

 

This Agreement, the
Registration Rights Agreement, the Notes and the Indenture are hereinafter
sometimes referred to collectively as the “Operative Documents.”

 

The Company and the Initial
Purchasers agree as follows:

 

1.             Sale and Purchase:  Upon the basis of the representations and
warranties and subject to the other terms and conditions herein set forth, the
Company agrees to issue and sell to the respective Initial Purchasers and each
of the Initial Purchasers, severally and not jointly, agrees to purchase from
the Company, the aggregate principal amount of Firm Notes set forth opposite
the name of such Initial Purchaser in Schedule A attached hereto in
each case at a purchase price of 98.375% of the principal amount thereof.

 

In addition, the Company hereby grants to the several
Initial Purchasers the option (the “Manager’s Option”) to purchase from
time to time, and upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Initial Purchasers
shall have the right to purchase, severally and not jointly, from the Company,
ratably in accordance with the aggregate principal amount of Firm Notes to be
purchased by each of them, all or a portion of the Additional Notes, at a
purchase price of 98.375%
of the principal amount thereof, plus accrued interest, if any, from the “time
of purchase” (as hereinafter defined) to the “additional time of purchase” (as
hereinafter defined), such accrued interest to be calculated in the same manner
and at the same rate at which interest accrues on the Notes in accordance with
their terms and the terms of the Indenture. The Manager’s Option may be exercised
by Morgan Stanley & Co. Incorporated (“Morgan Stanley”) on behalf of
the several Initial Purchasers at any time and from time to time on or before
the thirtieth day following the date of the Final Memorandum by written notice
to the Company. Such notice shall set forth the aggregate principal amount of 

 

2

 

Additional
Notes as to which the Manager’s Option is being exercised and the date and time
when the Additional Notes are to be delivered (any such date and time being
herein referred to as an “additional time of purchase”); provided,
however, that no additional time of purchase shall be earlier than the “time
of purchase” (as defined below) nor earlier than the second business day after
the date on which the Manager’s Option shall have been exercised nor later than
the tenth business day after the date on which the Manager’s Option shall have
been exercised. The principal amount of Additional Notes to be sold to each
Initial Purchaser shall be the principal amount which bears the same proportion
to the aggregate principal amount of Additional Notes being purchased as the
principal amount of Firm Notes set forth opposite the name of such Initial
Purchaser on Schedule A hereto bears to the aggregate principal amount
of Firm Notes, subject to adjustment in accordance with Section 9 hereof.

 

2.             Payment and Delivery:  Payment of the purchase price for the Firm
Notes shall be made to the Company by Federal Funds wire transfer, against
delivery of the Firm Notes to you through the facilities of The Depository
Trust Company (“DTC”) for the respective accounts of the Initial
Purchasers. Such payment and delivery shall be made at 9:00 A.M., central
standard time, on May 26, 2006 (unless another time shall be agreed to by you
and the Company or unless postponed in accordance with the provisions of
Section 9 hereof). The time at which such payment and delivery are to be made
is hereinafter sometimes called the “time of purchase.”  Electronic transfer of the Firm Notes shall
be made to you at the time of purchase in such names and in such denominations
as you shall specify.

 

Payment of the purchase
price for the Additional Notes shall be made at the additional time of purchase
in the same manner and at the same office and time of day as the payment for
the Firm Notes. Electronic transfer of the Additional Notes shall be made to
you at the additional time of purchase in such names and in such denominations
as you shall specify.

 

For the purpose of expediting
the checking of the certificates for the Notes by you, the Company agrees to
make such certificates available to you for such purpose at least one full
business day preceding the time of purchase or the additional time of purchase,
as the case may be.

 

Deliveries of the documents
described in Section 7 hereof with respect to the purchase of the Notes shall
be made at the offices of Baker Botts L.L.P. at 910 Louisiana, Houston, Texas,
at 8:00 A.M., central standard time, on the date of the closing of the purchase
of the Firm Notes or the Additional Notes, as the case may be.

 

3.             Representations
and Warranties of the Company:  The
Company represents and warrants to and agrees with each of the Initial
Purchasers that:

 

(a)           At no time during the period that begins on the date of
the Preliminary Memorandum and ends at the time of purchase did or will the
Preliminary Memorandum, as then amended or supplemented and when taken together
with the Term Sheet, include an 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 no
time during the period that begins 

 

3

 

on the date of the Final Memorandum and ends at the later of the time
of purchase, the latest additional time of purchase, if any, and the last time
at which the Final Memorandum, as then amended or supplemented, is delivered in
connection with an initial resale of any Notes by any Initial Purchaser will
the Final Memorandum, as then amended or supplemented, include an 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, however, that the Company makes
no representation or warranty in this Section 3(a) with respect to any
statement contained in either Memorandum in reliance upon and in conformity
with information concerning an Initial Purchaser and furnished in writing by or
on behalf of such Initial Purchaser through Morgan Stanley to the Company
expressly for use in such Memorandum; each Incorporated Document, at the time
such document was filed, or will be filed, with the Commission or at the time
such document became or becomes effective, as applicable, complied or will
comply, in all material respects, with the requirements of the Exchange Act and
did not or will not, as applicable, include an 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. The “Term Sheet” means the term sheet attached as Exhibit
D hereto.

 

(b)           Prior to the
execution of this Agreement, the Company has not, directly or indirectly,
offered or sold any Notes by means of, or used, in connection with the offer or
sale of the Notes, any material or communication that would, assuming the Notes
were to be offered publicly, constitute a “prospectus” (within the meaning of
the Act), in each case other than the Preliminary Memorandum.

 

(c)           All of the issued
and outstanding shares of capital stock, including Common Stock, of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any statutory or
contractual preemptive rights, resale rights, rights of first refusal or
similar rights.

 

(d)           The subsidiaries of
the Company (the “subsidiaries”), other than Cooper Cameron (UK)
Limited, Cooper Cameron Canada Corporation, Cameron France SAS, Cooper Cameron
(Singapore) Pte. Ltd., Cooper Cameron Valves Italy Srl, Cameron International
Holding Corp., Cooper Cameron Holding (Cayman) Limited, Cameron Holding
(Luxembourg) SARL and Cameron (Luxembourg) SARL (each, a “Principal Subsidiary”),
(i) do not, individually or in the aggregate, account for more than 20% of the
Company and its subsidiaries’ customer sales, (ii) do not, individually or in
the aggregate, provide more than 20% of the Company and its subsidiaries’
income from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principle, and (iii) do not,
individually or in the aggregate, account for more than 20% of the total assets
of the Company and its subsidiaries after the elimination of intercompany items.
Except as set forth in the Preliminary Memorandum and the Final Memorandum, all
of the 

 

4

 

issued and outstanding shares of capital stock or other equity
interests of each Principal Subsidiary have been duly authorized and validly
issued and are fully paid and nonassessable. All shares of capital stock or
other equity interests of the Principal Subsidiaries that are owned of record
directly by the Company or indirectly by a wholly owned subsidiary of the
Company are owned free and clear of any lien, security interest, pledge,
charge, encumbrance, mortgage, equity, claim or adverse interest of any nature
(each a “Lien”); none of the outstanding shares of capital stock or
other equity interests of any such Principal Subsidiary was issued in violation
of any preemptive or similar rights or the charter or bylaws or other organizational
documents of the Company or such Principal Subsidiary or any agreement to which
the Company or such Principal Subsidiary is a party. Except as set forth in the
Preliminary Memorandum and the Final Memorandum, there are no outstanding subscriptions,
rights, warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest of the
Principal Subsidiaries.

 

(e)           The Company and each
Principal Subsidiary has been duly incorporated, organized or formed as a
corporation, partnership or other entity, is validly existing in good standing
under the laws of its respective jurisdiction of incorporation, organization or
formation and has all requisite power and authority to carry on its business as
it is currently being conducted as described in the Preliminary Memorandum and
the Final Memorandum and to own, lease, license and operate its respective
properties in accordance with its business as currently conducted. The Company
and each Principal Subsidiary is duly registered and qualified and in good
standing as a foreign corporation, partnership or other entity authorized to do
business in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such registration or qualification,
except where the failure to be so registered or qualified would not,
individually or in the aggregate, result in a Material Adverse Effect. A “Material
Adverse Effect” means any material adverse effect on the business,
condition (financial or other), properties, results of operations, earnings or
business prospects of the Company and its subsidiaries, taken as a whole.

 

(f)            The Company has all
requisite power and authority to execute, deliver and perform all of its
obligations under the Operative Documents and to consummate the transactions
contemplated by the Operative Documents to be consummated on its part and,
without limitation, the Company has all requisite power and authority to issue,
sell and deliver the Notes.

 

(g)           This Agreement has
been duly and validly authorized, executed and delivered by the Company and
when executed and delivered by the Company and by you will be a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms.

 

(h)           The Indenture has
been duly and validly authorized by the Company and, when duly executed and
delivered by the Company (assuming the due 

 

5

 

authorization, execution and delivery thereof by the Trustee), will
constitute a legal, valid and binding obligation of the Company, enforceable
against it in accordance with its terms, except as enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws affecting the enforcement of creditors’
rights generally and by general principles of equity.

 

(i)            The Registration
Rights Agreement has been duly authorized by the Company and when executed and
delivered by the Company and duly authorized, executed and delivered by the
Initial Purchasers will be a legal, valid and binding agreement of the Company,
and will entitle the holders of the Notes to the benefits thereof and
enforceable in accordance with its terms, except as (i) the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or similar laws affecting creditors’ rights
generally and general principles of equity and (ii) rights to indemnity and
contribution may be limited by applicable law.

 

(j)            The Notes have been
duly and validly authorized for issuance and sale to the Initial Purchasers by
the Company and, when executed by the Company and authenticated by the Trustee
in accordance with the Indenture and delivered by the Company against payment
by the Initial Purchasers in accordance with the terms of this Agreement, the
Notes will have been validly issued and delivered, will be legal, 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, fraudulent
conveyance, moratorium or similar laws affecting the enforcement of creditors’
rights generally and by general principles of equity. The Shares initially
issuable upon conversion of the Notes have been duly authorized and validly
reserved for issuance upon conversion of the Notes, and upon conversion of the
Notes in accordance with their terms and the terms of the Indenture will be
issued free of statutory and contractual preemptive rights and are sufficient
in number to meet the current conversion requirements, and such Shares, when so
issued upon such conversion in accordance with the terms of the Indenture, will
be duly and validly issued and fully paid and non-assessable.

 

(k)           The Notes, the
Registration Rights Agreement, the Indenture and the capital stock of the
Company, including the Shares, conform in all material respects to each
description thereof contained or incorporated by reference in the Preliminary
Memorandum and the Final Memorandum.

 

(l)            None of the Company
or any Principal Subsidiary is (i) in violation of its charter, bylaws or
other constitutive and governing documents, (ii) in default (or, with
notice or lapse of time or both, would be in default) in the performance or
observance of any obligation, agreement, covenant or condition contained in any
bond, debenture, note, indenture, mortgage, deed of trust, loan or credit
agreement, or 

 

6

 

other evidence of indebtedness, or any lease, license, franchise
agreement, authorization, permit, certificate or other agreement or instrument
to which any of them is a party or by which any of them is bound or to which
any of their assets or properties is subject (collectively, “Agreements and
Instruments”), or (iii) in violation of any law, statute, rule,
regulation, judgment, order or decree of any domestic or foreign court with
jurisdiction over any of them or any of their assets or properties or other
governmental or regulatory authority, agency or other body, except as, in the
case of clauses (ii) and (iii) herein, would not, either individually or in the
aggregate, have a Material Adverse Effect. There exists no condition that, with
notice, the passage of time or otherwise, would constitute a default by the
Company or any Principal Subsidiary under any such document or instrument or
result in the imposition of any penalty or the acceleration of any
indebtedness, other than penalties, defaults or conditions that would not have
a Material Adverse Effect.

 

(m)          The execution,
delivery and performance by the Company of the Operative Documents, including
the consummation of the offer and sale of the Notes, does not or will not
violate, conflict with or constitute a breach of any of the terms or provisions
of, or a default under (or an event that with notice or the lapse of time, or
both, would constitute a default), or require consent under, or result in the
creation or imposition of a lien, charge or encumbrance on any property or
assets of the Company or any Principal Subsidiary or an acceleration of any
indebtedness of the Company or any Principal Subsidiary pursuant to,
(i) the charter, bylaws or other constitutive documents of the Company or
any Principal Subsidiary, (ii) any Agreements and Instruments, (iii) any
law, statute, rule or regulation applicable to the Company or any of its subsidiaries
or their respective assets or properties or (iv) any judgment, order or
decree of any domestic or foreign court or governmental agency or authority
having jurisdiction over the Company or any of its subsidiaries or their respective
assets or properties, except as, in the case of clauses (ii) and (iv), would
not, either individually or in the aggregate, (A) have a Material Adverse
Effect or (B) interfere with or adversely affect the issuance of the Notes
in any jurisdiction or adversely affect the consummation of the transactions
contemplated by any of the Operative Documents.

 

(n)           No approval,
authorization, consent or order of, or filing, registration, qualification,
license or permit of or with, any federal, state, local or foreign court or governmental
agency, body or administrative agency, or of or with the rules of the New York
Stock Exchange, or approval of stockholders of the Company, is required to be
obtained or made by the Company for the execution, delivery and performance by
the Company of the Operative Documents, including the consummation of any of
the transactions contemplated thereby, except (i) such as have been or
will be obtained or made on or prior to the time of purchase in connection with
the issuance of the Notes, (ii) such as may be required under state
securities or blue sky laws, (iii) as may be required by federal and state
securities laws with respect to the Company’s obligations under the
Registration Rights Agreement and the listing of the Shares on the New York
Stock Exchange in connection therewith, or (iv) those for which the
failure to obtain would not, either individually or in the aggregate,
(A) have a Material 

 

7

 

Adverse Effect or (B) interfere with or adversely affect the
issuance of the Notes in any jurisdiction or adversely affect the consummation
of the transactions contemplated by any of the Operative Documents.

 

(o)           Except as described
in the Preliminary Memorandum and the Final Memorandum, (i) no person has any
preemptive rights or similar rights to purchase any shares of Common Stock or
shares of any other capital stock or other equity interests of the Company,
whether as a result of the sale of the Notes as contemplated hereby or
otherwise, and (ii) no person has the right to act as an initial purchaser or
as a financial advisor to the Company in connection with the offer and sale of
the Notes. Except as described in the Preliminary Memorandum and the Final
Memorandum and except pursuant to the Registration Rights Agreement, no person
has the right, contractual or otherwise, to require the Company to register any
securities with the Commission, whether in the registration statement to be
filed with the Commission pursuant to the Registration Rights Agreement or
otherwise, and whether as a result of the sale of the Notes as contemplated
hereby or otherwise.

 

(p)           Except as described
in the Preliminary Memorandum and the Final Memorandum, there is no action,
suit, claim, investigation or proceeding before or by any court, arbitrator or
governmental agency, board, authority, body or official, domestic or foreign,
now pending or, to the knowledge of the Company, threatened or contemplated to
which the Company or any of its subsidiaries is a party or to which the business,
assets or property of such entity is subject, except such as, if determined adversely
to the Company or such subsidiary, would not, either individually or in the
aggregate, (i) have a Material Adverse Effect or (ii) interfere with or adversely
affect the issuance of the Notes in any jurisdiction or adversely affect the
consummation of the transactions contemplated by any of the Operative Documents.
Every request of any securities authority or agency of any jurisdiction for
additional information with respect to the Notes that has been received by the
Company or its counsel prior to the date hereof has been, or will prior to the
time of purchase be, complied with in all material respects.

 

(q)           Except as described
in the Preliminary Memorandum and the Final Memorandum, the Company and each
Principal Subsidiary (i) is in compliance with, or not subject to costs or
liabilities under, any and all local, state, provincial, federal and foreign
laws, regulations, rules of common law, orders and decrees, as in effect as of
the date hereof, and any present judgments and injunctions issued or
promulgated thereunder relating to pollution or protection of public and
employee health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants applicable to it or its business or
operations or ownership or use of its property (“Environmental Laws”),
(ii) possesses all permits, licenses or other approvals required under
applicable Environmental Laws, and is in compliance with all terms and
conditions of any such permit, license or other approval, and (iii) except as
set forth in the Preliminary Memorandum and the Final Memorandum, has not
received notice of any actual or potential liability for the investigation or
remediation 

 

8

 

of any disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except in each case where liability or other
consequences arising out of the matters referred to in clauses (i) through
(iii) above would not, individually or in the aggregate, have a Material Adverse
Effect. There has been no spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto any property now or previously owned or
leased by the Company or any of its subsidiaries or into the environment
surrounding such property of any solid wastes or hazardous substances due to or
caused by the Company or any of its subsidiaries, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not,
individually or in the aggregate, have a Material Adverse Effect. There are no
costs or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties) which would, individually or in the
aggregate, have a Material Adverse Effect. For purposes of this provision, the
terms “hazardous substances” and “solid wastes” shall have the meanings
specified in any applicable Environmental Laws.

 

(r)            Except as otherwise
set forth in the Preliminary Memorandum and the Final Memorandum or such as
would not have a Material Adverse Effect, each of the Company and its
subsidiaries has good and marketable title to all property (real and personal)
described or incorporated by reference into the Preliminary Memorandum and the
Final Memorandum as being owned by it, free and clear of all Liens, except
Liens for taxes not yet due and payable and Liens described in the Preliminary
Memorandum and the Final Memorandum. All the property described in the
Preliminary Memorandum or the Final Memorandum or a document incorporated by
reference into either the Preliminary Memorandum or the Final Memorandum, as
being held under lease by the Company or any of its subsidiaries is held by
such entity under valid, subsisting and enforceable leases, except as would not
have a Material Adverse Effect.

 

(s)           The Company and each
subsidiary has filed on a timely basis all necessary federal, state, local and
foreign income, franchise and other tax returns (other than returns being
contested in good faith or as to which the failure to file would not have a
Material Adverse Effect) and have paid all taxes shown thereon as due (other
than those being contested in good faith or which are currently payable without
penalty or interest), and the Company has no knowledge of any tax deficiency
which has been or might be asserted against the Company or any subsidiary
except as would not have a Material Adverse Effect; all material tax liabilities
are adequately provided for within the financial statements of the Company in
accordance with United States generally accepted accounting principles (“GAAP”).

 

(t)            None of the Company
or any of its subsidiaries is and, after giving effect to the offering and sale
of the Notes and the application of the proceeds thereof as described in the
Preliminary Memorandum and the Final Memorandum will be, 

 

9

 

required to register as an “investment company” or a company “controlled”
by an “investment company” incorporated in the United States within the meaning
of the Investment Company Act of 1940, as amended.

 

(u)           The Company and each
of the Principal Subsidiaries maintains a system of internal accounting
controls sufficient to provide reasonable assurance that:  (i) transactions are executed in
accordance with management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of its
financial statements in conformity with GAAP and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded accountability
for its assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Since December 31,
2005, there have been no significant changes in internal controls or in other
factors that could materially affect the Company’s or any Principal Subsidiary’s
internal controls over financial reporting.

 

(v)           The Company has
established and maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15 and 15d-15 under the Exchange Act); such disclosure
controls and procedures (i) are designed to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made known
to the Company’s Chief Executive Officer and its Chief Financial Officer by
others within those entities, particularly during the period in which the
Annual Report on Form 10-K for the year ended December 31, 2005 was being
prepared; (ii) have been evaluated for effectiveness as of the end of the
periods covered by the Company’s Annual Report on Form 10-K for the year ended
December 31, 2005; and (iii) are effective to perform the functions for which
they were established.

 

(w)          Based on the
evaluation of its disclosure controls and procedures as of the end of the
period covered by the Annual Report on Form 10-K for the year ended December
31, 2005, and other than as has been disclosed to the Company’s auditors and
the audit committee of the board of directors of the Company, the Company is
not aware of (i) any significant deficiency in the design or operation of
internal controls which could adversely affect its ability to record, process,
summarize and report financial data or any material weaknesses in internal
controls; or (ii) any fraud, whether or not material, that involves management
or other employees who have a significant role in the internal controls of the
Company.

 

(x)            Except as would not
have a Material Adverse Effect, (i) the Company and each of its
subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged, (ii) all policies of
insurance insuring the Company or any its subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force and
effect and (iii) the Company and its subsidiaries are in compliance with
the terms of such policies and instruments. There are no claims by the Company
or any of its subsidiaries under any such policy 

 

10

 

or instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause. Neither the Company nor any
subsidiary has been refused any insurance coverage sought or applied for,
except in each case as set forth in the Preliminary Memorandum and the Final
Memorandum. Neither the Company nor any subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would not have a
Material Adverse Effect, except as set forth in the Preliminary Memorandum and
the Final Memorandum.

 

(y)           Since December 31,
2005, except as set forth or incorporated by reference in the Preliminary
Memorandum and the Final Memorandum, (i) none of the Company or any of its
subsidiaries has (A) incurred any liabilities or obligations, direct or
contingent, that would have a Material Adverse Effect, or (B) entered into any
material transaction not in the ordinary course of business, (ii) there has
been no material adverse change or any development involving a prospective material
adverse change in the business, properties, management, condition (financial or
otherwise), earnings or results of operations of the Company and its
subsidiaries, taken as a whole, and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock except in a manner consistent with past practices.

 

(z)            None of the Company
or any of its subsidiaries (or any agent thereof acting on their behalf other
than the Initial Purchasers, as to whom the Company makes no representation)
has taken, and none of them will take (other than the Initial Purchasers, as to
whom the Company makes no representation), any action that would cause this
Agreement or the issuance or sale of the Notes to violate Regulations T, U
or X of the Board of Governors of the Federal Reserve System or analogous
foreign laws and regulations, in each case as in effect, or as the same may
hereafter be in effect, at the time of purchase of the Notes.

 

(aa)         Ernst & Young
LLP, who has certified or shall certify the audited financial statements
included or to be included as part of or incorporated by reference in the
Preliminary Memorandum and the Final Memorandum is an independent accountant
within the meaning of the Securities Act. The historical financial statements
and the notes and schedules thereto included in or incorporated by reference in
the Preliminary Memorandum and the Final Memorandum present fairly in all
material respects the consolidated financial position and results of operations
of the Company and its subsidiaries at the respective dates and for the
respective periods indicated. Such financial statements have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
presented (except as disclosed in the Preliminary Memorandum and the Final
Memorandum, including the documents incorporated by reference therein). The
other financial and statistical information and data included in or incorporated
by reference in the Preliminary Memorandum and the Final Memorandum are accurately
presented in all material respects and prepared on a 

 

11

 

basis consistent with the financial statements and the books and
records of the Company and its subsidiaries.

 

(bb)         Except as would not
have a Material Adverse Effect, each of the Company and its subsidiaries own or
possess the right to use all patents, trademarks (both registered and
unregistered), trademark registrations, service marks, service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets and
other intellectual property rights described in the Preliminary Memorandum and
the Final Memorandum as being owned by them or any of them or necessary for the
conduct of their respective businesses, and the Company is not aware of any
claims to the contrary or any challenge by any other entity to the rights of
the Company and its subsidiaries with respect to any of the foregoing.

 

(cc)         Except as described
in the Preliminary Memorandum and the Final Memorandum, there are no contracts,
agreements or understandings between the Company or any subsidiaries and any
other entity other than the Initial Purchasers that would give rise to a valid
claim against the Company, any of its subsidiaries or the Initial Purchasers
for a brokerage commission, finder’s fee or like payment in connection with the
issuance, purchase and sale of the Notes.

 

(dd)         Except as would not have
a Material Adverse Effect, each of the Company and its subsidiaries has
fulfilled its obligations, if any, under the minimum funding standards of
Section 302 of the United States Employee Retirement Income Security Act of
1974 (“ERISA”) and the regulations and published interpretations
thereunder with respect to each “plan” (as defined in Section 3(3) of ERISA and
such regulations and published interpretations) in which employees of the
Company and its subsidiaries are eligible to participate and each such plan is
in compliance with the presently applicable provisions of ERISA and such
regulations and published interpretations. Except as would not have a Material
Adverse Effect, the Company and its subsidiaries have not incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than for the
payment of premiums in the ordinary course) or to any such plan under Title IV
of ERISA.

 

(ee)         No labor problem or
dispute with any of the employees of the Company or any of its subsidiaries
exists or is threatened or imminent, nor is the Company aware of any existing
or imminent labor disturbance by the employees of any of its or its
subsidiaries principal suppliers, contractors or customers, that could have a
Material Adverse Effect, except as set forth in the Preliminary Memorandum and
the Final Memorandum.

 

(ff)           The principal
executive officer and principal financial officer of the Company have made all
certifications required by the Sarbanes-Oxley Act of 2002 or any related rules
and regulations promulgated by the Commission, and the statements contained in
any such certification are true and correct in all material respects.

 

12

 

(gg)         The statistical and
market-related data and forward-looking statements (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act) included
in the Preliminary Memorandum and the Final Memorandum are based on or derived
from sources that the Company believes to be reliable and accurate in all
material respects and represent its good faith estimates that are made on the
basis of data derived from such sources.

 

(hh)         When the Notes are
issued pursuant to this Agreement, the Notes will not be of the same class
(within the meaning of Rule 144A) as securities that are listed on a national
securities exchange registered pursuant to Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system.

 

(ii)           Neither the Company
nor any Affiliate (as defined in Rule 501(b) of Regulation D under the
Securities Act) (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as defined in the Securities
Act) which is or would be integrated with the sale of the Notes in a manner
that would require the registration under the Securities Act of the Notes or
(ii) offered, solicited offers to buy or sold the Notes by any form of general
solicitation or general advertising (as those terms are used in 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.

 

(jj)           It is not necessary
in connection with the offer, sale and delivery of the Notes to the Initial
Purchasers pursuant to this Agreement to register the Notes or the Shares
deliverable upon conversion of the Notes under the Securities Act or to qualify
the Indenture under the Trust Indenture Act of 1939, as amended.

 

(kk)         The Company is
subject to requirements of the sanctions program implemented and administered
by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”),
including without limitation, 31 CFR Parts 500-600 (“OFAC Sanctions Programs”).
The Company consults from time to time with knowledgeable counsel regarding its
compliance with the OFAC Sanctions Program. The Company has undertaken
commercially reasonable efforts to comply with the OFAC Sanctions Program. None
of the Company, any of its subsidiaries or, 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
OFAC, and the Company will not expend any of its funds, or lend, contribute or
otherwise make available such funds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities of any such
person in violation of the OFAC Sanctions Program.

 

In addition, any certificate signed by any officer of
the Company or any of the Principal Subsidiaries and delivered to the Initial
Purchasers or counsel for the Initial Purchasers in connection with the offer
and sale of the Notes pursuant to this Agreement shall 

 

13

 

be
deemed to be a representation and warranty by the Company or Principal
Subsidiary, as the case may be, as to matters covered thereby, to the Initial
Purchasers.

 

4.             Representations
and Warranties of the Initial Purchasers. The Initial Purchasers propose to
offer the Notes for sale upon the terms and conditions set forth in this
Agreement, and each Initial Purchaser hereby, severally and not jointly,
represents and warrants to and agrees with the Company that:

 

(a)           They will offer and
sell the Notes only to persons whom they reasonably believe are “qualified
institutional buyers” (“QIBs”) within the meaning of Rule 144A in
transactions meeting the requirements of Rule 144A and that, in purchasing such
Notes, are deemed to have represented and agreed as provided in the Final
Memorandum under the caption “Notice to Investors.”

 

(b)           Each Initial
Purchaser is a QIB within the meaning of Rule 144A.

 

(c)           Each Initial
Purchaser has not and will not directly or indirectly, solicit offers in the
United States for, or offer or sell, the Notes by any form of general
solicitation, general advertising (as such terms are used in Regulation D) or
in any manner involving a public offering within the meaning of Section 4(2) of
the Securities Act.

 

5.             Certain Covenants of the Company:  The Company hereby agrees:

 

(a)           The Company will
prepare the Final Memorandum in a form approved by the Initial Purchasers and
will make no amendment or supplement to the Final Memorandum to which the
Initial Purchasers reasonably object.

 

(b)           Promptly, from time
to time, the Company will take such action as the Initial Purchasers may
reasonably request to qualify the Notes and the Shares for offering and sale
under the securities laws of such jurisdictions as the Initial Purchasers may
request and will comply with such laws so as to permit the continuance of sales
and dealing therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Notes; provided, that in connection
therewith the Company shall not be required to qualify as a foreign corporation,
to file a general consent to service of process or subject itself to any tax in
any such jurisdiction where it is not now so qualified or subject.

 

(c)           The Company will
furnish the Initial Purchasers with as many copies of the Final Memorandum, any
documents incorporated by reference therein and any amendment or supplement
thereto as the Initial Purchasers may from time to time reasonably request, and
if, at any time prior to the completion of the resale of the Notes by the
Initial Purchasers, any event shall have occurred as a result of which the
Final Memorandum as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were 

 

14

 

made when such Final Memorandum is delivered, not misleading, or, if
for any other reason it shall be necessary or desirable during such same period
to amend or supplement the Final Memorandum, the Company will notify the
Initial Purchasers and upon the request of the Initial Purchasers will prepare
and furnish without charge to the Initial Purchasers and to any dealer in
securities as many copies as the Initial Purchasers may from time to time
reasonably request of an amended Final Memorandum or a supplement to the Final
Memorandum which will correct such statement or omission or effect such
compliance.

 

(d)           During the period
beginning from the date hereof and continuing until the date 90 days after the
date of the Final Memorandum, the Company will not, without the prior written
consent of Morgan Stanley issue, offer, sell, contract to sell, hypothecate,
pledge, grant or sell any option, right or warrant to purchase, or otherwise
dispose of, or contract to dispose of, any Shares, any securities substantially
similar to the Notes or the Common Stock, any securities that are convertible
into or exchangeable for shares of Common Stock and any debt securities or any
securities that are convertible into or exchangeable for the Notes or such
other debt securities, or file or cause to be declared effective a registration
statement under the Securities Act relating to the offer and sale of any
Shares, any securities substantially similar to the Notes or the Common Stock,
any securities that are convertible into or exchangeable for shares of Common
Stock and debt securities or any securities that are convertible into or
exchangeable for the Notes or such other debt securities (other than (i) the
issuance of the Notes; (ii) the issuance of Shares upon conversion of the
Notes; (iii) the issuance of shares of Common Stock upon conversion or exercise
of convertible or exercisable or exchangeable securities outstanding as of the
date of this Agreement or (iv) the issuance of shares of Common Stock or
options pursuant to employee stock option or employee stock purchase plans
existing on, or upon exercise of warrants outstanding as of, the date of this
Agreement), or enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences of ownership of the Common Stock
or Notes irrespective of whether any transaction mentioned above is to be
settled by delivery of the Common Stock, the Notes or other securities, in cash
or otherwise.

 

(e)           At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act and so long
as any of the Notes (or Shares issued upon conversion thereof) are “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act, for
the benefit of holders from time to time of the Notes, the Company will furnish
at its expense, upon request, to holders and beneficial owners of Notes and
prospective purchasers of Notes information satisfying the requirements of
subsection (d)(4)(i) of Rule 144A.

 

(f)            The Company will
use its best efforts to cause the Notes to be eligible for trading in PORTAL.

 

15

 

(g)           For so long as the
Notes remain outstanding, the Company will furnish to the Initial Purchasers
copies of all reports or other communications (financial or other) furnished to
stockholders of the Company, and will deliver, or make available via the
Commission’s Electronic Data, Gathering, Analysis and Retrieval (EDGAR) System,
to the Initial Purchasers (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed by the Company with the
Commission or any securities exchange on which the Notes or any class of securities
of the Company is listed; and (ii) such additional public information
concerning the business and financial condition of the Company as the Initial
Purchasers may from time to time reasonably request (such financial information
to be on a consolidated basis to the extent the accounts of the Company and the
Subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission).

 

(h)           The Company will use
the net proceeds received by it from the sale of the Notes pursuant to this
Agreement in the manner specified in the Preliminary Memorandum and the Final
Memorandum under the caption “Use of Proceeds.”

 

(i)            The Company will
reserve and keep available at all times free of preemptive rights, Shares for
the purpose of enabling the Company to satisfy any obligations to issue Shares
upon conversion of the Notes.

 

(j)            The Company will
use its best efforts to list, as promptly as practicable but in no event later
than the time that the registration statement is declared effective in accordance
with the Registration Rights Agreement, and subject to notice of issuance, the
Shares on the New York Stock Exchange.

 

(k)           Whether or not the
transactions contemplated in this Agreement are consummated or this Agreement
is terminated, the Company will pay or cause to be paid all expenses incident
to the performance of its obligations under this Agreement, including, without
limitation, (i) the fees, disbursements and expenses of the Company’s counsel
and the Company’s accountants in connection with the issuance and sale of the
Notes and all other fees and expenses in connection with the preparation of
each Memorandum and all amendments and supplements thereto, including all
printing costs associated therewith, and the furnishing of copies thereof to
the Initial Purchasers and to dealers (including costs of mailing and
shipment), (ii) all costs related to the preparation, issuance, execution,
authentication and delivery of the Notes and the Shares, (iii) all costs
related to the transfer and delivery of the Notes to the Initial Purchasers,
including any transfer or other taxes payable thereon, (iv) all expenses in
connection with the qualification of the Notes and the Shares for offering and
sale under state laws and the cost of printing and furnishing of copies of any
blue sky or legal investment memorandum to the Initial Purchasers and to
dealers (including filing fees and the fees and disbursements of counsel for
the Initial Purchasers in connection with such qualification and in connection
with such blue sky or legal investment memorandum), (v) any fees payable to
investment rating agencies with respect to the rating of the Notes, (vi) the
costs and charges of the Trustee and 

 

16

 

any transfer agent, registrar or depositary, (vii) the fees and
expenses, if any, incurred in connection with the admission of the Notes for
trading in PORTAL or any appropriate market system, (viii) the costs and
expenses of the Company relating to investor presentations on any “road show”
undertaken in connection with the marketing of the offering of the Notes,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (ix) all other costs and expenses incident
to the performance of the Company’s obligations hereunder for which provision
is not otherwise made in this Section 5(k).

 

(l)            Neither the Company
nor any Affiliate will sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Securities
Act) which could be integrated with the sale of the Notes in a manner which
would require the registration under the Securities Act of the offer and sale
of the Notes pursuant to this Agreement.

 

(m)          The Company will not
solicit any offer to buy or offer or sell the Notes or the Shares by means of
any form of general solicitation or general advertising (as those terms are
used in Regulation D) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.

 

(n)           The Company will
not, at any time at or after the execution of this Agreement, directly or
indirectly, offer or sell any Notes by means of, or use, in connection with the
offer or sale of the Notes, any material or communication that would, assuming
the Notes were to be offered publicly, constitute a “prospectus” (within the
meaning of the Securities Act), in each case other than the Final Memorandum.

 

(o)           During the period
after the time of purchase or the additional time of purchase, if later, the
Company will not, and will not permit Affiliates, to resell any of the Notes or
the Shares which constitute “restricted securities” under Rule 144 under the
Securities Act that have been reacquired by any of them except pursuant to an
effective registration statement under the Securities Act.

 

(p)           Neither the Company
nor any Affiliate will take any action prohibited by Regulation M under the
Exchange Act in connection with the distribution of the Notes contemplated
hereby.

 

(q)           The Company and each
Principal Subsidiary will comply in all material respects with all applicable
securities and other laws, rules and regulations, including without limitation,
the Sarbanes-Oxley Act, and use its best efforts to cause the officers and
directors of the Company and each Principal Subsidiary, as the case may 

 

17

 

be, in their capacities as such, to comply with such laws, rules and
regulations, including without limitation, the provisions of the Sarbanes-Oxley
Act.

 

6.             Reimbursement of Initial
Purchasers’ Expenses:  If the Firm
Notes are not delivered for any reason other than the termination of this
Agreement pursuant to clause (iii), (v) or (vi) of Section 8(b) or Section 9(e)
hereof or the default by one or more of the Initial Purchasers in its or their
respective obligations hereunder, the Company shall, in addition to paying the
amounts described in Section 5(k) hereof, reimburse the Initial Purchasers
for all of their reasonable out-of-pocket expenses, including the fees and
disbursements of their counsel.

 

7.             Conditions of Initial Purchasers’
Obligations:  The several obligations
of the Initial Purchasers hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase. The several obligations of the Initial Purchasers at the additional
time of purchase are subject to the accuracy of the representations and
warranties on the part of the Company on the date hereof, at the time of
purchase and at the additional time of purchase, as the case may be. Additionally,
the several obligations of the Initial Purchasers are subject to the
performance by the Company of its obligations hereunder and to the following
additional conditions precedent:

 

(a)           The Initial
Purchasers shall have received at the time of purchase and at the additional
time of purchase, as the case may be, an opinion of Porter & Hedges,
L.L.P., counsel for the Company, substantially in the form of Exhibit A
hereto, addressed to the Initial Purchasers and dated the date of the time of
purchase or the additional time of purchase, as the case may be.

 

(b)           The Initial
Purchasers shall have received at the time of purchase and at the additional
time of purchase, as the case may be, an opinion of William C. Lemmer, Vice
President, General Counsel and Secretary to the Company, substantially in the
form of Exhibit B hereto, addressed to the Initial Purchasers and
dated the date of the time of purchase or the additional time of purchase, as
the case may be.

 

(c)           The Initial Purchasers shall have received at the time of
purchase and at the additional time of purchase, as the case may be, from Ernst
& Young LLP customary comfort letters dated, respectively, as of the date
of the time of purchase or the additional time of purchase, as the case may be,
and addressed to the Initial Purchasers, which letters shall cover the various
financial disclosures contained in the Preliminary Memorandum and the Final
Memorandum, in the form and substance heretofore approved by Morgan Stanley and
Baker Botts L.L.P., counsel to the Initial Purchasers.

 

(d)           The Initial Purchasers shall have received at the time of
purchase and at the additional time of purchase, as the case may be, the
opinion of Baker Botts L.L.P., counsel for the Initial Purchasers, dated the
date of the time of purchase or the 

 

18

 

additional time of purchase, as the case may be, in form and substance
reasonably satisfactory to you.

 

(e)           No amendment or supplement to the Preliminary Memorandum
or the Final Memorandum, or any document which upon filing with the Commission
would be incorporated by reference in the Preliminary Memorandum or the Final
Memorandum, shall at any time have been made or filed to which the Initial
Purchasers have reasonably objected in writing.

 

(f)            At the time of
purchase or the additional time of purchase, as the case may be, neither the
Preliminary Memorandum, when taken together with the Term Sheet, nor the Final
Memorandum, and no amendment or supplement to either Memorandum, shall include
an 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.

 

(g)           Between the time of
execution of this Agreement and the time of purchase, or an additional time of
purchase, as the case may be, there shall not have occurred or become known any
material and unfavorable change, financial or otherwise, in the business,
properties, management, conditions, business prospects or results of operations
of the Company and its subsidiaries, taken as a whole, that in the judgment of
the Initial Purchasers makes it impracticable or inadvisable to proceed with
the offering or delivery of the Notes on the terms and in the manner
contemplated by the Preliminary Memorandum and the Final Memorandum.

 

(h)           The Company will, at
the time of purchase and, if applicable at the additional time of purchase,
deliver to you a certificate of its Chief Executive Officer and its Chief
Financial Officer in the form attached as Exhibit C hereto.

 

(i)            You shall have
received copies, duly executed by the Company and the other parties thereto, of
the Registration Rights Agreement and the Indenture.

 

(j)            The Company shall
have furnished to you such other documents and certificates as to the accuracy
and completeness of any statement in the Preliminary Memorandum and the Final
Memorandum as of the time of purchase and the additional time of purchase, as
the case may be, as you may reasonably request.

 

(k)           The Notes shall be
included in the book-entry settlement system of the DTC and designated for
trading on PORTAL, subject only to notice of issuance at or prior to the time
of purchase.

 

(l)            Between the time of
execution of this Agreement and the time of purchase or additional time of
purchase, as the case may be, there shall not have occurred any downgrading,
nor shall any notice have been given of (i) any intended or potential
downgrading or (ii) any review or possible change that does not indicate an 

 

19

 

improvement, in the rating accorded any securities of or guaranteed by
the Company by Moody’s Investor Services, Inc. or Standard & Poor’s Rating
Services.

 

8.             Effective Date of Agreement;
Termination:  This Agreement shall become effective when
the parties hereto have executed and delivered this Agreement.

 

The obligations of
the several Initial Purchasers hereunder shall be subject to termination in the
absolute discretion of Morgan Stanley at any time prior to the time of purchase
or an additional time of purchase, as the case may be, if prior to such time
(i) the Company shall have failed, refused or been unable to perform in
any material respect any agreement on its part to be performed under this
Agreement when and as required, (ii) any other condition to the
obligations of the Initial Purchasers under this Agreement to be fulfilled by
the Company pursuant to Section 7 is not fulfilled when and as required in
any material respect, (iii) trading in securities generally on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market
shall have been suspended or limitations or minimum prices shall have been
established on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market, (iv) a suspension or material limitation in
trading in the Company’s securities on the New York Stock Exchange has
occurred, (v) a general banking moratorium shall have been declared either by
the United States or New York State authorities, or if there has been a material
disruption in securities settlement or clearance services in the United States,
or (vi) the United States shall have declared war in accordance with its
constitutional processes or there shall have occurred any material outbreak or
escalation of hostilities or terrorism or other national or international
calamity or crisis of such magnitude in its effect on the financial markets of
the United States as, in the judgment of Morgan Stanley to make it
impracticable or inadvisable to proceed with the offering or delivery of the
Notes on the terms and in the manner contemplated in the Preliminary Memorandum
and the Final Memorandum.

 

If Morgan Stanley
elects to terminate this Agreement as provided in this Section 8, the Company
shall be notified as provided for herein.

 

If the sale to the
Initial Purchasers of the Notes, as contemplated by this Agreement, is not
carried out by the Initial Purchasers for any reason permitted under this Agreement
or if such sale is not carried out because the Company shall be unable to
comply and does not comply with any of the terms of this Agreement, the Company
shall not be under any obligation or liability under this Agreement (except to
the extent provided in Sections 5(k), 6 and 10 hereof), and the Initial
Purchasers shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.

 

20

 

9.             Increase
in Initial Purchasers’ Commitments:  Subject to Sections 7 and 8
hereof, if any Initial Purchaser shall default in its obligation to take up and
pay for the Notes to be purchased by it hereunder at the time of purchase or an
additional time of purchase (otherwise than for a failure of a condition set
forth in Section 7 hereof or a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 hereof) (the “Defaulted
Notes”) and if the aggregate principal amount of the Defaulted Notes which
all Initial Purchasers so defaulting shall have agreed but failed to take up
and pay for at such time does not exceed 10% of the total aggregate principal
amount of Notes to be purchased at such time, the non-defaulting Initial
Purchasers (including the Initial Purchasers, if any, substituted in the manner
set forth below) shall take up and pay for (in addition to the aggregate
principal amount of Notes they are obligated to purchase at such time pursuant
to Section 1 hereof) the aggregate principal amount of Defaulted Notes agreed
to be purchased by all such defaulting Initial Purchasers at such time, as hereinafter
provided. Such Defaulted Notes shall be taken up and paid for by such
non-defaulting Initial Purchasers, acting severally and not jointly, in such
amount or amounts as you may designate with the consent of each Initial
Purchaser so designated or, in the event no such designation is made, such
Notes shall be taken up and paid for by all non-defaulting Initial Purchasers
pro rata in proportion to the aggregate principal amount of Firm Notes set
forth opposite the names of such non-defaulting Initial Purchasers in Schedule A.

 

Without relieving any defaulting Initial Purchaser from its obligations
hereunder, the Company agrees with the non-defaulting Initial Purchasers that
it will not sell any Firm Notes hereunder unless all of the Firm Notes are purchased
by the Initial Purchasers (or by substituted Initial Purchasers selected by you
with the approval of the Company or selected by the Company with your approval).
Without relieving any defaulting Initial Purchaser from its obligations
hereunder, the Company agrees with the non-defaulting Initial Purchasers that
it will not sell any Additional Notes hereunder at an additional time of
purchase unless all of the Additional Notes to be purchased by the Initial
Purchasers at such additional time of purchase (as set forth in the related
written notice referred to in the second paragraph of Section 1 hereof) are
purchased by the Initial Purchasers (or by substituted Initial Purchasers selected
by you with the approval of the Company or selected by the Company with your
approval).

 

If a new Initial Purchaser or Initial Purchasers are substituted by the
Initial Purchasers or by the Company for a defaulting Initial Purchaser or
Initial Purchasers in accordance with the foregoing provision, the Company or
you shall have the right to postpone the time of purchase for a period not
exceeding five business days in order that any necessary changes in the Final
Memorandum and other documents may be effected.

 

The term “Initial Purchaser” as used in this Agreement shall refer
to and include any Initial Purchaser substituted under this Section 9 with like
effect as if such substituted Initial Purchaser had originally been named in Schedule
A hereto.

 

If the aggregate principal amount of Defaulted Notes which the defaulting
Initial Purchaser or Initial Purchasers agreed to purchase at the time of
purchase or an 

 

21

 

additional
time of purchase, as the case may be, exceeds 10% of the total aggregate
principal amount of Notes which all Initial Purchasers agreed to purchase
hereunder at such time, and if neither the non-defaulting Initial Purchasers
nor the Company shall make arrangements within the five business day period
stated above for the purchase of all the Firm Notes which the defaulting
Initial Purchaser or Initial Purchasers agreed to purchase hereunder at such
time, this Agreement, or, in the case of a default with respect to any
Additional Notes, the obligations of the Initial Purchasers to purchase, and of
the Company to sell, the Additional Notes that otherwise were to be purchased
by the Initial Purchasers at such additional time of purchase, shall terminate
without further act or deed and without any liability with respect thereto on
the part of the Company to any Initial Purchaser and without any liability with
respect thereto on the part of any non-defaulting Initial Purchaser to the
Company; provided, however, that, for avoidance of doubt, in the
case of such a termination on account of a default with respect to any
Additional Notes, this Agreement shall not terminate as to the Firm Notes or
any Additional Notes purchased by the Initial Purchasers from the Company
pursuant hereto prior to such termination. Nothing in this paragraph, and no
action taken hereunder, shall relieve any defaulting Initial Purchaser from
liability in respect of any default of such Initial Purchaser under this Agreement.

 

10.           Indemnity
and Contribution:

 

(a)           The
Company agrees to indemnify and hold harmless each Initial Purchaser, its
partners, directors and officers, and any person who controls any Initial
Purchaser within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, and the successors and assigns of all the foregoing
persons (each, an “Initial Purchaser Indemnified Party”) from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, any such Initial Purchaser Indemnified Party may incur under the Securities Act, the
Exchange Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in any Memorandum as
amended or supplemented, if applicable, or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated or
necessary to make the statements made therein not misleading, except insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in such Memorandum
relying upon and in conformity with information furnished in writing by or on
behalf of any Initial Purchaser to the Company expressly for use with reference
to such Initial Purchaser or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such information
required to be stated in such Memorandum or necessary to make such statements
not misleading.

 

(b)           Each
Initial Purchaser severally and not jointly agrees to indemnify, defend and
hold harmless the Company, its directors and officers and any person who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and the successors and assigns of all the
foregoing 

 

22

 

persons (each, a “Company Indemnified Party”) from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, the Company or any such person may incur under the
Securities Act, the Exchange Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in
and in conformity with information furnished in writing by or on behalf of such
Initial Purchaser to the Company expressly for use with reference to such Initial
Purchaser or arises out of or is based upon any omission or alleged omission to
state a material fact in connection with such information required to be stated
in such Memorandum or necessary to make such statements not misleading.

 

(c)           If
any action, suit or proceeding (each, a “Proceeding”) is brought
against any person in respect of which indemnity may be sought pursuant to
either subsection (a) or (b) of this Section 10, such person (the “Indemnified
Party”) shall promptly notify the person against whom such indemnity may be
sought (the “Indemnifying Party”) in writing of the institution of such
Proceeding and such Indemnifying Party shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such
Indemnified Party and payment of all fees and expenses; provided, however,
that the omission to so notify such Indemnifying Party shall not relieve such
Indemnifying Party from any liability which it may have to such Indemnified
Party or otherwise, except to the extent that the Indemnifying Party has been
prejudiced in any material respect by such omission to so notify. Such Indemnified
Party shall have the right to employ its own counsel in any such case, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Party unless the employment of such counsel shall have been authorized in
writing by such Indemnifying Party in connection with the defense of such
Proceeding or such Indemnifying Party shall not have employed counsel to have
charge of the defense of such Proceeding within 30 days of the receipt of
notice thereof or such Indemnified Party shall have reasonably concluded upon
written advice of counsel that there may be defenses available to it that are
different from, additional to, or in conflict with those available to such Indemnifying
Party (in which case such Indemnifying Party shall not have the right to direct
that portion of the defense of such Proceeding on behalf of such Indemnified
Party, but such Indemnifying Party may employ counsel and participate in the
defense thereof but the fees and expenses of such counsel shall be at the
expense of such Indemnifying Party), in any of which events such reasonable
fees and expenses shall be borne by such Indemnifying Party and paid as
incurred (it being understood, however, that such Indemnifying Party shall not
be liable for the expenses of more than one separate counsel in any one
Proceeding or series of related Proceedings together with reasonably necessary
local counsel representing the Indemnified Parties who are parties to such
Proceeding). An Indemnifying Party shall not be liable for any settlement of
any such Proceeding effected without its written consent, but if settled with
the written consent of such Indemnifying Party, such Indemnifying Party agrees
to indemnify and hold harmless an Indemnified Party from and against any loss
or 

 

23

 

liability by
reason of such settlement. Notwithstanding the foregoing sentence, if at any
time an Indemnified Party shall have requested an Indemnifying Party to
reimburse such Indemnified Party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then such 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 60 business days after receipt by such Indemnifying Party of the
aforesaid request, (ii) such Indemnifying Party shall not have reimbursed such
Indemnified Party in accordance with such request prior to the date of such
settlement and (iii) such Indemnified Party shall have given such Indemnifying
Party at least 30 days’ prior notice of its intention to settle. An
Indemnifying Party shall not, without the prior written consent of any
Indemnified Party, effect any settlement of any pending or threatened Proceeding
in respect of which such Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party
from all liability on claims that are the subject matter of such Proceeding and
does not include an admission of fault, culpability or a failure to act, by or
on behalf of such Indemnified Party.

 

(d)           If
the indemnification provided for in this Section 10 is held to be unavailable
to an Indemnified Party under subsections (a) and (b) of this Section 10 in
respect of any losses, damages, expenses, liabilities or claims referred to
therein, then each applicable Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, damages, expenses, liabilities or
claims (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 Notes 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 of the Initial Purchasers on the other in connection with the
statements or omissions which resulted in such losses, damages, expenses,
liabilities or claims, 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 shall be deemed to be in the same respective proportion
as the total proceeds from the offering (net of the Initial Purchasers’
discounts and commissions but before deducting expenses) received by the
Company and the discounts and commissions received by the Initial Purchasers. The
relative fault of the Company on the one hand and of the Initial Purchasers on
the other shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Initial Purchasers 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
and liabilities referred to in this subsection shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating, preparing to defend or defending any Proceeding.

 

24

 

(e)           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 that does not take account of the
equitable considerations referred to in subsection (d) above. Notwithstanding
the provisions of this Section 10, no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at which
the Notes resold by it in the initial placement of such were offered to
investors exceeds the amount of any damage which such Initial Purchaser has
otherwise been required to pay by reason of such untrue statement or alleged
untrue statement or omission or alleged omission. 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’ respective
obligations to contribute pursuant to this Section 10 are several in proportion
to the respective principal amount of Notes they have purchased hereunder and
not joint. The remedies provided for in this Section 10 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any Indemnified Party at law or in equity.

 

(f)            The
indemnity and contribution agreements contained in this Section 10 and the
covenants, warranties and representations of the Company contained in this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of any Initial Purchaser, its partners, directors and
officers or any person (including each partner, officer or director of such
person) who controls any Initial Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, or by or on behalf of the
Company, its directors and officers or any person who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and shall survive the issuance and delivery of the Notes. In
addition, the agreements contained in Sections 5(k), 6, 10, 11, and 13 shall
survive the termination of this Agreement, including pursuant to Section 8.
The Company and each Initial Purchaser agree promptly to notify each other of
the commencement of any Proceeding against it and, in the case of the Company,
against any of the Company’s officers or directors, in connection with the
issuance and sale of the Notes, or in connection with any Memorandum.

 

11.           Initial Purchasers’ Information.
The statements set forth in the last paragraph on the cover page of the Final
Memorandum and the statements set forth in the fifth, seventh (second and third
sentences only) and tenth paragraphs under the caption “Plan of Distribution”
in the Final Memorandum constitute the only information furnished by or on
behalf of the Initial Purchasers.

 

12.           Notices:  Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by
facsimile and, if to the Initial Purchasers, shall be 

 

25

 

sufficient in all
respects if delivered or sent to Morgan Stanley & Co. Incorporated, 1585
Broadway, New York, New York 10036, Attention: 
Syndicate Department, facsimile no. (212) 296-3146, with a copy to (for
informational purposes only): Attention: 
Legal Department, facsimile no. (646) 202-9119, and, if to the Company,
shall be sufficient in all respects if delivered or sent to the Company at the
offices of the Company at 1333 West Loop South, Suite 1700, Houston, Texas  77027, Attention:  General Counsel (telephone:
(713) 513-3300, telecopy: (713) 513-3456.

 

13.           Governing Law and Construction: THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES. THE SECTION HEADINGS IN THIS AGREEMENT HAVE BEEN INSERTED AS A
MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF THIS AGREEMENT.

 

14.           Submission to Jurisdiction. Except as set forth below, no
Proceeding may be commenced, prosecuted or continued in any court other than
the courts of the State of New York located in the City and County of New York
or in the United States District Court for the Southern District of New York,
which courts shall have jurisdiction over the adjudication of such matters, and
the Company hereby consents to the jurisdiction of such courts and personal
service with respect thereto. The Company hereby consents to personal
jurisdiction, service and venue in any court in which any Proceeding arising
out of or in any way relating to this Agreement is brought by any third party
against any of the Initial Purchasers. The Company hereby waives all right to
trial by jury in any Proceeding (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Company
agrees that a final judgment in any such Proceeding brought in any such court
shall be conclusive and binding upon the Company and may be enforced in any
other courts in the jurisdiction of which the Company is or may be subject, by
suit upon such judgment. The Company hereby appoints, without power of
revocation, CT Corporation System, 111 Eighth Avenue, New York, New York 10011
as its agent to accept and acknowledge on its behalf service of any and all
process which may be served in any Proceeding in any way relating to or arising
out of this Agreement.

 

15.           Parties at Interest:  The Agreement herein set forth has been and
is made solely for the benefit of the Initial Purchasers and the Company and,
to the extent provided in Section 10 hereof, the controlling persons, directors
and officers referred to in such section, and their respective successors,
assigns, executors and administrators. No other person, partnership, heirs,
personal representatives, association or corporation (including a purchaser, as
such purchaser, from any of the Initial Purchasers) shall acquire or have any
right under or by virtue of this Agreement.

 

16.           No
Fiduciary Relationship. The Company hereby acknowledges that the Initial
Purchasers are acting solely as initial purchasers in connection with the
purchase and sale of the Company’s securities. The Company further acknowledges
that the Initial Purchasers are acting pursuant to a contractual relationship
created solely by this Agreement entered into on 

 

26

 

an arm’s length basis, and in no event do the parties
intend that the Initial Purchasers act or be responsible as a fiduciary to the
Company, its management, stockholders or creditors or any other person in
connection with any activity that the Initial Purchasers may undertake or have
undertaken in furtherance of the purchase and sale of the Company’s securities,
either before or after the date hereof. The Initial Purchasers hereby expressly
disclaim any fiduciary or similar obligations to the Company, either in
connection with the transactions contemplated by this Agreement or any matters
leading up to such transactions, and the Company hereby confirms its
understanding and agreement to that effect. The Company and the Initial
Purchasers agree that they are each responsible for making their own
independent judgments with respect to any such transactions and that any
opinions or views expressed by the Initial Purchasers to the Company regarding
such transactions, including, but not limited to, any opinions or views with
respect to the price or market for the Company’s securities, do not constitute
advice or recommendations to the Company. The Company hereby waives and releases,
to the fullest extent permitted by law, any claims that the Company may have
against the Initial Purchasers with respect to any breach or alleged breach of
any fiduciary or similar duty to the Company in connection with the
transactions contemplated by this Agreement or any matters leading up to such
transactions.

 

17.           Counterparts:  This Agreement may be signed by the parties
in one or more counterparts which together shall constitute one and the same
agreement among the parties. Delivery of an executed counterpart by facsimile
shall be effective as delivery of a manually executed counterpart thereof.

 

18.           Successors and Assigns:  This Agreement shall be binding upon the
Initial Purchasers and the Company and their successors and assigns and any
successor or assign of any substantial portion of the Company’s and any of the
Initial Purchasers’ respective businesses and/or assets.

 

[The Remainder of This Page Intentionally
Left Blank; Signature Page Follows]

 

27

 

If the foregoing correctly
sets forth the understanding between the Company and the Initial Purchasers,
please so indicate in the space provided below for the purpose, whereupon this
letter and your acceptance shall constitute a binding agreement between the Company
and the Initial Purchasers, severally.

 

	
   

  	
  Very
  truly yours,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CAMERON
  INTERNATIONAL CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Franklin Myers

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Franklin Myers

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President
  and

  	
   

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
							

 

 

Accepted and agreed to as of the date first
above written, on behalf of itself and the other several Initial Purchasers
named in

Schedule A hereto:

 

BY: MORGAN STANLEY & CO. INCORPORATED

 

 

	
  By:

  	
  /s/ Todd Singer

  	
   

  
	
   

  	
  Name:

  	
  Todd Singer

  
	
   

  	
  Title:

  	
  Executive Director

  
				

 

BY: CITIGROUP GLOBAL MARKETS INC.

 

 

	
  By:

  	
  /s/ Quinn P. Fanning

  	
   

  
	
   

  	
  Name:

  	
  Quinn P. Fanning

  
	
   

  	
  Title:

  	
  Managing Director

  
				

 

BY: J.P. MORGAN SECURITIES INC.

 

 

	
  By:

  	
  /s/ Helen A. Carr

  	
   

  
	
   

  	
  Name:

  	
  Helen A. Carr

  
	
   

  	
  Title:

  	
  Managing Director

  
				

 

 

SCHEDULE A

 

	
  Initial Purchaser

  	
   

  	
  Principal Amount

  of Notes

  	
   

  
	
  Morgan Stanley & Co. Incorporated

  	
   

  	
  $

  	
  400,000,000

  	
   

  
	
  Citigroup Global Markets Inc.

  	
   

  	
  50,000,000

  	
   

  
	
  J.P. Morgan Securities Inc.

  	
   

  	
  50,000,000

  	
   

  
	
  Total

  	
   

  	
  $

  	
  500,000,000

  	
   

  

 

 

Exhibit A

 

FORM OF OPINION OF COUNSEL TO THE COMPANY

 

The opinion of Porter &
Hedges, L.L.P., counsel for the Company (capitalized terms not otherwise
defined herein shall have the meanings provided in the Purchase Agreement, to
which this is an Exhibit), to be delivered pursuant to Section 7(a) of the
Purchase Agreement shall be to the effect that:

 

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

 

(ii)           The Registration Rights
Agreement has been duly authorized, executed and delivered by the Company and
constitutes a legal, valid and binding agreement of the Company, entitling the
holders of the Notes to the benefits thereof and enforceable in accordance with
its terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting creditors’ rights generally and general principles of
equity and (ii) rights to indemnity and contribution may be limited by
applicable law.

 

(iii)          The Indenture has been duly and
validly authorized, executed and delivered by the Company and constitutes a
legal, valid and binding obligation of the Company, enforceable against it in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws affecting the enforcement of creditors’ rights
generally and by general principles of equity.

 

(iv)          The Notes have been duly
authorized and executed by the Company and when duly authenticated in
accordance with the terms of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of the Purchase Agreement, will constitute legal, 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 the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity.

 

(v)           The Shares initially issuable
upon conversion of the Notes have been duly authorized and reserved for
issuance upon conversion of the Notes, and upon conversion of the Notes in
accordance with their terms and the terms of the Indenture will be issued free
of statutory and contractual preemptive rights and are initially sufficient in
number to meet the conversion requirements of the Notes, and such Shares, when
so issued in accordance with the terms of the Indenture, will be duly and
validly issued and fully paid and non-assessable.

 

A-1

 

(vi)          The execution, delivery and
performance by the Company of the Operative Documents, including the
consummation of the offer and sale of the Notes, and the issuance of the Shares
upon conversion of the Notes, does not or will not violate, conflict with or
constitute a breach of any of the terms or provisions of, or default under (or
an event that with notice or the lapse of time, or both, would constitute a
default), or require consent under, or result in the creation or imposition of
a lien, charge or encumbrance on any property or assets of the Company or any
Principal Subsidiary or an acceleration of any indebtedness of the Company or
any Principal Subsidiary pursuant to (i) the charter, bylaws or other
constitutive documents of the Company or any Principal Subsidiary, (ii) to the
knowledge of such counsel, any Agreements and Instruments filed as an exhibit
to the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2005, together with any amendments to such Agreements or
Instruments, (iii) to the knowledge of such counsel, any law, statute, rule or
regulation applicable to the Company or any subsidiary or its respective assets
or properties typical, in such counsel’s experience, for transactions
contemplated by the Operative Documents and assuming the accuracy of the
representations and warranties of the Company and the Initial Purchasers in the
Purchase Agreement and the due performance by the Company and the Initial
Purchasers thereof or (iv) to the knowledge of such counsel, any judgment,
order or decree of any domestic or foreign court or governmental agency or
authority having jurisdiction over the Company or any subsidiary or their
respective assets or properties that, except as, in the case of clauses (ii)
and (iv), would not, either individually or in the aggregate, interfere with or
adversely affect the issuance of the Notes or the issuance of the Shares upon
conversion of the Notes, in any jurisdiction or adversely affect the
consummation of the transactions contemplated by any of the Operative
Documents.

 

(vii)         It is not necessary in
connection with (i) the offer, sale and delivery of the Notes to the Initial
Purchasers pursuant to the Purchase Agreement or (ii) the initial resales of
the Notes by the Initial Purchasers in the manner contemplated in the
Preliminary Memorandum and the Final Memorandum to register the Notes under the
Securities Act or to qualify the Indenture in respect thereof under the Trust
Indenture Act of 1939, as amended, it being understood that no opinion is
expressed as to any subsequent resale of any Note or Share.

 

(viii)        No consent, approval, authorization or
order of, or filing, registration, qualification, license or permit of or with,
any national, state or local court or governmental agency, body or
administrative agency or of or with the rules of the New York Stock Exchange,
or approval of the stockholders of the Company, is required to be obtained or
made by the Company for the performance by the Company of its obligations under
the Purchase Agreement, the Indenture or the Notes, except (a) such as
have been obtained or made on or prior to the date hereof, (b) such as may
be required under state securities and blue sky laws, (c) as may be required by
Federal or state securities laws with respect to the Company’s obligations
under the Registration Rights Agreement and the listing of the Shares on the
New York Stock 

 

A-2

 

Exchange in connection
therewith, or (d) those for which the failure to obtain or make would not,
either individually or in the aggregate (1) have a Material Adverse Effect
or (2)  interfere with or adversely affect the issuance of the Notes or
the Shares in any jurisdiction or adversely affect the consummation of the
transactions contemplated by any of the Operative Documents.

 

(ix)           The Company is not, and after giving
effect to the offering and sale of the Notes and the application of the
proceeds thereof as described in the Preliminary Memorandum and the Final
Memorandum will not be, required to register as an “investment company” within
the meaning of the Investment Company Act of 1940, as amended.

 

(x)            The terms of the Notes, the
Registration Rights Agreement, the Indenture and the capital stock of the
Company, including the Shares, conform as to legal matters in all material
respects to the description thereof contained in the Preliminary Memorandum and
the Final Memorandum.

 

(xi)           Each document filed under the
Exchange Act and incorporated by reference in the Preliminary Memorandum or the
Final Memorandum (other than the financial statements and related schedules
included therein, as to which such counsel need not comment) when they were
filed with the Commission complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations promulgated thereunder.

 

(xii)          The statements in the Preliminary
Memorandum and the Final Memorandum under the captions “Description of the
Notes”, “Description of Capital Stock”, “Plan of Distribution” and “Notice to
Investors”, in so far as such statements constitute summaries of legal matters,
documents or proceedings referred to therein, fairly summarize the matters
referred to therein.

 

(xiii)         In addition, such counsel shall state
that they have participated in discussions with your representatives,
representatives of the Company and its counsel and independent registered
public accounting firm concerning the preparation of the Preliminary Memorandum
and the Final Memorandum. Such counsel shall state that, although they are not
passing upon and do not assume any responsibility for the accuracy, completeness
or fairness of any of the statements in the Preliminary Memorandum and the
Final Memorandum (except to the extent stated in paragraphs (x) and (xii)
above), no facts have come to their attention that lead such counsel to believe
that (i) the Preliminary Memorandum (other than the financial statements and
related schedules and other financial data contained or incorporated therein as
to which such counsel need express no belief), as of the Applicable Time (as
defined below), when taken together with the Term Sheet (as defined below),
included 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
Memorandum (other than the financial

 

A-3

 

statements and related schedules and other financial
data contained or incorporated therein as to which such counsel need express no
belief), as of the date of the Final Memorandum, or as of the date hereof,
included or includes an untrue statement of a material fact or omitted or omits
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. As
used herein, “Applicable Time” means 7:00 A.M., eastern standard time,
on May 23, 2006.

 

A-4

 

Exhibit B

 

FORM OF
OPINION OF THE GENERAL COUNSEL

 

The opinion of William C.
Lemmer, Vice President, General Counsel and Secretary of the Company
(capitalized terms not otherwise defined herein shall have the meanings provided
in the Purchase Agreement, to which this is an Exhibit), to be delivered
pursuant to Section 7(b) of the Purchase Agreement shall be to the effect
that:

 

(i)            The Company (a) has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction
of its incorporation; (b) has the corporate power and authority to own its
property and to conduct its business as described in the Preliminary Memorandum
and the Final Memorandum and to own, lease, license and operate its respective
properties in accordance with its business as currently conducted; and
(c) is duly qualified or licensed to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a Material Adverse Effect on the Company and its subsidiaries, taken as a
whole.

 

(ii)           Based on a certificate of public officials in such
jurisdictions and advice of counsel licensed to practice in such jurisdiction,
each of Cooper Cameron (UK) Limited, Cooper Cameron Canada Corporation, Cameron
France SAS, Cooper Cameron (Singapore) Pte. Ltd., Cooper Cameron Valves Italy
Srl, Cameron International Holding Corp., Cooper Cameron Holding (Cayman)
Limited, Cameron Holding (Luxembourg) SARL and Cameron (Luxembourg) SARL (each,
a “Principal Subsidiary”) (a) has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction
of its incorporation; (b) has the corporate power and authority to own its property
and to conduct it business as described in the Preliminary Memorandum and the
Final Memorandum and to own, lease, license and operate its respective
properties in accordance with its business as currently conducted; and (c) is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing
of property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a Material Adverse
Effect on the Company and its subsidiaries, taken as a whole.

 

(iii)          The Company has all requisite corporate power and authority
to execute, deliver and perform all of its obligations under the Operative
Documents and to consummate the transactions contemplated by the Operative
Documents to be consummated on its part.

 

(iv)          The Company has an authorized capitalization as set forth
in the Preliminary Memorandum and the Final Memorandum; the outstanding shares
of capital stock of the Company have been duly authorized and validly issued
and are fully paid and non-assessable, have been issued in compliance with all
federal and state securities laws and were not issued in violation of any
statutory or contractual preemptive rights, resale rights, rights of first
refusal or similar rights.

 

B-1

 

(v)           The statements in “Item 3 – Legal Proceedings” of the
Company’s most recent annual report on Form 10-K incorporated by reference in
the Preliminary Memorandum and the Final Memorandum, insofar as such statements
constitute summaries of the legal proceedings referred to therein, fairly
present the information called for with respect to such legal proceedings and
fairly summarize the matters referred to therein.

 

(vi)          The execution, delivery and performance by the Company of
the Operative Documents, including the consummation of the offer and sale of
the Notes, and the issuance of the Shares upon conversion of the Notes, does
not or will not violate, conflict with or constitute a breach of any of the
terms or provisions of, or default under (or an event that with notice or the
lapse of time, or both, would constitute a default), or require consent under,
or result in the creation or imposition of a lien, charge or encumbrance on any
property or assets of the Company or any Principal Subsidiary or an
acceleration of any indebtedness of the Company or any Principal Subsidiary
pursuant to (i) the charter, bylaws or other constitutive documents of the
Company or any Principal Subsidiary, (ii) to the knowledge of such counsel, any
Agreements and Instruments filed as an exhibit to the Company’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2005, together with
any amendments to such Agreements or Instruments, (iii) to the knowledge of
such counsel, any law, statute, rule or regulation applicable to the Company or
any subsidiary or its respective assets or properties typical, in such counsel’s
experience, for transactions contemplated by the Operative Documents and
assuming the accuracy of the representations and warranties of the Company and
the Initial Purchasers in the Purchase Agreement and the due performance by the
Company and the Initial Purchasers thereof or (iv) to the knowledge of such
counsel, any judgment, order or decree of any domestic or foreign court or
governmental agency or authority having jurisdiction over the Company or any
subsidiary or their respective assets or properties that, except as, in the
case of clauses (ii) and (iv), would not, either individually or in the
aggregate, interfere with or adversely affect the issuance of the Notes or the
issuance of the Shares upon conversion of the Notes, in any jurisdiction or
adversely affect the consummation of the transactions contemplated by any of
the Operative Documents.

 

(vii)         Neither the Company nor any of the Principal Subsidiaries is
in breach or violation of, or in default under (nor has any event occurred
which with notice, lapse of time, or both would result in any breach or
violation of, constitute a default under or give the holder of any indebtedness
(or person acting on such holder’s behalf), the right to require the
repurchase, redemption or repayment of all or part of such indebtedness under)
its respective charter or by-laws or any indenture, mortgage, deed of trust,
bank loan or credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which the Company
or any of the Principal Subsidiaries is a party or by which any of them or
their respective properties may be bound or affected, or under any federal,
state, local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Company or any of the Principal Subsidiaries.

 

(viii)        After due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or any of
its subsidiaries is a party 

 

B-2

 

or to which any of the properties of the
Company or any of its subsidiaries is subject that would be required to be
described in the Preliminary Memorandum or the Final Memorandum (if the
Securities Act and the rules and regulations thereunder were applicable to the
offer and sale of the Notes) and are not so described or of any statutes,
regulations, contracts or other documents that are required to be described in
the Preliminary Memorandum or the Final Memorandum (if the Securities Act and
the rules and regulations thereunder were applicable to the offer and sale of
the Notes) or to be filed or incorporated by reference as exhibits to the
Preliminary Memorandum or the Final Memorandum that are not described, filed or
incorporated as required.

 

(ix)           In addition, such counsel shall state that he has
participated in discussions with your representatives, representatives of the
Company and its counsel and independent registered public accounting firm
concerning the preparation of the Preliminary Memorandum and the Final
Memorandum. Such counsel shall state that, although he is not passing upon and
does not assume any responsibility for the accuracy, completeness or fairness
of any of the statements in the Preliminary Memorandum and the Final Memorandum
(except to the extent stated in paragraph (v) above), no facts have come to his
attention that lead such counsel to believe that (i) the Preliminary
Memorandum (other than the financial statements and related schedules and other
financial data contained or incorporated therein as to which such counsel need
express no belief), as of the Applicable Time (as defined below), when taken
together with the Term Sheet (as defined below), included 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 Memorandum (other than the financial
statements and related schedules and other financial data contained or
incorporated therein as to which such counsel need express no belief), as of
the date of the Final Memorandum, or as of the date hereof, included or
includes an untrue statement of a material fact or omitted or omits 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. As used
herein, “Applicable Time” means 7:00 A.M., eastern standard time, on May
23, 2006.

 

B-3

 

Exhibit C

 

OFFICERS’ CERTIFICATE

 

1.               I
have reviewed the Memorandum.

 

2.               The
representations and warranties of the Company as set forth in the Purchase
Agreement are true and correct as of the time of purchase and, if applicable,
the additional time of purchase.

 

3.               The
Company has performed all of its obligations under the Purchase Agreement as
are to be performed at or before the time of purchase and at or before the
additional time of purchase, as the case may be.

 

4.               The
conditions set forth in paragraphs (f) and (g) of Section 7 of the Purchase
Agreement have been met.

 

5.               The
financial statements and other financial information included in the
Preliminary Memorandum and the Final Memorandum fairly present in all material
respects the financial condition, results of operations, and cash flows of the
Company as of, and for, the periods presented in the Preliminary Memorandum and
the Final Memorandum.

 

C-1

 

Exhibit D

 

**APPROVED FOR EXTERNAL USE**

**QIBS ONLY**

Cameron International Corporation

 

$500,000,000

2.5% 144A Convertible Senior Notes due 2026

 

	
  Issuer:

  	
   

  	
  Cameron
  International Corporation

  
	
  Title
  of securities:

  	
   

  	
  2.5%
  Convertible Senior Notes due 2026

  
	
  Ticker
  / Exchange:

  	
   

  	
  CAM
  / NYSE

  
	
  Aggregate
  principal

  amount offered:

  	
   

  	
  $500
  million

  
	
  Over-allotment
  option:

  	
   

  	
  $75
  million

  
	
  Net
  proceeds:

  	
   

  	
  Approximately
  $491 million (approximately $565 million if the initial purchasers exercise
  their over-allotment options in full) after deducting initial purchasers’
  discounts, commissions and offering expenses

  
	
  Use
  of proceeds:

  	
   

  	
  Cameron
  intends to use the net proceeds from this offering (1) to repay at maturity
  (or at its option at an earlier date) 100% of its issued and outstanding $200
  million 2.650% senior notes due 2007; (2) to purchase outstanding shares of
  Cameron’s common stock concurrently with the sale of the notes, and (3) for
  general corporate purposes including additional purchases of Cameron’s common
  stock. Pending application of the proceeds, Cameron may initially invest the
  proceeds in short-term marketable securities.

  
	
  Ranking:

  	
   

  	
  The
  notes will be Cameron’s senior unsecured obligations and rank equally in
  right of payment with all of the company’s other unsecured indebtedness and
  senior to any of the company’s subordinated indebtedness. The notes will be
  effectively subordinated to any secured indebtedness Cameron may incur to the
  extent of the collateral securing such indebtedness. The notes will not be
  guaranteed by any of Cameron’s subsidiaries and, accordingly, the notes will
  be effectively subordinated to the indebtedness and other liabilities of the
  company’s subsidiaries, including trade creditors.

  
	
  Initial
  purchasers:

  	
   

  	
  Morgan
  Stanley & Co. Incorporated (Bookrunner), Citigroup Global Markets Inc.
  and J.P. Morgan Securities Inc. (Co-managers)

  
	
  Trustee:

  	
   

  	
  Sun
  Trust Bank

  
	
  Principal
  amount per note:

  	
   

  	
  $1,000

  
	
  Issue
  price:

  	
   

  	
  98.375%
  of the principal amount

  
	
  Annual
  interest rate:

  	
   

  	
  2.5%
  per annum

  
	
  Conversion
  premium:

  	
   

  	
  55%

  
	
  Reference
  price

  	
   

  	
  $45.65

  
	
  Initial
  conversion price:

  	
   

  	
  Approximately
  $70.76 per share of common stock

  
	
  Initial
  conversion rate:

  	
   

  	
  14.1328
  shares of common stock per $1,000 aggregate principal amount of notes
  (subject to anti-dilution adjustments)

  
	
  Conversion
  rights:

  	
   

  	
  Holders
  may convert their notes before the close of business on the scheduled trading
  day immediately preceding June 15, 2011 in multiples of $1,000 principal
  amount, at the option of the holder, under the following circumstances: (1)
  during any fiscal quarter after the fiscal quarter ending June 30, 2006 if
  the closing sale price of Cameron’s common stock exceeds 130% of the then
  current conversion price for at least 20 consecutive trading days in the 30
  consecutive trading day period ending on the last trading day of the
  immediately preceding fiscal quarter; (2) during the five business-day period
  after any five consecutive trading-day period (the “measurement period”) in
  which the trading price per note for each day of such measurement period 

  

 

D-1

 

	
   

  	
   

  	
  was
  less than 97% of the product of the last reported sale price of Cameron’s
  common stock and the conversion rate on each such day; (3) upon the
  occurrence of specified corporate transactions; or (4) upon receipt of a
  notice of redemption. On or after June 15, 2011 to (and including) the close
  of business on the scheduled trading day immediately preceding the maturity
  date, subject to prior repurchase of the notes, holders may convert the
  notes, in multiples of $1,000 principal amount, at the option of the holder
  regardless of the foregoing circumstances.

  
	
  Conversion
  rate cap:

  	
   

  	
  None

  
	
  Interest
  payment dates:

  	
   

  	
  June
  15 and December 15 of each year, beginning December 15, 2006

  
	
  Maturity:

  	
   

  	
  June
  15, 2026

  
	
  Optional
  redemption:

  	
   

  	
  Beginning
  on June 20, 2011, Cameron may redeem the notes at any time as a whole, or
  from time to time in part, at a redemption price equal to 100% of the
  principal amount plus accrued and unpaid interest to, but not including, the
  redemption date.

  
	
  Repurchase
  of notes at the option of holders:

  	
   

  	
  Each
  holder may require Cameron to repurchase all or a portion of that holder’s
  notes on June 15, 2011, 2016 and 2021, at a repurchase price in cash equal to
  100% of the principal amount of the notes to be repurchased plus accrued and
  unpaid interest to, but not including, the repurchase date.

  
	
  Trade
  date:

  	
   

  	
  May
  23, 2006

  
	
  Settlement
  date:

  	
   

  	
  May
  26, 2006

  
	
  CUSIP:

  	
   

  	
  13342BAA3

  
	
  ISIN
  NUMBER:

  	
   

  	
  US13342BAA35

  
	
  Registration:

  	
   

  	
  144A
  with Registration Rights

  
	
  Dividend protection:

  	
   

  	
  Full
  dividend protection via a conversion rate adjustment

  
	
  Fundamental
  change:

  	
   

  	
  If
  Cameron undergoes a “fundamental change,” holders will have the option to
  require Cameron to purchase all or any portion of their notes. The
  fundamental change purchase price will be 100% of the principal amount of the
  notes to be purchased plus any accrued and unpaid interest, to but excluding
  the fundamental change purchase date. Cameron will pay cash for all notes so
  purchased.

  
	
  Adjustment to conversion rate upon a fundamental
  change:

  	
   

  	
  In the event of any fundamental change, a holder may
  elect to convert its notes and Cameron will pay a make-whole premium by
  increasing the conversion rate applicable to such notes.

  

 

Make-Whole Table:

 

	
   

  	
   

  	
  Stock
  Price

  	
   

  
	
  Effective Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
  45.65

  	
   

  	
  $

  	
  48.00

  	
   

  	
  $

  	
  50.00

  	
   

  	
  $

  	
  55.00

  	
   

  	
  $

  	
  60.00

  	
   

  	
  $

  	
  65.00

  	
   

  	
  $

  	
  70.00

  	
   

  	
  $

  	
  80.00

  	
   

  	
  $

  	
  90.00

  	
   

  	
  $

  	
  100.00

  	
   

  	
  $

  	
  120.00

  	
   

  	
  $

  	
  140.00

  	
   

  	
  $

  	
  160.00

  	
   

  	
  $

  	
  180.00

  	
   

  	
  $

  	
  200.00

  	
   

  
	
  5/26/2006

  	
   

  	
  7.4170

  	
   

  	
  6.7310

  	
   

  	
  6.2132

  	
   

  	
  5.1367

  	
   

  	
  4.3016

  	
   

  	
  3.6442

  	
   

  	
  3.1204

  	
   

  	
  2.3545

  	
   

  	
  1.8370

  	
   

  	
  1.4752

  	
   

  	
  1.0205

  	
   

  	
  0.7581

  	
   

  	
  0.5927

  	
   

  	
  0.4804

  	
   

  	
  0.3996

  	
   

  
	
  5/15/2007

  	
   

  	
  7.3410

  	
   

  	
  6.6175

  	
   

  	
  6.0726

  	
   

  	
  4.9448

  	
   

  	
  4.0769

  	
   

  	
  3.4003

  	
   

  	
  2.8672

  	
   

  	
  2.1019

  	
   

  	
  1.5989

  	
   

  	
  1.2571

  	
   

  	
  0.8445

  	
   

  	
  0.6179

  	
   

  	
  0.4803

  	
   

  	
  0.3893

  	
   

  	
  0.3245

  	
   

  
	
  5/15/2008

  	
   

  	
  7.2597

  	
   

  	
  6.4873

  	
   

  	
  5.9068

  	
   

  	
  4.7107

  	
   

  	
  3.7991

  	
   

  	
  3.0974

  	
   

  	
  2.5530

  	
   

  	
  1.7915

  	
   

  	
  1.3110

  	
   

  	
  0.9986

  	
   

  	
  0.6439

  	
   

  	
  0.4635

  	
   

  	
  0.3596

  	
   

  	
  0.2928

  	
   

  	
  0.2457

  	
   

  
	
  5/15/2009

  	
   

  	
  7.2044

  	
   

  	
  6.3621

  	
   

  	
  5.7296

  	
   

  	
  4.4316

  	
   

  	
  3.4532

  	
   

  	
  2.7132

  	
   

  	
  2.1522

  	
   

  	
  1.3998

  	
   

  	
  0.9572

  	
   

  	
  0.6911

  	
   

  	
  0.4205

  	
   

  	
  0.2998

  	
   

  	
  0.2353

  	
   

  	
  0.1946

  	
   

  	
  0.1655

  	
   

  
	
  5/15/2010

  	
   

  	
  7.2746

  	
   

  	
  6.3201

  	
   

  	
  5.5993

  	
   

  	
  4.1151

  	
   

  	
  3.0056

  	
   

  	
  2.1877

  	
   

  	
  1.5937

  	
   

  	
  0.8660

  	
   

  	
  0.5041

  	
   

  	
  0.3260

  	
   

  	
  0.1881

  	
   

  	
  0.1407

  	
   

  	
  0.1157

  	
   

  	
  0.0984

  	
   

  	
  0.0850

  	
   

  
	
  5/15/2011

  	
   

  	
  7.4170

  	
   

  	
  6.7005

  	
   

  	
  5.8672

  	
   

  	
  4.0490

  	
   

  	
  2.5339

  	
   

  	
  1.2518

  	
   

  	
  0.1529

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  
																																															

 

You should rely only on the information contained or
incorporated by reference in the preliminary offering memorandum dated May 22,
2006, as supplemented by this final pricing term sheet in making an investment
decision with respect to these securities.

 

This notice shall not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any sale of the notes or
the common stock issuable upon conversion of the notes in any state or
jurisdiction in which such offer, solicitation or sale would be

 

D-2

 

unlawful. The notes will be offered to qualified
institutional buyers in reliance on Rule 144A under the Securities Act of 1933,
as amended. The notes and the shares of common stock issuable upon conversion
of the notes have not been registered under the Securities Act or any state
securities laws, and may not be offered or sold in the United States or to U.S.
persons absent registration or an applicable exemption from the registration
requirements.

 

**QIBS ONLY**

**APPROVED FOR EXTERNAL USE**

 

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

 

ANY DISCLAIMERS 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.

 

D-3

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