10-K405

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

x    ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Fiscal year ended December 31, 2001

OR

¨  TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-13884

COOPER CAMERON CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	76-045183
(State of other jurisdiction of incorporation or organization)	(I.R. S. Employer Identification No.)
1333 West Loop South Suite 1700 Houston, Texas
(Address of principal	77027
executive offices)	(Zip Code)

Registrant’s telephone number, including area code (713) 513-3300

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, Par Value $0.01 Per Share	New York Stock Exchange
Junior Participating Preferred Stock Purchase Rights Par Value $0.01 Per Share	New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in a definitive proxy or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

The number of shares of Common Stock, par value $.01 per share, outstanding as of March 13, 2002 was 54,013,411. The aggregate market value of the Common Stock, par value $0.01 per share, held by non-affiliates of Registrant as of March 13, 2002 was approximately $2,707,207,969. For the purposes of the determination of the above statement amount only, all directors and executive officers of the Registrant are presumed to be affiliates.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Registrant’s Annual Report to Stockholders for 2001 are incorporated by reference into Part II.

Portions of Registrant’s 2002 Proxy Statement for the Annual Meeting of Stockholders to be held

May 9, 2002 are incorporated by reference into Part III.

TABLE OF CONTENTS

		Page
Item		2001 Form 10-K	2001 Annual Report	March 25, 2002 Proxy Statement
	Part I
1.	Business	1	—	—
	Markets and Products	2	—	—
	Market Issues	6	—	—
	New Product Development	7	—	—
	Competition	8	—	—
	Manufacturing	8	—	—
	Backlog	9	—	—
	Patents, Trademarks and Other Intellectual Property	9	—	—
	Employees	9	—	—
2.	Properties	10	—	—
3.	Legal Proceedings	11	—	—
4.	Submission of Matters to a Vote of Security Holders	12	—	—
	Part II
5.	Market for Registrant’s Common Equity and Related Stockholder Matters	12	—	—
6.	Selected Financial Data	13	57	—
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13	27-34	—
7A.	Quantitative and Qualitative Disclosures about Market Risk	13	34
8.	Financial Statements and Supplementary Data	13	35-56
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	14	—	—
	Part III
10.	Directors and Executive Officers of the Registrant	14	—	7-8, 21
11.	Executive Compensation	15	—	15-17
12.	Security Ownership of Certain Beneficial Owners and Management	15	—	9,20
13.	Certain Relationships and Related Transactions	16	—	—
	Part IV
14.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	16	—	—

PART I

ITEM 1.    BUSINESS.

Cooper Cameron Corporation (“Cooper Cameron” or the “Company”) is a leading international manufacturer of oil and gas pressure control equipment, including valves, wellheads, controls, chokes, blowout preventers and assembled systems for oil and gas drilling, production and transmission used in onshore, offshore and subsea applications. Cooper Cameron is also a leading manufacturer of centrifugal air compressors, integral and separable gas compressors and turbochargers.

Cooper Cameron’s business of manufacturing petroleum production equipment and compression and power equipment began in the mid-1800’s with the manufacture of steam engines that provided power for plants and textile or rolling mills. By 1900, with the discovery of oil and gas, Cooper Cameron’s predecessors moved into the production of natural gas internal combustion engines and gas compressors. Product offerings were added by the Company’s predecessors through various acquisitions, in particular the acquisitions of The Bessemer Gas Engine Company (gas engines and compressors); Pennsylvania Pump and Compressor (reciprocating air and gas compressors); Ajax Iron Works (compressors); Superior (engines and compressors); Joy Petroleum Equipment Group (valves, couplings and wellheads); Joy Industrial Compressor Group (compressors); and Cameron Iron Works (blowout preventers, ball valves, control equipment and McEvoy-Willis wellhead equipment and choke valves).

Cooper Cameron, a Delaware corporation, was incorporated on November 10, 1994. The Company operated as a wholly-owned subsidiary of Cooper Industries, Inc. (“Cooper”) until June 30, 1995, the effective date of the completion of an exchange offer with Cooper’s stockholders resulting in the Company becoming a separate stand-alone company. The common stock of Cooper Cameron trades on the New York Stock Exchange under the symbol “CAM”.

In 1996, Cooper Cameron purchased the assets and assumed certain operating liabilities of Ingram Cactus Company. The business acquired manufactures and sells wellheads, surface systems, valves and actuators used primarily in onshore oil and gas production operations, and owned manufacturing facilities in, among other places, Oklahoma City and Broussard, Louisiana, as well as in the United Kingdom. The Company also acquired interests in the Ingram Cactus joint ventures in Venezuela and Malaysia. The operations have now been integrated into those of the Cameron division.

In 1998, the Company acquired Orbit Valve International, Inc. (“Orbit^®”). Orbit became part of the Cooper Cameron Valves organization. Orbit manufactures and sells high-performance valves and actuators for the oil and gas and petrochemical industries. Orbit’s primary manufacturing facility is located in Little Rock, Arkansas with a sales, marketing, assembly, test and warehousing base at Livingston, Scotland in the United Kingdom.

During 1999, the Company sold its rotating compressor product line business to Rolls-Royce plc for approximately $200 million. The operations that were sold had primary facilities in Liverpool, United Kingdom, Hengelo in the Netherlands and Mt. Vernon, Ohio.

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In January 2001, the Company decided to exit the market for new Superior brand natural gas engines and close its Springfield, Ohio manufacturing facility. Manufacturing operations at this facility were discontinued in the first half of 2001.

Business Segments

Markets and Products

The Company’s operations are organized into four separate business segments which are Cameron, Cooper Cameron Valves, Cooper Energy Services and Cooper Turbocompressor, each of which conducts business as a division of the Company. For additional industry segment information for each of the three years in the period ended December 31, 2001, see Note 13 of the Notes to Consolidated Financial Statements, which Notes are incorporated herein by reference in Part II, Item 8 hereof (“Notes to Consolidated Financial Statements.”)

Cameron Division

Cameron is a leading provider of systems and equipment used to control pressures and direct flows of oil and gas wells. Its products are employed in a wide variety of operating environments including basic onshore fields, highly complex onshore and offshore environments, deepwater subsea applications and ultra-high temperature geothermal operations.

Cameron’s products include surface and subsea production systems, blowout preventers, drilling and production control systems, gate valves, actuators, chokes, wellheads, drilling and production riser and aftermarket parts and services. Cameron’s products are marketed under the brand names Cameron^®, W-K-M^®, McEvoy^® and Willis^®. Additionally, Cameron manufacturers elastomers, which are used in pressure and flow control equipment, other petroleum industry applications as well as in the petroleum, petrochemical, rubber molding and plastics industries.

Cameron’s aftermarket service, CAMSERV^™, provides replacement parts, field service, major repairs and overhauls, unit installation assistance and Total Vendor Management contracts. CAMSERV’s services are designed to provide flexible, cost-effective solutions to customer aftermarket needs throughout the world. Cameron also provides an inventory of repair parts, service personnel, planning services and inventory and storage of customers’ idle equipment.

As petroleum exploration activities have increasingly focused on subsea locations, Cameron directed much of its new product development efforts toward this market. Cameron’s patented SpoolTree^™ horizontal subsea production system, which was introduced in 1993, is used in oil and gas fields with subsea completions that require frequent retrieval of downhole equipment. With the SpoolTree system, well completion and workover activities can be performed without a workover riser or removal of the christmas tree and under conventional

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blowout preventer control, thereby reducing the time, equipment and expense needed to perform such activities.

During 2001, Cameron reorganized to address the growing market for system-level subsea projects, in which clients entrust their suppliers with more responsibility to deliver complete systems. The Offshore Systems organization was created expressly for such projects and provides concept design, system engineering, and project management of offshore projects.

The Cameron Controls business unit was created in late 1996 with a primary goal of expanding Cameron’s role in the design, manufacture and service of drilling, production and workover control systems worldwide. Drilling and production equipment used on the ocean floor operates from a platform or other remote location through hydraulic or electronic connections which allow the operator to measure and control the pressures and throughput associated with these installations. Cameron Controls’ two primary manufacturing assembly and testing facilities are located in Celle, Germany and Houston, Texas. Cameron Controls launched a new electro-hydraulic drilling control system in 1997 and a new subsea production control system in 1998. In 2001, the Company expanded the CAMTROL system to include all of Cameron’s controls capabilities, including production, drilling and workover.

The Cameron Willis Chokes business unit was formed in late 1997 to focus resources on the choke product line with the goal of enhancing Cameron’s performance in this product line. Cameron Willis manufactures production chokes, control valves, drilling choke systems, actuators, and pigging and production automation systems for the surface and subsea production markets. The Company’s primary choke manufacturing operations have now been consolidated into its Longford, Ireland facility with surface gate valve actuator manufacturing primarily performed in Houston, Texas.

In 1998, Cameron opened a new research center in Houston, Texas that has ten specially designed test bays to test and evaluate Cameron’s products under realistic conditions. These include environmental test chambers to simulate extreme pressures and temperatures, high-strength fixtures for the application of multi-million pound tensile and bending loads, high pressure gas compressors and test enclosures, a hyperbaric chamber to simulate the external pressures of deep water environments, and two circulation loops for erosion and flow testing.

Cameron primarily markets its products directly to end-users through a worldwide network of sales and marketing employees, supported by agents in some international locations. Due to the technical nature of many of the products, the marketing effort is further supported by a staff of engineering employees. The balance of Cameron’s products are sold through established independent distributors.

Cameron’s primary customers include major oil and gas exploration and production companies, independent oil and gas exploration and production companies, engineering and construction companies, drilling contractors, rental equipment companies and geothermal energy producers.

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Cooper Cameron Valves Division

Cooper Cameron Valves (CCV) is a leading provider of valves and related systems primarily used to control pressures and direct the flow of oil and gas as they are moved from individual wellheads through flow lines, gathering lines and transmission systems to refineries, petrochemical plants and industrial centers for processing. Large diameter valves are used primarily in natural gas transmission lines. Smaller valves are used in oil and gas gathering and processing systems and in various types of industrial processes in refineries and petrochemical plants. Equipment used in these environments is generally required to meet demanding API 6D and American National Standards Institute (ANSI) standards.

CCV’s products include gate valves, ball valves, butterfly valves, Orbit valves, rotary process valves, block & bleed valves, plug valves, actuators, chokes and aftermarket parts and services. These products are marketed under the brand names Cameron^®, W-K-M^®, Orbit^®, Demco^®, Foster^®, Thornhill Craver^™, TriAx^® and TruSeal^®. During the first quarter of 2000, CCV significantly expanded its field service capabilities with the acquisition of Valve Sales Inc., a Houston-based valve repair and manufacturing company.

CCV markets its equipment and services through a worldwide network of combined sales and marketing employees, distributors and agents in selected international locations. Due to the technical nature of many of the products, the marketing effort is further supported by a staff of engineering employees.

CCV’s primary customers include major and independent oil and gas exploration and production companies, engineering and construction companies pipeline operators, drilling contractors and major chemical, petrochemical and refining companies.

Cooper Energy Services Division

Cooper Energy Services (CES) is a leading provider of reciprocating compression equipment and related aftermarket parts and services for the energy industry. Its products and services are marketed under the Ajax^®, Superior^®, Cooper-Bessemer^® (Reciprocating Products), Penn^™, PPC^®, Enterprise^™, Texcentric^®, Quad 2000^®, C-B Turbocharger^® and Turbine Specialties^™ brand names. CES uses manufacturing facilities in the U.S. and sales and service offices around the world to sell and deliver its products and services.

CES is organized into three business units in order to better focus on the strategic growth, product development, and technical support unique to its product offerings and to better serve its customers’ needs. The three business units consist of the Ajax and Superior Compressor, Aftermarket Parts, and Aftermarket Service business units.

CES provides Ajax integral engine-compressors (140 to 880 horsepower), which combine the engine and compressor on a single drive shaft and are used for gas re-injection and storage, as well as smaller gathering and transmission lines. In addition, a line of rotary screw compressors powered by natural gas engines and electric motor drives was added in 1997. CES introduced a proprietary 1,150 psi high-pressure rotary screw system in 1999.

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The Superior reciprocating compressors (200 to 9,000 horsepower) are used primarily for natural gas applications, including production, storage, withdrawal, processing and transmission, as well as petrochemical processing. The Superior WG compressor series was introduced in 2000 for large project applications up to 9,000 horsepower. These high-speed separable compressor units can be matched with either natural gas engine drivers or electric motors and provide a cost advantage over competitive equipment in the same power range.

There is an installed base of Cooper-Bessemer, Penn, Enterprise, Superior, Ajax and Joy engines and compressors (up to 30,000 horsepower) for which CES provides replacement parts and service on a worldwide basis.

In 1999, CES began selling its new compression equipment domestically through a network of independent distributors rather than on a direct basis to the end user. These distributors are offered varying levels of pricing and support depending on their volume of purchases and whether the products purchased are for their own rental fleets or for resale. CES completed its network of distributors for domestic compression equipment in mid-2000. CES continues to sell its compression equipment internationally directly to end users through a network of sales and marketing employees supported by agents in some locations.

In addition to the previously described sale of the rotating business, CES has undergone a significant level of restructuring to enhance the productivity of its manufacturing processes. In 2000, CES completed the closing of the Grove City, Pennsylvania plant and foundry. Most of the activity previously conducted at that location was outsourced to third parties or relocated to other CES or Cooper Cameron facilities. In 2001, CES completed the relocation of its central warehouse from Mt. Vernon, Ohio to Houston, Texas.

As part of its restructuring, CES has constructed a new separable compressor plant and research and development center in Waller, Texas. Each manufacturing station in the new plant is designed for short cycle, just-in-time machining and assembly to reduce inventory requirements and product lead times. The plant is designed to manufacture the division’s complete line of separable compressor units to serve the natural gas market. The relocation of the existing compressor plant in Mt. Vernon, Ohio to the new Waller facility was completed in the first half of 2001.

In January 2001, CES announced its decision to exit the market for new Superior brand natural gas engines, including its 2400 engine line, and to close the Springfield, Ohio engine plant. This shutdown was substantially completed by the end of the second quarter of 2001.

CES’s primary customers include gas transmission companies, compression leasing companies, oil and gas producers and independent power producers.

Cooper Turbocompressor Division

Cooper Turbocompressor (“CTC”) manufactures and supplies integrally geared centrifugal compressors, compressor systems and controls to customers around the world. Additionally, CTC offers complete aftermarket services and Compression Solutions^™,

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including rental compressors, air-over-the-fence (long-term contracts to purchase compressed air) and air system audits. Centrifugal air compressors, used primarily in manufacturing processes, are sold under the trade name of Turbo Air^®, with specific models including the TA-2000, TAC-2000, TA-3000 and TA-6000. CTC Engineered Compressors are for the process air and gas industries and are identified by the trade names of TA^™ and MSG^®.

The process and plant air centrifugal compressors manufactured by CTC deliver oil-free compressed gas to the customer, thus preventing oil contamination of the finished products. Industrial markets worldwide increasingly prefer oil-free air for quality, safety, operational and environmental reasons.

CTC provides installation and maintenance service, labor, parts, repairs, overhauls and upgrades to its worldwide customers for plant air and process gas compressors. CTC also provides aftermarket service and repairs on all equipment it produces through a worldwide network of service centers and field service technicians utilizing an extensive inventory of parts, including Genuine Joy^® parts.

During 2000 and 2001, CTC expanded its product range through the addition of three new compressor frames (TA-6000, TAC-2000 and TA-11000) and the addition of trademarked accessories such as Dry Pak^™ heat of compression dryers and Turboblend^® hydro-cracked turbomachinery lubricating oil. CTC is also continuing its efforts to focus on customer service. In 2001, CTC began an active aftermarket development effort leveraging off of its significant base of installed equipment, redefined its Engineered Compressor product line and has continued to move forward with an MSG Renaissance program to update its MSG product line. Also in 2001, CTC introduced a rental fleet, consisting of air-cooled, trailer-mounted TAC-2000 compressors and established a packaging capability in Europe to better serve customers in the region.

CTC primarily sells its products through sales representatives and independent distributors supported by a staff of trained product specialists. Customers include petrochemical and refining companies, natural gas processing companies, durable goods manufacturers, utilities, air separation and chemical companies, with a specific focus on automotive, glass, textile, electronics, food, container, pharmaceutical and other companies that require reliable gas compressors.

Market Issues

Cooper Cameron, through its segments, is a leader in the global market for petroleum production equipment. Cooper Cameron believes that it is well positioned to serve these markets. Plant and service center facilities around the world in major oil-producing regions provide a broad, global breadth of market coverage.

The international market continues to be a source of growth for Cooper Cameron. The desire to expand oil and gas resources and transmission capacity in developed and developing countries, for both economic and political reasons, continues to be a major factor affecting market demand. Additionally, establishment of industrial infrastructure in the developing countries will necessitate the growth of basic industries that require plant air and process compression equipment. Production and service facilities in North and South America, Europe,

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the Far East and West Africa provide the Company with the ability to serve the global marketplace.

In each of Cooper Cameron’s business segments, a large population of installed engines, compression equipment, and oil and gas production equipment exists in both the U.S. and international market segments. The rugged, long-lived nature of the equipment that exists in the field provides a relatively stable repair parts and service business. The Company expects that as increasing quantities of new units are sold into the international markets, there will be a continuing growth opportunity in market demand for aftermarket parts and service.

New Product Development

In 1997, Cameron introduced the MOSAIC^™ (Modular Subsea And Integrated Completions) system. MOSAIC includes a suite of pre-engineered elements with standard interfaces that can be combined in a fashion to allow customers to configure a system to meet their specific needs. Cameron believes that it has chosen to standardize components at a level low enough to give customers the required customization while providing engineering and manufacturing efficiencies. Cameron has realigned its engineering and marketing resources to further develop and market the MOSAIC Subsea system and other stand-alone standardized subsea products, such as christmas trees and wellheads.

Several new drilling products were introduced in 1998 and 1999. These new products included the 3.5 million-pound load capacity LoadKing^™ riser system, used for drilling in up to 10,000-foot water depths; a new lightweight and lower-cost locking mechanism for subsea BOPs; and a new generation of variable-bore ram packers. Additionally, Cameron’s Freestanding Drilling Riser, introduced in 1999, was a winner of the Petroleum Engineer International Special Meritorious Award for Engineering Innovation.

In 2000, CCV completed the development of a range of 2” to 16” ball valves capable of performing at pressures of 10,000 psi and in water depths of 10,000 feet.

CTC has focused product development resources to further expand its high efficiency plant air compressor line and to provide custom compressors matched to the requirements of its industrial gas customers. The latter is being achieved by advances in aerodynamic and rotor dynamic analytical design capability. The year 2001 saw the addition of centrifugal gas applications.

Through the introduction of its new compressor frames in 2000, CTC extended its standard product range up to 2,500 horsepower and positioned itself as a viable supplier of turbo plant air compressors in a wide range of horsepowers. In fact, the TAC-2000, for which patents have been applied, is the only air-cooled, packaged centrifugal compressor on the market today. This compressor won 2001’s Silver Award for Product of the Year from Plant Engineering magazine. In 2001, remote monitoring has been added to CTC’s control system capabilities. The new Vantage Controller is available as an upgrade kit for both CTC and competitor compressors.

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Competition

Cooper Cameron competes in all areas of its operations with a number of other companies, some of which have financial and other resources comparable to or greater than those of Cooper Cameron.

Cooper Cameron has a leading position in the petroleum production equipment markets, particularly with respect to its high-pressure products. In these markets, Cooper Cameron competes principally with Balon Corporation, Circor, Dril-Quip, Inc., Dresser Valve, FMC Technologies, Inc., Hydril Company, Kvaerner Oil and Gas, Masterflo, Neles-Jamesbury, Varco International, Inc. and Vetco Gray Inc. (a subsidiary of Asea Brown Boveri). The principal competitive factors in the petroleum production equipment markets are technology, quality, service and price. Cooper Cameron believes several factors give it a strong competitive position in these markets. Most significant are Cooper Cameron’s broad product offering, its worldwide presence and reputation, its service and repair capabilities, its expertise in high pressure technology and its experience in alliance and partnership arrangements with customers and other suppliers.

Cooper Cameron also has a leading position in the compression equipment markets. In these markets, Cooper Cameron competes principally with the Dresser Rand Division of Ingersoll-Rand Company, Ingersoll-Rand Air Solutions Group, Demag, GHH/Borsig, Elliott Company, division of Ebara, Ariel Corporation and Atlas-Copco AB. The principal competitive factors in the compression equipment markets are engineering and design capabilities, product performance, reliability and quality, service and price. Cooper Cameron has a competent engineering staff and skilled technical and service representatives, with service centers located throughout the world.

Manufacturing

Cooper Cameron has manufacturing facilities worldwide that conduct a broad variety of processes, including machining, fabrication, assembly and testing using a variety of forged and cast alloyed steels and stainless steel as the primary raw materials. In recent years, Cooper Cameron has rationalized plants and products, closed various manufacturing facilities, moved product lines to achieve economies of scale, and upgraded the remaining facilities. Cooper Cameron maintains advanced manufacturing, quality assurance and testing equipment geared to the specific products that it manufactures and uses extensive process automation in its manufacturing operations. The manufacturing facilities utilize computer-aided, numeric-controlled tools and manufacturing techniques that concentrate the equipment necessary to produce similar products in one area of the plant in a configuration commonly known as a manufacturing cell. One operator in a manufacturing cell can monitor and operate several machines, as well as assemble and test products made by such machines, thereby improving operating efficiency and product quality.

Cooper Cameron’s test capabilities are critical to its overall process. The Company has the capability to test most equipment at rated operating conditions, measuring all operating parameters, efficiency and emissions. All process compressors for air separation and all plant air

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compressors are given a mechanical and aerodynamic test in a dedicated test center prior to shipment.

All of Cooper Cameron’s European manufacturing plants are ISO certified and API licensed. Most of the U.S. plants are ISO certified and certification is planned for the remainder. ISO is an internationally recognized verification system for quality management.

Backlog

Cooper Cameron’s backlog was approximately $695.4 million at December 31, 2001, (approximately 87% of which is expected to be shipped during 2002) as compared to $528.2 million at December 2000 and $512.6 million at December 31, 1999. Backlog consists of customer orders for which a purchase order has been received, satisfactory credit or financing arrangements exist and delivery is scheduled.

Patents, Trademarks and Other Intellectual Property

As part of its ongoing research, development and manufacturing activities, Cooper Cameron has a policy of seeking patents when appropriate on inventions concerning new products and product improvements. Cooper Cameron owns 239 unexpired United States patents and 632 unexpired foreign patents. During 2001, 30 new U.S. and 50 foreign patent applications were filed.

Although in the aggregate these patents are of considerable importance to the manufacturing of many of its products, Cooper Cameron does not consider any single patent or group of patents to be material to its business as a whole.

Trademarks are of considerable importance to the marketing of Cooper Cameron’s products. Cooper Cameron considers the following tradenames to be material to its business as a whole: Cameron, Cooper-Bessemer (Reciprocating Products), Ajax, Willis and W-K-M. Other important trademarks used by Cooper Cameron include C-B Turbocharger, Demco, Enterprise, Foster, McEvoy, MSG, Orbit, PPC, Penn, Quad 2000, Superior, TA, Texcentric, Thornhill Craver, TriAx, TruSeal, Turbine Specialties and Turbo Air. Additionally, Cooper Cameron has the right to use the trademark Joy on aftermarket parts until November 2027. Cooper Cameron has registered its trademarks in the countries where such registration is deemed material.

Cooper Cameron also relies on trade secret protection for its confidential and proprietary information. Cooper Cameron routinely enters into confidentiality agreements with its employees and suppliers. There can be no assurance, however, that others will not independently obtain similar information or otherwise gain access to Cooper Cameron’s trade secrets.

Employees

As of December 31, 2001, Cooper Cameron had approximately 8,000 employees, of which approximately 1,055 were represented by labor unions. Cooper Cameron believes its current relations with employees are good. In July 2000, the Company reached a new agreement with the International Association of Machinists union (IAM) representing 140 hourly employees of Cooper Turbocompressor which runs through July 28, 2003. Labor contracts that expired in

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2001 were successfully renegotiated, with three-year agreements signed in Mexico and at Cameron’s Elastomer Technology facility in Texas and a two-year agreement signed in Singapore. These labor contracts covered 120 employees at Cameron’s facility in Mexico, 220 Cameron employees in Singapore and 22 Cameron Elastomer Technology facility employees in Texas. Also in 2001, the Company successfully concluded negotiation of a closing/severance agreement with the IAM representing approximately 100 employees at the CES facility in Springfield, Ohio. The Agreement allowed for an orderly shutdown of operations in this location.

ITEM 2.    PROPERTIES

The Company operates manufacturing plants ranging in size from approximately 21,000 square feet to approximately 442,000 square feet of manufacturing space. The Company also owns and leases warehouses, distribution centers, aftermarket and storage facilities, and sales offices. The Company leases its corporate headquarters office space in Houston, Texas. In late 2001, the Company completed construction of a new 9-story office building in Houston, Texas, which houses the Cameron division headquarters.

The Company manufactures, markets and sells its products and provides services throughout the world, operating facilities in numerous countries. At December 31, 2001, the significant facilities used by Cooper Cameron throughout the world for manufacturing, distribution, aftermarket services, machining, storage and warehousing contained an aggregate of approximately 7,231,545 square feet of space, of which approximately 6,198,815 square feet (86%) was owned and 1,032,730 (14%) was leased. Of this total, approximately 5,031,853 square feet of space (70%) is located in the United States and Canada and 1,654,757 square feet of space (23%) is located in Europe and Asia. The table below shows the number of significant manufacturing, warehouse and distribution and aftermarket facilities by industry segment and geographic area. Cameron and CCV share space in certain facilities and, thus, are being reported together.

	Western Hemisphere	Eastern Hemisphere	Asia/Pacific and Middle East	West Africa	Total
Cameron and CCV	40	12	5	3	60
Cooper Energy Services	30	0	0	0	30
Cooper Turbocompressor	3	2	0	0	5

Cooper Cameron believes its facilities are suitable for their present and intended purposes and are adequate for the Company’s current and anticipated level of operations.

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ITEM 3.    LEGAL PROCEEDINGS

Cooper Cameron is a party to various legal proceedings and administrative actions, including certain environmental matters discussed below, all of which are of an ordinary or routine nature incidental to the operations of the Company. In the opinion of Cooper Cameron’s management, such proceedings and actions should not, individually or in the aggregate, have a material adverse effect on the Company’s results of operations or financial condition.

Environmental Matters

Cooper Cameron is subject to numerous federal, state, local and foreign laws and regulations relating to the storage, handling and discharge of materials into the environment, including the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”), the Clean Water Act, the Clean Air Act (including the 1990 Amendments) and the Resource Conservation and Recovery Act. Cooper Cameron believes that its existing environmental control procedures are adequate and it has no current plans for substantial capital expenditures in this area. Cooper Cameron has an active environmental management program aimed at compliance with existing environmental regulations and elimination or significant reduction in the generation of pollutants in its manufacturing processes. Cooper Cameron management intends to continue these policies and programs.

Cooper Cameron has been identified as a potentially responsible party (“PRP”) with respect to five sites designated for cleanup under CERCLA or similar state laws, which impose liability for cleanup of certain waste sites and for related natural resource damages without regard to fault or the legality of waste generation or disposal. Persons liable for such costs and damages generally include the site owner or operator and persons that disposed or arranged for the disposal of substances found at those sites. Although CERCLA imposes joint and several liability on all PRPs, in application, the PRPs typically allocate the investigation and cleanup costs based upon the volume of waste contributed by each PRP. Settlements often can be achieved through negotiations with the appropriate environmental agency or the other PRPs. PRPs that contributed less than one percent of the waste are often given the opportunity to settle as a “de minimis” party, resolving liability for a particular site.

Cooper Cameron is the major PRP at the Osborne Landfill in Grove City, Pennsylvania, which it owns. A remediation plan was developed and accepted by the U.S. Environmental Protection Agency as the preferred remedy for the site. The construction phase of the remediation was completed in 1997 and the remaining costs relate to ground water treatment and monitoring. With respect to the remaining four sites, Cooper Cameron’s share of the waste volume is estimated and believed to be less than one percent. Therefore, Cooper Cameron is a “de minimis” party with respect to these sites. The Company also has discontinued operations at a number of sites which had previously been in existence for many years. The Company does not believe, based on information currently available, that there are any material environmental liabilities existing at these locations.

Cooper Cameron has accruals to the extent costs are known for the five sites referred to above. Cooper Cameron believes, based on its review and other factors, that the estimated costs relating to these sites will not have a material adverse effect on its results of operations, financial

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condition or liquidity. However, no assurance can be given that the actual costs will not exceed the current estimates of the cleanup costs.

Some risk of environmental liability and other costs is inherent in the nature of Cooper Cameron’s business, and there can be no assurance that material environmental costs will not arise. Moreover, it is possible that future developments, such as promulgation of regulations implementing the 1990 amendments to the Clean Air Act and other increasingly strict requirements of environmental laws and enforcement policies thereunder, could lead to material costs of environmental compliance and cleanup by Cooper Cameron.

The cost of environmental remediation and compliance generally has not been an item of material expense for Cooper Cameron during any of the periods presented. Cooper Cameron’s balance sheet at December 31, 2001, includes liabilities totaling approximately $3.0 million for environmental remediation activities.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders during the fourth quarter of 2001.

PART II

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The common stock of Cooper Cameron, par value $.01 per share (together with the associated Rights to Purchase Series A Junior Participating Preferred Stock), is traded on The New York Stock Exchange (“NYSE”). No dividends were paid during 2001.

The following table indicates the range of trading prices on the NYSE for January 3, 2000 through December 29, 2000, and for January 2, 2001 through December 31, 2001.

	Price Range ($)
	High		Low		Last
2001
First Quarter	$	69.28	$	52.56	$	54.00
Second Quarter		73.00		46.55		55.80
Third Quarter		57.74		28.85		32.80
Fourth Quarter		44.75		31.20		40.36

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	Price Range ($)
	High		Low		Last
2000
First Quarter	$	71.875	$	42.375	$	66.875
Second Quarter		83.5625		60.5625		66.00
Third Quarter		83.875		58.625		73.6875
Fourth Quarter		77.9375		52.3125		66.0625

As of March 13, 2002, the approximate number of stockholders of record of Cooper Cameron common stock was 1,693.

ITEM 6.    SELECTED FINANCIAL DATA

The information set forth under the caption “Selected Consolidated Historical Financial Data of Cooper Cameron Corporation” on page 57 in the 2001 Annual Report to Stockholders is incorporated herein by reference.

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The information set forth under the caption “Management’s Discussion and Analysis of Results of Operations and Financial Condition of Cooper Cameron Corporation” on pages 27-34 in the 2001 Annual Report to Stockholders is incorporated herein by reference.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The information for this item is set forth in the section entitled “Market Risk Information” on page 34 in the 2001 Annual Report to Stockholders and is incorporated herein by reference.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The following consolidated financial statements of the Company and the independent auditors’ report set forth on pages 35-56 in the 2001 Annual Report to Stockholders are incorporated herein by reference:

Report of Independent Auditors.

Consolidated Results of Operations for each of the three years in the period ended December 31, 2001.

Consolidated Balance Sheets as of December 31, 2001 and 2000.

13

Consolidated Cash Flows for each of the three years in the period ended December 31, 2001.

Consolidated Changes in Stockholders’ Equity for each of the three years in the period

ended December 31, 2001.

Notes to Consolidated Financial Statements.

ITEM 9.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

             ACCOUNTING AND FINANCIAL DISCLOSURE.

            None.

PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information on Directors of the Company is set forth in the section entitled “The Nominees and Continuing Directors” on pages 7-8 in the Proxy Statement of the Company for the Annual Meeting of Stockholders to be held on May 9, 2002, which section is incorporated herein by reference. Information regarding executive officers of the Company is set forth below.

There are no family relationships among the officers listed, and there are no arrangements or understandings pursuant to which any of them were elected as officers. Officers are appointed or elected annually by the Board of Directors at its first meeting following the Annual Meeting of Stockholders, each to hold office until the corresponding meeting of the Board in the next year or until a successor shall have been elected, appointed or shall have qualified.

Section 16(a) Beneficial Ownership Reporting Compliance

The information concerning compliance with Section 16(a) is set forth in the section entitled “Section 16(a) Beneficial Ownership Reporting Compliance” on page 21 in the Proxy Statement of the Company for the Annual Meeting of Stockholders to be held on May 9, 2002, which section is incorporated herein by reference.

CURRENT EXECUTIVE OFFICERS OF THE REGISTRANT

Name and Age	Present Principal Position and Other Material Positions Held During Last Five Years
Sheldon R. Erikson (60)	President and Chief Executive Officer since January 1995. Chairman of the Board from 1988 to January 1995 and President and Chief Executive Officer from 1987 to January 1995 of The Western Company of North America.

14

Thomas R. Hix (54)	Senior Vice President and Chief Financial Officer since January 1995. Senior Vice President of Finance, Treasurer and Chief Financial Officer of The Western Company of North America from 1993 to January 1995.
Franklin Myers (49)	Senior Vice President since April 1995. President of the Cooper Energy Services division from August 1998 to July 2001 and General Counsel and Secretary from April 1995 to July 1999.
A. John Chapman (60)	Vice President since May 1998. President, Cooper Cameron Valves division from 1995 until March 2002.
Jane L. Crowder (51)	Vice President, Human Resources since May 1999. Vice President, Compensation and Benefits from 1996 to 1999, and Director, Compensation and Benefits from 1995 to 1996. Vice President, Human Resources of the CES division from September 1998 to October 1999.
William C. Lemmer (57)	Vice President, General Counsel and Secretary since July 1999. Vice President, General Counsel and Secretary of Oryx Energy Company from 1994 to 1999.
Robert J. Rajeski (56)	Vice President since July 2000. President, Cooper Turbocompressor division since July 1999 and President, Cooper Energy Services division since July 2001. Vice President and General Manager of Ingersoll-Dresser Pump Co., Engineered Pump division from 1994 to 1999.
Charles M. Sledge (36)	Vice President and Corporate Controller since July 2001. Senior Vice President, Finance and Treasurer from 1999 to June 2001, and Vice President, Controller from 1996 to 1999, of Stage Stores, Inc. Stage Stores, Inc. filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in June 2000 and successfully emerged from bankruptcy protection in August 2001.

ITEM 11.     EXECUTIVE COMPENSATION.

The information for this item is set forth in the section entitled “Executive Compensation Tables” on pages 15-17 in the Proxy Statement of the Company for the Annual Meeting of Stockholders to be held on May 9, 2002, which section is incorporated herein by reference.

ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

15

The information concerning security ownership of certain beneficial owners and management is set forth in the sections entitled “Security Ownership of Certain Beneficial Owners” on page 20 and “Security Ownership of Management” on page 9 in the Proxy Statement of the Company for the Annual Meeting of Stockholders to be held on May 9, 2002, which sections are incorporated herein by reference.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

None

PART IV

ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a)    The following documents are filed as part of this Report:

(1)    Financial Statements:

All financial statements of the Registrant as set forth under Item 8 of this Annual Report on Form 10-K.

(2)    Financial Statement Schedules:

Financial statement schedules are omitted because of the absence of conditions under which they are required or because all material information required to be reported is included in the consolidated financial statements and notes thereto.

(3)    Exhibits:

3.1	Amended and Restated Certificate of Incorporation of Cooper Cameron Corporation, dated June 30, 1995, filed as Exhibit 4.2 to the Registration Statement on Form S-8 of Cooper Cameron Corporation (Commission File No. 33-94948), and incorporated herein by reference.
3.2	Certificate of Amendment to the Restated Certificate of Incorporation of Cooper Cameron Corporation, filed as Exhibit 4.3 to the Registration Statement on Form S-8 of Cooper Cameron Corporation (Commission File No. 333-57995), and incorporated herein by reference.
3.3	First Amended and Restated Bylaws of Cooper Cameron Corporation, as amended December 12, 1996, filed as Exhibit 3.2 to the Annual Report on Form 10-K for 1996 of Cooper Cameron Corporation, and incorporated herein by reference.

16

4.1	Form of Rights Agreement, dated as of May 1, 1995, between Cooper Cameron Corporation and First Chicago Trust Company of New York, as Rights Agent, filed as Exhibit 4.1 to the Registration Statement on Form S-8 of Cooper Cameron Corporation (Commission File No. 33-94948), and incorporated herein by reference.
4.2	First Amendment to Rights Agreement between Cooper Cameron Corporation and First Chicago Trust Company of New York, as Rights Agent, dated November 1, 1997, filed as Exhibit 4.2 to the Annual Report on Form 10-K for 1997 of Cooper Cameron Corporation, and incorporated herein by reference.
4.3	Registration Statement on Form S-3 filed with the Securities and Exchange Commission on May 4, 1998 (Registration Statement No. 333-51705) incorporated herein by reference.
10.1	Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan, incorporated by reference to the Cooper Cameron Corporation Proxy Statement for the Annual Meeting of Stockholders held on May 8, 1997.
10.2	First Amendment to the Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan, effective February 12, 1998, filed as Exhibit 4.5 to the Registration Statement on Form S-8 of Cooper Cameron Corporation (Commission File No. 333-53545), and incorporated herein by reference.
10.3	Second Amendment to the Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan, effective May 13, 1999, filed as Exhibit 4.8 to the Registration Statement on Form S-8 of Cooper Cameron Corporation (Commission File No. 333-37850), and incorporated herein by reference.
10.4	Third Amendment to the Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan, incorporated by reference to the Cooper Cameron Corporation 2000 Proxy Statement for the Annual Meeting of Stockholders held on May 11, 2000.
10.5	Fourth Amendment to the Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan.
10.6	Cooper Cameron Corporation Broad Based 2000 Incentive Plan, filed as Exhibit 4.6 to the Registration Statement on Form S-8 of Cooper Cameron Corporation (Commission File No. 333-46638), and incorporated herein by reference.

17

10.7	First Amendment to the Cooper Cameron Corporation Broad Based 2000 Incentive Plan, filed as Exhibit 4.7 to the Registration Statement on Form S-8 filed with the SEC on May 29, 2001 (File No. 333-61820) and incorporated herein by reference.
10.8	Second Amendment to the Cooper Cameron Corporation Broad Based 2000 Incentive Plan, filed as Exhibit 4.8 to the Registration Statement on Form S-8 filed with the SEC on February 4, 2002 (File No. 333-82082) and incorporated herein by reference.
10.9	Third Amendment to the Cooper Cameron Corporation Broad Based 2000 Incentive Plan, filed as Exhibit 4.9 to the Registration Statement on Form S-8 filed with the SEC on February 4, 2002 (File No. 333-82082) and incorporated herein by reference.
10.10	Cooper Cameron Corporation Second Amended and Restated 1995 Stock Option Plan for Non-Employee Directors (Registration Statement on Form S-8 No. 333-79787), incorporated herein by reference.
10.11	Cooper Cameron Corporation Retirement Savings Plan, as Amended and Restated, effective April 1, 1996, filed as Exhibit 10.10 to the Annual Report on Form 10-K for 1997 of Cooper Cameron Corporation, and incorporated herein by reference.
10.12	Cooper Cameron Corporation Employee Stock Purchase Plan (Registration Statement No. 33-94948), incorporated herein by reference.
10.13	Cooper Cameron Corporation Supplemental Excess Defined Benefit Plan, filed as Exhibit 10.4 to the Registration Statement on Form S-4 of Cooper Cameron Corporation (Commission File No. 33-90288), and incorporated herein by reference.
10.14	First Amendment to Cooper Cameron Corporation Supplemental Excess Defined Benefit Plan, effective as of January 1, 1996, filed as Exhibit 10.7 to the Annual Report on Form 10-K for 1996 of Cooper Cameron Corporation, and incorporated herein by reference.
10.15	Cooper Cameron Corporation Supplemental Excess Defined Contribution Plan, filed as Exhibit 10.5 to the Registration Statement on Form S-4 of Cooper Cameron Corporation (Commission File No. 33-90288), and incorporated herein by reference.
10.16	First Amendment to Cooper Cameron Corporation Supplemental Excess Defined Contribution Plan, effective April 1, 1996, filed as Exhibit 10.9 to the Annual Report on Form 10-K for 1996 of Cooper Cameron Corporation, and incorporated herein by reference.

18

10.17	Cooper Cameron Corporation Compensation Deferral Plan (formerly the Cooper Cameron Corporation Management Incentive Compensation Deferral Plan), effective January 1, 1996, filed as Exhibit 10.10 to the Annual Report on Form 10-K for 1996 of Cooper Cameron Corporation, and incorporated herein by reference.
10.18	First Amendment to the Cooper Cameron Corporation Compensation Deferral Plan, effective July 1, 1998, filed as Exhibit 10.12 to the Annual Report on Form 10-K for 1999 of Cooper Cameron Corporation, and incorporated herein by reference.
10.19	Second Amendment to the Cooper Cameron Corporation Compensation Deferral Plan, effective January 1, 1999, filed as Exhibit 10.13 to the Annual Report on Form 10-K for 1999 of Cooper Cameron Corporation, and incorporated herein by reference.
10.20	Third Amendment to the Cooper Cameron Corporation Compensation Deferral Plan, effective January 1, 2000, filed as Exhibit 10.14 to the Annual Report on Form 10-K for 1999 of Cooper Cameron Corporation, and incorporated herein by reference.
10.21	Cooper Cameron Corporation Directors Deferred Compensation Plan, filed as Exhibit 10.7 to the Registration Statement on Form S-4 of Cooper Cameron Corporation (Commission File No. 33-90288), and incorporated herein by reference.
10.22	Employment Agreement by and between Sheldon R. Erikson and Cooper Cameron Corporation, effective as of August 13, 1999, filed as Exhibit 10.16 to the Annual Report on Form 10-K for 1999 of Cooper Cameron Corporation, and incorporated herein by reference.
10.23	Employment Agreement by and between Thomas R. Hix and Cooper Cameron Corporation, effective as of September 1, 1999, filed as Exhibit 10.17 to the Annual Report on Form 10-K for 1999 of Cooper Cameron Corporation, and incorporated herein by reference.
10.24	Employment Agreement by and between Franklin Myers and Cooper Cameron Corporation, effective as of September 1, 1999, filed as Exhibit 10.18 to the Annual Report on Form 10-K for 1999 of Cooper Cameron Corporation, and incorporated herein by reference.
10.25	Form of Change in Control Agreement, effective November 11, 1999, by and between Cooper Cameron Corporation and Scott Amann, John Chapman, Jane Crowder, William Lemmer and Robert Rajeski, filed as Exhibit 10.19 to the Annual Report on Form 10-K for 1999 of Cooper Cameron Corporation, and incorporated herein by reference.

19

10.26	Form of Change in Control Agreement, effective July 12, 2000, by and between Cooper Cameron Corporation and Michael C. Jennings, filed as Exhibit 10.22 to the Annual Report on Form 10-K for 2000 of Cooper Cameron Corporation and incorporated herein by reference.
10.27	Amended and Restated Management Incentive Compensation Plan of Cooper Cameron Corporation, incorporated herein by reference to the Cooper Cameron Corporation 2000 Proxy Statement for the Annual Meeting of Stockholders held on May 11, 2000.
10.28	Change in Control Policy of Cooper Cameron Corporation, approved February 19, 1996, filed as Exhibit 10.18 to the Annual Report on Form 10-K for 1996 of Cooper Cameron Corporation, and incorporated herein by reference.
10.29	Executive Severance Program of Cooper Cameron Corporation, approved July 20, 2000, filed as Exhibit 10.25 to the Annual Report on Form 10-K for 2000 of Cooper Cameron Corporation and incorporated herein by reference.
10.30	Credit Agreement, dated as of March 6, 2002, among Cooper Cameron Corporation and certain of its subsidiaries and the banks named therein and Bank One, as agent.
10.31	Individual Account Retirement Plan for Bargaining Unit Employees at the Cooper Cameron Corporation Buffalo, New York Plant, filed as Exhibit 4.6 to the Registration Statement on Form S-8 (Registration No. 333-57991), incorporated herein by reference.
10.32	Cooper Cameron Corporation Savings-Investment Plan for Hourly Employees, filed as Exhibit 4.7 to the Registration Statement on Form S-8 (Registration No. 333-77641), incorporated herein by reference.
10.33	Cooper Cameron Corporation Directors’ 2001 Deferred Compensation Plan dated February 7, 2001.
13.1	Portions of the 2001 Annual Report to Stockholders are included as an exhibit to this report and have been specifically incorporated by reference elsewhere herein.
21.1	Subsidiaries of registrant.
23.1	Consent of Independent Auditors.

20

(b)    Reports on Form 8-K

The Company has filed no reports on Form 8-K during the fourth quarter of 2001 or through March 22, 2002.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 22nd day of March, 2002.

COOPER CAMERON CORPORATION
Registrant
By:	/s/ Charles M. Sledge
	(Charles M. Sledge)
	Vice President and Corporate Controller
	(Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on this 22nd day of March, 2002, below by the following persons on behalf of the Registrant and in the capacities indicated.

Signature	Title
/s/ Nathan M. Avery (Nathan M. Avery)	Director
/s/ C. Baker Cunningham (C. Baker Cunningham)	Director
/s/ Grant A. Dove (Grant A. Dove)	Director
/s/ Sheldon R. Erikson (Sheldon R. Erikson)	Chairman, President and Chief Executive Officer (principal executive officer)
/s/ Lamar Norsworthy (Lamar Norsworthy)	Director
/s/ Michael E. Patrick (Michael E. Patrick)	Director
/s/ David Ross III (David Ross III)	Director
/s/ Thomas R. Hix (Thomas R. Hix)	Senior Vice President of Finance and Chief Financial Officer (principal financial officer)

21

EXHIBIT INDEX

Exhibit Number	Description	Sequential Page No.
3.1	Amended and Restated Certificate of Incorporation of Cooper Cameron Corporation, dated June 30, 1995, filed as Exhibit 4.2 to the Registration Statement on Form S-8 of Cooper Cameron Corporation (Commission File No. 33-94948), and incorporated herein by reference.
3.2	Certificate of Amendment to the Restated Certificate of Incorporation of Cooper Cameron Corporation, filed as Exhibit 4.3 to the Registration Statement on Form S-8 of Cooper Cameron Corporation (Commission File No. 333-57995), and incorporated herein by reference.
3.3	First Amended and Restated Bylaws of Cooper Cameron Corporation, as amended December 12, 1996, filed as Exhibit 3.2 to the Annual Report on Form 10-K for 1996 of Cooper Cameron Corporation, and incorporated herein by reference.
4.1	Form of Rights Agreement, dated as of May 1, 1995, between Cooper Cameron Corporation and First Chicago Trust Company of New York, as Rights Agent, filed as Exhibit 4.1 to the Registration Statement on Form S-8 of Cooper Cameron Corporation (Commission File No. 33-94948), and incorporated herein by reference.
4.2	First Amendment to Rights Agreement between Cooper Cameron Corporation and First Chicago Trust Company of New York, as Rights Agent, dated November 1, 1997, filed as Exhibit 4.2 to the Annual Report on Form 10-K for 1997 of Cooper Cameron Corporation, and incorporated herein by reference.
4.3	Registration Statement on Form S-3 filed with the Securities and Exchange Commission on May 4, 1998 (Registration Statement No. 333-51705) incorporated herein by reference.
10.1	Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan, incorporated by reference to the Cooper Cameron Corporation Proxy Statement for the Annual Meeting of Stockholders held on May 8, 1997.
10.2	First Amendment to the Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan, effective February 12,

	1998, filed as Exhibit 4.5 to the Registration Statement on Form S-8 of Cooper Cameron Corporation (Commission File No. 333-53545), and incorporated herein by reference.
10.3	Second Amendment to the Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan, effective May 13, 1999, filed as Exhibit 4.8 to the Registration Statement on Form S-8 of Cooper Cameron Corporation (Commission File No. 333-37850), and incorporated herein by reference.
10.4	Third Amendment to the Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan, incorporated by reference to the Cooper Cameron Corporation 2000 Proxy Statement for the Annual Meeting of Stockholders held on May 11, 2000.
10.5	Fourth Amendment to the Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan
10.6	Cooper Cameron Corporation Broad Based 2000 Incentive Plan, filed as Exhibit 4.6 to the Registration Statement on Form S-8 of Cooper Cameron Corporation (Commission File No. 333-46638), and incorporated herein by reference.
10.7	First Amendment to the Cooper Cameron Corporation Broad Based 2000 Incentive Plan, filed as Exhibit 4.7 to the Registration Statement on Form S-8 filed with the SEC on May 29, 2001 (File No. 333-61820) and incorporated herein by reference.
10.8	Second Amendment to the Cooper Cameron Corporation Broad Based 2000 Incentive Plan, filed as Exhibit 4.8 to the Registration Statement on Form S-8 filed with the SEC on February 4, 2002 (File No. 333-82082) and incorporated herein by reference.
10.9	Third Amendment to the Cooper Cameron Corporation Broad Based 2000 Incentive Plan, filed as Exhibit 4.9 to the Registration Statement on Form S-8 filed with the SEC on February 4, 2002 (File No. 333-82082) and incorporated herein by reference.
10.10	Cooper Cameron Corporation Second Amended and Restated 1995 Stock Option Plan for Non-Employee Directors (Registration Statement on Form S-8 No. 333-79787), incorporated herein by reference.
10.11	Cooper Cameron Corporation Retirement Savings Plan, as Amended and Restated, effective April 1, 1996, filed as Exhibit

	10.10 to the Annual Report on Form 10-K for 1997 of Cooper Cameron Corporation, and incorporated herein by reference.
10.12	Cooper Cameron Corporation Employee Stock Purchase Plan (Registration Statement No. 33-94948), incorporated herein by reference.
10.13	Cooper Cameron Corporation Supplemental Excess Defined Benefit Plan, filed as Exhibit 10.4 to the Registration Statement on Form S-4 of Cooper Cameron Corporation (Commission File No. 33-90288), and incorporated herein by reference.
10.14	First Amendment to Cooper Cameron Corporation Supplemental Excess Defined Benefit Plan, effective as of January 1, 1996, filed as Exhibit 10.7 to the Annual Report on Form 10-K for 1996 of Cooper Cameron Corporation, and incorporated herein by reference.
10.15	Cooper Cameron Corporation Supplemental Excess Defined Contribution Plan, filed as Exhibit 10.5 to the Registration Statement on Form S-4 of Cooper Cameron Corporation (Commission File No. 33-90288), and incorporated herein by reference.
10.16	First Amendment to Cooper Cameron Corporation Supplemental Excess Defined Contribution Plan, effective April 1, 1996, filed as Exhibit 10.9 to the Annual Report on Form 10-K for 1996 of Cooper Cameron Corporation, and incorporated herein by reference.
10.17	Cooper Cameron Corporation Compensation Deferral Plan (formerly the Cooper Cameron Corporation Management Incentive Compensation Deferral Plan), effective January 1, 1996, filed as Exhibit 10.10 to the Annual Report on Form 10-K for 1996 of Cooper Cameron Corporation, and incorporated herein by reference.
10.18	First Amendment to the Cooper Cameron Corporation Compensation Deferral Plan, effective July 1, 1998, filed as Exhibit 10.12 to the Annual Report on Form 10-K for 1999 of Cooper Cameron Corporation, and incorporated herein by reference.
10.19	Second Amendment to the Cooper Cameron Corporation Compensation Deferral Plan, effective January 1, 1999, filed as Exhibit 10.13 to the Annual Report on Form 10-K for 1999 of

	Cooper Cameron Corporation, and incorporated herein by reference.
10.20	Third Amendment to the Cooper Cameron Corporation Compensation Deferral Plan, effective January 1, 2000, filed as Exhibit 10.14 to the Annual Report on Form 10-K for 1999 of Cooper Cameron Corporation, and incorporated herein by reference.
10.21	Cooper Cameron Corporation Directors Deferred Compensation Plan, filed as Exhibit 10.7 to the Registration Statement on Form S-4 of Cooper Cameron Corporation (Commission File No. 33-90288), and incorporated herein by reference.
10.22	Employment Agreement by and between Sheldon R. Erikson and Cooper Cameron Corporation, effective as of August 13, 1999, filed as Exhibit 10.16 to the Annual Report on Form 10-K for 1999 of Cooper Cameron Corporation, and incorporated herein by reference.
10.23	Employment Agreement by and between Thomas R. Hix and Cooper Cameron Corporation, effective as of September 1, 1999, filed as Exhibit 10.17 to the Annual Report on Form 10-K for 1999 of Cooper Cameron Corporation, and incorporated herein by reference.
10.24	Employment Agreement by and between Franklin Myers and Cooper Cameron Corporation, effective as of September 1, 1999, filed as Exhibit 10.18 to the Annual Report on Form 10-K for 1999 of Cooper Cameron Corporation, and incorporated herein by reference.
10.25	Form of Change in Control Agreement, effective November 11, 1999, by and between Cooper Cameron Corporation and Scott Amann, John Chapman, Jane Crowder, William Lemmer and Robert Rajeski, filed as Exhibit 10.19 to the Annual Report on Form 10-K for 1999 of Cooper Cameron Corporation, and incorporated herein by reference.
10.26	Form of Change in Control Agreement, effective July 12, 2000, by and between Cooper Cameron Corporation and Michael C. Jennings, filed as Exhibit 10.22 to the Annual Report on Form 10-K for 2000 of Cooper Cameron Corporation and incorporated herein by reference.

10.27	Amended and Restated Management Incentive Compensation Plan of Cooper Cameron Corporation, incorporated herein by reference to the Cooper Cameron Corporation 2000 Proxy Statement for the Annual Meeting of Stockholders held on May 11, 2000.
10.28	Change in Control Policy of Cooper Cameron Corporation, approved February 19, 1996, filed as Exhibit 10.18 to the Annual Report on Form 10-K for 1996 of Cooper Cameron Corporation, and incorporated herein by reference.
10.29	Executive Severance Program of Cooper Cameron Corporation, approved July 20, 2000, filed as Exhibit 10.25 to the Annual Report on Form 10-K for 2000 of Cooper Cameron Corporation and incorporated herein by reference.
10.30	Credit Agreement, dated as of March 6, 2002, among Cooper Cameron Corporation and certain of its subsidiaries and the banks named therein and Bank One, as agent.
10.31	Individual Account Retirement Plan for Bargaining Unit Employees at the Cooper Cameron Corporation Buffalo, New York Plant, filed as Exhibit 4.6 to the Registration Statement on Form S-8 (Registration No. 333-57991), incorporated herein by reference.
10.32	Cooper Cameron Corporation Savings-Investment Plan for Hourly Employees, filed as Exhibit 4.7 to the Registration Statement on Form S-8 (Registration No. 333-77641), incorporated herein by reference.
10.33	Cooper Cameron Corporation Directors’ 2001 Deferred Compensation Plan dated February 7, 2001.
13.1	Portions of the 2001 Annual Report to Stockholders are included as an exhibit to this report and have been specifically incorporated by reference elsewhere herein.
21.1	Subsidiaries of registrant.
23.1	Consent of Independent Auditors.

EX-10.5

EXHIBIT 10.5

FOURTH AMENDMENT TO

AMENDED AND RESTATED

COOPER CAMERON CORPORATION

LONG-TERM INCENTIVE PLAN

WHEREAS, COOPER CAMERON CORPORATION (the “Company”) has heretofore adopted the AMENDED AND RESTATED COOPER CAMERON CORPORATION LONG-TERM INCENTIVE PLAN (the “Plan”); and

WHEREAS, the Company desires to amend the Plan in certain respects;

NOW, THEREFORE, the Plan shall be amended as follows, effective as of November 8, 2001:

1.    Section 2.4 of the Plan shall be deleted in its entirety and the following substituted therefor:

“Change of Control” means the earliest date at which:

(i) any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s outstanding Voting Securities, other than through the purchase of Voting Securities directly from the Company through a private placement; or

(ii) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the directors comprising the Incumbent Board shall from and after such election be deemed to be a member of the Incumbent Board; or

(iii) the Company is merged or consolidated with another corporation or entity and as a result of such merger or consolidation less than 50% of the outstanding Voting Securities of the surviving or resulting corporation or entity shall then be owned by the former stockholders of the Company; or

1

(iv) a tender offer or exchange offer is made and consummated by a Person other than the Company for the ownership of 20% or more of the Voting Securities of the Company then outstanding; or

(v) all or substantially all of the assets of the Company are sold or transferred to a Person as to which (A) the Incumbent Board does not have authority (whether by law or contract) to directly control the use or further disposition of such assets and (b) the financial results of the Company and such Person are not consolidated for financial reporting purposes.

Anything else in this definition to the contrary notwithstanding, no Change of Control shall be deemed to have occurred by virtue of any transaction which results in you, or a group of Persons which includes you, acquiring more than 20% of either the combined voting power of the Company’s outstanding Voting Securities or the Voting Securities of any other corporation or entity which acquires all or substantially all of the assets of the Company, whether by way of merger, consolidation, sale of such assets or otherwise.

2.    As amended hereby, the Plan is specifically ratified and reaffirmed.

COOPER CAMERON CORPORATION
By:	/s/    WILLIAM C. LEMMER
	William C. Lemmer Vice President, General Counsel and Secretary

2

EX-10.30

EXHIBIT 10.30

$150,000,000

364-DAY CREDIT AGREEMENT

DATED AS OF MARCH 6, 2002

AMONG

COOPER CAMERON CORPORATION,

AND THE OTHER BORROWERS NAMED HEREIN

AS BORROWERS,

THE LENDERS NAMED HEREIN,

BANK ONE, NA

AS AGENT,

BANC ONE CAPITAL MARKETS, INC.

AS LEAD ARRANGER AND SOLE BOOK RUNNER,

CREDIT LYONNAIS NEW YORK BRANCH

AS SYNDICATION AGENT,

AND

ABN AMRO BANK, N.V.

THE BANK OF NOVA SCOTIA

THE ROYAL BANK OF SCOTLAND PLC

AS DOCUMENTATION AGENTS

DATED AS OF

MARCH 6, 2002

TABLE OF CONTENTS

		Page
ARTICLE I	DEFINITIONS	1
ARTICLE II	THE CREDITS	15
2.1	Commitment	15
2.2	Determination of Dollar Amounts; Required Payments; Termination	15
2.3	Ratable Loans	15
2.4	Types of Advances	15
2.5	Swing Line Loans	16
2.6	Facility Fee; Usage Fee; Reductions in Aggregate Commitment	19
2.7	Minimum Amount of Each Advance	20
2.8	Optional Principal Payments	20
2.9	Method of Selecting Types and Interest Periods for New Advances	20
2.10	Conversion and Continuation of Outstanding Advances	21
2.11	Method of Borrowing	22
2.12	Changes in Interest Rate, etc	22
2.13	Rates Applicable After Default	22
2.14	Method of Payment	23
2.15	Advances to be Made in Euro	23
2.16	Noteless Agreement; Evidence of Indebtedness	23
2.17	Telephonic Notices	24
2.18	Interest Payment Dates; Interest and Fee Basis	24
2.19	Notification of Advances, Interest Rates, Prepayments and Commitment Reductions	25
2.20	Lending Installations	25
2.21	Non-Receipt of Funds by the Agent	25
2.22	Market Disruption	25
2.23	Judgment Currency	26
2.24	Additional Borrowing Subsidiaries	26
2.25	Lender Replacement	26
ARTICLE III	YIELD PROTECTION; TAXES	27
3.1	Yield Protection	27
3.2	Changes in Capital Adequacy Regulations	28

-i-

TABLE OF CONTENTS

		Page
3.3	Availability of Types of Advances	28
3.4	Funding Indemnification	29
3.5	Taxes	29
3.6	Lender Statements; Survival of Indemnity	31
ARTICLE IV	CONDITIONS PRECEDENT	31
4.1	Initial Credit Extensions	31
4.2	Each Credit Extension	33
ARTICLE V	REPRESENTATIONS AND WARRANTIES	34
5.1	Existence and Standing	34
5.2	Authorization and Validity	34
5.3	No Conflict; Government Consent	34
5.4	Financial Statements	35
5.6	Taxes	35
5.7	Litigation and Contingent Obligations	35
5.8	Subsidiaries	35
5.9	ERISA	36
5.10	Accuracy of Information	36
5.11	Regulation U	36
5.12	Material Agreements	36
5.13	Compliance With Laws	36
5.14	Ownership of Properties	36
5.15	Plan Assets; Prohibited Transactions	37
5.16	Environmental Matters	37
5.17	Investment Company Act	37
5.18	Public Utility Holding Company Act	37
ARTICLE VI	COVENANTS	37
6.1	Financial Reporting	37
6.2	Use of Proceeds	38
6.3	Notice of Default	39
6.4	Conduct of Business	39
6.5	Taxes	39
6.6	Insurance	39

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TABLE OF CONTENTS

		Page
6.7	Compliance with Laws	39
6.8	Maintenance of Properties	39
6.9	Inspection	39
6.10	Capital Stock and Dividends	40
6.11	Indebtedness	40
6.12	Merger	41
6.13	Sale of Assets	41
6.14	Sale of Accounts	41
6.16	Liens	41
6.17	Affiliates	42
6.18	Environmental Matters	42
6.19	Restrictions on Subsidiary Payments	42
6.20	ERISA Compliance	43
6.21	Financial Covenants	43
ARTICLE VII	DEFAULTS	43
ARTICLE VIII	ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES	46
8.1	Acceleration	46
8.2	Amendments	46
8.3	Preservation of Rights	47
ARTICLE IX	GENERAL PROVISIONS	47
9.1	Survival of Representations	47
9.2	Governmental Regulation	47
9.3	Headings	47
9.4	Entire Agreement	47
9.5	Several Obligations; Benefits of this Agreement	47
9.6	Expenses; Indemnification	48
9.7	Numbers of Documents	49
9.8	Accounting	49
9.9	Severability of Provisions	49
9.10	Nonliability of Lenders	49
9.11	Confidentiality	50
9.12	Nonreliance	50

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TABLE OF CONTENTS

		Page
9.13	Disclosure	50
ARTICLE X	THE AGENT	50
10.1	Appointment; Nature of Relationship	50
10.2	Powers	51
10.3	General Immunity	51
10.4	No Responsibility for Loans, Recitals, etc	51
10.5	Action on Instructions of Lenders	51
10.6	Employment of Agents and Counsel	52
10.7	Reliance on Documents; Counsel	52
10.8	Agent’s Reimbursement and Indemnification	52
10.9	Notice of Default	52
10.10	Rights as a Lender	53
10.11	Lender Credit Decision	53
10.12	Successor Agent	53
10.13	Agent and Arranger Fees	54
10.14	Delegation to Affiliates	54
10.17	Co-Agents, Documentation Agent, Syndication Agent, etc	54
ARTICLE XI	SETOFF; RATABLE PAYMENTS	54
11.1	Setoff	54
11.2	Ratable Payments	54
ARTICLE XII	BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS	55
12.1	Successors and Assigns	55
12.2	Participations	55
12.3	Assignments	56
12.4	Dissemination of Information	57
12.5	Tax Treatment	57
ARTICLE XIII	NOTICES	57
13.1	Notices	57
13.2	Change of Address	58
ARTICLE XIV	COUNTERPARTS	58
ARTICLE XV	CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL	58
15.1	CHOICE OF LAW	58
15.2	CONSENT TO JURISDICTION	58
15.3	WAIVER OF JURY TRIAL	58

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SCHEDULES AND EXHIBITS

PRICING SCHEDULE
EXHIBIT A-1	FORM OF IN-HOUSE COUNSEL OPINION
EXHIBIT A-2	FORM OF OUTSIDE COUNSEL OPINION
EXHIBIT B	FORM OF COMPLIANCE CERTIFICATE
EXHIBIT C	FORM OF ASSIGNMENT AGREEMENT
EXHIBIT D	FORM OF LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
EXHIBIT E	FORM OF NOTE
EXHIBIT F	FORM OF JOINDER AGREEMENT
SCHEDULE 1	SUBSIDIARIES
SCHEDULE 2	LIENS
SCHEDULE 3	EUROCURRENCY PAYMENT OFFICES OF THE AGENT

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364-DAY CREDIT AGREEMENT

This Agreement, dated as of March 6, 2002, is among Cooper Cameron Corporation, Cooper Cameron (U.K.) Limited, Cameron GmbH, Cooper Cameron (Singapore) Pte. Ltd., Cooper Cameron Canada Ltd., the Lenders (defined below), Credit Lyonnais New York Branch, as Syndication Agent, ABN AMRO Bank, N.V., as Documentation Agent, The Bank of Nova Scotia, as Documentation Agent, The Royal Bank of Scotland plc, as Documentation Agent, and Bank One, NA, as Agent. The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

As used in this Agreement:

“Advance” means a borrowing hereunder, (i) made by some or all of the Lenders on the same Borrowing Date, or (ii) converted or continued by the Lenders on the same date of conversion or continuation, consisting, in either case, of the aggregate amount of the several Loans of the same Type and, in the case of Eurocurrency Loans, in the same Agreed Currency and for the same Interest Period. The term “Advance” shall include Swing Line Loans unless otherwise expressly provided.

“Affiliate” of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if the controlling Person owns 15% or more of any class of voting securities (or other ownership interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise.

“Agent” means Bank One in its capacity as contractual representative of the Lenders pursuant to Article X, and not in its individual capacity as a Lender, and any successor Agent appointed pursuant to Article X.

“Agreed Currencies” means (i) Dollars, (ii) so long as such currencies remain Eligible Currencies, British Pounds Sterling and the Euro, and (iii) any other Eligible Currency which the Parent requests the Agent to include as an Agreed Currency hereunder and which is acceptable to all of the Lenders.

“Aggregate Commitment” means the aggregate of the Commitments of all the Lenders, as reduced from time to time pursuant to the terms hereof.

“Aggregate Outstanding Credit Exposure” means, at any time, the aggregate of the Outstanding Credit Exposure of all the Lenders.

“Agreement” means this credit agreement, as it may be amended or modified and in effect from time to time.

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“Agreement Accounting Principles” means generally accepted accounting principles as in effect from time to time, applied in a manner consistent with that used in preparing the financial statements referred to in Section 5.4.

“Alternate Base Rate” means, for any day, a rate of interest per annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the Federal Funds Effective Rate for such day plus 1/2% per annum.

“Applicable Fee Rate” means, at any time, the percentage rate per annum at which Facility Fees are accruing on the Aggregate Commitment (without regard to usage) at such time as set forth in the Pricing Schedule.

“Applicable Margin” means, with respect to Advances of any Type at any time, the percentage rate per annum which is applicable at such time with respect to Advances of such Type as set forth in the Pricing Schedule.

“Approximate Equivalent Amount” of any currency with respect to any amount of Dollars shall mean the Equivalent Amount of such currency with respect to such amount of Dollars on or as of such date, rounded up to the nearest amount of such currency as determined by the Agent from time to time.

“Arranger” means Banc One Capital Markets, Inc., a Delaware corporation, and its successors, in its capacity as Lead Arranger and Sole Book Runner.

“Article” means an article of this Agreement unless another document is specifically referenced.

“Asset Disposition” means any sale, transfer, or other disposition of any asset of the Parent or any Subsidiary in a single transaction or in a series of related transactions (other than the sale of inventory in the ordinary course, the sale of obsolete or excess machinery, equipment, or furniture in the ordinary course, and the sale of accounts and notes receivable permitted by Section 6.14).

“Attributable Debt” means as at the time of determination (a) with respect to a Synthetic Lease, the present value (discounted at the explicit or implicit interest rate applicable to such Synthetic Lease at such time) of the total obligations of the lessee for rental payments during the remaining term of such Synthetic Lease at such time and (b) with respect to an accounts or notes receivable financing or securitization program, the outstanding balance of amounts advanced in respect of the receivables and notes under such program.

“Authorized Officer” means, with respect to any of the Borrowers, any of the chief executive officer, president, chief financial officer, treasurer, or controller, acting singly.

“Available Aggregate Commitment” means, at any time, the Aggregate Commitment then in effect minus the Aggregate Outstanding Credit Exposure at such time.

“Bank One” means Bank One, NA, a national banking association having its principal office in Chicago, Illinois, in its individual capacity, and its successors.

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“Borrower” means any of the Parent and the Borrowing Subsidiaries and “Borrowers” means, collectively, the Parent and the Borrowing Subsidiaries.

“Borrowing Date” means a date on which an Advance is made hereunder.

“Borrowing Notice” is defined in Section 2.9.

“Borrowing Subsidiary” means each of Cooper Cameron (U.K.) Limited, Cameron GmbH, Cooper Cameron (Singapore) Pte. Ltd., Cooper Cameron Canada Ltd., and any other Subsidiary of the Parent which has entered into a Joinder Agreement substantially in the form of the attached Exhibit F.

“Business Day” means (i) with respect to any borrowing, payment or rate selection of Eurocurrency Advances, a day (other than a Saturday or Sunday) on which banks generally are open in Chicago and New York for the conduct of substantially all of their commercial lending activities, interbank wire transfers can be made on the Fedwire system and dealings in Dollars and the other Agreed Currencies are carried on in the London interbank market (and, if the Advances which are the subject of such borrowing, payment or rate selection are denominated in Euro, a day upon which such clearing system as is determined by the Agent to be suitable for clearing or settlement of the Euro is open for business) and (ii) for all other purposes, a day (other than a Saturday or Sunday) on which banks generally are open in Chicago for the conduct of substantially all of their commercial lending activities and interbank wire transfers can be made on the Fedwire system.

“Canadian Borrower” means any Borrowing Subsidiary which is incorporated under and operating in Canada or one of its provinces.

“Canadian Dollars” shall mean the lawful currency of Canada.

“Canadian Swing Line Borrowing Notice” is defined in Section 2.5.1(b).

“Canadian Swing Line Election” means the agreement of the Canadian Swing Line Lenders to make, at their election, Canadian Swing Line Loans up to a maximum principal amount of $10,000,000 at any one time outstanding.

“Canadian Swing Line Lenders” means Bank One and each other Lender which agrees at the request of the Parent to act as a Canadian Swing Line Lender hereunder, or any other Lender which may succeed to their rights and obligations as Canadian Swing Line Lender pursuant to the terms of this Agreement, and “Canadian Swing Line Lenders” means, collectively, all of such Canadian Swing Line Lenders. Each Canadian Swing Line Lender must be exempt from withholding taxes imposed by Canada on interest payments made by the Parent or any Canadian Borrower, but need not be located in Canada.

“Canadian Swing Line Loan” means a Loan made available to the Parent or any Canadian Borrower by the Canadian Swing Line Lenders pursuant to Section 2.5.1.

“Canadian Swing Line Share” means, with respect to a Canadian Swing Line Lender, a portion equal to a fraction the numerator of which is the Dollar Amount set forth opposite its

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signature below under the heading “Canadian Swing Line Loan Amount” (as it may be modified as a result of any assignment that has become effective pursuant to Section 12.3.2 or as otherwise modified from time to time pursuant to the terms hereof) and the denominator of which is Dollar Amount of the Canadian Swing Line Election.

“Capitalized Lease” of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.

“Capitalized Lease Obligations” of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.

“Change in Control” means the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d–3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 50% or more of the outstanding shares of voting stock of the Parent.

“Closing Date” means the date on or after the date of this Agreement on which all conditions precedent set forth in Section 4.1 hereof (except for termination of the Existing Credit Agreement as set forth in Section 4.1.2 hereof) have been satisfied or waived by the party or parties entitled to performance thereof.

“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.

“Commitment” means, for each Lender, the obligation of such Lender to make Revolving Loans to the Borrowers in an aggregate amount not exceeding the amount set forth opposite its signature below, as it may be modified as a result of any assignment that has become effective pursuant to Section 12.3.2 or as otherwise modified from time to time pursuant to the terms hereof.

“Computation Date” is defined in Section 2.2.

“Consolidated EBITDA” means (a) Consolidated Net Income for any applicable period plus, to the extent deducted from revenues in determining Consolidated Net Income (i) Consolidated Interest Expense for such period, (ii) expenses for income and franchise taxes paid or accrued during such period, (iii) depreciation and amortization for such period, (iv) non-recurring, non-cash charges for such period, and (iv) extraordinary losses incurred during such period other than in the ordinary course of business minus, to the extent included in Consolidated Net Income, extraordinary gains realized in such period other than in the ordinary course of business, all calculated for the Parent and its Subsidiaries on a consolidated basis, and (b) includes, on a pro forma basis, Consolidated EBITDA of any Person acquired in accordance with Section 6.12 for the four fiscal quarters most recently ended prior to the date of such acquisition, provided that the Consolidated EBITDA of any such acquired Person may be included in the Consolidated EBITDA of the Parent only if the Parent provides to the Agent, prior to or simultaneously with the delivery of any compliance certificate including the Consolidated EBITDA of such Person, financial statements of such Person for the fiscal year of such Person

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most recently ended, audited by independent certified public accountants reasonably acceptable to the Agent and including, at a minimum, a balance sheet, income statement, and statement of cash flows.

“Consolidated Indebtedness” means at any time the Indebtedness of the Parent and its Subsidiaries calculated on a consolidated basis as of such time.

“Consolidated Interest Expense” means, with reference to any period, the interest expense, whether paid or accrued, of the Parent and its Subsidiaries calculated on a consolidated basis for such period as determined in accordance with Agreement Accounting Principles.

“Consolidated Net Income” means, for any period, the net income (or loss) of the Parent and its Subsidiaries calculated on a consolidated basis for such period in accordance with Agreement Accounting Principles.

“Consolidated Net Worth” means at any time the consolidated stockholders’ equity of the Parent and its Subsidiaries calculated on a consolidated basis as of such time; provided, however, that any changes in consolidated stockholders’ equity as a result of (a) foreign currency translation adjustments and (b) any change in the fair value of any Financial Contract pursuant to Financial Accounting Standards Board Bulletin No 133, in each case after the date hereof, shall be excluded when computing Consolidated Net Worth.

“Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take–or–pay contract or the obligations of any such Person as general partner of a partnership with respect to the liabilities of the partnership.

“Conversion/Continuation Notice” is defined in Section 2.10.

“Controlled Group” means all members of a controlled group of corporations or other business entities and all trades or businesses (whether or not incorporated) under common control which, together with the Parent or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code.

“Coverage Ratio” means, for any applicable computation period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for such period.

“Credit Extension” means the making of an Advance hereunder.

“Credit Extension Date” means the Borrowing Date for an Advance.

“Default” means an event described in Article VII.

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“Dollar Amount” of any currency at any date shall mean (i) the amount of such currency if such currency is Dollars or (ii) the equivalent in such currency of such amount of Dollars if such currency is any currency other than Dollars, calculated on the basis of the arithmetical mean of the buy and sell spot rates of exchange of the Agent for such currency on the London market at 11:00 a.m., London time, on or as of the most recent Computation Date provided for in Section 2.2.

“Dollars” and “$” shall mean the lawful currency of the United States of America.

“Eligible Assignee” means any commercial bank organized under the laws of the United States or any of the countries parties to the Organization for Economic Cooperation and Development or any political subdivision of any thereof which has primary capital (or its equivalent) of not less than $250,000,000, is approved by the Agent, and, so long as no Default exists, is approved by the Parent, in either case, such approval not to be unreasonably withheld.

“Eligible Currency” means any currency other than Dollars (i) that is readily available, (ii) that is freely traded, (iii) in which deposits are customarily offered to banks in the London interbank market, (iv) which is convertible into Dollars in the international interbank market and (v) as to which an Equivalent Amount may be readily calculated. If, after the designation by the Lenders of any currency as an Agreed Currency, (x) currency control or other exchange regulations are imposed in the country in which such currency is issued with the result that different types of such currency are introduced, (y) such currency is, in the determination of the Agent, no longer readily available or freely traded or (z) in the determination of the Agent, an Equivalent Amount of such currency is not readily calculable, the Agent shall promptly notify the Lenders and the Borrowers, and such currency shall no longer be an Agreed Currency until such time as all of the Lenders agree to reinstate such currency as an Agreed Currency and promptly, but in any event within five Business Days of receipt of such notice from the Administrative Agent, the Borrowers shall repay all Loans in such affected currency or convert such Loans into Loans in Dollars or another Agreed Currency, subject to the other terms set forth in Article II.

“Environmental Laws” means any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions relating to (i) the protection of the environment, (ii) the effect of the environment on human health, (iii) emissions, discharges or releases of pollutants, contaminants, hazardous substances or wastes into surface water, ground water or land, or (iv) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, hazardous substances or wastes or the clean-up or other remediation thereof.

“Equivalent Amount” of any currency with respect to any amount of Dollars at any date shall mean the equivalent in such currency of such amount of Dollars, calculated on the basis of the arithmetical mean of the buy and sell spot rates of exchange of the Agent for such other currency at 11:00 a.m., London time, on the date on or as of which such amount is to be determined.

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any rule or regulation issued thereunder.

“Euro” and/or “EUR” means the euro referred to in Council Regulation (EC) No. 1103/97 dated June 17, 1997 passed by the Council of the European Union, or, if different, the then lawful currency of the member states of the European Union that participate in the third stage of Economic and Monetary Union.

“Euro Implementation Date” means January 1, 1999.

“Eurocurrency” means any Agreed Currency.

“Eurocurrency Advance” means an Advance which, except as otherwise provided in Section 2.12, bears interest at the applicable Eurocurrency Rate.

“Eurocurrency Loan” means a Loan which, except as otherwise provided in Section 2.12, bears interest at the applicable Eurocurrency Rate.

“Eurocurrency Payment Office” of the Agent shall mean, for each of the Agreed Currencies, the office, branch, affiliate or correspondent bank of the Agent specified as the “Eurocurrency Payment Office” for such currency in Schedule 3 hereto or such other office, branch, affiliate or correspondent bank of the Agent as it may from time to time specify to the Borrowers and each Lender as its Eurocurrency Payment Office.

“Eurocurrency Rate” means, with respect to a Eurocurrency Advance for the relevant Interest Period, the sum of (i) the quotient of (a) the Eurocurrency Reference Rate applicable to such Interest Period, divided by (b) one minus the Reserve Requirement (expressed as a decimal) applicable to such Interest Period, plus (ii) the Applicable Margin.

“Eurocurrency Reference Rate” means, with respect to a Eurocurrency Advance for the relevant Interest Period, the applicable British Bankers’ Association Interest Settlement Rate for deposits in the applicable Agreed Currency appearing on Reuters Screen FRBD or the applicable Reuters Screen for such Agreed Currency as of 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, and having a maturity equal to such Interest Period, provided that, (i) if Reuters Screen FRBD or the applicable Reuters Screen for such Agreed Currency is not available to the Agent for any reason, the applicable Eurocurrency Reference Rate for the relevant Interest Period shall instead be the applicable British Bankers’ Association Interest Settlement Rate for deposits in the Applicable Agreed Currency as reported by any other generally recognized financial information service as of 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, and having a maturity equal to such Interest Period, and (ii) if no such British Bankers’ Association Interest Settlement Rate is available, the applicable Eurocurrency Reference Rate for the relevant Interest Period shall instead be the rate determined by the Agent to be the arithmetic average of the rates reported to the Agent by each Reference Lender as the rate at which such Reference Lender offers to place deposits in the applicable Agreed Currency with first-class banks in the London interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, in the approximate amount of such Reference Lender’s relevant Eurocurrency Loan and having a maturity equal to such Interest Period. If any Reference Lender fails to provide such

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quotation to the Agent, then the Agent shall determine the Eurocurrency Reference Rate on the basis of the quotations of the remaining Reference Lender(s).

“Excluded Taxes” means, in the case of each Lender or applicable Lending Installation and the Agent, taxes imposed on its overall net income, and franchise taxes imposed on it, by (i) the jurisdiction under the laws of which such Lender or the Agent is incorporated or organized or (ii) the jurisdiction in which the Agent’s or such Lender’s principal executive office or such Lender’s applicable Lending Installation is located.

“Exhibit” refers to an exhibit to this Agreement, unless another document is specifically referenced.

“Existing Credit Agreement” means the Amended and Restated Credit Agreement dated as of March 20, 1997 among the Parent, the other borrowers named therein, the lenders named therein, and Bank One, as successor in interest to The First National Bank of Chicago, as agent, as amended.

“Facility Fee” is defined in Section 2.6.1.

“Facility Termination Date” means March 5, 2003 or any earlier date on which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.

“Federal Funds Effective Rate” means, for any day, an interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago time) on such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by the Agent in its sole discretion.

“Financial Contract” of a Person means (i) any exchange-traded or over-the-counter futures, forward, swap or option contract or other financial instrument with similar characteristics, or (ii) any Rate Management Transaction.

“Floating Rate” means, for any day, a rate per annum equal to the Alternate Base Rate for such day, in each case changing when and as the Alternate Base Rate changes.

“Floating Rate Advance” means an Advance which, except as otherwise provided in Section 2.12, bears interest at the Floating Rate.

“Floating Rate Loan” means a Loan which, except as otherwise provided in Section 2.12, bears interest at the Floating Rate.

“Foreign Subsidiary” means a Subsidiary not organized under the laws of the United States or any state, possession, or territory thereof.

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Forward Equity Purchase Program means the Parent’s program through which it contracts for the repurchase of the Parent’s capital stock through third parties; provided that such program (a) complies with the requirements of EITF 00-19 and is not required to be recorded on the Parent’s balance sheet in accordance with Agreement Accounting Principles, (b) can be settled by the Parent in its sole discretion with either cash or capital stock of the Parent, and (c) does not provide for the repurchase of capital stock having a notional value in excess of $100,000,000.

“Guaranty” means that certain Parent Guaranty dated as of March 6, 2002, executed by the Parent in favor of the Agent, for the ratable benefit of the Lenders, as it may be amended or modified and in effect from time to time.

“Indebtedness” of a Person means such Person’s (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of Property or services (other than accounts payable arising in the ordinary course of such Person’s business payable on terms customary in the trade), (iii) obligations, whether or not assumed, secured by Liens or payable out of the proceeds or production from Property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances, or other instruments, (v) obligations of such Person to purchase securities or other Property arising out of or in connection with the sale of the same or substantially similar securities or Property, (vi) Capitalized Lease Obligations, (vii) Contingent Obligations, (viii) reimbursement obligations of such Person in respect of letters of credit or acceptance financing, (ix) Off-Balance Sheet Liabilities, (x) any other obligation for borrowed money which in accordance with Agreement Accounting Principles would be shown as a liability on the consolidated balance sheet of such Person.

“Interest Period” means, with respect to a Eurocurrency Advance, a period of one, two, three or six months (or such other period as may be agreed by the Lenders with respect to a particular Agreed Currency) commencing on a Business Day selected by the applicable Borrower pursuant to this Agreement. Such Interest Period shall end on the day which corresponds numerically to such date one, two, three or six months (or such other applicable period) thereafter, provided, however, that if there is no such numerically corresponding day in such next, second, third or sixth succeeding month (or such other applicable period), such Interest Period shall end on the last Business Day of such next, second, third or sixth succeeding month (or such other applicable period). If an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day, provided, however, that if said next succeeding Business Day falls in a new calendar month, such Interest Period shall end on the immediately preceding Business Day.

“Investment” of a Person means any loan, advance (other than commission, travel and similar advances to officers and employees made in the ordinary course of business), extension of credit (other than accounts receivable arising in the ordinary course of business on terms customary in the trade) or contribution of capital by such Person; stocks, bonds, mutual funds, partnership interests, notes, debentures or other securities owned by such Person; any deposit accounts and certificate of deposit owned by such Person; and structured notes, derivative financial instruments and other similar instruments or contracts owned by such Person.

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“Lenders” means the lending institutions listed on the signature pages of this Agreement and their respective successors and assigns. Unless otherwise specified, the term “Lenders” includes the Swing Line Lenders.

“Lending Installation” means, with respect to a Lender or the Agent, the office, branch, subsidiary or affiliate of such Lender or the Agent with respect to each Agreed Currency listed on the administration information sheets provided to the Agent in connection herewith or otherwise selected by such Lender or the Agent pursuant to Section 2.22.

“Lien” means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement).

“Loan” means a Revolving Loan or Swing Line Loan.

“Loan Documents” means this Agreement, any Notes issued pursuant to Section 2.16, the Guaranty, any Joinder Agreement and any other documents and agreements contemplated hereby and executed by any Borrower with or in favor of the Agent or any Lender, as any such agreement, instrument or document may be amended, modified or supplemented from time-to-time.

“Material Adverse Effect” means a material adverse effect on (i) the business, Property, condition (financial or otherwise), results of operations, or prospects of the Parent and its Subsidiaries taken as a whole, (ii) the ability of any Borrower to perform its obligations under the Loan Documents to which it is a party, or (iii) the validity or enforceability of this Agreement, any Notes, the Guaranty, or any of the other material Loan Documents or the rights or remedies of the Agent or the Lenders thereunder.

“Material Indebtedness” is defined in Section 7.5.

“Material Subsidiary” means any Subsidiary of the Parent, which Subsidiary holds or constitutes 10% or more of either the consolidated assets or Consolidated EBITDA of the Parent.

“Moody’s” means Moody’s Investors Service, Inc., and any successor thereto which is a nationally recognized statistical rating organization.

“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining agreement or any other arrangement to which the Parent or any member of the Controlled Group is a party to which more than one employer is obligated to make contributions.

“National Currency Unit” means the unit of currency (other than a Euro unit) of each member state of the European Union that participates in the third stage of Economic and Monetary Union.

“Non-U.S. Borrower” is defined in Section 3.1(b).

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“Non-U.S. Lender” is defined in Section 3.5(d).

“Note” is defined in Section 2.16.

“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Borrowers to the Lenders or to any Lender, the Agent, or any indemnified party arising under the Loan Documents.

“Off-Balance Sheet Liability” of a Person means (i) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (ii) any liability under any Sale and Leaseback Transaction which is not a Capitalized Lease, (iii) any liability under any so-called “synthetic lease” transaction entered into by such Person, or (iv) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheets of such Person, but excluding from this clause (iv) Operating Leases.

“Offered Rate” is defined in Section 2.5.2(b).

“Operating Lease” of a Person means any lease of Property (other than a Capitalized Lease) by such Person as lessee which has an original term (including any required renewals and any renewals effective at the option of the lessor) of one year or more.

“Other Taxes” is defined in Section 3.5(b).

“Outstanding Credit Exposure” means, as to any Lender at any time, the sum of (i) the aggregate principal amount of its Loans outstanding at such time, plus (ii) an amount equal to its Pro Rata Share of the aggregate principal amount of Swing Line Loans outstanding at such time.

“Parent” means Cooper Cameron Corporation and its successors and assigns.

“Participants” is defined in Section 12.2.1.

“Payment Date” means the last day of each March, June, September and December.

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

“Person” means any natural person, corporation, firm, joint venture, partnership, limited liability company, association, enterprise, trust or other entity or organization, or any government or political subdivision or any agency, department or instrumentality thereof.

“Plan” means an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code as to which the Parent or any member of the Controlled Group may have any liability.

“Pricing Schedule” means the Schedule attached hereto identified as such.

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“Prime Rate” means a rate per annum equal to the prime rate of interest announced from time to time by Bank One or its parent (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes.

“Property” of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.

“Pro Rata Share” means, with respect to a Lender, a portion equal to a fraction the numerator of which is such Lender’s Commitment and the denominator of which is the Aggregate Commitment.

“Rate Management Transaction” means any transaction (including an agreement with respect thereto) now existing or hereafter entered into by the Parent or any of its Subsidiaries which is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures.

“Reference Lenders” means Crédit Lyonnais, The Royal Bank of Scotland plc, The Bank of Nova Scotia, and ABN AMRO Bank, N.V.

“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereto or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System.

“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System.

“Reportable Event” means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event, provided, however, that a failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.

“Reports” is defined in Section 9.6.

“Required Lenders” means Lenders in the aggregate having at least 51% of the Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders in the aggregate holding at least 51% of the Aggregate Outstanding Credit Exposure.

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“Reserve Requirement” means, with respect to an Interest Period, the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed under Regulation D on Eurocurrency liabilities.

“Revolving Loan” means, with respect to a Lender, such Lender’s loan made pursuant to its commitment to lend set forth in Section 2.1 (or any conversion or continuation thereof).

“S&P” means Standard and Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc., and any successor thereto which is a nationally recognized statistical rating organization.

“Sale and Leaseback Transaction” means any sale or other transfer of Property by any Person with the intent to lease such Property as lessee.

“Schedule” refers to a specific schedule to this Agreement, unless another document is specifically referenced.

“Section” means a numbered section of this Agreement, unless another document is specifically referenced.

“Single Employer Plan” means a Plan maintained by the Parent or any member of the Controlled Group for employees of the Parent or any member of the Controlled Group.

“Subsidiary” of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, limited liability company, association, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a “Subsidiary” shall mean a Subsidiary of the Parent.

“Substantial Portion” means, with respect to the Property of the Parent and its Subsidiaries, Property which represents more than the greater of (i) $300,000,000 and (ii) 20% of the consolidated assets of the Parent and its Subsidiaries as would be shown in the consolidated financial statements of the Parent and its Subsidiaries as at the beginning of the quarter ending with the month in which such determination is made.

“Swing Line Commitments” means the Canadian Swing Line Elections and the US Swing Line Commitment.

“Swing Line Lenders” means the Canadian Swing Line Lenders and the US Swing Line Lender.

“Swing Line Loans” means the Canadian Swing Line Loans and the US Swing Line Loans.

“Synthetic Lease” means (a) any lease that is treated as an Operating Lease under Agreement Accounting Principles but for which the Parent or any of the Subsidiaries is viewed

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as the owner of the leased Property under the Code and (b) guaranties by the Parent or any of the Subsidiaries of the obligations of the lessor of such leased Property which are secured by the payments due under the lease of such Property.

“Taxes” means any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings, and any and all liabilities with respect to the foregoing, but excluding Excluded Taxes and Other Taxes.

“Termination Event” means, with respect to a Plan which is subject to Title IV of ERISA, (a) a Reportable Event, (b) the withdrawal of the Borrower or any other member of a Controlled Group from such Plan during a plan year in which the Borrower or any other member of a Controlled Group was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or was deemed such under Section 4068(f) of ERISA, (c) the termination of such Plan, the filing of a notice of intent to terminate such Plan or the treatment of an amendment of such Plan as a termination under Section 4041 of ERISA, (d) the institution by the PBGC of proceedings to terminate such Plan, or (e) any event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or appointment of a trustee to administer, such Plan.

“Total Capitalization” means, at any time, the sum of Total Debt and Consolidated Net Worth at such time.

“Total Debt” means, at any time, that part of the Consolidated Indebtedness of the Parent and the Subsidiaries at such time which would be reflected on a balance sheet prepared in accordance with Agreement Accounting Principles.

“Transferee” is defined in Section 12.4.

“Type” means, with respect to any Advance, its nature as a Floating Rate Advance or a Eurocurrency Advance.

“US Swing Line Borrowing Notice” is defined in Section 2.5.2(b).

“US Swing Line Commitment” means the obligation of the US Swing Line Lender to make US Swing Line Loans up to a maximum principal amount of $15,000,000 at any one time outstanding.

“US Swing Line Lender” means Bank One or any other Lender which may succeed to its rights and obligations as US Swing Line Lender pursuant to the terms of this Agreement.

“US Swing Line Loan” means a Loan made available to a Borrower by the US Swing Line Lender pursuant to Section 2.5.2.

“Unfunded Liabilities” means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Single Employer Plans exceeds the fair market value of all such Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations.

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“Unmatured Default” means an event which but for the lapse of time or the giving of notice, or both, would constitute a Default.

“Wholly–Owned Subsidiary” of a Person means (i) any Subsidiary all of the outstanding voting securities of which shall at the time be owned or controlled, directly or indirectly, by such Person or one or more Wholly–Owned Subsidiaries of such Person, or by such Person and one or more Wholly–Owned Subsidiaries of such Person, or (ii) any partnership, limited liability company, association, joint venture or similar business organization 100% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled.

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

ARTICLE II

THE CREDITS

2.1    Commitment.    From and including the date of this Agreement and prior to the Facility Termination Date, each Lender severally agrees, on the terms and conditions set forth in this Agreement, to make Revolving Loans to any Borrower in Agreed Currencies upon the request of any Borrower from time to time, provided that, after giving effect to the making of each such Revolving Loan, such Lender’s Dollar Amount of its Outstanding Credit Exposure shall not exceed its Commitment, provided that (i) at no time shall Revolving Loans be outstanding hereunder in more than three different Agreed Currencies, (ii) at no time shall the Dollar Amount of Revolving Loans made in Agreed Currencies other than Dollars exceed $100,000,000 and (iii) all Floating Rate Loans shall be made in Dollars. Subject to the terms of this Agreement, the Borrowers may borrow, repay and reborrow at any time prior to the Facility Termination Date. The Commitments to lend hereunder shall expire on the Facility Termination Date.

2.2    Determination of Dollar Amounts; Required Payments; Termination.

(a)    The Agent will determine the Dollar Amount of (i) each Advance as of the date three Business Days prior to the Borrowing Date or, if applicable, date of conversion/continuation of such Advance, and (ii) all outstanding Advances on and as of the last Business Day of each quarter and on any other Business Day elected by the Agent in its discretion or upon instruction by the Required Lenders. Each day upon or as of which the Agent determines Dollar Amounts as described in the preceding clauses (i) and (ii) is herein described as a “Computation Date” with respect to each Advance for which a Dollar Amount is determined on or as of such day. If at any time the Dollar Amount of the sum of the aggregate principal amount of all outstanding Advances (calculated, with respect to those Advances denominated in Agreed Currencies other than Dollars, as of the most recent Computation Date with respect to each such Advance) exceeds the Aggregate Commitment, the Borrowers shall immediately repay Advances in an aggregate principal amount sufficient to eliminate any such excess.

(b)    The Aggregate Outstanding Credit Exposure and all other unpaid Obligations shall be paid in full by the Borrowers on the Facility Termination Date.

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2.3    Ratable Loans.    Each Advance hereunder (other than any Swing Line Loan) shall consist of Revolving Loans made from the several Lenders ratably according to their Pro Rata Shares.

2.4    Types of Advances.    The Advances may be Floating Rate Advances or Eurocurrency Advances, or a combination thereof, selected by the applicable Borrower in accordance with Sections 2.9 and 2.10, Canadian Swing Line Loans selected by the Parent or the applicable Canadian Borrower in accordance with Section 2.5.1, or US Swing Line Loans selected by the applicable Borrower in accordance with Section 2.5.2.

2.5    Swing Line Loans.

2.5.1    Canadian Swing Line Loans.

(a)    Upon the satisfaction of the conditions precedent set forth in Section 4.2 and, if such Canadian Swing Line Loan is to be made on the date of the initial Advance hereunder, the satisfaction of the conditions precedent set forth in Section 4.1 as well, from and including the date of this Agreement and prior to the Facility Termination Date, each Canadian Swing Line Lender agrees, on the terms and conditions set forth in this Agreement, to make Canadian Swing Line Loans in Dollars or Canadian Dollars to the Parent or any Canadian Borrower from time to time in an aggregate principal Dollar Amount not to exceed the Canadian Swing Line Election, provided that (a) the Aggregate Outstanding Credit Exposure shall not at any time exceed the Aggregate Commitment, and (b) at no time shall such Canadian Swing Line Lender’s Outstanding Credit Exposure exceed the Dollar Amount of such Canadian Swing Line Lender’s Commitment at such time. Subject to the terms of this Agreement, the Parent or the applicable Canadian Borrower may borrow, repay and reborrow Canadian Swing Line Loans at any time prior to the Facility Termination Date.

(b)    The Parent or the applicable Canadian Borrower shall deliver to the Agent and the Canadian Swing Line Lenders irrevocable notice (a “Canadian Swing Line Borrowing Notice”) not later than noon (Chicago time) on the Borrowing Date of each Canadian Swing Line Loan denominated in Dollars and four Business Days before the Borrowing Date for each Canadian Swing Line Loan denominated in Canadian Dollars, specifying (a) the applicable Borrowing Date (which date shall be a Business Day), (b) the aggregate amount of the requested Canadian Swing Line Loan which shall be an amount not less than $100,000 (c) whether such Canadian Swing Line Loan shall be denominated in Dollars or Canadian Dollars, (d) the Interest Period applicable thereto, and (e) the applicable Canadian Borrower. The Canadian Swing Line Loans shall bear interest at the Eurocurrency Rate.

(c)    Promptly after receipt of a Canadian Swing Line Borrowing Notice, the Agent shall notify each Canadian Swing Line Lender by fax, or other similar form of transmission, of the requested Canadian Swing Line Loan. Not later than 2:00 p.m. (Chicago time) on the applicable Borrowing Date, each Canadian Swing Line Lender shall make available its Canadian Swing Line Share of the Canadian Swing Line Loan, in funds immediately available in Chicago, to the Agent at its address specified pursuant to Article XIII. The Agent will promptly make the funds so received from the Canadian Swing Line Lenders available to the Parent or the applicable Canadian Borrower on the Borrowing Date at the Agent’s aforesaid

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address. Notwithstanding anything in this Agreement to the contrary, it is expressly agreed that no Canadian Swing Line Lender shall have an obligation whatsoever to make any Canadian Swing Line Loan, the making of any Canadian Swing Line Loan to be in the sole discretion of each Canadian Swing Line Lender determined at the time of any request for any Canadian Swing Line Loan by the Parent or any Canadian Borrower. Without limiting the foregoing sentence, each Canadian Swing Line Lender agrees to give the Parent, each Canadian Borrower and the Agent written notice of its decision to no longer make Canadian Swing Line Loans.

(d)    Repayment of Canadian Swing Line Loans:

(i)    Upon the occurrence of a Default, any Canadian Swing Line Lender may require each Lender (including such Canadian Swing Line Lender) to make a Revolving Loan in the amount of such Lender’s Pro Rata Share of such Canadian Swing Line Loan (including, without limitation, any interest accrued and unpaid thereon), for the purpose of repaying such Canadian Swing Line Loan. Not later than noon (Chicago time) on the date of any notice received pursuant to this Section 2.5.1, each Lender shall make available its required Revolving Loan, in funds immediately available in Chicago to the Agent at its address specified pursuant to Article XIII. Revolving Loans made pursuant to this Section 2.5.1 shall initially be Floating Rate Loans and thereafter may be continued as Floating Rate Loans or converted into Eurodollar Loans in the manner provided in Section 2.10 and subject to the other conditions and limitations set forth in this Article II. Unless a Lender shall have notified such Canadian Swing Line Lender, prior to its making any Canadian Swing Line Loan, that any applicable condition precedent set forth in Sections 4.1 or 4.2 had not then been satisfied, such Lender’s obligation to make Revolving Loans pursuant to this Section 2.5.1 to repay Canadian Swing Line Loans shall be unconditional, continuing, irrevocable and absolute and shall not be affected by any circumstances, including, without limitation, (a) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Agent, any Canadian Swing Line Lender or any other Person, (b) the occurrence or continuance of a Default or Unmatured Default, (c) any adverse change in the condition (financial or otherwise) of the Parent or the applicable Canadian Borrower, or (d) any other circumstances, happening or event whatsoever. In the event that any Lender fails to make payment to the Agent of any amount due under this Section 2.5.1, the Agent shall be entitled to receive, retain and apply against such obligation the principal and interest otherwise payable to such Lender hereunder until the Agent receives such payment from such Lender or such obligation is otherwise fully satisfied. In addition to the foregoing, if for any reason any Lender fails to make payment to the Agent of any amount due under this Section 2.5.1, such Lender shall be deemed, at the option of the Agent, to have unconditionally and irrevocably purchased from such Canadian Swing Line Lender, without recourse or warranty, an undivided interest and participation in the applicable Canadian Swing Line Loan in the amount of such Revolving Loan, and such interest and participation may be recovered from such Lender together with interest thereon at the Federal Funds Effective Rate for each day during the period commencing on the date of demand and ending on the date such amount is received.

(ii)    All Canadian Swing Line Loans shall mature, and the principal amount thereof and the unpaid accrued interest thereon shall be due and payable on the

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last day of the Interest Period therefor (subject to Section 2.10(b)), on any date on which such Canadian Swing Line Loans are prepaid, whether due to acceleration or otherwise, and on the Facility Termination Date.

2.5.2    US Swing Line Loans.

(a)    Upon the satisfaction of the conditions precedent set forth in Section 4.2 and, if such US Swing Line Loan is to be made on the date of the initial Advance hereunder, the satisfaction of the conditions precedent set forth in Section 4.1 as well, from and including the date of this Agreement and prior to the Facility Termination Date, the US Swing Line Lender agrees, on the terms and conditions set forth in this Agreement, to make US Swing Line Loans in Dollars to any Borrower from time to time in an aggregate principal amount not to exceed the US Swing Line Commitment, provided that the Aggregate Outstanding Credit Exposure shall not at any time exceed the Aggregate Commitment. Subject to the terms of this Agreement, the Borrowers may borrow, repay and reborrow US Swing Line Loans at any time prior to the Facility Termination Date.

(b)    The applicable Borrower shall deliver to the Agent and the US Swing Line Lender irrevocable notice (a “US Swing Line Borrowing Notice”) not later than noon (Chicago time) on the Borrowing Date of each US Swing Line Loan specifying (a) the applicable Borrowing Date (which date shall be a Business Day), (b) the aggregate amount of the requested US Swing Line Loan which shall be an amount not less than $1,000,000 and in integral multiples of $100,000 in excess thereof and (c) whether such US Swing Line Loan shall bear interest at the Floating Rate or at the rate offered by the US Swing Line Lender, upon request by the applicable Borrower, for US Swing Line Loans (the “Offered Rate”).

(c)    Promptly after receipt of a US Swing Line Borrowing Notice, the Agent shall notify the US Swing Line Lender by fax, or other similar form of transmission, of the requested US Swing Line Loan. Not later than 2:00 p.m. (Chicago time) on the applicable Borrowing Date, the US Swing Line Lender shall make available the US Swing Line Loan, in funds immediately available in Chicago, to the Agent at its address specified pursuant to Article XIII. The Agent will promptly make the funds so received from the US Swing Line Lender available to the applicable Borrower on the Borrowing Date at the Agent’s aforesaid address.

(d)    Repayment of US Swing Line Loans:

(i)    Each US Swing Line Loan shall be paid in full by the applicable Borrower on or before the seventh (7th) day after the Borrowing Date for such US Swing Line Loan. In addition, US Swing Line Lender (i) may at any time in its sole discretion with respect to any outstanding US Swing Line Loan, or (ii) shall on the seventh (7th) day after the Borrowing Date of any US Swing Line Loan, require each Lender (including the US Swing Line Lender) to make a Revolving Loan in the amount of such Lender’s Pro Rata Share of such US Swing Line Loan (including, without limitation, any interest accrued and unpaid thereon), for the purpose of repaying such US Swing Line Loan. Not later than noon (Chicago time) on the date of any notice received pursuant to this Section 2.5.2(d), each Lender shall make available its required Revolving Loan, in funds immediately available in Chicago to the Agent at its address specified pursuant to

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Article XIII. Revolving Loans made pursuant to this Section 2.5.2(d) shall initially be Floating Rate Loans and thereafter may be continued as Floating Rate Loans or converted into Eurodollar Loans in the manner provided in Section 2.10 and subject to the other conditions and limitations set forth in this Article II. Unless a Lender shall have notified the US Swing Line Lender, prior to its making any US Swing Line Loan, that any applicable condition precedent set forth in Sections 4.1 or 4.2 had not then been satisfied, such Lender’s obligation to make Revolving Loans pursuant to this Section 2.5.2(d) to repay Swing Line Loans shall be unconditional, continuing, irrevocable and absolute and shall not be affected by any circumstances, including, without limitation, (a) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Agent, the US Swing Line Lender or any other Person, (b) the occurrence or continuance of a Default or Unmatured Default, (c) any adverse change in the condition (financial or otherwise) of the Parent or the applicable Borrower, or (d) any other circumstances, happening or event whatsoever. In the event that any Lender fails to make payment to the Agent of any amount due under this Section 2.5.2(d), the Agent shall be entitled to receive, retain and apply against such obligation the principal and interest otherwise payable to such Lender hereunder until the Agent receives such payment from such Lender or such obligation is otherwise fully satisfied. In addition to the foregoing, if for any reason any Lender fails to make payment to the Agent of any amount due under this Section 2.5.2(d), such Lender shall be deemed, at the option of the Agent, to have unconditionally and irrevocably purchased from such US Swing Line Lender, without recourse or warranty, an undivided interest and participation in the applicable US Swing Line Loan in the amount of such Revolving Loan, and such interest and participation may be recovered from such Lender together with interest thereon at the Federal Funds Effective Rate for each day during the period commencing on the date of demand and ending on the date such amount is received.

(ii)    All US Swing Line Loans shall mature, and the principal amount thereof and the unpaid accrued interest thereon shall be due and payable as set forth above in (i) above and on the Facility Termination Date. Interest accrued on US Swing Line Loans shall be payable on each Payment Date and on any date on which such US Swing Line Loans are prepaid, whether due to acceleration or otherwise, and at maturity.

2.6    Facility Fee; Usage Fee; Reductions in Aggregate Commitment.

2.6.1    Facility Fee.    The Parent agrees to pay to the Agent for the account of each Lender according to its Pro Rata Share a facility fee (the “Facility Fee”) at a per annum rate equal to the Applicable Fee Rate on the Aggregate Commitment from the date hereof to and including the Facility Termination Date, payable on each Payment Date hereafter and on the Facility Termination Date.

2.6.2    Usage Fee.    For all days on which the Aggregate Outstanding Credit Exposure exceeds 33% of the Aggregate Commitment, the Parent agrees to pay to the Agent for the account of each Lender according to its Pro Rata Share a usage fee at a per annum rate equal to the Applicable Fee Rate on the amount of the Aggregate Outstanding Credit Exposure from the date hereof to and including the Facility Termination Date, payable on each Payment Date hereafter and on the Facility Termination Date.

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2.6.3    Reductions in Aggregate Commitment.    The Parent may permanently reduce the Aggregate Commitment in whole, or in part ratably among the Lenders in integral multiples of $10,000,000 (or the Approximate Equivalent Amount if denominated in an Agreed Currency other than Dollars), upon at least three Business Days’ written notice to the Agent, which notice shall specify the amount of any such reduction, provided, however, that the amount of the Aggregate Commitment may not be reduced below the Dollar Amount of the Aggregate Outstanding Credit Exposure unless the amount of the excess of the Dollar Amount of the Aggregate Outstanding Credit Exposure over the amount of the reduced Aggregate Commitment is repaid concurrently with the reduction of the Aggregate Commitment. All accrued facility fees shall be payable on the effective date of any termination of the obligations of the Lenders to make Credit Extensions hereunder.

2.7    Minimum Amount of Each Advance.    Each Eurocurrency Advance shall be in a minimum amount of $5,000,000 and in multiples of $1,000,000 if in excess thereof (or the Approximate Equivalent Amounts if denominated in an Agreed Currency other than Dollars), and each Floating Rate Advance (other than an Advance to repay Swing Line Loans) shall be in the minimum amount of $1,000,000 and in multiples of $500,000 if in excess thereof, provided, however, that any Floating Rate Advance may be in the amount of the Available Aggregate Commitment.

2.8    Optional Principal Payments.    Any Borrower may from time to time pay, without penalty or premium, all outstanding Floating Rate Advances (other than Swing Line Loans), or, in a minimum aggregate amount of $1,000,000 or any integral multiple of $500,000 in excess thereof, any portion of the outstanding Floating Rate Advances (other than Swing Line Loans) upon two Business Days’ prior notice to the Agent. The applicable Borrower may at any time pay, without penalty or premium, all outstanding Swing Line Loans that bear interest at the Floating Rate or the Offered Rate, or, in a minimum amount of $100,000 and increments of $50,000 in excess thereof, any portion of such outstanding Swing Line Loans, with notice to the Agent and the applicable Swing Line Lender(s) by 11:00 a.m. (Chicago time) on the date of repayment. Any Borrower may from time to time pay, subject to the payment of any funding indemnification amounts required by Section 3.4 but without penalty or premium, all outstanding Eurocurrency Advances (other than Canadian Swing Line Loans), or, in a minimum aggregate amount of $5,000,000 or any integral multiple of $1,000,000 in excess thereof (or the Approximate Equivalent Amount if denominated in an Agreed Currency other than Dollars), any portion of the outstanding Eurocurrency Advances upon three Business Days’ prior notice to the Agent. The Parent or any Canadian Borrower may at any time pay, subject to the payment of any funding indemnification amounts required by Section 3.4 but without penalty or premium, all outstanding Canadian Swing Line Loans, or, in a minimum amount of $100,000 and increments of $50,000 in excess thereof (or the Approximate Equivalent Amount if denominated in Canadian Dollars), any portion of such outstanding Canadian Swing Line Loans, upon three Business Days’ prior notice to the Agent and the Canadian Swing Line Lenders.

2.9    Method of Selecting Types and Interest Periods for New Advances.    A Borrower shall select the Type of Advance and, in the case of each Eurocurrency Advance, the Interest Period and Agreed Currency applicable thereto from time to time. Such Borrower shall give the Agent irrevocable notice (a “Borrowing Notice”) not later than 10:00 a.m. (Chicago time) on the

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Borrowing Date of each Floating Rate Advance (other than a Swing Line Loan), three Business Days before the Borrowing Date for each Eurocurrency Advance denominated in Dollars and four Business Days before the Borrowing Date for each Eurocurrency Advance denominated in an Agreed Currency other than Dollars, specifying (a) the Borrowing Date, which shall be a Business Day, of such Advance, (b) the aggregate amount of such Advance, (c) the Type of Advance selected, (d) in the case of each Eurocurrency Advance, the Interest Period and Agreed Currency applicable thereto, and (e) the applicable Borrower.

2.10    Conversion and Continuation of Outstanding Advances.    (a) Floating Rate Advances (other than Swing Line Loans which shall be continued as provided below) shall continue as Floating Rate Advances unless and until such Floating Rate Advances are converted into Eurocurrency Advances pursuant to this Section 2.10 or are repaid in accordance with Section 2.8. Each Eurocurrency Advance (other than Canadian Swing Line Loans which shall be continued and converted as provided below) shall continue as a Eurocurrency Advance until the end of the then applicable Interest Period therefor, at which time (i) each such Eurocurrency Advance denominated in Dollars shall be automatically converted into a Floating Rate Advance unless (A) such Eurocurrency Advance is or was repaid in accordance with Section 2.8 or (B) the applicable Borrower shall have given the Agent a Conversion/Continuation Notice (as defined below) requesting that, at the end of such Interest Period, such Eurocurrency Advance either continue as a Eurocurrency Advance for the same or another Interest Period or be converted into a Floating Rate Advance; and (ii) each such Eurocurrency Advance denominated in an Agreed Currency other than Dollars shall automatically continue as a Eurocurrency Advance in the same Agreed Currency with an Interest Period of one month unless (A) such Eurocurrency Advance is or was repaid in accordance with Section 2.8 or (B) the applicable Borrower shall have given the Agent a Conversion/Continuation Notice (as defined below) requesting that, at the end of such Interest Period, such Eurocurrency Advance continue as a Eurocurrency Advance for the same or another Interest Period.

(b)    Each US Swing Line Loan shall continue as such unless prepaid or repaid. Each Canadian Swing Line Loan shall continue as such until the end of the then applicable Interest Period therefor, at which time such Canadian Swing Line Loan shall, unless prepaid or repaid or any Canadian Swing Line Lender has given the Borrower and the Agent written notice under Section 2.5.3 that it will not continue making Canadian Swing Line Loans, automatically be deemed to be continued as a Canadian Swing Line Loan in the same amount and in the same currency with an Interest Period of one month (commencing on the last day of the expiring Interest Period) unless the Borrower shall have given the Agent a Conversion/Continuation Notice requesting that, at the end of such Interest Period, such Canadian Swing Line Loan continue for the same or another Interest Period and in the same currency.

(c)    Subject to the terms of Section 2.7, any Borrower may elect from time to time to convert all or any part of an Advance of any Type into any other Type or Types of Advances denominated in the same or any other Agreed Currency; provided that any conversion of any Eurocurrency Advance shall be made on, and only on, the last day of the Interest Period applicable thereto. Such Borrower shall give the Agent irrevocable notice (a “Conversion/Continuation Notice”) of each conversion of an Advance or continuation of a Eurocurrency Advance not later than 10:00 a.m. (Chicago time) at least one Business Day, in the case of a conversion into a Floating Rate Advance, three Business Days, in the case of a

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conversion into or continuation of a Eurocurrency Advance denominated in Dollars, or four Business Days, in the case of a conversion into or continuation of a Eurocurrency Advance denominated in an Agreed Currency other than Dollars, prior to the date of the requested conversion or continuation, specifying (i) the requested date, which shall be a Business Day, of such conversion or continuation, and (ii) the Agreed Currency, amount and Type(s) of Advance(s) into which such Advance is to be converted or continued and, in the case of a conversion into or continuation of a Eurocurrency Advance, the duration of the Interest Period applicable thereto.

2.11    Method of Borrowing.    On each Borrowing Date, each Lender shall make available its Loan or Loans, if any, (a) if such Loan is denominated in Dollars, not later than noon, Chicago time, in Federal or other funds immediately available to the Agent, in Chicago, Illinois at its address specified in or pursuant to Article XIII and, (b) if such Loan is denominated in an Agreed Currency other than Dollars, not later than noon, local time, in the city of the Agent’s Eurocurrency Payment Office for such currency, in such funds as may then be customary for the settlement of international transactions in such currency in the city of and at the address of the Agent’s Eurocurrency Payment Office for such currency. Unless the Agent determines that any applicable condition specified in Article IV has not been satisfied, the Agent will make the funds so received from the Lenders available to the applicable Borrower at the Agent’s aforesaid address. Notwithstanding the foregoing provisions of this Section 2.11, to the extent that a Loan made by a Lender matures on the Borrowing Date of a requested Loan, such Lender shall apply the proceeds of the Loan it is then making to the repayment of principal of the maturing Loan.

2.12    Changes in Interest Rate, etc.    Each Floating Rate Advance (other than a Swing Line Loan) shall bear interest on the outstanding principal amount thereof, for each day from and including the date such Advance is made or is converted from a Eurocurrency Advance into a Floating Rate Advance pursuant to Section 2.10 to but excluding the date it becomes due or is converted into a Eurocurrency Advance pursuant to Section 2.10 hereof, at a rate per annum equal to the Floating Rate for such day. Each Swing Line Loan that bears interest at the Floating Rate or the Offered Rate shall bear interest on the outstanding principal amount thereof, for each day from and including the day such Swing Line Loan is made to but excluding the date it is paid, at a rate per annum equal to the Floating Rate or the Offered Rate, as applicable, for such day. Changes in the rate of interest on that portion of any Advance maintained as a Floating Rate Advance or bearing interest at the Offered Rate will take effect simultaneously with each change in the Alternate Base Rate or Offered Rate, as applicable. Each Eurocurrency Advance shall bear interest on the outstanding principal amount thereof from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at the interest rate determined by the Agent as applicable to such Eurocurrency Advance based upon the applicable Borrower’s selections under Sections 2.5.2 and 2.9, as applicable, and 2.10 and otherwise in accordance with the terms hereof. No Interest Period may end after the Facility Termination Date.

2.13    Rates Applicable After Default.    Notwithstanding anything to the contrary contained in Section 2.9 or 2.10, during the continuance of a Default or Unmatured Default the Required Lenders may, at their option, by notice to the Parent, declare that no Advance may be made as, converted into or continued at the end of the applicable Interest Period as a

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Eurocurrency Advance. During the continuance of a Default the Required Lenders may, at their option, by notice to the Parent, declare that (a) each Eurocurrency Advance shall bear interest for the remainder of the applicable Interest Period at the rate otherwise applicable to such Interest Period plus 2% per annum, and (b) each Floating Rate Advance shall bear interest at a rate per annum equal to the Floating Rate in effect from time to time plus 2% per annum, provided that, during the continuance of a Default under Section 7.6 or 7.7, the interest rates set forth in clauses (a) and (b) above shall be applicable to all Credit Extensions without any election or action on the part of the Agent or any Lender.

2.14    Method of Payment.    (a) Each Advance shall be repaid and each payment of interest thereon shall be paid in the currency in which such Advance was made or, where such currency has converted to the Euro, in the Euro. All payments of the Obligations hereunder shall be made, without setoff, deduction, or counterclaim, in immediately available funds to the Agent at (except as set forth in the next sentence) the Agent’s address specified pursuant to Article XIII, or at any other Lending Installation of the Agent specified in writing by the Agent to the Borrowers, by noon (local time) on the date when due and shall be applied ratably by the Agent among the Lenders. All payments to be made by the Borrowers hereunder in any currency other than Dollars shall be made in such currency on the date due in such funds as may then be customary for the settlement of international transactions in such currency for the account of the Agent, at its Eurocurrency Payment Office for such currency and shall be applied ratably by the Agent among the Lenders. Each payment delivered to the Agent for the account of any Lender shall be delivered promptly by the Agent to such Lender in the same type of funds that the Agent received at, (i) with respect to Floating Rate Loans and Eurocurrency Loans denominated in Dollars, its address specified pursuant to Article XIII or at any Lending Installation specified in a notice received by the Agent from such Lender and (ii) with respect to Eurocurrency Loans denominated in an Agreed Currency other than Dollars, in the funds received from the applicable Borrower at the address of the Agent’s Eurocurrency Payment Office for such currency. The Agent is hereby authorized to charge any account of any Borrower maintained with Bank One or any of its Affiliates for each payment of principal, interest, and fees as it becomes due hereunder.

(b)    Notwithstanding the provisions of subsection (a) above, if, after the making of any Advance in any currency other than Dollars, currency control or exchange regulations are imposed in the country which issues such currency with the result that the type of currency in which the Advance was made (the “Original Currency”) no longer exists or the applicable Borrower is not able to make payment to the Agent for the account of the Lenders in such Original Currency, then all payments to be made by such Borrower hereunder in such currency shall instead be made when due in Dollars in an amount equal to the Dollar Amount (as of the date of repayment) of such payment due, it being the intention of the parties hereto that the Borrowers take all risks of the imposition of any such currency control or exchange regulations. For purposes of this Section 2.14(b), the commencement of the third stage of European Economic and Monetary Union and the occurrence of the Euro Implementation Date shall not constitute the imposition of currency control or exchange regulations.

2.15    Advances to be Made in Euro.    If any Advance made hereunder would be capable of being made in either the Euro or in a National Currency Unit, such Advance shall be made in the Euro.

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2.16    Noteless Agreement; Evidence of Indebtedness.    (a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of each Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(b)    The Agent shall maintain accounts in which it will record (i) the amount of each Loan made hereunder, the Agreed Currency and Type thereof and the Interest Period with respect thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from each Borrower to each Lender hereunder, and (iii) the amount of any sum received by the Agent hereunder from the Borrowers and each Lender’s share thereof.

(c)    The entries maintained in the accounts maintained pursuant to paragraphs (a) and (b) above shall be prima facie evidence of the existence and amounts of the Obligations therein recorded; provided, however, that the failure of the Agent or any Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrowers to repay the Obligations in accordance with their terms.

(d)    Any Lender may request that its Loans be evidenced by a promissory note (a “Note”). In such event, the Borrowers shall prepare, execute and deliver to such Lender a Note payable to the order of such Lender in a form supplied by the Agent. Thereafter, the Loans evidenced by such Note and interest thereon shall at all times (including after any assignment pursuant to Section 12.3) be represented by one or more Notes payable to the order of the payee named therein or any assignee pursuant to Section 12.3, except to the extent that any such Lender or assignee subsequently returns any such Note for cancellation and requests that such Loans once again be evidenced as described in paragraphs (a) and (b) above.

2.17    Telephonic Notices.    Each Borrower hereby authorizes the Lenders and the Agent to extend, convert or continue Advances, effect selections of Agreed Currencies and Types of Advances and to transfer funds based on telephonic notices which the Agent or any Lender in good faith believes to be made by any person or persons that an Authorized Officer of the Parent has designated in writing to the Agent, which written authorization(s) may be relied upon by the Agent, in the case of any person so authorized, until such time as the Agent shall have received written notice from an Authorized Officer of the Borrower revoking such person’s authority to make such telephonic notices, it being understood that the foregoing authorization is specifically intended to allow Borrowing Notices and Conversion/Continuation Notices to be given telephonically. Each Borrower agrees to deliver promptly to the Agent a written confirmation, if such confirmation is requested by the Agent or any Lender, of each telephonic notice signed by an Authorized Officer. If the written confirmation differs in any material respect from the action taken by the Agent and the Lenders, the records of the Agent and the Lenders shall govern absent manifest error.

2.18    Interest Payment Dates; Interest and Fee Basis.    Interest accrued on each Floating Rate Advance shall be payable on each Payment Date, commencing with the first such date to occur after the date hereof, on any date on which the Floating Rate Advance is prepaid, whether due to acceleration or otherwise, and at maturity. Interest accrued on that portion of the outstanding principal amount of any Floating Rate Advance converted into a Eurocurrency

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Advance on a day other than a Payment Date shall be payable on the date of conversion. Interest accrued on each Eurocurrency Advance shall be payable on the last day of its applicable Interest Period, on any date on which the Eurocurrency Advance is prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued on each Eurocurrency Advance having an Interest Period longer than three months shall also be payable on the last day of each three-month interval during such Interest Period. Interest shall be calculated for actual days elapsed on the basis of a 360-day year, except for interest on Loans denominated in British Pounds Sterling and Loans comprised of Floating Rate Advances, which shall be calculated for actual days elapsed on the basis of a 365-day year. Facility Fees and utilization fees shall be calculated for actual days elapsed on the basis of a 365-day year. Interest shall be payable for the day an Advance is made but not for the day of any payment on the amount paid if payment is received prior to noon (local time) at the place of payment. If any payment of principal of or interest on an Advance shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the case of a principal payment, such extension of time shall be included in computing interest in connection with such payment.

2.19    Notification of Advances, Interest Rates, Prepayments and Commitment Reductions.    Promptly after receipt thereof, the Agent will notify each Lender of the contents of each Aggregate Commitment reduction notice, Borrowing Notice, Swing Line Borrowing Notice, Conversion/Continuation Notice, and repayment notice received by it hereunder. The Agent will notify each Lender of the interest rate applicable to each Eurocurrency Advance promptly upon determination of such interest rate and will give each Lender prompt notice of each change in the Alternate Base Rate.

2.20    Lending Installations.    Each Lender will book its Loans at the appropriate Lending Installation listed on the administrative information sheets provided to the Agent in connection herewith or such other Lending Installation designated by such Lender in accordance with the final sentence of this Section 2.20. All terms of this Agreement shall apply to any such Lending Installation and the Loans and any Notes issued hereunder shall be deemed held by each Lender for the benefit of any such Lending Installation. Each Lender may, by written notice to the Agent and the Borrowers in accordance with Article XIII, designate replacement or additional Lending Installations through which Loans will be made by it and for whose account Loan payments are to be made.

2.21    Non-Receipt of Funds by the Agent.    Unless the applicable Borrower or a Lender, as the case may be, notifies the Agent prior to the date on which it is scheduled to make payment to the Agent of (a) in the case of a Lender, the proceeds of a Loan or (b) in the case of any Borrower, a payment of principal, interest or fees to the Agent for the account of the Lenders, that it does not intend to make such payment, the Agent may assume that such payment has been made. The Agent may, but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption. If such Lender or such Borrower, as the case may be, has not in fact made such payment to the Agent, the recipient of such payment shall, on demand by the Agent, repay to the Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Agent until the date the Agent recovers such amount at a rate per annum equal to (i) in the case of payment by a Lender, the Federal Funds Effective Rate for such

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day for the first three days and, thereafter, the interest rate applicable to the relevant Loan or (ii) in the case of payment by any Borrower, the interest rate applicable to the relevant Loan.

2.22    Market Disruption.    Notwithstanding the satisfaction of all conditions referred to in Article II and Article IV with respect to any Advance in any Agreed Currency other than Dollars, if there shall occur on or prior to the date of such Advance any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which would in the reasonable opinion of the Agent or the Required Lenders make it impracticable for the Eurocurrency Loans comprising such Advance to be denominated in the Agreed Currency specified by the applicable Borrower, then the Agent shall forthwith give notice thereof to the Borrowers and the Lenders, and such Loans shall not be denominated in such Agreed Currency but shall, except as otherwise set forth in Section 2.15, be made on such Borrowing Date in Dollars, in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related Borrowing Notice or Conversion/Continuation Notice, as the case may be, as Floating Rate Loans, unless the applicable Borrower notifies the Agent at least one Business Day before such date that (a) it elects not to borrow on such date or (b) it elects to borrow on such date in a different Agreed Currency, as the case may be, in which the denomination of such Loans would in the opinion of the Agent and the Required Lenders be practicable and in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related Borrowing Notice or Conversion/Continuation Notice, as the case may be.

2.23    Judgment Currency.    If for the purposes of obtaining judgment in any court it is necessary to convert a sum due from any Borrower hereunder in the currency expressed to be payable herein (the “specified currency”) into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Agent could purchase the specified currency with such other currency at the Agent’s main Chicago office on the Business Day preceding that on which final, non-appealable judgment is given. The obligations of the Borrowers in respect of any sum due to any Lender or the Agent hereunder shall, notwithstanding any judgment in a currency other than the specified currency, be discharged only to the extent that on the Business Day following receipt by such Lender or the Agent (as the case may be) of any sum adjudged to be so due in such other currency such Lender or the Agent (as the case may be) may in accordance with normal, reasonable banking procedures purchase the specified currency with such other currency. If the amount of the specified currency so purchased is less than the sum originally due to such Lender or the Agent, as the case may be, in the specified currency, each of the Borrowers agrees, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender or the Agent, as the case may be, against such loss, and if the amount of the specified currency so purchased exceeds (a) the sum originally due to any Lender or the Agent, as the case may be, in the specified currency and (b) any amounts shared with other Lenders as a result of allocations of such excess as a disproportionate payment to such Lender under Section 12.2, such Lender or the Agent, as the case may be, agrees to remit such excess to the Borrowers.

2.24    Additional Borrowing Subsidiaries.    Upon the request by the Parent and approval by the Agent, any Subsidiary of the Parent may become a Borrowing Subsidiary hereunder provided that such Borrowing Subsidiary shall execute and deliver to the Agent a Joinder

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Agreement in substantially the form of the attached Exhibit F, together with such evidence of corporate authority to enter into such Joinder Agreement as the Agent may reasonably request, including without limitation, opinions of legal counsel regarding such corporate authority and the enforceability of such Joinder Agreement and such other documents, governmental certificates, agreement as the Agent may reasonably request.

2.25    Lender Replacement.    The Parent shall be permitted to replace with an Eligible Assignee any Lender which (a) makes an assertion of the type described in Section 3.3 or requests reimbursement for amounts owing pursuant to Section 3.1 or 3.2 (either for its own account or for the account of any of its participants), (b) requires any Borrower to pay Taxes in respect of such Lender or (c) fails to make any Advance requested by it if the Required Lenders have made the Advances requested of them pursuant to the same Borrowing Notice; provided that (i) such replacement does not conflict with any applicable law, rule, regulation, or directive, (ii) no Default or Unmatured Default shall have occurred and be continuing at the time of such replacement, (iii) prior to any such replacement, such Lender being replaced shall not have eliminated the continued need for repayment of amounts owing pursuant to Section 3.1 or 3.2, as applicable; and (iv) the Parent shall repay (or cause to be repaid) or the Eligible Assignee shall pay to the Lender being replaced, the amount of the Obligations owing to such Lender on the date of replacement (including any amounts owing under Sections 3.1 and 3.2).

ARTICLE III

YIELD PROTECTION; TAXES

3.1    Yield Protection.    (a) If, on or after the date of this Agreement, the adoption of any law or any governmental or quasi–governmental rule, regulation, policy, guideline or directive (whether or not having the force of law), or any change in the interpretation or administration thereof by any governmental or quasi-governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender or applicable Lending Installation with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:

(i)    subjects any Lender or any applicable Lending Installation to any Taxes, or changes the basis of taxation of payments (other than with respect to Excluded Taxes) to any Lender in respect of its Eurocurrency Loans or participations therein, or

(ii)    imposes or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation (other than reserves and assessments taken into account in determining the interest rate applicable to Eurocurrency Advances), or

(iii)    imposes any other condition the result of which is to increase the cost to any Lender or any applicable Lending Installation of making, funding or maintaining its Eurocurrency Loans (including, without limitation, any conversion of any Loan denominated in an Agreed Currency other than Euro into a Loan denominated in Euro), or reduces any amount receivable by any Lender or any applicable Lending

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Installation in connection with its Eurocurrency Loans, or requires any Lender or any applicable Lending Installation to make any payment calculated by reference to the amount of Eurocurrency Loans or interest received by it, by an amount deemed material by such Lender,

and the result of any of the foregoing is to increase the cost to such Lender or applicable Lending Installation, as the case may be, of making or maintaining its Eurocurrency Loans (including, without limitation, any conversion of any Loan denominated in an Agreed Currency other than Euro into a Loan denominated in Euro) or Commitment or to reduce the return received by such Lender or applicable Lending Installation, as the case may be, in connection with such Eurocurrency Loans or Commitment, then, within 15 days of demand by such Lender, the Borrowers shall pay such Lender, such additional amount or amounts as will compensate such Lender for the actual increased cost or reduction in amount received.

(b)    If any law or any governmental or quasi–governmental rule, regulation, policy, guideline or directive of any jurisdiction outside of the United States of America or any subdivision thereof (whether or not having the force of law), imposes or deems applicable any reserve requirement against or fee with respect to assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation and the result of the foregoing is to increase the cost to such Lender or applicable Lending Installation of making or maintaining its Eurocurrency Loans to or of making or maintaining its Commitment to any Borrower that is not incorporated under the laws of the United States of America or a state thereof (each a “Non-U.S. Borrower”) or to reduce the return received by such Lender or applicable Lending Installation in connection with such Eurocurrency Loans or Commitment to any Non-U.S. Borrower, then, within 15 days of demand by such Lender, such Non-U.S. Borrower shall pay such Lender such additional amount or amounts as will compensate it for such increased cost or reduction in amount received, provided that such Non-U.S. Borrower shall not be required to compensate any Lender for such non-U.S. reserve costs or fees to the extent that an amount equal to such reserve costs or fees is received by such Lender as a result of the calculation of the interest rate applicable to Eurocurrency Advances pursuant to clause (i)(b) of the definition of “Eurocurrency Rate.”

3.2    Changes in Capital Adequacy Regulations.    If a Lender determines the amount of capital required or expected to be maintained by such Lender, any Lending Installation of such Lender or any corporation controlling such Lender is increased as a result of a Change, then, within 15 days of demand by such Lender, the Borrowers shall pay such Lender the amount necessary to compensate for any shortfall in the rate of return on the portion of such increased capital which such Lender determines is attributable to this Agreement, its Outstanding Credit Exposure or its Commitment to make Loans, as the case may be, hereunder (after taking into account such Lender’s policies as to capital adequacy). “Change” means (a) any change after the date of this Agreement in the Risk–Based Capital Guidelines or (b) any adoption of or change in any other law, governmental or quasi–governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having the force of law) after the date of this Agreement which affects the amount of capital required or expected to be maintained by any Lender or any Lending Installation or any corporation controlling any Lender. “Risk–Based Capital Guidelines” means (i) the risk–based capital guidelines in effect in the United States on the date of this Agreement, including transition rules, and (ii) the corresponding capital

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regulations promulgated by regulatory authorities outside the United States implementing the July 1988 report of the Basle Committee on Banking Regulation and Supervisory Practices Entitled “International Convergence of Capital Measurements and Capital Standards,” including transition rules, and any amendments to such regulations adopted prior to the date of this Agreement.

3.3    Availability of Types of Advances.    If any Lender determines that maintenance of its Eurocurrency Loans at a suitable Lending Installation would violate any applicable law, rule, regulation, or directive, whether or not having the force of law, or if the Required Lenders determine that (a) deposits of a type, currency and maturity appropriate to match fund Eurocurrency Advances are not available or (b) the interest rate applicable to Eurocurrency Advances does not accurately reflect the cost of making or maintaining Eurocurrency Advances, then the Agent shall suspend the availability of Eurocurrency Advances and require any affected Eurocurrency Advances to be repaid or converted to Floating Rate Advances, subject to the payment of any funding indemnification amounts required by Section 3.4. If the Agent suspends the availability of Eurocurrency Advances under this Section 3.3, the availability of Eurocurrency Advances shall be reinstated upon, as applicable (i) the replacement of the Lender (or Lenders) which determined that maintenance of its Eurocurrency Loans at a suitable Lending Installation would violate any applicable law, rule, regulation, or directive, or (b) the Required Lenders determine that (A) deposits of a type, currency and maturity appropriate to match fund Eurocurrency Advances are once again available or (B) the interest rate applicable to Eurocurrency Advances once again accurately reflects the cost of making or maintaining Eurocurrency Advances.

3.4    Funding Indemnification.    If any payment of a Eurocurrency Advance occurs on a date which is not the last day of the applicable Interest Period, whether because of acceleration, prepayment or otherwise, or a Eurocurrency Advance is not made on the date specified by the applicable Borrower for any reason other than default by the Lenders, each of the Borrowers will indemnify each Lender for any loss or cost incurred by it resulting therefrom, including, without limitation, any actual loss or cost in liquidating or employing deposits acquired to fund or maintain such Eurocurrency Advance.

3.5    Taxes.    (a) All payments by the Borrowers to or for the account of any Lender or the Agent hereunder or under any Note shall be made free and clear of and without deduction for any and all Taxes. If any Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender or the Agent, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.5) such Lender or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions, (iii) such Borrower shall pay the full amount deducted to the relevant authority in accordance with applicable law and (iv) such Borrower shall furnish to the Agent the original copy of a receipt evidencing payment thereof within 30 days after such payment is made. Each Lender agrees to use reasonable efforts to obtain the benefit of any tax or other credit or allowance which may be available to it as a consequence of any such deduction made by a Borrower in accordance herewith and will pay to such Borrower an amount equal to all or such portion of the net benefit actually received by such Lender as such Lender shall reasonably allocate to this Agreement. Notwithstanding the

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foregoing, a Lender shall not be required to apply for any tax credit or allowance or to make a payment to a Borrower under this Section 3.5(a) if such Lender determines in good faith that to do so would be prejudicial to its own interests. Should it later develop because of loss carrybacks, tax credit carrybacks, or otherwise that a Lender in fact did not receive the net benefits so paid to such Borrower, such Borrower shall promptly reimburse such Lender for the amount by which the payment theretofore made to the Borrower exceeds the net benefit actually so received and reasonably allocated to this Agreement by such Lender, as reasonably determined in good faith by such Lender.

(b)    In addition, each Borrower hereby agrees to pay any present or future stamp or documentary taxes and any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or under any Note or from the execution or delivery of, or otherwise with respect to, this Agreement or any Note (“Other Taxes”).

(c)    Each Borrower hereby agrees to indemnify the Agent and each Lender for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed on amounts payable under this Section 3.5) paid by the Agent or such Lender and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. Payments due under this indemnification shall be made within 30 days of the date the Agent or such Lender makes demand therefor pursuant to Section 3.6.

(d)    Each Lender that is not incorporated under the laws of the United States of America or a state thereof (each a “Non-U.S. Lender”) agrees that it will, not more than ten Business Days after the date of this Agreement, (i) deliver to each of the Borrowers and the Agent two duly completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes, and (ii) deliver to each of the Borrowers and the Agent a United States Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to an exemption from United States backup withholding tax. Each Non-U.S. Lender further undertakes to deliver to each of the Borrowers and the Agent (A) renewals or additional copies of such form (or any successor form) on or before the date that such form expires or becomes obsolete, and (B) after the occurrence of any event requiring a change in the most recent forms so delivered by it, such additional forms or amendments thereto as may be reasonably requested by any Borrower or the Agent. All forms or amendments described in the preceding sentence shall certify that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes, unless an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form or amendment with respect to it and such Lender advises the Borrowers and the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax.

(e)    For any period during which a Non-U.S. Lender has failed to provide the Borrowers with an appropriate form pursuant to clause (d), above (unless such failure is due to a change in treaty, law or regulation, or any change in the interpretation or administration thereof by any governmental authority, occurring subsequent to the date on which a form originally was

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required to be provided), such Non-U.S. Lender shall not be entitled to indemnification under this Section 3.5 with respect to Taxes imposed by the United States; provided that, should a Non-U.S. Lender which is otherwise exempt from or subject to a reduced rate of withholding tax become subject to Taxes because of its failure to deliver a form required under clause (iv), above, the Borrowers shall take such steps as such Non-U.S. Lender shall reasonably request to assist such Non-U.S. Lender to recover such Taxes.

(f)    Any Lender that is entitled to an exemption from or reduction of withholding tax with respect to payments under this Agreement or any Note pursuant to the law of any relevant jurisdiction or any treaty shall deliver to the Borrowers (with a copy to the Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate.

(g)    If the U.S. Internal Revenue Service or any other governmental authority of the United States or any other country or any political subdivision thereof asserts a claim that the Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered or properly completed, because such Lender failed to notify the Agent of a change in circumstances which rendered its exemption from withholding ineffective, or for any other reason), such Lender shall indemnify the Agent fully for all amounts paid, directly or indirectly, by the Agent as tax, withholding therefor, or otherwise, including penalties and interest, and including taxes imposed by any jurisdiction on amounts payable to the Agent under this subsection, together with all costs and expenses related thereto (including attorneys fees and time charges of attorneys for the Agent, which attorneys may be employees of the Agent). The obligations of the Lenders under this Section 3.5(g) shall survive the payment of the Obligations and termination of this Agreement.

3.6    Lender Statements; Survival of Indemnity.    To the extent reasonably possible, each Lender shall designate an alternate Lending Installation with respect to its Eurocurrency Loans to reduce any liability of any Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurocurrency Advances under Section 3.3, so long as such designation is not, in the judgment of such Lender, disadvantageous to such Lender. Each Lender shall deliver a written statement of such Lender to the Borrowers (with a copy to the Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable detail the calculations upon which such Lender determined such amount and shall be final, conclusive and binding on the Borrowers in the absence of manifest error. Determination of amounts payable under such Sections in connection with a Eurocurrency Loan shall be calculated as though each Lender funded its Eurocurrency Loan through the purchase of a deposit of the type, currency and maturity corresponding to the deposit used as a reference in determining the Eurocurrency Rate applicable to such Loan, whether in fact that is the case or not. Unless otherwise provided herein, the amount specified in the written statement of any Lender shall be payable on demand after receipt by the Borrowers of such written statement. The obligations of each of the Borrowers under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and termination of this Agreement.

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ARTICLE IV

CONDITIONS PRECEDENT

4.1    Initial Credit Extensions.    The Lenders shall not be required to make the initial Credit Extensions hereunder unless, prior to or concurrently with the making of such initial Credit Extensions, the following conditions precedent have been satisfied:

4.1.1    Closing Documents.    The Agent shall have received on or before the Closing Date the following, each dated such date (unless otherwise specified) and duly executed by the respective party or parties thereto, in form and substance satisfactory to the Agent and the Lenders, and (except for the Notes) with sufficient copies for the Agent and each Lender:

(a)    Copies of the articles or certificate of incorporation of the Parent, together with all amendments, and a certificate of good standing, each certified by the appropriate governmental officer in its jurisdiction of incorporation.

(b)    Copies, certified by the Secretary or Assistant Secretary of the Parent, of its by–laws and of its Board of Directors’ resolutions and of resolutions or actions of any other body authorizing the execution of the Loan Documents to which the Parent is a party.

(c)    An incumbency certificate, executed by the Secretary or Assistant Secretary of the Parent, which shall identify by name and title and bear the signatures of the Authorized Officers and any other officers of the Parent authorized to sign the Loan Documents to which the Parent is a party, upon which certificate the Agent and the Lenders shall be entitled to rely until informed of any change in writing by the Parent.

(d)    A certificate of good standing for each Borrowing Subsidiary (to the extent such concept applies to such entity), each certified by the appropriate governmental officer in its jurisdiction of formation.

(e)    Copies, certified by the Secretary or Assistant Secretary, director or other appropriate official of each Borrowing Subsidiary, of its organizational documents, together with all amendments thereto, by–laws, and of its Board of Directors’ (or functional equivalent thereof’s) resolutions and of resolutions or actions of any other body authorizing the execution of the Loan Documents to which each such Borrowing Subsidiary is a party.

(f)    An incumbency certificate, executed by the Secretary or Assistant Secretary, director or other appropriate official of each Borrowing Subsidiary, which shall identify by name and title and bear the signatures of the Authorized Officers and any other officers of each such Borrowing Subsidiary authorized to sign the Loan Documents to which such Borrowing Subsidiary is a party, upon which certificate the Agent and the Lenders shall be entitled to rely until informed of any change in writing by the applicable Borrowing Subsidiary.

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(g)    A certificate, signed by the chief financial officer of the Parent, stating that on the Closing Date (A) no Default or Unmatured Default has occurred and is continuing, (B) each of the representations and warranties set forth in Article V of this Agreement is true and correct on and as of the Closing Date, (C) there has occurred no material adverse change in the consolidated financial condition of the Parent from that reflected in the Parent’s consolidated financial statements as of December 31, 2000, and (d) since December 31, 2000, there has been no change in the business, Property, prospects, condition (financial or otherwise) or results of operations of the Parent and its Subsidiaries which could reasonably be expected to have a Material Adverse Effect.

(h)    A written opinion of William C. Lemmer, general counsel of the Parent, addressed to the Agent and the Lenders in substantially the form of Exhibit A-1.

(i)    A written opinion of the outside counsel to the Parent and the Borrowing Subsidiaries, addressed to the Agent and the Lenders in substantially the form of Exhibit A-2.

(j)    Any Notes requested by a Lender pursuant to Section 2.16 payable to the order of each such requesting Lender.

(k)    Written money transfer instructions, in substantially the form of Exhibit D, addressed to the Agent and signed by an Authorized Officer, together with such other related money transfer authorizations as the Agent may have reasonably requested.

(l)    This Agreement, and all its attached Exhibits and Schedules.

(m)    The Guaranty.

(n)    Such other documents as any Lender or its counsel may have reasonably requested.

4.1.2    Termination of Existing Credit Agreement.    On March 8, 2002, the obligations of the Borrowers under the Existing Credit Agreement shall have been repaid and all obligations of the Borrowers and the lenders under the Existing Credit Agreement shall have been terminated (including, without limitation, any obligations of any Subsidiary of the Parent in respect of guaranties, security agreements executed in connection with such Existing Credit Agreement but excluding any obligations which expressly survive the repayment of the amounts owing under the Existing Credit Agreement).

4.1.3    Fees.

(a)    All fees, costs, and expenses of Bank One and its affiliates (including, without limitation, legal fees and expenses of counsel to the Agent) to be paid on the Closing Date shall have been paid, or arrangements acceptable to Bank One shall have been made for the payment thereof.

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(b)    The Parent shall have paid to the Agent and the Arranger, for their respective accounts, the fees agreed to pursuant to the terms of that certain letter agreement dated February 8, 2002, among the Parent, the Agent and the Arranger, or as otherwise agreed from time to time.

4.2    Each Credit Extension.    The Lenders shall not (except as otherwise set forth in Section 2.5.4 with respect to Revolving Loans for the purpose of repaying Swing Line Loans) be required to make any Credit Extension unless on the applicable Credit Extension Date:

(a)    There exists no Default or Unmatured Default.

(b)    The representations and warranties contained in Article V are true and correct as of such Credit Extension Date except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct on and as of such earlier date.

Each Borrowing Notice or Swing Line Borrowing Notice, as the case may be, with respect to each such Credit Extension shall constitute a representation and warranty by the Borrowers that the conditions contained in Sections 4.2(a) and (b) have been satisfied. The Agent may require a duly completed compliance certificate in substantially the form of Exhibit B as a condition to making a Credit Extension .

ARTICLE V

REPRESENTATIONS AND WARRANTIES

The Borrowers represent and warrant to the Lenders that:

5.1    Existence and Standing.    Each of the Borrowers is a corporation, partnership or limited liability company duly and properly incorporated or organized, as the case may be, validly existing and (to the extent such concept applies to such entity) in good standing under the laws of its jurisdiction of incorporation or organization and has all requisite authority to conduct its business in each jurisdiction in which its business is conducted. Each of the Borrowers and each of the Subsidiaries is duly qualified and in good standing (to the extent applicable) as a foreign corporation or other business entity and is duly authorized to conduct its business in each jurisdiction in which its business is conducted or proposed to be conducted except where the failure to qualify may not reasonably be expected to have a Material Adverse Effect.

5.2    Authorization and Validity.    Each of the Borrowers has the power and authority and legal right to execute and deliver the Loan Documents to which it is a party and to perform its obligations thereunder. The execution and delivery by the Borrowers of the Loan Documents to which it is a party and the performance of its obligations thereunder have been duly authorized by proper corporate proceedings, and the Loan Documents to which each of the Borrowers is a party constitute legal, valid and binding obligations of each of the Borrowers enforceable against each of such Borrowers in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.

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5.3    No Conflict; Government Consent.    Neither the execution and delivery by each of the Borrowers of the Loan Documents to which it is a party, nor the consummation of the transactions therein contemplated, nor compliance with the provisions thereof will violate (i) any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on any Borrower or any of their respective Subsidiaries or (ii) any Borrower’s or any of their Subsidiaries’ articles or certificate of incorporation, partnership agreement, certificate of partnership, articles or certificate of organization, by–laws, or operating or other management agreement, as the case may be, or (iii) the provisions of any indenture, instrument or agreement to which any of the Borrowers or any of their respective Subsidiaries is a party or is subject, or by which it, or its Property, is bound, or conflict with or constitute a default thereunder, or result in, or require, the creation or imposition of any Lien in, of or on the Property of any Borrower or a Subsidiary pursuant to the terms of any such indenture, instrument or agreement. No order, consent, adjudication, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, or other action in respect of any governmental or public body or authority, or any subdivision thereof, which has not been obtained by the Borrowers or any of their Subsidiaries, is required to be obtained by any Borrower or any of their Subsidiaries in connection with the execution and delivery of the Loan Documents, the borrowings under this Agreement, the payment and performance by the Borrowers of the Obligations or the legality, validity, binding effect or enforceability of any of the Loan Documents.

5.4    Financial Statements.    The December 31, 2000 consolidated financial statements of the Parent and its Subsidiaries heretofore delivered to the Lenders were prepared in accordance with generally accepted accounting principles in effect on the date such statements were prepared and fairly present the consolidated financial condition and operations of the Parent and its Subsidiaries at such date and the consolidated results of their operations for the period then ended.

5.5    Taxes.    The Parent and its Subsidiaries have filed all United States federal tax returns and all other tax returns which are required to be filed and have paid all taxes due pursuant to said returns or pursuant to any assessment received by the Parent or any of its Subsidiaries, except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided in accordance with Agreement Accounting Principles and as to which no Lien exists. The United States income tax returns of the Parent and its Subsidiaries have been audited by the Internal Revenue Service (or the applicable statute of limitations has expired) through the years ending December 31, 1997. No tax liens have been filed and no claims are being asserted with respect to any such taxes. The charges, accruals and reserves on the books of the Parent and its Subsidiaries in respect of any taxes or other governmental charges are adequate.

5.6    Litigation and Contingent Obligations.    There is no litigation, arbitration, governmental investigation, proceeding or inquiry pending or, to the knowledge of any of their officers, threatened against or affecting the Parent or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect or which seeks to prevent, enjoin or delay the making of any Credit Extensions. Other than any liability incident to any litigation, arbitration or proceeding which could not reasonably be expected to have a Material Adverse Effect, the Parent has no material contingent obligations not provided for or disclosed in the financial statements referred to in Section 5.4.

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5.7    Subsidiaries.    Schedule 1 contains an accurate list of all Subsidiaries of the Parent as of the date of this Agreement, setting forth their respective jurisdictions of organization and the percentage of their respective capital stock or other ownership interests owned by the Parent or other Subsidiaries. Each Borrowing Subsidiary is a direct, Wholly-Owned Subsidiary, all of the issued and outstanding shares of capital stock of which is owned by the Parent and Cooper Energy Services International, Inc., a direct, Wholly-Owned Subsidiary of the Parent. All of the issued and outstanding shares of capital stock of each Subsidiary or other ownership interests of such Subsidiaries have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non–assessable, and are free and clear of all Liens. No authorized but unissued or treasury shares of capital stock of any Subsidiary are subject to any option, warrant, right to call, or commitment of any kind or character. Except as set forth on Schedule 1, no Subsidiary has any outstanding stock or securities convertible into or exchangeable for any shares of its capital stock, or any right issued to any Person (either preemptive or other) to subscribe for or to purchase, or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments, or claims of any character relating to any of its capital stock or any stock or securities convertible into or exchangeable for any of its capital stock other than as expressly set forth in the certificate or articles of incorporation or other charter document of the Parent or such Subsidiary.

5.8    ERISA.    The Unfunded Liabilities of all Single Employer Plans do not in the aggregate exceed $50,000,000. Neither the Parent nor any other member of the Controlled Group has incurred, or is reasonably expected by the Parent to incur, any withdrawal liability to Multiemployer Plans. Each Plan complies in all material respects with all applicable requirements of law and regulations, no material Reportable Event has occurred with respect to any Plan, neither the Parent nor any other member of the Controlled Group has withdrawn from any Multiemployer Plan or initiated steps to do so, and no steps have been taken to reorganize or terminate any Single Employer Plan.

5.9    Accuracy of Information.    No information, exhibit or report furnished by the Parent or any of its Subsidiaries to the Agent or to any Lender in connection with the negotiation of, or compliance with, the Loan Documents contained any material misstatement of fact or omitted to state a material fact or any fact necessary to make the statements contained therein not misleading.

5.10    Regulation U.    Margin stock (as defined in Regulation U) constitutes less than 25% of the value of those assets of the Parent and its Subsidiaries which are subject to any limitation on sale, pledge, or other restriction hereunder.

5.11    Material Agreements.    Neither the Parent nor any Subsidiary is a party to any agreement or instrument or subject to any charter or other corporate restriction which could reasonably be expected to have a Material Adverse Effect. Neither the Parent nor any Subsidiary is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any agreement to which it is a party, which default could reasonably be expected to have a Material Adverse Effect or (ii) any agreement or instrument evidencing or governing Material Indebtedness.

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5.12    Compliance With Laws.    The Parent and its Subsidiaries have complied with all applicable statutes, rules, regulations, orders and restrictions of any domestic or foreign government or any instrumentality or agency thereof having jurisdiction over the conduct of their respective businesses or the ownership of their respective Property except for any failure to comply with any of the foregoing which could not reasonably be expected to have a Material Adverse Effect.

5.13    Ownership of Properties.    The Parent and its Subsidiaries will have good title, free of all Liens other than those permitted by Section 6.15, to all of the Property and assets reflected in the Parent’s most recent consolidated financial statements provided to the Agent as owned by the Parent and its Subsidiaries.

5.14    Plan Assets; Prohibited Transactions.    None of the Borrowers is an entity deemed to hold “plan assets” within the meaning of 29 C.F.R. § 2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan (within the meaning of Section 4975 of the Code), and neither the execution of this Agreement nor the making of Credit Extensions hereunder gives rise to a prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code.

5.15    Environmental Matters.    In the ordinary course of its business, the officers of the Parent consider the effect of Environmental Laws on the business of the Parent and its Subsidiaries, in the course of which they identify and evaluate potential risks and liabilities accruing to the Parent and its Subsidiaries due to Environmental Laws. On the basis of this consideration, the Parent has concluded that Environmental Laws cannot reasonably be expected to have a Material Adverse Effect. None of the Parent or any of its Subsidiaries has received any notice to the effect that its operations are not in material compliance with any of the requirements of applicable Environmental Laws or are the subject of any federal or state investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous waste or substance into the environment, which non–compliance or remedial action is reasonably expected by the Parent to have a Material Adverse Effect.

5.16    Investment Company Act.    None of the Parent or any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

5.17    Public Utility Holding Company Act.    None of the Parent or any of its Subsidiaries is a “holding company” or a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company”, within the meaning of the Public Utility Holding Company Act of 1935, as amended.

ARTICLE VI

COVENANTS

During the term of this Agreement, unless the Required Lenders shall otherwise consent in writing:

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6.1    Financial Reporting.    The Parent will maintain, for itself and each Subsidiary, a system of accounting established and administered in accordance with generally accepted accounting principles, and furnish to the Lenders:

(a)    Within 90 days after the close of each of its fiscal years, an unqualified audit report certified by Ernst & Young, L.L.P., or any other independent certified public accountants reasonably acceptable to the Lenders, prepared in accordance with Agreement Accounting Principles on a consolidated basis for itself and its Subsidiaries, including a balance sheet as of the end of such period, related profit and loss and statement of change of shareholders’ equity, and a statement of cash flows, accompanied by a certificate of said accountants that, in the course of their examination necessary for their certification of the foregoing, they have obtained no knowledge of any Default or Unmatured Default, or if, in the opinion of such accountants, any Default or Unmatured Default shall exist, stating the nature and status thereof. The 90-day period referenced above shall be extended for up to 15 days for any fiscal year as to which the Parent has received an extension from the SEC for the filing of its annual report on SEC Form 10K.

(b)    Within 45 days after the close of the first three quarterly periods of each of its fiscal years, for itself and its Subsidiaries, a consolidated unaudited balance sheet as at the close of each such period and consolidated profit and loss and statement of change of shareholders’ equity and a statement of cash flows for the period from the beginning of such fiscal year to the end of such quarter, all certified by an Authorized Officer of the Parent. The 45-day period referenced above shall be extended for up to 15 days for any fiscal quarter as to which the Parent has received an extension from the SEC for the filing of its quarterly report on SEC Form 10Q.

(c)    Together with the financial statements required under Sections 6.1(a) and (b), a compliance certificate in substantially the form of Exhibit B signed by an Authorized Officer of the Parent showing the calculations necessary to determine compliance with this Agreement and stating that no Default or Unmatured Default exists, or if any Default or Unmatured Default exists, stating the nature and status thereof.

(d)    As soon as possible and in any event (i) within 30 days after the Parent knows that any Termination Event described in clause (a) of the definition of Termination Event with respect to any Plan has occurred, and (ii) within 10 Business Days after the Parent knows that any other Termination Event with respect to any Plan has occurred, a statement, signed by an Authorized Officer of the Parent, describing such Termination Event and the action which the Parent proposes to take with respect thereto.

(e)    As soon as possible and in any event within 30 days after receipt by the Parent, a copy of (a) any notice or claim to the effect that the Parent or any of its Subsidiaries is or may be liable to any Person as a result of the release by the Parent, any of its Subsidiaries, or any other Person of any toxic or hazardous waste or substance into the environment, and (b) any notice alleging any violation of any federal, state or local environmental, health or safety law or regulation by the Parent or any of its Subsidiaries, which, in either case, could reasonably be expected to exceed $5,000,000.

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(f)    Promptly upon the furnishing thereof to the shareholders of the Parent, copies of all financial statements, reports and proxy statements so furnished.

(g)    Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports which the Parent or any of its Subsidiaries files with the Securities and Exchange Commission.

(h)    Such other information (including non–financial information) as the Agent or any Lender may from time to time reasonably request.

6.2    Use of Proceeds.    The Parent will, and will cause each Subsidiary to, use the proceeds of the Credit Extensions for working capital and other general corporate purposes. The Borrower will not, nor will it permit any Subsidiary to, use any of the proceeds of the Advances to purchase or carry any “margin stock” (as defined in Regulation U).

6.3    Notice of Default.    The Parent will, and will cause each Subsidiary to, give prompt notice in writing to the Lenders of the occurrence of any Default or Unmatured Default and of any other development, financial or otherwise, which could reasonably be expected to have a Material Adverse Effect.

6.4    Conduct of Business.    The Parent will, and will cause each Subsidiary to, continue to operate its core business in the oil field service industry and carry on and conduct its business in substantially the same manner as it is presently conducted and do all things necessary to remain duly incorporated or organized, validly existing and (to the extent such concept applies to such entity) in good standing as a domestic corporation, partnership or limited liability company in its jurisdiction of incorporation or organization, as the case may be, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted where the failure to so maintain its authority could reasonably be expected to cause a Material Adverse Effect; provided, however, that Subsidiaries may enter into mergers permitted by Section 6.11 and may (other than in the case of Borrowing Subsidiaries) be liquidated if such liquidation may not reasonably be expected to have a Material Adverse Effect.

6.5    Taxes.    The Parent will, and will cause each Subsidiary to, timely file complete and correct United States federal and applicable foreign, state and local tax returns required by law and pay when due all taxes, assessments and governmental charges and levies upon it or its income, profits or Property, except those which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside in accordance with Agreement Accounting Principles.

6.6    Insurance.    The Parent will, and will cause each Subsidiary to, maintain with financially sound and reputable insurance companies insurance on all their Property in such amounts and covering such risks as is consistent with sound business practice, and the Parent will furnish to any Lender upon request a summary of the insurance carried.

6.7    Compliance with Laws.    The Parent will, and will cause each Subsidiary to, comply with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject including, without limitation, all Environmental Laws, the failure to

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comply with which could reasonably be expected to have a Material Adverse Effect or for which the compliance is being contested in good faith by appropriate proceedings.

6.8    Maintenance of Properties.    The Parent will, and will cause each Subsidiary to, do all things necessary to maintain, preserve, protect and keep its Property in good repair, working order and condition, and make all necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times.

6.9    Inspection.    The Parent will, and will cause each Subsidiary to, permit the Agent, by its representatives and agents, to inspect any of the Property, books and financial records of the Parent and each Subsidiary, to examine and make copies of the books of accounts and other financial records of the Parent and each Subsidiary, and to discuss the affairs, finances and accounts of the Parent and each Subsidiary with, and to be advised as to the same by, their respective officers at such reasonable times and intervals as the Agent may designate The Agent shall give the Parent three (3) Business Days’ notice of each such inspection, shall schedule such inspections during normal business hours, shall conduct the inspection in a manner that does not unreasonably and materially interfere with the business operations of the Parent and its Subsidiaries, and if no Default has occurred and is continuing, shall conduct no more than one inspection during each calendar year. When no Default has occurred and is continuing, any such inspection or examination shall be at the Agent’s cost and expense. When a Default has occurred and is continuing, any such inspection or examination shall be at the Parent’s cost and expense.

6.10    Capital Stock and Dividends.    If a Default or Unmatured Default exists before or after giving effect thereto, the Parent will not, nor will it permit any Subsidiary to, (a) issue (except by a Subsidiary to the Parent or any Wholly-Owned Subsidiary) any preferred stock, other capital stock or any equity securities of any kind, in each case, subject to sinking fund payments or other mandatory redemptions or payments prior to the Facility Termination Date or (b) declare or pay any dividends or make any distributions on its capital stock (other than dividends payable in its own capital stock and dividends payable in cash to the Parent or a Wholly-Owned Subsidiary of the Parent) or redeem, repurchase or otherwise acquire or retire any of its capital stock at any time outstanding.

6.11    Indebtedness.

(a)    The Parent will not, nor will it permit any Subsidiary to, create, incur or suffer to exist any Indebtedness, except (i) Indebtedness which, in accordance with Agreement Accounting Principles is required to be shown on the balance sheet of such Person (other than Indebtedness owed by one of the Parent’s Wholly-Owned Subsidiaries to the Parent or to another Wholly-Owned Subsidiary), (ii) in an aggregate amount outstanding at any time not in excess of $100,000,000 (A) Contingent Obligations in respect of a Person other than the Parent or another Subsidiary, (B) Attributable Debt as lessor or guarantor under Synthetic Leases or, without duplication, other Off-Balance Sheet Liabilities, and (C) Attributable Debt as seller, originator, or guarantor under accounts or notes receivable financing or securitization programs, and (iii) obligations of the Parent under the Parent’s Forward Equity Purchase Program in an aggregate amount outstanding at any time not in excess of $100,000,000.

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        (b)    Notwithstanding the foregoing, the Parent will not permit any Subsidiary to create, incur or suffer to exist any Indebtedness (exclusive of any Indebtedness in the form of the Obligations) in an aggregate amount outstanding at any time in excess of the greater of (i) $200,000,000 and (ii) 15% of Consolidated Net Worth at such time; provided that, with respect to any Subsidiary acquired by the Parent (or by any Subsidiary) after the date of this Agreement, for purposes of calculating compliance with this Section 6.11(b), there shall be excluded from such calculation the amount of Indebtedness owed by any such Subsidiary prior to its acquisition, other than any Indebtedness created in anticipation of such acquisition, if the Parent provides to the Agent a balance sheet of such acquired Subsidiary as of a recent date evidencing the amount of such Indebtedness. To satisfy the foregoing requirement, any such balance sheet must be (y) audited by independent certified public accountants reasonably acceptable to the Agent or (z) if the Parent provides to the Agent the balance sheet of such acquired Subsidiary for the fiscal year of such Subsidiary then most recently ended, but such year end balance sheet is either (1) audited by independent certified public accountants not reasonably acceptable to the Agent or (2) audited by independent certified public accountants reasonably acceptable to the Agent, but not relating to a recent date as reasonably determined by the Agent, then reviewed by independent certified public accountants reasonably acceptable to the Agent.

6.12    Merger.    The Parent will not, nor will it permit any Subsidiary to, merge or consolidate with or into any other Person, except that (a) a Wholly-Owned Subsidiary may merge into the Parent or any Wholly-Owned Subsidiary of the Parent and (b) the Parent or any Subsidiary may merge or consolidate with any other Person, so long as immediately thereafter (and after giving effect thereto), (i) no Default or Unmatured Default exists, (ii) in the case of a merger or a consolidation involving the Parent, the Parent is the continuing or surviving corporation, and (iii) in the case of a merger or a consolidation involving a Borrowing Subsidiary, if such Subsidiary is not the continuing or surviving entity, then the continuing or surviving entity has agreed in writing to assume the obligations of such Subsidiary under the Loan Documents.

6.13    Sale of Assets.    The Parent will not, nor will it permit any Subsidiary to enter into any Asset Disposition from on and after the date of this Agreement, except for Asset Dispositions that in the aggregate do not constitute a Substantial Portion of the Property of the Parent and the Subsidiaries. Notwithstanding the foregoing, the Parent (or its Subsidiaries) may enter into and consummate an Asset Disposition that individually, or when aggregated with prior Asset Dispositions made after the date of this Agreement, would constitute a Substantial Portion of the Property of the Parent and its Subsidiaries if: (a) concurrently with its entering into such Asset Disposition, the Parent gives notice of its intent to (i) use the net cash proceeds from such Asset Disposition to replace the assets which are the subject of such disposition or (ii) otherwise reinvest such net cash proceeds in capital assets, (b) such replacement or reinvestment is completed within 180 days after the date the Parent (or its applicable Subsidiary) receives the net cash proceeds from the applicable Asset Disposition, and (c) the net proceeds received from such Asset Disposition equal or exceed (in the reasonable opinion of two Authorized Officers of the Parent) the fair market value of the Property transferred.

6.14    Sale of Accounts.    The Parent will not, nor will it permit any Subsidiary to, sell or otherwise dispose of any notes receivable or accounts receivable arising in the ordinary course of business on terms customary in the trade and which are due within 120 days after the invoice

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date, with or without recourse, in an amount that exceeds $150,000,000 in the aggregate face amount at any time outstanding.

6.15    Liens.    The Parent will not, nor will it permit any Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the Property of the Parent or any of its Subsidiaries, except:

        (a)    Liens for taxes, assessments or governmental charges or levies on its Property if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with Agreement Accounting Principles shall have been set aside on its books.

        (b)    Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ liens and other similar liens arising in the ordinary course of business which secure payment of obligations not more than 60 days past due or which are being contested in good faith by appropriate proceedings and for which adequate reserves shall have been set aside on its books.

        (c)    Liens arising out of pledges or deposits under worker’s compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation.

        (d)    Utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of the Borrower or its Subsidiaries.

        (e)    Liens existing on the date hereof and described in Schedule 2.

        (f)    Liens other than those permitted by subsections (a) through (e) above securing Indebtedness not at any time exceeding in the aggregate 10% of Consolidated Net Worth.

6.16    Affiliates.    The Parent will not, and will not permit any Subsidiary to, enter into any transaction (including, without limitation, the purchase or sale of any Property or service) with, or make any payment or transfer to, any Affiliate except in the ordinary course of business and pursuant to the reasonable requirements of the Parent’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Parent or such Subsidiary than the Borrower or such Subsidiary would obtain in a comparable arms–length transaction.

6.17    Environmental Matters.    The Parent will, and will cause each Subsidiary to, (a) conduct its business so as to comply with all applicable material Environmental Laws and shall promptly take corrective action to remedy any non-compliance with any applicable material Environmental Law, except where failure to comply or take action could not reasonably be expected to have a Material Adverse Effect and (b) establish and maintain a management system designed to ensure compliance with applicable material Environmental Laws and minimize financial and other risks to the Parent and each Subsidiary arising under applicable material Environmental Laws or as the result of environmentally related injuries to Persons or Property. If the Agent or any Lender at any time has a reasonable basis to believe that there may be a

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material violation of any Environmental Law by the Parent or any of the Subsidiaries, or any material liability arising thereunder or related to a Release of Hazardous Materials on any real property owned, leased, or operated by the Borrower or any of the Subsidiaries or a Release on real property adjacent to such real property, then the Parent shall, upon the request of the Agent or such Lender, provide the Agent and each Lender with all such reports, certificates, engineering studies, and other written material or data relating thereto as the Agent or any Lender may reasonably require.

6.18    Restrictions on Subsidiary Payments.    The Parent shall not, nor shall it permit any Subsidiary to, enter into any indenture, agreement, instrument or other arrangement which, directly or indirectly, prohibits or restrains, or has the effect of prohibiting or restraining, or imposes materially adverse conditions upon the ability of any Subsidiary to (a) pay dividends or make other distributions on its capital stock, (b) make loans or advances to the Parent, or (c) repay loans or advances from the Parent.

6.19    ERISA Compliance.    With respect to any Plan, neither the Parent nor any Subsidiary shall (a) incur any “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA) in excess of $25,000,000, whether or not waived; (b) permit the occurrence of any Termination Event which could result in a liability to the Borrower or any other member of the Controlled Group in excess of $25,000,000; (c) become an “employer” (as such term is defined in Section 3(5) of ERISA) required to contribute to any Multiemployer Plan or a “substantial employer” (as such term in defined in Section 4001(a)(2) of ERISA) required to contribute to any Multiemployer Plan under circumstances such that withdrawal from such Multiemployer Plan could reasonably be expected to have a Material Adverse Effect or a material adverse effect on the Parent or its ability to perform its obligations under this Agreement, the Guaranty or any other material Loan Document; or (d) permit the establishment or amendment of any Plan or fail to comply with the applicable provisions of ERISA and the Code with respect to any Plan, in each case, which could result in liability to the Borrower or any other member of a Controlled Group which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor any Subsidiary shall incur liability in excess of $25,000,000 under Title IV of ERISA or Chapter 43 of the Code by reason of being or having been a part of Cooper Industries, Inc.

6.20    Financial Covenants.    The Parent on a consolidated basis with the Subsidiaries:

6.20.1    Coverage Ratio.    As of the end of each fiscal quarter for the four fiscal quarters then ended, shall not permit the Coverage Ratio to be less than 3.00 to 1.0.

6.20.2    Total Debt to Total Capitalization Ratio.    Shall not permit the ratio of Total Debt to Total Capitalization to be greater than 60% at any time.

ARTICLE VII

DEFAULTS

The occurrence of any one or more of the following events shall constitute a Default:

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7.1    Any representation or warranty made or deemed made by or on behalf of the Parent or any Material Subsidiary to the Lenders or the Agent under or in connection with this Agreement, any Credit Extension, or any certificate or information delivered in connection with this Agreement or any other Loan Document shall be materially false on the date as of which made.

7.2    Nonpayment of (a) principal of any Loan (other than a Swing Line Loan) when due, (b) principal of any Swing Line Loan (i) within five Business Days of when due if the Aggregate Commitments minus the Aggregate Outstanding Credit Exposure (the “Availability”) on the date such principal payment is due is greater than or equal to the principal amount so due or (ii) when due if the Availability is less than the principal amount so due, or (c) nonpayment of interest upon any Loan or of any commitment fee or other obligations under any of the Loan Documents within five days after the same becomes due.

7.3    The breach by any of the Borrowers of any of the terms or provisions of Sections 6.2, 6.3, 6.10 through 6.20.

7.4    The breach by any of the Borrowers (other than a breach which constitutes a Default under another Section of this Article VII) of any of the terms or provisions of this Agreement which is not remedied within 30 days after written notice from the Agent or any Lender.

7.5    Failure of the Parent or any Material Subsidiary to pay when due any Indebtedness aggregating in excess of $50,000,000 (“Material Indebtedness”); or the default by the Parent or any Material Subsidiary in the performance (beyond the applicable grace period with respect thereto, if any) of any term, provision or condition contained in any agreement under which any such Material Indebtedness was created or is governed, or any other event shall occur or condition exist, the effect of which default or event is to cause, or to permit the holder or holders of such Material Indebtedness to cause, such Material Indebtedness to become due prior to its stated maturity; or any Material Indebtedness of the Parent or any Material Subsidiary shall be declared to be due and payable or required to be prepaid or repurchased (other than by a regularly scheduled payment) prior to the stated maturity thereof; or the Parent or any Material Subsidiary shall not pay, or admit in writing its inability to pay, its debts generally as they become due.

7.6    The Parent or any Material Subsidiary shall (a) have an order for relief entered with respect to it under the Federal bankruptcy laws as now or hereafter in effect, (b) make an assignment for the benefit of creditors, (c) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any Substantial Portion of its Property, (d) institute any proceeding seeking an order for relief under the Federal bankruptcy laws as now or hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (e) take any corporate or partnership action to authorize or effect any of the foregoing actions set forth in this Section 7.6 or (f) fail to contest in good faith any appointment or proceeding described in Section 7.7.

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7.7    Without the application, approval or consent of the Parent or any Material Subsidiary a receiver, trustee, examiner, liquidator or similar official shall be appointed for the Parent or any Material Subsidiary or any Substantial Portion of its Property, or a proceeding described in Section 7.6(d) shall be instituted against the Parent or any Material Subsidiary and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of 60 consecutive days.

7.8    Any court, government or governmental agency shall condemn, seize or otherwise appropriate, or take custody or control of, all or any portion of the Property of the Parent and its Material Subsidiaries which, when taken together with all other Property of the Parent and its Material Subsidiaries so condemned, seized, appropriated, or taken custody or control of, during the twelve–month period ending with the month in which any such action occurs, constitutes a Substantial Portion.

7.9    The Parent or any Material Subsidiary shall fail within 30 days to pay, bond or otherwise discharge one or more (a) judgments or orders for the payment of money in excess of $25,000,000 (or multiple judgments or orders for the payment of an aggregate amount in excess of $50,000,000) (or the equivalent thereof in currencies other than U.S. Dollars) in the aggregate, or (b) nonmonetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgment(s), in any such case, is/are not stayed on appeal or otherwise being appropriately contested in good faith.

7.10    The Unfunded Liabilities of all Single Employer Plans shall exceed in the aggregate $50,000,000 or any Reportable Event that could reasonably be expected to have a Material Adverse Effect shall occur in connection with any Plan.

7.11    The Parent or any other member of the Controlled Group shall have been notified by the sponsor of a Multiemployer Plan that it has incurred withdrawal liability to such Multiemployer Plan in an amount which, when aggregated with all other amounts required to be paid to Multiemployer Plans by the Parent or any other member of the Controlled Group as withdrawal liability (determined as of the date of such notification), exceeds $25,000,000 or requires payments exceeding $10,000,000 per annum.

7.12    The Parent or any other member of the Controlled Group shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, if as a result of such reorganization or termination the aggregate annual contributions of the Borrower and the other members of the Controlled Group (taken as a whole) to all Multiemployer Plans which are then in reorganization or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the respective plan years of each such Multiemployer Plan immediately preceding the plan year in which the reorganization or termination occurs by an amount exceeding $25,000,000.

7.13    The Parent or any of its Subsidiaries shall (i) be the subject of any proceeding or investigation pertaining to the release by the Borrower, any of its Subsidiaries or any other Person of any toxic or hazardous waste or substance into the environment, or (ii) violate any

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Environmental Law, which, in the case of an event described in clause (i) or clause (ii), could reasonably be expected to have a Material Adverse Effect.

7.14    Any Change in Control shall occur.

7.15    The occurrence of any “default” under any Loan Document (other than this Agreement) or the breach of any of the terms or provisions of any Loan Document (other than this Agreement), which default or breach continues beyond any period of grace therein provided.

7.16    The Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Guaranty, or the Parent shall fail to comply with any of the material terms or provisions of the Guaranty to which it is a party, or the Guarantor shall deny that it has any further liability under the Guaranty, or shall give notice to such effect.

ARTICLE VIII

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

8.1    Acceleration.    (a) If any Default described in Section 7.6 or 7.7 occurs with respect to any Borrower, the obligations of the Lenders to make Loans hereunder shall automatically terminate and the Obligations shall immediately become due and payable without any election or action on the part of the Agent or any Lender. If any other Default occurs, the Required Lenders (or the Agent with the consent of the Required Lenders) may terminate or suspend the obligations of the Lenders to make Loans hereunder or declare the Obligations to be due and payable, or both, whereupon the Obligations shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which each of the Borrowers hereby expressly waives.

(b)    If, within 30 days after acceleration of the maturity of the Obligations or termination of the obligations of the Lenders to make Loans hereunder as a result of any Default (other than any Default as described in Section 7.6 or 7.7 with respect to any Borrower) and before any judgment or decree for the payment of the Obligations due shall have been obtained or entered, the Required Lenders (in their sole discretion) shall so direct, the Agent shall, by notice to the Borrowers, rescind and annul such acceleration and/or termination.

8.2    Amendments.    Subject to the provisions of this Article VIII, the Required Lenders (or the Agent with the consent in writing of the Required Lenders) and the Borrowers may enter into agreements supplemental hereto for the purpose of adding or modifying any provisions to the Loan Documents or changing in any manner the rights of the Lenders or the Borrower hereunder or waiving any Default hereunder; provided, however, that no such supplemental agreement shall, without the consent of all of the Lenders:

(a)    Extend the final maturity of any Loan to a date after the Facility Termination Date or forgive all or any portion of the principal amount thereof, or reduce the rate or extend the time of payment of interest or fees thereon.

(b)    Reduce the percentage specified in the definition of Required Lenders.

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(c)    Extend the Facility Termination Date, or reduce the amount or extend the payment date for, the mandatory payments required under Section 2.2, or increase the amount of the Aggregate Commitment, the Commitment of any Lender hereunder or permit the Borrower to assign its rights under this Agreement.

(d)    Amend this Section 8.2.

(e)    Release the Parent under the Guaranty.

(f)    Permit any assignment by any of the Borrowers of their respective Obligations or their rights hereunder.

No amendment of any provision of this Agreement relating to the Agent shall be effective without the written consent of the Agent. No amendment of any provision of this Agreement relating to any Swing Line Lender or any Swing Line Loans shall be effective without the written consent of the applicable Swing Line Lender(s). The Agent may waive payment of the fee required under Section 12.3.2 without obtaining the consent of any other party to this Agreement.

8.3    Preservation of Rights.    No delay or omission of the Lenders or the Agent to exercise any right under the Loan Documents shall impair such right or be construed to be a waiver of any Default or an acquiescence therein, and the making of a Credit Extension notwithstanding the existence of a Default or the inability of any Borrower to satisfy the conditions precedent to such Credit Extension shall not constitute any waiver or acquiescence. Any single or partial exercise of any such right shall not preclude other or further exercise thereof or the exercise of any other right, and no waiver, amendment or other variation of the terms, conditions or provisions of the Loan Documents whatsoever shall be valid unless in writing signed by the Lenders required pursuant to Section 8.2, and then only to the extent in such writing specifically set forth. All remedies contained in the Loan Documents or by law afforded shall be cumulative and all shall be available to the Agent and the Lenders until the Obligations have been paid in full.

ARTICLE IX

GENERAL PROVISIONS

9.1    Survival of Representations.    All claims arising out of or relating to the representations and warranties of the Borrowers contained in this Agreement (and the bases giving rise to such claims) shall survive the making of the Credit Extensions herein contemplated.

9.2    Governmental Regulation.    Anything contained in this Agreement to the contrary notwithstanding, no Lender shall be obligated to extend credit to any Borrower in violation of any limitation or prohibition provided by any applicable statute or regulation.

9.3    Headings.    Section headings in the Loan Documents are for convenience of reference only, and shall not govern the interpretation of any of the provisions of the Loan Documents.

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9.4    Entire Agreement.    The Loan Documents embody the entire agreement and understanding among the Borrowers, the Agent and the Lenders and supersede all prior agreements and understandings among the Borrowers, the Agent and the Lenders relating to the subject matter thereof other than the fee letter described in Section 10.13.

9.5    Several Obligations; Benefits of this Agreement.    The respective obligations of the Lenders hereunder are several and not joint and no Lender shall be the partner or agent of any other (except to the extent to which the Agent is authorized to act as such). The failure of any Lender to perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. This Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and assigns, provided, however, that the parties hereto expressly agree that the Arranger shall enjoy the benefits of the provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth therein and shall have the right to enforce such provisions on its own behalf and in its own name to the same extent as if it were a party to this Agreement.

9.6    Expenses; Indemnification.    (a) The Parent shall reimburse the Agent and the Arranger for any costs and reasonable out–of–pocket expenses (including attorneys’ fees of such Persons) paid or incurred by the Agent or the Arranger in connection with the preparation, negotiation, execution, delivery, syndication, distribution (including, without limitation, via the internet), review, amendment, modification, and administration of the Loan Documents. The Parent also agrees to reimburse the Agent, the Arranger and the Lenders for any costs and out–of–pocket expenses (including attorneys’ fees of such Persons) paid or incurred by the Agent, the Arranger or any Lender in connection with the collection and enforcement of the Loan Documents. Expenses being reimbursed by the Parent under this Section include, without limitation, costs and expenses incurred in connection with the Reports described in the following sentence. The Parent acknowledges that from time to time Bank One may prepare and may distribute to the Lenders (but shall have no obligation or duty to prepare or to distribute to the Lenders) certain audit reports (the “Reports”) pertaining to the Parent’s and its Subsidiaries’ assets for internal use by Bank One from information furnished to it by or on behalf of the Parent, after Bank One has exercised its rights of inspection pursuant to this Agreement.

(b)    Each of the Borrowers hereby further agrees to indemnify the Agent, the Arranger, each Lender, their respective affiliates, and each of their directors, officers and employees against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all expenses of litigation or preparation therefor whether or not the Agent, the Arranger, any Lender or any affiliate is a party thereto) which any of them may pay or incur arising out of or relating to this Agreement, the other Loan Documents, the transactions contemplated hereby or the direct or indirect application or proposed application of the proceeds of any Loan hereunder except to the extent that they are determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the party seeking indemnification. The obligations of the Borrowers under this Section 9.6 shall survive the termination of this Agreement.

(c)    Each Person claiming a right to indemnification under this Section 9.6 shall promptly give the Parent written notice of receipt by such Person of notice of the commencement of any action, suit or proceeding and the Parent (or any applicable Borrower)

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shall have the right, but not the obligation to participate in the defense of such action. Notwithstanding the foregoing, the failure of any such Person to so notify the Parent promptly of any such action, suit, or proceeding shall not relieve the indemnifying party from any liability that it may have to the indemnified party hereunder, except to the extent that such failure has a material adverse effect on the indemnifying party’s ability to defend such claim. The Parent (or applicable Borrower) may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by the Borrower in accordance with the foregoing.

(i)    The indemnified party shall consult in good faith with the indemnifying party and its counsel with respect to the defense and shall keep the indemnifying party reasonably informed as to the progress of the defense. The Agent shall supply the Parent (or applicable Borrower) with such information and documents reasonably requested by the Parent (or applicable Borrower) as are necessary or advisable for the Parent (or applicable Borrower) to participate in any action, suit or proceeding.

(ii)    Except during the existence of a Default, no indemnified party shall enter into any settlement or other compromise with respect to any claim which is entitled to be indemnified under this Agreement if such settlement or compromise would result in any payment hereunder without the prior written consent of the Parent (or applicable Borrower), which consent shall not be unreasonably withheld.

(iii)    Upon payment in full of any claim by the Parent (or applicable Borrower) pursuant to this Agreement, to or on behalf of the Agent, the Arranger, any Lender or their respective Affiliates, the Parent (or applicable Borrower), without any further action, shall be subrogated to any and all claims that such indemnified party may have relating thereto (other than claims in respect of insurance policies maintained by such indemnified party at its own expense) and such indemnified party shall execute at its own expense such instruments of assignment and conveyance, evidence of claims and payment and such other documents, instruments and agreements as may be necessary to preserve any such claims and otherwise cooperate with the Parent (or applicable Borrower) and give such further assurances as are necessary or advisable to enable the Parent (or applicable Borrower) to vigorously pursue such claims.

9.7    Numbers of Documents.    All statements, notices, closing documents, and requests hereunder shall be furnished to the Agent with sufficient counterparts so that the Agent may furnish one to each of the Lenders.

9.8    Accounting.    Except as provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with Agreement Accounting Principles, except that any calculation or determination which is to be made on a consolidated basis shall be made for the Parent and all its Subsidiaries, including those Subsidiaries, if any, which are unconsolidated on the Borrower’s audited financial statements.

9.9    Severability of Provisions.    Any provision in any Loan Document that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that

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jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable.

9.10    Nonliability of Lenders.    The relationship between each of the Borrowers on the one hand and the Lenders and the Agent on the other hand shall be solely that of borrower and lender. Neither the Agent, the Arranger nor any Lender shall have any fiduciary responsibilities to any Borrower. None of the Agent, the Arranger or any Lender undertakes any responsibility to any Borrower to review or inform any Borrower of any matter in connection with any phase of any Borrower’s business or operations. Each of the Borrowers agrees that none of the Agent, the Arranger or any Lender shall have liability to any Borrower (whether sounding in tort, contract or otherwise) for losses suffered by any Borrower in connection with, arising out of, or in any way related to, the transactions contemplated and the relationship established by the Loan Documents, or any act, omission or event occurring in connection therewith, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted from the gross negligence or willful misconduct of the party from which recovery is sought. None of the Agent, the Arranger or any Lender shall have any liability with respect to, and each of the Borrowers hereby waives, releases and agrees not to sue for, any special, indirect, consequential or punitive damages suffered by any Borrower in connection with, arising out of, or in any way related to the Loan Documents or the transactions contemplated thereby.

9.11    Confidentiality.    Each Lender agrees that any confidential information which it may receive from any Borrower pursuant to this Agreement will be used only for purposes of this Agreement and will not be disclosed to any of its directors, officers or employees, or to any other Person except for disclosure (which, in the case of any disclosure pursuant to (d), (e), or (f) shall be accompanied by a written notice that such information is subject to this Section 9.11) (a) to its Affiliates and to other Lenders and their respective Affiliates, (b) to legal counsel, accountants, and other professional advisors to such Lender or to a Transferee, (c) to regulatory officials, (d) to any Person as requested pursuant to or as required by law, regulation, or legal process, (e) to any Person in connection with any legal proceeding to which such Lender is a party, (f) to such Lender’s direct or indirect contractual counterparties in swap agreements or to legal counsel, accountants and other professional advisors to such counterparties, and (g) permitted by Section 12.4.

9.12    Nonreliance.    Each Lender hereby represents that it is not relying on or looking to any margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System) for the repayment of the Credit Extensions provided for herein.

9.13    Disclosure.    Each of the Borrowers and each Lender hereby (i) acknowledge and agree that Bank One and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with any Borrower and its Affiliates and (ii) waive any liability of Bank One or such Affiliate to any Borrower or any Lender, respectively, arising out of resulting from such investments, loans or relationships other than liabilities arising out of the gross negligence or willful misconduct of Bank One or its Affiliates.

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ARTICLE X

THE AGENT

10.1    Appointment; Nature of Relationship.    Bank One, NA is hereby appointed by each of the Lenders as its contractual representative (herein referred to as the “Agent”) hereunder and under each other Loan Document, and each of the Lenders irrevocably authorizes the Agent to act as the contractual representative of such Lender with the rights and duties expressly set forth herein and in the other Loan Documents. The Agent agrees to act as such contractual representative upon the express conditions contained in this Article X. Notwithstanding the use of the defined term “Agent,” it is expressly understood and agreed that the Agent shall not have any fiduciary responsibilities to any Lender by reason of this Agreement or any other Loan Document and that the Agent is merely acting as the contractual representative of the Lenders with only those duties as are expressly set forth in this Agreement and the other Loan Documents. In its capacity as the Lenders’ contractual representative, the Agent (a) does not hereby assume any fiduciary duties to any of the Lenders, (b) is a “representative” of the Lenders within the meaning of Section 9-105 of the Uniform Commercial Code and (c) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Loan Documents. Each of the Lenders hereby agrees to assert no claim against the Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender hereby waives.

10.2    Powers.    The Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Agent shall have no implied duties to the Lenders, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Agent.

10.3    General Immunity.    Neither the Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower, the Lenders or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith except to the extent such action or inaction is determined in a final non-appealable judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of such Person.

10.4    No Responsibility for Loans, Recitals, etc.    Neither the Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (a) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder; (b) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document, including, without limitation, any agreement by an obligor to furnish information directly to each Lender; (c) the satisfaction of any condition specified in Article IV, except receipt of items required to be delivered solely to the Agent; (d) the existence or possible existence of any Default or Unmatured Default; (e) the validity, enforceability, effectiveness, sufficiency or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith; (f) the value, sufficiency, creation, perfection or priority of any Lien in any collateral security; or (g) the financial condition of any Borrower or any guarantor of any of the Obligations or of any of the Borrower’s or any such

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guarantor’s respective Subsidiaries. The Agent shall have no duty to disclose to the Lenders information that is not required to be furnished by any Borrower to the Agent at such time, but is voluntarily furnished by any Borrower to the Agent (either in its capacity as Agent or in its individual capacity).

10.5    Action on Instructions of Lenders.    The Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by the Required Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. The Lenders hereby acknowledge that the Agent shall be under no duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement or any other Loan Document unless it shall be requested in writing to do so by the Required Lenders. The Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.

10.6    Employment of Agents and Counsel.    The Agent may execute any of its duties as Agent hereunder and under any other Loan Document by or through employees, agents, and attorneys–in–fact and shall not be answerable to the Lenders, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys–in–fact selected by it with reasonable care. The Agent shall be entitled to advice of counsel concerning the contractual arrangement between the Agent and the Lenders and all matters pertaining to the Agent’s duties hereunder and under any other Loan Document.

10.7    Reliance on Documents; Counsel.    The Agent shall be entitled to rely upon any Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel selected by the Agent, which counsel may be employees of the Agent.

10.8    Agent’s Reimbursement and Indemnification.    The Lenders agree to reimburse and indemnify the Agent ratably in proportion to their respective Commitments (or, if the Commitments have been terminated, in proportion to their Commitments immediately prior to such termination) (i) for any amounts not reimbursed by the Borrowers for which the Agent is entitled to reimbursement by the Borrowers under the Loan Documents, (ii) for any other expenses incurred by the Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents (including, without limitation, for any expenses incurred by the Agent in connection with any dispute between the Agent and any Lender or between two or more of the Lenders) and (iii) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby (including, without limitation, for any such amounts incurred by or asserted against the Agent in connection with any dispute between the Agent and any Lender or between two or more of the Lenders), or the enforcement of any of the terms of the Loan Documents or of any such other

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documents, provided that (i) no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Agent and (ii) any indemnification required pursuant to Section 3.5(vii) shall, notwithstanding the provisions of this Section 10.8, be paid by the relevant Lender in accordance with the provisions thereof. The obligations of the Lenders under this Section 10.8 shall survive payment of the Obligations and termination of this Agreement.

10.9    Notice of Default.    The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Unmatured Default hereunder unless the Agent has received written notice from a Lender or the Borrower referring to this Agreement describing such Default or Unmatured Default and stating that such notice is a “notice of default”. In the event that the Agent receives such a notice, the Agent shall give prompt notice thereof to the Lenders.

10.10    Rights as a Lender.    In the event the Agent is a Lender, the Agent shall have the same rights and powers hereunder and under any other Loan Document with respect to its Commitment and its Loans as any Lender and may exercise the same as though it were not the Agent, and the term “Lender” or “Lenders” shall, at any time when the Agent is a Lender, unless the context otherwise indicates, include the Agent in its individual capacity. The Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Loan Document, with any Borrower or any of their respective Subsidiaries in which any Borrower or such Subsidiary is not restricted hereby from engaging with any other Person. The Agent, in its individual capacity, is not obligated to remain a Lender.

10.11    Lender Credit Decision.    Each Lender acknowledges that it has, independently and without reliance upon the Agent, the Arranger or any other Lender and based on the financial statements prepared by the Parent and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Agent, the Arranger or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents.

10.12    Successor Agent.    The Agent may resign at any time by giving written notice thereof to the Lenders and the Borrowers, such resignation to be effective upon the appointment of a successor Agent or, if no successor Agent has been appointed, forty-five days after the retiring Agent gives notice of its intention to resign. The Agent may be removed at any time with or without cause by written notice received by the Agent from the Required Lenders, such removal to be effective on the date specified by the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint, on behalf of the Borrowers and the Lenders, a successor Agent (with the consent of the Parent which shall not be unreasonably withheld). If no successor Agent shall have been so appointed by the Required Lenders within thirty days after the resigning Agent’s giving notice of its intention to resign, then the resigning Agent may appoint, on behalf of the Borrowers and the Lenders, a successor Agent. Notwithstanding the previous sentence, the Agent may at any time without the consent of any Borrower or any Lender, appoint any of its Affiliates which is a commercial bank as a successor

53

Agent hereunder. If the Agent has resigned or been removed and no successor Agent has been appointed, the Lenders may perform all the duties of the Agent hereunder and the Borrowers shall make all payments in respect of the Obligations to the applicable Lender and for all other purposes shall deal directly with the Lenders. No successor Agent shall be deemed to be appointed hereunder until such successor Agent has accepted the appointment. Any such successor Agent shall be a commercial bank having capital and retained earnings of at least $100,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the resigning or removed Agent. Upon the effectiveness of the resignation or removal of the Agent, the resigning or removed Agent shall be discharged from its duties and obligations hereunder and under the Loan Documents. After the effectiveness of the resignation or removal of an Agent, the provisions of this Article X shall continue in effect for the benefit of such Agent in respect of any actions taken or omitted to be taken by it while it was acting as the Agent hereunder and under the other Loan Documents. In the event that there is a successor to the Agent by merger, or the Agent assigns its duties and obligations to an Affiliate pursuant to this Section 10.12, then the term “Prime Rate” as used in this Agreement shall mean the prime rate, base rate or other analogous rate of the new Agent.

10.13    Agent and Arranger Fees.    The Parent agrees to pay to the Agent and the Arranger, for their respective accounts, the fees agreed to by the Borrower, the Agent and the Arranger pursuant to that certain letter agreement dated February 8, 2002, or as otherwise agreed from time to time.

10.14    Delegation to Affiliates.    Each of the Borrowers and the Lenders agree that the Agent may delegate any of its duties under this Agreement to any of its Affiliates. Any such Affiliate (and such Affiliate’s directors, officers, agents and employees) which performs duties in connection with this Agreement shall be entitled to the same benefits of the indemnification, waiver and other protective provisions to which the Agent is entitled under Articles IX and X.

10.15    Co-Agents, Documentation Agent, Syndication Agent, etc.    Neither any of the Lenders identified in this Agreement as a “co-agent” nor the Documentation Agent or the Syndication Agent shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender. Each Lender hereby makes the same acknowledgments with respect to such Lenders as it makes with respect to the Agent in Section 10.11.

ARTICLE XI

SETOFF; RATABLE PAYMENTS

11.1    Setoff.    In addition to, and without limitation of, any rights of the Lenders under applicable law, if any Borrower becomes insolvent, however evidenced, or any Default occurs, any and all deposits (including all account balances, whether provisional or final and whether or not collected or available) and any other Indebtedness at any time held or owing by any Lender or any Affiliate of any Lender to or for the credit or account of such Borrower may be offset and

54

applied toward the payment of the Obligations owing to such Lender, whether or not the Obligations, or any part thereof, shall then be due.

11.2    Ratable Payments.    If any Lender, whether by setoff or otherwise, has payment made to it upon its Outstanding Credit Exposure (other than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any other Lender, such Lender agrees, promptly upon demand, to purchase a portion of the Aggregate Outstanding Credit Exposure held by the other Lenders so that after such purchase each Lender will hold its Pro Rata Share of the Aggregate Outstanding Credit Exposure. If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in proportion to their respective Pro Rata Share of the Aggregate Outstanding Credit Exposure. In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made.

If an amount to be setoff is to be applied to Indebtedness of any Borrower to a Lender other than Indebtedness comprised of the Outstanding Credit Exposure of such Lender, such amount shall be applied ratably to such other Indebtedness and to the Indebtedness comprised of such Outstanding Credit Exposure.

ARTICLE XII

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

12.1    Successors and Assigns.    The terms and provisions of the Loan Documents shall be binding upon and inure to the benefit of the Borrowers and the Lenders and their respective successors and assigns, except that (a) none of the Borrowers shall not have the right to assign its rights or obligations under the Loan Documents and (b) any assignment by any Lender must be made in compliance with Section 12.3. The parties to this Agreement acknowledge that clause (b) of this Section 12.1 relates only to absolute assignments and does not prohibit assignments creating security interests, including, without limitation, (i) any pledge or assignment by any Lender of all or any portion of its rights under this Agreement and any Note to a Federal Reserve Bank or (ii) in the case of a Lender which is a fund, any pledge or assignment of all or any portion of its rights under this Agreement and any Note to its trustee in support of its obligations to its trustee; provided, however, that no such pledge or assignment creating a security interest shall release the transferor Lender from its obligations hereunder unless and until the parties thereto have complied with the provisions of Section 12.3. The Agent may treat the Person which made any Loan or which holds any Note as the owner thereof for all purposes hereof unless and until such Person complies with Section 12.3; provided, however, that the Agent may in its discretion (but shall not be required to) follow instructions from the Person which made any Loan or which holds any Note to direct payments relating to such Loan or Note to another Person. Any assignee of the rights to any Loan or any Note agrees by acceptance of such assignment to be bound by all the terms and provisions of the Loan Documents. Any request, authority or consent of any Person, who at the time of making such request or giving such authority or consent is the owner of the rights to any Loan (whether or not a Note has been issued in evidence thereof), shall be conclusive and binding on any subsequent holder or

55

assignee of the rights to such Loan.

12.2    Participations.

12.2.1    Permitted Participants; Effect.    Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time sell to one or more banks or other entities (“Participants”) participating interests in any Outstanding Credit Exposure of such Lender, any Note held by such Lender, any Commitment of such Lender or any other interest of such Lender under the Loan Documents. In the event of any such sale by a Lender of participating interests to a Participant, such Lender’s obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, such Lender shall remain the owner of its Outstanding Credit Exposure and the holder of any Note issued to it in evidence thereof for all purposes under the Loan Documents, all amounts payable by the Borrowers under this Agreement shall be determined as if such Lender had not sold such participating interests, and the Borrowers and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under the Loan Documents.

12.2.2    Voting Rights.    Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Loan Documents other than any amendment, modification or waiver with respect to any Credit Extension or Commitment in which such Participant has an interest which would require consent of all of the Lenders pursuant to the terms of Section 8.2 or of any other Loan Document.

12.2.3    Benefit of Setoff.    Each Borrower agrees that each Participant shall be deemed to have the right of setoff provided in Section 11.1 in respect of its participating interest in amounts owing under the Loan Documents to the same extent as if the amount of its participating interest were owing directly to it as a Lender under the Loan Documents, provided that each Lender shall retain the right of setoff provided in Section 11.1 with respect to the amount of participating interests sold to each Participant. The Lenders agree to share with each Participant, and each Participant, by exercising the right of setoff provided in Section 11.1, agrees to share with each Lender, any amount received pursuant to the exercise of its right of setoff, such amounts to be shared in accordance with Section 11.2 as if each Participant were a Lender.

12.3    Assignments.

12.3.1    Permitted Assignments.    Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time assign to one or more Eligible Assignees all or any part of its rights and obligations under the Loan Documents. Such assignment shall be substantially in the form of Exhibit C or in such other form as may be agreed to by the parties thereto. The consent of the Parent and the Agent shall be required prior to an assignment becoming effective with respect to an Eligible Assignee which is not a Lender or an Affiliate thereof; provided, however, that if a Default has occurred and is continuing, the consent of the Parent shall not be required. Such consent

56

shall not be unreasonably withheld or delayed. Each such assignment with respect to an Eligible Assignee which is not a Lender or an Affiliate thereof shall (unless each of the Parent and the Agent otherwise consent) be in an amount not less than the lesser of (i) $5,000,000 or (ii) the remaining amount of the assigning Lender’s Commitment (calculated as at the date of such assignment) or outstanding Loans (if the applicable Commitment has been terminated).

12.3.2    Effect; Effective Date.    Upon (i) delivery to the Agent of an assignment, together with any consents required by Section 12.3.1, and (ii) payment of a $4,000 fee to the Agent for processing such assignment (unless such fee is waived by the Agent), such assignment shall become effective on the effective date specified in such assignment. The assignment shall contain a representation by the assignee to the effect that none of the consideration used to make the purchase of the Commitment and Outstanding Credit Exposure under the applicable assignment agreement constitutes “plan assets” as defined under ERISA and that the rights and interests of the assignee in and under the Loan Documents will not be “plan assets” under ERISA. On and after the effective date of such assignment, such assignee shall for all purposes be a Lender party to this Agreement and any other Loan Document executed by or on behalf of the Lenders and shall have all the rights and obligations of a Lender under the Loan Documents, to the same extent as if it were an original party hereto, and no further consent or action by the Borrower, the Lenders or the Agent shall be required to release the transferor Lender with respect to the percentage of the Aggregate Commitment and Outstanding Credit Exposure assigned to such assignee. Upon the consummation of any assignment pursuant to this Section 12.3.2, the transferor Lender, the Agent and the Borrower shall, if the transferor Lender or the assignee desires that its Loans be evidenced by Notes, make appropriate arrangements so that new Notes or, as appropriate, replacement Notes are issued to such transferor Lender and new Notes or, as appropriate, replacement Notes, are issued to such assignee, in each case in principal amounts reflecting their respective Commitments, as adjusted pursuant to such assignment.

12.4    Dissemination of Information.    Each Borrower authorizes each Lender to disclose to any Participant or Eligible Assignee or any other Person acquiring an interest in the Loan Documents by operation of law (each a “Transferee”) and any prospective Transferee any and all information in such Lender’s possession concerning the creditworthiness of the Parent and its Subsidiaries, including without limitation any information contained in any Reports; provided that each Transferee and prospective Transferee agrees to be bound by Section 9.11 of this Agreement.

12.5    Tax Treatment.    If any interest in any Loan Document is transferred to any Transferee which is organized under the laws of any jurisdiction other than the United States or any State thereof, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to comply with the provisions of Section 3.5(d).

57

ARTICLE XIII

NOTICES

13.1    Notices.    Except as otherwise permitted by Section 2.17 with respect to borrowing notices, all notices, requests and other communications to any party hereunder shall be in writing (including electronic transmission, facsimile transmission or similar writing) and shall be given to such party: in the case of the Borrower or the Agent, at its address or facsimile number set forth on the signature pages hereof, in the case of any Lender, at its address or facsimile number set forth in its administrative questionnaire or in the case of any party, at such other address or facsimile number as such party may hereafter specify for the purpose by notice to the Agent and the Borrower in accordance with the provisions of this Section 13.1. Each such notice, request or other communication shall be effective (a) if given by facsimile transmission, when transmitted to the facsimile number specified in this Section and confirmation of receipt is received, (b) if given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid, or (c) if given by any other means, when delivered (or, in the case of electronic transmission, received) at the address specified in this Section; provided that notices to the Agent under Article II shall not be effective until received.

13.2    Change of Address.    Any Borrower, the Agent and any Lender may each change the address for service of notice upon it by a notice in writing to the other parties hereto.

ARTICLE XIV

COUNTERPARTS

This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be effective when it has been executed by the Borrowers, the Agent, and the Lenders and each party has notified the Agent by facsimile transmission or telephone that it has taken such action.

ARTICLE XV

CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

15.1    CHOICE OF LAW.    THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

15.2    CONSENT TO JURISDICTION.    EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON–EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY

58

IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT, ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK.

15.3    WAIVER OF JURY TRIAL.    EACH BORROWER, THE AGENT, AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

59

IN WITNESS WHEREOF, the Borrowers, the Lenders and the Agent have executed this Agreement as of the date first above written.

COOPER CAMERON CORPORATION
By:
	Name:  Michael C. Jennings Title:    Vice President & Treasurer
Address:      1333 West Loop South, Suite 1700
Houston, Texas 770027
Attention:    Michael C. Jennings
Vice President & Treasurer
Telephone:  (713) 513-3336
Telecopy:    (713) 513-3355

COOPER CAMERON (U.K) LIMITED CAMERON GMBH COOPER CAMERON (SINGAPORE) PTE. LTD. COOPER CAMERON CANADA LTD.
By:
	Name:  Michael C. Jennings Title:    Vice President & Treasurer
Address:      1333 West Loop South, Suite 1700
Houston, Texas 770027
Attention:    Michael C. Jennings
Vice President & Treasurer
Telephone:  (713) 513-3336
Telecopy:    (713) 513-3355

60

Commitment $22,500,000 US Swing Line Commitment $15,000,000 Canadian Swing Line Election $10,000,000	BANK ONE, NA, individually and as Agent
	By:
	Name:
	Title:
	Address:	910 Travis Street Mail Code TX2.4335 Houston, Texas 77002
	Attention:	Helen Carr
	Telephone:	(713) 751-3731
	Telecopy:	(713) 751-3760

61

Commitment $20,000,000	CREDIT LYONNAIS NEW YORK BRANCH, individually and as Syndication Agent
	By:
	Name:
	Title:
	Address:	1000 Louisiana, Suite 5360 Houston, Texas 77002
	Attention:	David Gurghigian
	Telephone:	(713) 890-8610
	Telecopy:	(713) 890-8668

62

Commitment $20,000,000	THE ROYAL BANK OF SCOTLAND PLC, individually and as Documentation Agent
	By:
	Name:
	Title:
	Address:	600 Travis Street, Suite 6070 Houston, Texas 77002
	Attention:	Scott Barton, Senior Vice President
	Telephone:	(713) 221-2436
	Telecopy:	(713) 221-2430

63

Commitment $20,000,000	THE BANK OF NOVA SCOTIA, individually and as Documentation Agent
	By:
	Name:	N. Bell
	Title:	Senior Manager Loan Operations
	Address:	Scotia Capital Markets 1100 Louisiana, Suite 3000 Houston, Texas 77002
	Attention:	Jean Paul Purdy
	Telephone:	(713) 759-3433
	Telecopy:	(713) 752-2425
	With a copy to:
	The Bank of Nova Scotia, Atlanta Agency 600 Peachtree St. N.E., Suite 2700 Atlanta, Georgia 30308
	Attn:	Loan Operations
	Telecopy:	(404) 877-1500
	Telecopy:	(404) 888-8998

64

Commitment $20,000,000	ABN AMRO BANK, N.V., individually and as Documentation Agent
	By:
	Stuart Murray Group Vice Presidentl
	By:
	John Reed Vice Presidentl
	Address:	208 South LaSalle Street, Suite 1500 Chicago, Illinois 60604-1003
	Attention:	Credit Administration
	Telephone:	(312) 992-5110
	Telecopy:	(312) 992-5111
	With a copy to:
	ABN AMRO Bank N.V. 4400 Post Oak Parkway, Suite 1500 Houston, Texas 77027
	Attention:	Stuart Murray
	Telecopy:	(832) 681-7158
	Telecopy:	(832) 681-7141

65

Commitment $17,500,000	DEN NORSKE BANK ASA
	By:
	Name:	Nils Fykse
	Title:
	By:
	Name:	Hans J. Ormar
	Title:
	Address:	200 Park Avenue, 31st Floor New York, New York 10166
	Attention:	Hans J. Ormar
	Telephone:	(212) 681-3865
	Telecopy:	(212) 681-3900

66

Commitment $15,000,000	BANK OF AMERICA, N.A
	By:
	Name:	Claire Liu
	Title:
	Address:	333 Clay Street, Suite 4550 Houston, Texas 77002
	Attention:	Claire Liu
	Telephone:	(713) 651-4855
	Telecopy:	(713) 651-4841

67

Commitment $15,000,000	THE NORTHERN TRUST COMPANY
	By:
	Name:	Eric Dybing
	Title:
	Address:		50 South LaSalle Street Chicago, Illinois 60675
	Attention:		Eric Dybing
	Telephone:		(312) 557-4063
	Telecopy:		(312) 444-5055

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PRICING SCHEDULE

Applicable Margin	Level I Status	Level II Status	Level III Status	Level IV Status	Level V Status	Level VI Status
Eurocurrency Rate	0.37%	0.50%	0.60%	0.70%	0.90%	1.25%
Applicable Margin	Level I Status	Level II Status	Level III Status	Level IV Status	Level V Status	Level VI Status
Facility Fee	0.08%	0.10%	0.125%	0.15%	0.20%	0.25%
Usage Fee	0.10%	0.10%	0.125%	0.25%	0.25%	0.25%

For the purposes of this Schedule, the following terms have the following meanings, subject to the final paragraph of this Schedule:

“Level I Status” exists at any date if, on such date, the Parent’s Moody’s Rating is A2 or better or the Parent’s S&P Rating is A or better.

“Level II Status” exists at any date if, on such date, (i) the Parent has not qualified for Level I Status and (ii) the Parent’s Moody’s Rating is A3 or better or the Parent’s S&P Rating is A- or better.

“Level III Status” exists at any date if, on such date, (i) the Parent has not qualified for Level I Status or Level II Status and (ii) the Parent’s Moody’s Rating is Baa1 or better or the Parent’s S&P Rating is BBB+ or better.

“Level IV Status” exists at any date if, on such date, (i) the Parent has not qualified for Level I Status, Level II Status or Level III Status and (ii) the Parent’s Moody’s Rating is Baa2 or better or the Parent’s S&P Rating is BBB or better.

“Level V Status” exists at any date if, on such date, (i) the Parent has not qualified for Level I Status, Level II Status, Level III Status or Level IV Status and (ii) the Parent’s Moody’s Rating is Baa3 or better or the Parent’s S&P Rating is BBB- or better.

“Level VI Status” exists at any date if, on such date, the Parent has not qualified for Level I Status, Level II Status, Level III Status, Level IV Status or Level V Status.

“Moody’s Rating” means, at any time, the rating issued by Moody’s and then in effect with respect to the Parent’s senior unsecured long-term debt securities without third-party credit enhancement.

“S&P Rating” means, at any time, the rating issued by S&P and then in effect with respect to the Parent’s senior unsecured long-term debt securities without third-party credit enhancement.

PS-1

“Status” means either Level I Status, Level II Status, Level III Status, Level IV Status, Level V Status or Level VI Status.

The Applicable Margin and Applicable Fee Rate shall be determined in accordance with the foregoing table based on the Borrower’s Status as determined by the then-current Moody’s and S&P Ratings. The credit rating in effect on any date for the purposes of this Schedule is that in effect at the close of business on such date. If at any time the Parent has no Moody’s Rating or no S&P Rating, Level IV Status shall exist. If the credit ratings from Moody’s and S&P fall within different categories, the Applicable Margin and Applicable Fee Rate shall be based on the higher of the two ratings unless the lower rating is two or more levels below the higher rating, in which case the rating which is one level above the lower rating will apply.

PS-2

EXHIBIT A-1

FORM OF IN-HOUSE COUNSEL OPINION

See Attached

A-1-1

EXHIBIT A-2

FORM OF OUTSIDE COUNSEL OPINION

See Attached

A-2-1

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

To:    The Lenders parties to the  Credit Agreement Described Below

This Compliance Certificate is furnished pursuant to that certain Credit Agreement dated as of March 6, 2002, (as amended, modified, renewed or extended from time to time, the “Agreement”) among Cooper Cameron Corporation (the “Parent”), Cooper Cameron (U.K.) Limited, Cameron GmbH, Cooper Cameron (Singapore) Pte. Ltd., Cooper Cameron Canada Ltd., the lenders party thereto and Bank One, NA, as Agent for the Lenders. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1.    I am the duly elected ____________________ of the Parent;

2.    I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Parent and its Subsidiaries during the accounting period covered by the attached financial statements;

3.    The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Default or Unmatured Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below; and

4.    Schedule I attached hereto sets forth financial data and computations evidencing the Parent’s compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct.

5.    Schedule II hereto sets forth the determination of the interest rates to be paid for Advances and the commitment fee rates commencing on the fifth day following the delivery hereof.

6.    Schedule III attached hereto sets forth the various reports and deliveries which are required at this time under the Credit Agreement and the other Loan Documents and the status of compliance.

Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event:

B-1

The foregoing certifications, together with the computations set forth in Schedule I [and Schedule II] hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this day of                                                               , 200        .

B-2

SCHEDULE I TO COMPLIANCE CERTIFICATE

Compliance as of ____________ _____, 200___ with

Provisions of Sections 6.20.1 and 6.20.2 of the Agreement

B-3

SCHEDULE II TO COMPLIANCE CERTIFICATE

Borrower’s Applicable Margin Calculation

B-4

SCHEDULE III TO COMPLIANCE CERTIFICATE

Reports and Deliveries Currently Due

B-5

EXHIBIT C

FORM OF ASSIGNMENT AGREEMENT

This Assignment Agreement (this “Assignment Agreement”) between ____________ (the “Assignor”) and __________ (the “Assignee”) is dated as of __________, 200___. The parties hereto agree as follows:

1.    PRELIMINARY STATEMENT.    The Assignor is a party to a Credit Agreement (which, as it may be amended, modified, renewed or extended from time to time is herein called the “Credit Agreement”) described in Item 1 of Schedule 1 attached hereto (“Schedule 1”). Capitalized terms used herein and not otherwise defined herein shall have the meanings attributed to them in the Credit Agreement.

2.    ASSIGNMENT AND ASSUMPTION.    The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, an interest in and to the Assignor’s rights and obligations under the Credit Agreement and the other Loan Documents, such that after giving effect to such assignment the Assignee shall have purchased pursuant to this Assignment Agreement the percentage interest specified in Item 3 of Schedule 1 of all outstanding rights and obligations under the Credit Agreement and the other Loan Documents relating to the facilities listed in Item 3 of Schedule 1. The aggregate Commitment (or Outstanding Credit Exposure, if the applicable Commitment has been terminated) purchased by the Assignee hereunder is set forth in Item 4 of Schedule 1.

3     EFFECTIVE DATE.    The effective date of this Assignment Agreement (the “Effective Date”) shall be the later of the date specified in Item 5 of Schedule 1 or two Business Days (or such shorter period agreed to by the Agent) after this Assignment Agreement, together with any consents required under the Credit Agreement, are delivered to the Agent. In no event will the Effective Date occur if the payments required to be made by the Assignee to the Assignor on the Effective Date are not made on the proposed Effective Date.

4.    PAYMENT OBLIGATIONS.    In consideration for the sale and assignment of Outstanding Credit Exposure hereunder, the Assignee shall pay the Assignor, on the Effective Date, the amount agreed to by the Assignor and the Assignee. On and after the Effective Date, the Assignee shall be entitled to receive from the Agent all payments of principal, interest and fees with respect to the interest assigned hereby. The Assignee will promptly remit to the Assignor any interest on Loans and fees received from the Agent which relate to the portion of the Commitment or Outstanding Credit Exposure assigned to the Assignee hereunder for periods prior to the Effective Date and not previously paid by the Assignee to the Assignor. In the event that either party hereto receives any payment to which the other party hereto is entitled under this Assignment Agreement, then the party receiving such amount shall promptly remit it to the other party hereto.

5.    RECORDATION FEE.    The Assignor and Assignee each agree to pay one-half of the recordation fee required to be paid to the Agent in connection with this Assignment Agreement unless otherwise specified in Item 6 of Schedule 1.

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6.    REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR’S LIABILITY.    The Assignor represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder, (ii) such interest is free and clear of any adverse claim created by the Assignor and (iii) the execution and delivery of this Assignment Agreement by the Assignor is duly authorized. It is understood and agreed that the assignment and assumption hereunder are made without recourse to the Assignor and that the Assignor makes no other representation or warranty of any kind to the Assignee. Neither the Assignor nor any of its officers, directors, employees, agents or attorneys shall be responsible for (i) the due execution, legality, validity, enforceability, genuineness, sufficiency or collectability of any Loan Document, including without limitation, documents granting the Assignor and the other Lenders a security interest in assets of any Borrower or any guarantor, (ii) any representation, warranty or statement made in or in connection with any of the Loan Documents, (iii) the financial condition or creditworthiness of any Borrower or any guarantor, (iv) the performance of or compliance with any of the terms or provisions of any of the Loan Documents, (v) inspecting any of the property, books or records of any Borrower, (vi) the validity, enforceability, perfection, priority, condition, value or sufficiency of any collateral securing or purporting to secure the Loans or (vii) any mistake, error of judgment, or action taken or omitted to be taken in connection with the Loans or the Loan Documents.

7.    REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE.    The Assignee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements requested by the Assignee and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement, (ii) agrees that it will, independently and without reliance upon the Agent, the Assignor or any other Lender and based on such documents and information at it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, (iii) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto, (iv) confirms that the execution and delivery of this Assignment Agreement by the Assignee is duly authorized, (v) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender, (vi) agrees that its payment instructions and notice instructions are as set forth in the attachment to Schedule 1, (vii) confirms that none of the funds, monies, assets or other consideration being used to make the purchase and assumption hereunder are “plan assets” as defined under ERISA and that its rights, benefits and interests in and under the Loan Documents will not be “plan assets” under ERISA, (viii) agrees to indemnify and hold the Assignor harmless against all losses, costs and expenses (including, without limitation, reasonable attorneys’ fees) and liabilities incurred by the Assignor in connection with or arising in any manner from the Assignee’s non–performance of the obligations assumed under this Assignment Agreement, and (ix) if applicable, attaches the forms prescribed by the Internal Revenue Service of the United States certifying that the Assignee is entitled to receive payments under the Loan Documents without deduction or withholding of any United States federal income taxes.

8.    GOVERNING LAW.    This Assignment Agreement shall be governed by the internal law, and not the law of conflicts, of the State of New York.

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9.    NOTICES.    Notices shall be given under this Assignment Agreement in the manner set forth in the Credit Agreement. For the purpose hereof, the addresses of the parties hereto (until notice of a change is delivered) shall be the address set forth in the attachment to Schedule 1.

10.    COUNTERPARTS; DELIVERY BY FACSIMILE.    This Assignment Agreement may be executed in counterparts. Transmission by facsimile of an executed counterpart of this Assignment Agreement shall be deemed to constitute due and sufficient delivery of such counterpart and such facsimile shall be deemed to be an original counterpart of this Assignment Agreement.

IN WITNESS WHEREOF, the duly authorized officers of the parties hereto have executed this Assignment Agreement by executing Schedule 1 hereto as of the date first above written.

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SCHEDULE 1

to Assignment Agreement

1. Description and Date of Credit Agreement:

Credit Agreement dated as of March 6, 2002, is among Cooper Cameron Corporation, a Delaware corporation, the other Borrowers named therein, the Lenders and Bank One, NA, a national banking association having its principal office in Chicago, Illinois, as Agent.

2.   Date of Assignment Agreement:	_______ __, 200__
3.   Amounts (as of date of item 2 above):
a.   Assignee’s percentage of Commitment (or Outstanding Credit Exposure with respect to terminated Commitments) purchased under the Assignment Agreement*	__________%
b.   Amount of Commitment (or Outstanding Credit Exposure with respect to terminated Commitments) purchased under the Assignment Agreement**	$__________
4.   Assignee’s Commitment (or Outstanding Credit Exposure with respect to terminated Commitments) purchased hereunder:	$__________
5.   Proposed Effective Date:	_______ __, 200__

6.   Non-standard Recordation Fee Arrangement N/A** [Assignor/Assignee to pay 100% of fee] [Fee waived by Agent]

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Accepted and Agreed:

[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]

By:________________________________________ By:________________________________________

Title:______________________________________ Title:______________________________________

ACCEPTED AND CONSENTED TO BY ACCEPTED AND CONSENTED TO BY

COOPER CAMERON CORPORATION*** BANK ONE, NA

By:________________________________________ By:________________________________________

Title:______________________________________ Title:______________________________________

*        Percentage taken to 10 decimal places

**      If fee is split 50-50, pick N/A as option

***    Delete if not required by Credit Agreement

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Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT

ADMINISTRATIVE INFORMATION SHEET

Attach Assignor’s Administrative Information Sheet, which must 

include notice addresses for the Assignor and the Assignee

(Sample form shown below)

ASSIGNOR INFORMATION

Contact:
Name:	Telephone No.:
Fax No.:	Telex No.:
	Answerback:
Payment Information:
Name & ABA # of Destination Bank:
Account Name & Number for Wire Transfer:
Other Instructions:
Address for Notices for Assignor:
ASSIGNEE INFORMATION
Credit Contact:
Contact:
Name:	Telephone No.:
Fax No.:	Telex No.:
	Answerback:

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Key Operations Contacts:

Name:	Name:
Fax No.:	Fax No.:
Telex No.:	Telex:
Answerback:	Answerback:
Booking Installation:	Booking Installation:

Payment Information:

Name & ABA # of Destination Bank:                                                                                                                         

Account Name & Number for Wire Transfer:                                                                                                             

Address for Noticfes for Assignor:                                                                                                                            

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BANK ONE INFORMATION

Assignee will be called promptly upon receipt of the signed agreement.

Initial Funding Contact: Subsequent Operations Contact:

Name:                                                                          Name:                                                                           

Telephone No.: (312)                                                Telephone No.: (312)                                                 

Fax No.: (312)                                                            Fax No.: (312)                                                            

Initial Funding Contact:

Libor – Fund 2 days after rates are set.

Bank One Wire Instructions: Bank One, NA, ABA # 071000013

LS2 Incoming Account # 481152860000

Ref:                        

Address for Notices for Bank One: 1 Bank One Plaza, Chicago, IL 60670

Attn: Agency Compliance Division, Suite IL1-0353

Fax No. (312) 732–2038 or (312) 732–4339

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EXHIBIT D

FORM OF LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION

To Bank One, NA,

as Agent (the “Agent”) under the Credit Agreement

Described Below.

Re: Credit Agreement dated March 6, 2002 (as the same may be amended or modified, the “Credit Agreement”), among Cooper Cameron Corporation, the Lenders named therein and the Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned thereto in the Credit Agreement.

The Agent is specifically authorized and directed to act upon the following standing money transfer instructions with respect to the proceeds of Advances or other extensions of credit from time to time until receipt by the Agent of a specific written revocation of such instructions by any Borrower, provided, however, that the Agent may otherwise transfer funds as hereafter directed in writing by any Borrower in accordance with Section 13.1 of the Credit Agreement or based on any telephonic notice made in accordance with Section 2.14 of the Credit Agreement.

Facility Identification Number(s)                                                                                                                                    

Customer/Account Name                                                                                                                                                

Transfer Funds To                                                                                                                                                           

For Account No.                                                                                                                                                              

Reference/Attention To                                                                                                                                                   

Authorized Officer (Customer Representative)	Date
(Please Print)	Signature
Bank Officer Name	Date
(Please Print)	Signature

(Deliver Completed Form to Credit Support Staff For Immediate Processing)

D-1

EXHIBIT E

FORM OF NOTE

[Date]

[Cooper Cameron Corporation, a Delaware corporation] (the “Borrower”), promises to pay to the order of                                          (the “Lender”) the aggregate unpaid principal amount of all Loans made by the Lender to the Borrower pursuant to Article II of the Agreement (as hereinafter defined), in immediately available funds at the main office of Bank One, NA in Chicago, Illinois, as Agent, together with interest on the unpaid principal amount hereof at the rates and on the dates set forth in the Agreement. The Borrower shall pay the principal of and accrued and unpaid interest on the Loans in full on the Facility Termination Date.

The Lender shall, and is hereby authorized to, record on the schedule attached hereto, or to otherwise record in accordance with its usual practice, the date and amount of each Loan and the date and amount of each principal payment hereunder.

This Note is one of the Notes issued pursuant to, and is entitled to the benefits of, the Credit Agreement dated as of March 6, 2002 (which, as it may be amended or modified and in effect from time to time, is herein called the “Agreement”), among the Borrower, the lenders party thereto, including the Lender, and Bank One, NA, as Agent, to which Agreement reference is hereby made for a statement of the terms and conditions governing this Note, including the terms and conditions under which this Note may be prepaid or its maturity date accelerated. This Note is guaranteed pursuant to the Guaranty, all as more specifically described in the Agreement, and reference is made thereto for a statement of the terms and provisions thereof. Capitalized terms used herein and not otherwise defined herein are used with the meanings attributed to them in the Agreement.

[COOPER CAMERON CORPORATION]
By:	__________________________________
Print Name:	__________________________________
Title:	__________________________________

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SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL

Date Principal Amount of Loan Maturity of Interest Period Principal Amount Paid Unpaid Balance

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EXHIBIT F

FORM OF JOINDER AGREEMENT

F-1

SCHEDULE 1

SUBSIDIARIES

(SEE SECTION 5.7)

Investment in Jurisdiction of Organization Owned By Amount of Investment Percent Ownership

F-2

SCHEDULE 2

LIENS

(SEE SECTIONS 6.15)

F-3

SCHEDULE 3

EUROCURRENCY PAYMENT OFFICES OF THE AGENT

Currency Eurocurrency Payment Office

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EX-10.33

EXHIBIT 10.33

Cooper Cameron Corporation

Directors’ 2001 Deferred Compensation Plan

Cooper Cameron Corporation, a Delaware Corporation (the “Company”), hereby establishes this Directors’ Deferred Compensation Plan effective as of February 8, 2001, to help attract and retain highly qualified directors by providing deferred compensation in recognition of services performed for the Company over a sustained period of time.

1.    Deferred Compensation Benefit

Each director of the Company who satisfies the eligibility criteria set out in Section 2 hereof shall be entitled to a lump sum payment equal to five times his or her last Annual Board Retainer payable within 30 days of when he or she ceases to serve as a director of the Company.

2.    Eligibility Criteria

In order to qualify for the benefits provided for hereunder, a director must

(a) serve at least five years as a director of the Company, and

(b) satisfy any one of the following:

i.      not stand for reelection at the end of a term in compliance with the Company policy of not doing so after reaching age 70 or as a result of not being nominated to do so by the Board of Directors of the Company;

ii.   stand for reelection at the end of a term but fail to be reelected by the stockholders; or

iii.   die while serving as a director.

3.    Nature of the Plan

This Plan is intended to constitute an unfunded, unsecured promise by the Company to pay the Deferred Compensation Benefit to each eligible director (or his or her beneficiary) out of the Company’s general assets. The adoption of this Plan and any setting aside of amounts by the Company with which to discharge its obligations hereunder shall not be deemed to create a trust; legal and equitable title to any funds so set aside shall remain in the Company, and any eligible recipient of benefit payments hereunder shall have no security or other interest in such funds. Any and all funds which may be set aside shall remain subject to the claims of the general creditors of the Company, present and future. This provision shall not require the Company to set aside any funds, but the Company may set aside such funds if it chooses to do so.

4.    Administration of the Plan

The Vice President, Human Resources shall serve as administrator of the Plan and shall serve at the pleasure of the Board of Directors. The Board shall have the power to appoint any successor administrator. The administrator shall maintain complete and adequate records pertaining to the Plan which shall be necessary or desirable in the proper administration of the Plan.

5.    Amendment and Termination

The Board of Directors may, without the consent of the individual directors or their beneficiaries, amend or terminate the Plan at any time, provided, however, that no such amendment may reduce or otherwise deprive a director or his or her beneficiary of the right to receive the benefits provided for hereunder once the criteria for eligibility are satisfied with respect to such director.

6.    General Provisions

(a)    No Preference over Creditors.    No person eligible for benefits hereunder shall have any preference over the general creditors of the Company in the event of the Company’s insolvency.

(b)    Benefits Not Assignable.    Benefits provided under the Plan may not be assigned or alienated, either voluntarily or involuntarily, other than by will or by the applicable laws of descent and distribution.

(c)    Controlling Law.    THE LAWS OF THE STATE OF TEXAS SHALL CONTROL THE INTERPRETATION AND PERFORMANCE OF THE TERMS OF THE PLAN. THE PLAN IS NOT INTENDED TO QUALIFY UNDER SECTION 401(a) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR TO COMPLY WITH THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED.

EXECUTED as of February 7, 2001.

COOPER CAMERON CORPORATION
By:	/s/    William C. Lemmer
Name:	William C. Lemmer
Title:	Vice President and General Counsel

2

EX-13.1

EXHIBIT 13.1

27

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION OF COOPER CAMERON CORPORATION

The following discussion of Cooper Cameron Corporation’s (the Company) historical results of operations and financial condition should be read in conjunction with the Company’s consolidated financial statements and notes thereto included elsewhere in this Annual Report. All per share amounts included in this discussion are based on diluted shares outstanding.

Overview

The Company’s operations are organized into four business segments — Cameron, Cooper Cameron Valves (CCV), Cooper Energy Services (CES) and Cooper Turbocompressor (CTC). Cameron is one of the world’s leading providers of systems and equipment used to control pressures and direct flows of oil and gas wells. Cameron’s products include surface and subsea production systems, blowout preventers, drilling and production control systems, gate valves, actuators, chokes, wellheads, drilling and production risers and aftermarket parts and services. CCV is a leading provider of valves and related systems primarily used to control pressure and direct the flow of oil and gas as they are moved from individual wellheads through flow lines, gathering lines and transmission systems to refineries, petrochemical plants and industrial centers for processing. CCV’s products include ball valves, gate valves, butterfly valves, Orbit valves, rotary process valves, block and bleed valves, plug valves, actuators, chokes and aftermarket parts and service. CES is a leading provider of reciprocating compression equipment and related aftermarket parts and services for the energy industry. CTC manufactures and supplies integrally geared centrifugal compressors and related aftermarket products and services to manufacturing companies and chemical process industries worldwide.

In addition to the historical data contained herein, this Annual Report, including the information set forth in the Company’s Management’s Discussion and Analysis and elsewhere in this report, includes forward-looking statements regarding the future revenues and earnings of the Company, future savings from nonrecurring actions taken to date, as well as expectations regarding cash flows and future levels of capital spending made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ materially from those described in forward-looking statements. These statements are based on current expectations of the Company’s performance and are subject to a variety of factors, not under the control of the Company, which can affect the Company’s results of operations, liquidity or financial condition. Such factors may include overall demand for, and pricing of, the Company’s products; the size and timing of orders; changes in the price of and demand for oil and gas in both domestic and international markets; political and social issues affecting the countries in which the Company does business; fluctuations in currency and financial markets worldwide; and variations in global economic activity. In particular, current and projected oil and gas prices directly affect customers’ spending levels and their related purchases of the Company’s products and services. Changes in oil and gas price expectations may also lead to changes in the Company’s cost structure, staffing or spending levels. See additional factors discussed in “Factors That May Affect Financial Condition and Future Results” contained herein.

Because the information herein is based solely on data currently available, it is subject to change as a result of changes in conditions over which the Company has no control or influence, and should not therefore be viewed as assurance regarding the Company’s future performance. Additionally, the Company is not obligated to make public indication of such changes unless required under applicable disclosure rules and regulations.

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to warranty obligations, bad debts, inventories, intangible assets, income taxes, pensions and other postretirement benefits, and contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Critical Accounting Policies

        The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

The Company generally recognizes revenue in accordance with invoice or contractual terms at the time of shipment or the performance of services.

        The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments based upon several factors including, but not limited to, historical experience and the current and projected financial condition of each specific customer. Were the financial condition of a customer to deteriorate, resulting in an impairment of its ability to make payments, additional allowances may be required.

28

The Company’s inventories are carried at cost or, if lower, net realizable value. Inventories located in the United States and Canada are carried on the last-in, first-out (LIFO) method. Inventories located outside of the United States and Canada are carried on the first-in, first-out (FIFO) method. The Company writes down its inventory for estimated obsolescence or excess quantities on hand equal to the difference between the cost of the inventory and its estimated realizable value. If future conditions indicate that the Company’s current estimate of realizable value is lower, additional provisions would be required.

The Company provides for the estimated cost of product warranties at the time of sale, or in most cases, when specific warranty problems are encountered. Should actual product failure rates or repair costs differ from the Company’s current estimates, revisions to the estimated warranty liability would be required.

The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. While the Company has considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance, in the event the Company were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax asset would increase income in the period such determination was made. Likewise, should the Company determine that it would not be able to realize all or part of its net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made.

Through December 31, 2001, the Company reviewed the carrying value of intangible assets, including goodwill, at least annually or whenever there were indications that the intangible might be impaired. In assessing the recoverability of these intangible assets and goodwill, the Company made assumptions regarding estimated future cash flows and other factors to determine the estimated fair value of the respective assets. Effective January 1, 2002, the Company will adopt Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (FAS 142) which requires that the Company estimate the fair market value of each of its businesses annually and compare such amount to their respective book value to determine if an impairment of intangibles is required.

The Company accounts for its defined benefit pension plans in accordance with Statement of Financial Accounting Standards No. 87, Employers’ Accounting for Pensions (FAS 87) which requires that amounts recognized in the financial statements be determined on an actuarial basis. A substantial portion of the Company’s pension amounts relate to its defined benefit plan in the United States. We have not made contributions to the U.S. pension plan since 1997 because the funded status of the plan would preclude a tax deduction. The Company does not anticipate making a contribution to the U.S. plan during 2002 for this reason.

A significant element in determining the Company’s pension income or expense in accordance with FAS 87 is the expected return on plan assets. The Company has assumed that the expected long-term rate of return on plan assets will be 9.25%. Over the long-term, the Company’s pension plan assets have earned in excess of 9.25%; therefore, the Company believes that its assumption of future returns of 9.25% is reasonable. The assumed long-term rate of return on assets is applied to a calculated value of plan assets which results in an estimated return on plan assets that is included in current year pension income or expense. The difference between this expected return and the actual return on plan assets is deferred and amortized against future pension income or expense. Due to the weakness in the overall equity markets during 2000 and 2001, the plan assets have earned a rate of return substantially less than 9.25% over the last two years. As a result, future pension income will decline significantly from the level recognized in the last three years.

Financial Summary

The following table sets forth the consolidated percentage relationship to revenues of certain income statement items for the periods presented.

	Year Ended December 31,
	2001		2000		1999
Revenues	100.0	%	100.0	%	100.0	%
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization)	69.1		70.3		73.0
Depreciation and amortization	5.3		5.4		5.7
Selling and administrative expenses	14.8		14.2		13.9
Interest, net	0.4		1.3		1.9
Nonrecurring/unusual charges	1.3		5.6		0.7
Total costs and expenses	90.9		96.8		95.2
Income before income taxes	9.1		3.2		4.8
Income tax provision	(2.8	)	(1.2	)	(1.9	)
Net income	6.3	%	2.0	%	2.9	%

29

2001 Compared to 2000

The Company had net income of $98.3 million, or $1.75 per share, for the twelve months ended December 31, 2001 compared with $27.7 million, or $0.50 per share in 2000. The results for 2001 and 2000 included after-tax charges of $13.9 million ($20.2 million pre-tax), or $0.24 per share, and $56.6 million ($77.4 million pre-tax), or $1.03 per share, respectively, for the cost of exiting a product line and other cost rationalization programs. See Note 2 of the Notes to Consolidated Financial Statements for a discussion of these charges. Excluding these items, the Company earned $1.99 per share in 2001 as compared to $1.53 per share in 2000, an increase of 30.1%

Revenues

Revenues for 2001 totaled $1.564 billion, an increase of 12.8% from 2000 revenues of $1.387 billion. Strong market conditions in the energy industry during the first half of 2001 resulted in revenue increases in the Cameron, CCV and CES divisions while the overall weakness in the worldwide industrial manufacturing environment during 2001 resulted in a decline in revenues at CTC.

Cameron’s revenues for 2001 totaled $898.3 million, an increase of 7.2% from 2000 revenues of $838.3 million. Revenue increases in both surface and aftermarket products more than offset a fairly significant decline in drilling and a smaller decline in subsea products. The increase in revenue for the surface and aftermarket products was primarily due to strong drilling and development activities in the energy industry during the first half of 2001. Drilling revenues declined in 2001 as results in 2000 included deliveries of several large projects which were not replaced in 2001. Subsea revenues declined slightly in 2001 due to deliveries related to an offshore project in the Philippines in 2000 which did not reoccur in 2001.

CCV’s revenues for 2001 totaled $292.3 million, an increase of 32.2% from 2000 revenues of $221.1 million. Revenue increased in all product lines as strong conditions in the energy industry during the first half of 2001 drove overall demand increases for the year.

CES’s revenues for 2001 totaled $272.8 million, an increase of 21.3% from 2000 revenues of $224.8 million. Increases in Ajax units, Superior compressors and aftermarket parts and services more than offset a decline in the Superior engine line (which was discontinued in early 2001). The increase in aftermarket parts and service was attributable to both CES’s traditional business as well as two aftermarket suppliers acquired in 2001.

CTC’s revenues for 2001 totaled $100.4 million, a decrease of 2.0% from 2000 revenues of $102.4 million. The decline in CTC’s revenues was attributable to the weakness in the worldwide industrial manufacturing environment during 2001.

Cost and Expenses

Gross margin (exclusive of depreciation and amortization) for 2001 was $482.6 million, an increase of 17.2% from 2000 gross margin of $411.9 million. Gross margin as a percentage of revenue for 2001 was 30.9% as compared to 29.7% for 2000. The increase in gross margin percentage is attributable to increases at Cameron and CES partially offset by declines at CCV and CTC.

Cameron’s gross margin percentage for 2001 was 31.6% as compared to 29.1% for 2000. The increase in the gross margin percentage occurred across all product lines due to, among other things, improved pricing in the domestic surface, aftermarket and drilling businesses. The drilling business also benefited from reduced warranty costs in 2001 as compared to 2000.

CCV’s gross margin percentage for 2001 was 31.1% as compared to 32.2% for 2000. The decline in the gross margin percentage was attributable to a shift in the mix of products sold during 2001 towards lower margin product lines.

CES’s gross margin percentage for 2001 was 29.6% as compared to 27.0% for 2000. The increase in the gross margin percentage was due primarily to the elimination of costs and lower margin product lines (i.e., the Superior engine line) as a result of the rationalization of CES’s manufacturing activities which occurred during 2000 and early 2001.

CTC’s gross margin percentage for 2001 was 27.0% as compared to 35.8% for 2000. The decline in gross margin percentage was primarily attributable to lower pricing on new units due to the overall weakness in the worldwide industrial manufacturing environment during 2001.

        Depreciation and amortization expense for 2001 was $83.1 million, an increase of 10.3% from 2000 depreciation and amortization of $75.3 million. The increase in depreciation and amortization expense was attributable to: accelerated amortization of existing software systems that will be replaced by new business systems software, the implementation of which is expected to begin in late 2002; accelerated depreciation expense associated with facilities to be closed during 2002; additional amortization expense associated with certain intangible assets; and higher capital expenditures. These increases were offset by reduced depreciation associated with the write-off of long-term assets at CES in connection with the decision to discontinue the Superior brand natural gas engine line and close its Springfield, Ohio manufacturing facility.

30

Selling and administrative expenses for 2001 were $231.1 million, an increase of 17.1% from 2000 selling and administrative expenses of $197.4 million. As a percentage of revenues, selling and administrative expenses for 2001 were 14.8% as compared to 14.2% for 2000. The increase in selling and administrative expenses as a rate of sales results primarily from increased investment associated with the Company’s expansion into the subsea markets, decreased sales leverage at CTC due to the soft industrial manufacturing environment encountered in 2001 and increased postretirement benefit plan costs associated with lower returns on pension assets and decreased amortization of actuarial gains.

As a result of the factors discussed above, operating income (defined as income before nonrecurring/unusual charges, interest and taxes) for 2001 was $168.4 million, an increase of $29.2 million from 2000 operating income of $139.2 million. Cameron’s operating income increased from $103.0 million to $123.9 million, CCV’s operating income increased from $25.7 million to $38.3 million, CES’s operating income increased from $8.8 million to $16.2 million and CTC’s operating income decreased from $17.5 million to $6.0 million.

Net interest expense declined from $18.0 million in 2000 to $5.6 million in 2001. This decline was attributable to the replacement of higher-cost borrowings with the issuance of $450.0 million of convertible securities which bear low rates of interest. Additionally, the issuance of the convertible securities in 2001 generated excess cash which was invested in income-bearing securities.

The effective tax rate for 2001 was 31.0% compared to 36.8% for 2000. The 2000 rate reflected a full-year rate on operational earnings, including nonrecurring/unusual charges, of 30.5%, and the absence of a tax deduction on $9.1 million of translation component write-offs included in pre-tax earnings that were not deductible for tax purposes.

2000 Compared to 1999

The Company had net income of $27.7 million, or $.50 per share, for the twelve months ended December 31, 2000 compared with $43.0 million, or $.78 per share in 1999. The results for 2000 included after-tax charges of $56.6 million ($77.4 million pre-tax), or $1.03 per share, for the cost of exiting a product line and other cost rationalization programs in all four segments. Of these charges, approximately 52% either have required, or will ultimately require, the use of cash, while the remaining 48% reflected write-offs and write-downs of intangible and tangible assets. Further information regarding the types of costs, a breakdown by segment and a breakdown by major project is set forth in Note 2 of the Notes to Consolidated Financial Statements. Excluding these items, the Company earned $1.53 per share in 2000 compared to $1.00 per share in 1999, an increase of 53%.

Revenues

Revenues for 2000 totaled $1.387 billion, a decline of 6.0% from 1999 revenue of $1.475 billion. Excluding 1999 revenues of $93.1 million attributable to the CES rotating compressor business that was sold on September 30, 1999, revenues year-to-year were essentially unchanged, with an increase in Cameron offsetting decreases in the other three segments.

Cameron’s revenues for 2000 totaled $838.3 million, an increase of 2.6% from 1999 revenues of $817.1 million. Revenue increases in both subsea and aftermarket products more than offset a fairly significant decline in drilling and a smaller decline in surface products. Subsea products benefited from deliveries related to a large offshore project in the Philippines, as well as several projects in Equatorial Guinea. Drilling revenues declined during 2000 as compared to 1999 since 2000 did not include the same level of large drilling projects, including control systems, that were completed in 1999. The small decline in year-over-year revenues from surface products was more a matter of individual markets than an overall trend, with improvements in the Western Hemisphere offset by declines in Europe and, to a lesser degree, Asia Pacific. Overall, aftermarket products fared best with a 17% improvement in revenues. This result reflected improvements in nearly all geographic areas as customers were repairing and upgrading oilfield equipment in response to higher oil and gas prices.

CCV’s revenues for 2000 totaled $221.1 million, a decline of 5.3% from 1999 revenues of $233.6 million. Increases in distributor products and aftermarket revenues were more than offset by declines in pipeline valve sales and in Orbit valves, which are sold primarily in industrial applications. Although order activity improved in 2000 compared to 1999, the overall decline in revenues was primarily the result of a higher backlog level, particularly in pipeline valves, at the beginning of 1999 compared to the beginning of 2000. Backlog at the beginning of 2001 was more than 30% higher than at the beginning of 2000, but still more than 20% below the beginning of 1999.

        Revenues for CES, excluding the revenues related to the rotating compressor business as noted above, were essentially flat, declining by less than 1%. Excluding revenues related to the now-discontinued new unit Superior engine business, which declined by approximately $6.0 million year over year, CES’s revenues actually increased by nearly 2%. Declines in the Superior separable compressor line, which were negatively affected by the problems in the Superior engine business, as well as start-up issues at a new manufacturing facility near Houston, Texas, where these compressors are now being manufactured, were more than offset by a 12% improvement in CES aftermarket revenues.

CTC revenues for 2000 totaled $102.4 million, a decline of 2.2% from 1999 revenues of $104.7 million. This decline was entirely attributable to a nearly 35% decline in revenues from CTC’s highly engineered process air machines, which are utilized by air separation companies throughout the world. Revenue growth in plant air machines, as well as improvements in both aftermarket parts and repairs, were nearly sufficient to offset this decline.

31

Cost and Expenses

Gross margin (exclusive of depreciation and amortization) for 2000 was $411.9 million, an increase of 3.3% from 1999 gross margin of $398.8 million. Gross margin as a percentage of revenue for 2000 was 29.7% as compared to 27.0% for 1999. The increase in gross margin percentage was attributable to increases at CCV, CES and CTC, with the gross margin percentage being relatively flat at Cameron.

Cameron’s gross margin percentage for 2000 was 29.1% as compared to 29.4% for 1999. The decline in gross margin percentage was attributable to start-up problems with a new drilling controls system, as well as pricing pressure in both the Asia Pacific and Eastern Hemisphere regions partially offset by savings generated by restructuring programs.

CCV’s gross margin percentage for 2000 was 32.2% as compared to 28.3% for 1999. The increase in gross margin resulted from earlier restructuring efforts, along with a revenue shift from pipeline to distributor products (which normally carry higher margins) and a growth in aftermarket revenues, partially offset by a decline in Orbit.

CES’s gross margin percentage for 2000 was 27.0% as compared to 18.4% for 1999. The increase in gross margin percentage was almost entirely as a result of the disposition of the rotating compressor business. Particularly in 1999, this business had a very low gross margin percentage and, after period costs, including an allocation of general overhead expenses, actually operated at a loss.

CTC’s gross margin percentage for 2000 was 35.8% as compared to 32.6% for 1999. The increase in gross margin percentage reflected productivity improvements as well as a focus on controlling the fixed-cost components of cost of sales. Machine tool upgrades, as well as a single manufacturing plant environment that permits closer management control, facilitated the improvement.

Depreciation and amortization expense for 2000 was $75.3 million, a decrease of 10.0% from 1999 depreciation and amortization of $83.7 million. Virtually all of this decline occurred at CES, where fixed assets sold in connection with the sale of the rotating compressor business, as well as those eliminated in various restructurings, more than offset any incremental increase resulting from new capital expenditures. In the other segments, year-to-year expense was essentially flat as depreciation on new additions offset the effect of assets that became fully depreciated.

Selling and administrative expenses for 2000 were $197.4 million, a decrease of 4.1% from 1999 selling and administrative expenses of $205.7 million. As a percentage of revenues, selling and administrative expenses were 14.2% in 2000 as compared to 13.9% in 1999. From a segment perspective, CES had the largest decline at $7.6 million, or 15.6%, for the same reasons discussed above in connection with depreciation and amortization expense. Cameron also had lower costs ($5.6 million or 5.5%), reflecting the benefits of restructuring efforts and additional pension income from higher returns on pension assets, while CCV, CTC and Corporate all had small increases primarily related to sales and marketing initiatives.

Reflecting the various factors discussed above, operating income (defined as earnings before the 1999 gain on sale, nonrecurring/unusual charges, interest and taxes) for 2000 was $139.2 million, an increase of $29.9 million from 1999 operating income of $109.3. Cameron’s operating income increased from $94.9 million to $103.0 million, CCV’s operating income increased from $20.4 million to $25.7 million, CES’s operating income increased from a loss of $8.5 million to income of $8.8 million and CTC’s operating income increased from $16.2 million to $17.5 million.

Interest expense declined from $27.8 million in 1999 to $18.0 million in 2000. This decline was almost entirely attributable to approximately $200 million of cash received on September 30, 1999 in connection with the sale of the CES rotating compressor business.

The tax rate for 2000 was 36.8%, reflecting the combination of a full-year rate on operational earnings, including nonrecurring/unusual charges, of 30.5% and the absence of a tax deduction on $9.1 million of translation component write-offs included in pre-tax earnings that were not deductible for tax purposes. The 30.5% compares with 32.9% in 1999 and is lower primarily because the proportion of foreign income in certain lower tax rate locations such as Singapore and Ireland was higher in 2000 than in 1999.

Recent Pronouncements

        In June 2001, the Financial Accounting Standards Board issued FAS 142. Under FAS 142, goodwill and intangible assets with indefinite lives are no longer amortized but are reviewed at least annually for impairment. The amortization provisions of FAS 142 apply to goodwill and intangible assets acquired after June 30, 2001. With respect to goodwill and intangible assets acquired prior to July 1, 2001, the Company is required to adopt FAS 142 effective January 1, 2002. Application of the non-amortization provisions of FAS 142 for goodwill is expected to result in an increase in operating income of approximately $11.0 million in 2002. At December 31, 2001, the Company had goodwill of approximately $454.7 million. Pursuant to FAS 142, the Company will test its goodwill for impairment upon adoption and, if impairment is indicated, record such impairment as a cumulative effect of accounting change. The Company is currently evaluating the effect that the adoption may have on its consolidated results of operation and financial position.

32

Outlook for 2002

Due to declines in North American exploration and development activity, the Company currently expects its 2002 earnings per share to total approximately $1.75 to $1.85, with the first quarter earnings expected to total approximately $0.30 to $0.35 per share. Earnings in the remaining quarters of 2002 are expected to show sequential increases, with 55 to 65 percent of the year’s earnings generated in the second half. The pace and magnitude of the improvement is expected to be determined primarily by the activity levels in North American natural gas markets.

Liquidity and Capital Resources

The Company’s combined cash and short-term investment balances increased to $213.7 million at December 31, 2001 from $16.6 million at December 31, 2000 due primarily to the issuance of $450.0 million of convertible securities and increased cash flow from operations, partially offset by repayment of previously outstanding indebtedness, capital expenditures and acquisition costs. During 2001, the Company’s operating activities generated $124.9 million of cash as compared to $20.2 million in 2000. Cash flow from operations in 2001 was comprised primarily of net income of $98.3 million adjusted for non-cash charges of $110.5 million offset by $83.9 million of working capital increases. The most significant increases in working capital were in inventory and receivables, resulting from increased activity levels at the Company during 2001.

During 2001, the Company’s investing activities consumed $271.6 million of cash as compared to $42.7 million in 2000. Capital expenditures in 2001 of $125.0 million increased significantly from expenditures in 2000 of $66.6 million as the Company’s 2001 expenditures included approximately $36.0 million for the construction of a new headquarters for the Cameron division and approximately $20.0 million for the Company’s enterprise-wide software system, which is expected to be implemented beginning in late 2002. Cash spent on acquisitions totalled $51.8 million for 2001 and consisted primarily of two aftermarket parts and service suppliers in the CES division and a supplier of motion compensation solutions in the Cameron division. The investment in marketable securities of $99.9 million in 2001 primarily represents the investment of the excess proceeds from the convertible securities offering.

During 2001, the Company’s financing activities generated $243.8 million of cash as compared to $37.6 million in 2000. The issuance of the convertible securities, as more fully described below, generated gross proceeds of $450.0 million. These proceeds were used to repay amounts outstanding under the Company’s revolving credit facility and other borrowings of $179.1 million and for other purposes, including share repurchases of $25.1 million.

On May 16, 2001, the Company issued two series of convertible debentures with aggregate gross proceeds to the Company of $450.0 million. The Zero-Coupon Convertible Debentures have an aggregate principal amount at maturity of approximately $320.8 million. The debentures were priced at $779.41 per debenture, which represents a yield-to-maturity of approximately 1.25%. The Company has the right to redeem the Zero-Coupon Convertible Debentures anytime after three years at the issue price plus the accrued original issue discount, and the debenture holders have the right to require the Company to repurchase the debentures on the third, eighth and thirteenth anniversaries of the issue. The Zero-Coupon Convertible Debentures are convertible into the Company’s common stock at a rate of 8.1961 shares per debenture, representing an initial conversion price of $95.095 per share.

The 1.75% Convertible Debentures, with an aggregate principal amount of $200.0 million, pay semi-annual interest on May 15 and November 15. The Company has the right to redeem the 1.75% Convertible Debentures anytime after five years at the principal amount plus accrued and unpaid interest, and the debenture holders have the right to require the Company to repurchase the debentures on the fifth, tenth and fifteenth anniversaries of the issue. The 1.75% Convertible Debentures are convertible into the Company’s common stock at a rate of 10.5158 shares per debenture, or $95.095 per share.

In addition to the Company’s cash and short-term investment balances, the Company’s existing revolving credit agreement continues to be available through March 2002 for future borrowing needs, if required. The Company expects to replace this existing facility with a similar facility prior to its expiration. Given its strong liquidity position, the Company reduced its availability under the existing revolving credit agreement to $150.0 million during January 2002. As of December 31, 2001, the Company had $5.2 million outstanding under this agreement. The Company expects to fund capital expenditures, estimated to be approximately $90.0 million in 2002, as well as general liquidity needs from its cash and short-term investment balances, internally generated funds and financing arrangements.

During the fourth quarter of 2001, the Company entered into a forward purchase agreement with a counterparty for the purchase of 286,000 shares of its common stock, at an average price of $34.24 per share. In accordance with EITF 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, this forward purchase agreement has not been included as a liability in the Company’s December 31, 2001 Consolidated Balance Sheet because this agreement can be settled at the Company’s option through physical or net-share settlement at any time within the next two years. The Company is required to settle this agreement if the Company’s stock falls below $16.50 per share.

33

The following summarizes the Company’s significant cash contractual obligations for the next three years as of December 31, 2001.

	Total		Less than One Year		One-Three Years
Significant contractual obligations:
Debt 1	$	8,275	$	5,851	$	2,424
Capital lease obligations		9,227		4,757		4,470
Non-cancelable operating lease obligations		16,469		6,456		10,013
Total significant contractual cash obligations during next three years	$	33,971	$	17,064	$	16,907

¹ The holders of the Zero-Coupon Debentures have the right to require the Company to repurchase the debentures on the third, eighth and thirteenth anniversaries of the issue. Such amounts have not been included in the one–three year category above.

As of December 31, 2001, the Company has $73.1 million of letters of credit and bank guarantees outstanding to secure its contractual obligations under various agreements with its customers or other parties.

Factors That May Affect Financial Condition and Future Results

Continued weakness in North American exploration and development activity could adversely impact the Company’s revenues and growth rate. During the year ended December 31, 2001, the North American rig count and natural gas market weakened significantly. Since a large part of the Company’s revenues are dependent on our customers willingness and ability to spend capital on the exploration, development and ongoing production of crude oil and natural gas reserves, these weaknesses could reduce the Company’s forecasted revenues and earnings.

The Company continues to expand into the deepwater subsea systems market. This market potentially subjects the Company to greater risk than has historically been present in its surface market.

Erosion of the financial condition of customers could adversely affect the Company’s business from both a receivable exposure perspective as well as future revenue realization. In both the CES and CCV divisions, a significant portion of revenues for 2001 were derived from a small number of customers. To the extent these customers encounter financial difficulty and/or curtail their expenditures with the Company, the Company’s revenues and earnings could be negatively affected.

The risks of doing business in developing countries and economically volatile areas could adversely affect the Company’s operations and earnings. The Company’s manufacturing operations in developing countries, such as Argentina and Brazil, and the expansion of sales into economically volatile areas such as Africa, Asia-Pacific, Latin America and other emerging markets, subject the Company to a number of economic and other risks. Additionally, the Company procures a large portion of its raw material and components from a relatively small number of foreign sources. To the extent such sources are disrupted, the ability of the Company to meet the delivery requirements of its customers could be adversely impacted. Any disruption could also negatively impact the costs of raw materials and components procured from these sources.

As a result of the excess proceeds generated from the issuance of the convertible securities, the Company had approximately $102.1 million of short-term investments at December 31, 2001. These investments are comprised of debt and publicly traded equity securities. Changes in the financial markets, including interest rates, as well as the performance of the issuing companies can affect the market value of the Company’s short-term investments.

The Company is in the process of implementing a new enterprise-wide software system. Although the Company believes it has developed an implementation plan which will allow for a successful transition to the new system, any disruption in this plan could negatively affect the Company’s ability to develop, procure, manufacture and/or deliver its products as well as disrupt the Company’s financial reporting system.

34

Environmental Remediation

The cost of environmental remediation and compliance has not been a material expense for the Company during any of the periods presented. The Company has been identified as a potentially responsible party with respect to five sites designated for cleanup under the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) or similar state laws. The Company’s involvement at four of the sites is at a de minimis level. The fifth site is Osborne, Pennsylvania (a landfill into which the CES operation in Grove City, Pennsylvania disposed waste), where remediation is complete and remaining costs (less than $1 million) relate to ongoing ground water treatment and monitoring. The Company believes, based on its review and other factors, that the estimated costs related to these sites will not have a material adverse effect on the Company’s results of operations, financial condition or liquidity. However, no assurance can be given that the actual cost will not exceed the estimates of the cleanup costs, once determined. Additionally, the Company has discontinued operations at a number of sites which had previously been in existence for many years. The Company does not believe, based upon information currently available, that there are any material environmental liabilities existing at these locations.

Market Risk Information

A large portion of the Company’s operations consist of manufacturing and sales activities in foreign jurisdictions, principally in Europe, Canada, West Africa, the Middle East, Latin America and the Pacific Rim. As a result, the Company’s financial performance may be affected by changes in foreign currency exchange rates or weak economic conditions in these markets. Overall, the Company generally is a net receiver of Pounds Sterling and Canadian dollars and, therefore, benefits from a weaker U.S. dollar with respect to these currencies. Typically, the Company is a net payer of euros (including related legacy currencies) and Norwegian krone as well as other currencies such as the Singapore dollar and the Brazilian real. A weaker U.S. dollar with respect to these currencies may have an adverse effect on the Company. For each of the last three years, the Company’s gain or loss from foreign currency-denominated transactions has not been material.

In order to mitigate the effect of exchange rate changes, the Company will often structure sales contracts to provide for collections from customers in U.S. dollars. In certain specific instances, the Company may enter into forward foreign currency exchange contracts to hedge specific, large, non-U.S. dollar anticipated receipts or large anticipated receipts in currencies for which the Company does not traditionally have fully offsetting local currency expenditures. As of December 31, 2001, there were no outstanding forward foreign currency exchange contracts.

Changes in interest rates affect interest income earned on the Company’s cash equivalents and short-term investments and interest expense on short-term borrowings. Based upon the Company’s short-term investments outstanding at December 31, 2001, the Company estimates that a 1% change in the market interest rate would have a $1.0 million impact on the value of these investments. As of December 31, 2001, the Company had $5.2 million of Canadian dollar-denominated short-term borrowings under its credit agreement that carried an interest rate of 2.46% as of that date.

35

Report of Independent Auditors

To the Board of Directors and Stockholders

Cooper Cameron Corporation

We have audited the accompanying consolidated balance sheets of Cooper Cameron Corporation as of December 31, 2001 and 2000 and the related statements of consolidated results of operations, consolidated changes in stockholders’ equity and consolidated cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cooper Cameron Corporation at December 31, 2001 and 2000, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States.

/s/   ERNST & YOUNG LLP

Houston, Texas

January 29, 2002

36

CONSOLIDATED RESULTS OF OPERATIONS

(dollars in thousands, except per share data)

	Year Ended December 31,
	2001			2000			1999
Revenues	$	1,563,678		$	1,386,709		$	1,475,061
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization)		1,081,078			974,797			1,076,276
Depreciation and amortization		83,095			75,321			83,716
Selling and administrative expenses		231,144			197,381			205,734
Interest, net		5,620			18,038			27,834
Nonrecurring/unusual charges		20,159			77,399			10,585
Total costs and expenses		1,421,096			1,342,936			1,404,145
Income before income taxes		142,582			43,773			70,916
Income tax provision		(44,237	)		(16,113	)		(27,914	)
Net income	$	98,345		$	27,660		$	43,002
Earnings per share:
Basic	$	1.82		$	.52		$	.81
Diluted	$	1.75		$	.50		$	.78

The Notes to Consolidated Financial Statements are an integral part of these statements.

37

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except shares and per share data)

	December 31,
	2001			2000
Assets
Cash and cash equivalents	$	111,640		$	16,566
Short-term investments		102,071			—
Receivables, net		306,205			268,768
Inventories, net		423,819			372,740
Other		21,251			29,912
Total current asset		964,986			687,986
Plant and equipment, at cost less accumulated depreciation		460,100			403,220
Intangibles, less accumulated amortization		293,912			261,600
Other assets		156,054			141,067
Total assets	$	1,875,052		$	1,493,873
Liabilities and stockholders’ equity
Short-term debt	$	10,487		$	4,212
Accounts payable and accrued liabilities		349,236			325,004
Accrued income taxes		18,048			16,815
Total current liabilities		377,771			346,031
Long-term debt		459,142			188,060
Postretirement benefits other than pensions		47,759			48,573
Deferred income taxes		41,665			38,453
Other long-term liabilities		25,434			30,477
Total liabilities		951,771			651,594
Stockholders’ equity:
Common stock, par value $.01 per share, 150,000,000 shares authorized, 54,566,054 shares issued (54,011,929 at December 31, 2000)		546			540
Preferred stock, par value $.01 per share, 10,000,000 shares authorized, no shares issued or outstanding		—			—
Capital in excess of par value		951,441			929,511
Accumulated other elements of comprehensive income		(53,050	)		(37,105	)
Retained earnings (deficit)		47,678			(50,667	)
Less: Treasury stock at cost, 571,320 shares		(23,334	)		—
Total stockholders’ equity		923,281			842,279
Total liabilities and stockholders’ equity	$	1,875,052		$	1,493,873

The Notes to Consolidated Financial Statements are an integral part of these statements.

38

CONSOLIDATED CASH FLOWS

(dollars in thousands)

	Year Ended December 31,
	2001			2000			1999
Cash flows from operating activities:
Net income	$	98,345		$	27,660		$	43,002
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		63,073			59,797			64,395
Amortization		20,022			15,524			19,321
Deferred income taxes and other		27,446			739			(10,688	)
Changes in assets and liabilities, net of translation and effects of acquisitions, dispositions and non-cash items:
Receivables		(36,511	)		(11,562	)		40,319
Inventories		(40,277	)		17,009			72,402
Accounts payable and accrued liabilities		23,342			(50,394	)		(20,872	)
Other assets and liabilities, net		(30,518	)		(38,587	)		(42,169	)
Change in assets and liabilities		(83,964	)		(83,534	)		49,680
Exclude nonoperating gain from sale of rotating business, net of tax		—			—			(25,788	)
Net cash provided by operating activities		124,922			20,186			139,922
Cash flows from investing activities:
Capital expenditures		(125,004	)		(66,599	)		(64,909	)
Proceeds from sale of rotating business		—			—			203,160
Other (acquisitions) dispositions, net		(51,778	)		8,171			(7,540	)
Investments in marketable securities		(99,932	)		—			—
Other		5,106			15,703			9,256
Net cash provided by (used for) investing activities		(271,608	)		(42,725	)		139,967
Cash flows from financing activities:
Loan repayments, net		(179,080	)		(17,830	)		(196,232	)
Debentures issued		450,000			—			—
Debenture issuance costs		(8,364	)		—			—
Purchase of treasury stock		(25,082	)		—			(92,332	)
Activity under stock option plans and other		6,316			55,446			(4,802	)
Net cash provided by (used for) financing activities		243,790			37,616			(293,366	)
Effect of translation on cash		(2,030	)		(6,726	)		396
Increase (decrease) in cash and cash equivalents		95,074			8,351			(13,081	)
Cash and cash equivalents, beginning of year		16,566			8,215			21,296
Cash and cash equivalents, end of year	$	111,640		$	16,566		$	8,215

The Notes to Consolidated Financial Statements are an integral part of these statements.

39

CONSOLIDATED CHANGES IN STOCKHOLDERS’ EQUITY

(dollars in thousands)

	Common stock		Capital in excess of par value			Accumulated other elements of comprehensive income			Retained earnings (deficit)			Treasury stock			Total
Balance  –  December 31, 1998	$	533	$	883,626		$	17,455		$	(121,329	)	$	—		$	780,285
Net income										43,002						43,002
Foreign currency translation							(29,479	)								(29,479	)
Minimum pension liability, net of $63 in taxes							(15	)								(15	)
Comprehensive income																13,508
Purchase of treasury stock				1,267									(98,378	)
Common stock issued under stock option and other employee benefit plans		7		9,392									2,304			11,703
Tax benefit of employee stock benefit plan transactions				5,693												5,693
Balance  –  December 31, 1999		540		899,978			(12,039	)		(78,327	)		(96,074	)		714,078
Net income										27,660						27,660
Foreign currency translation							(25,313	)								(25,313	)
Change in fair value of marketable securities							247									247
Comprehensive income																2,594
Common stock issued under stock option and other employee benefit plans				(30,091	)								96,074			65,983
Tax benefit of employee stock benefit plan transactions				59,624												59,624
Balance  –  December 31, 2000		540		929,511			(37,105	)		(50,667	)		—			842,279
Net income										98,345						98,345
Foreign currency translation							(15,681	)								(15,681	)
Minimum pension liability, net of $35 in taxes							57									57
Change in fair value of marketable securities							(321	)								(321	)
Comprehensive income																82,400
Purchase of treasury stock													(25,082	)		(25,082	)
Common stock issued under stock option and other employee benefit plans		6		14,828									1,748			16,582
Tax benefit of employee stock benefit plan transactions				7,129												7,129
Costs related to forward stock purchase agreement				(27	)											(27	)
Balance  –  December 31, 2001	$	546	$	951,441		$	(53,050	)	$	47,678		$	(23,334	)	$	923,281

The Notes to Consolidated Financial Statements are an integral part of these statements.

40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1:    Summary of Major Accounting Policies

Principles of Consolidation  —  The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. Investments of 50% or less in affiliated companies are accounted for using the equity method. The Company’s operations are organized into four separate business segments or divisions. The four segments are Cameron, Cooper Cameron Valves (CCV), Cooper Energy Services (CES) and Cooper Turbocompressor (CTC). Additional information regarding each segment may be found in Note 13 of the Notes to Consolidated Financial Statements.

Estimates in Financial Statements  —  The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Revenue Recognition  —  Revenue is generally recognized in accordance with invoice or contractual terms at the time of shipment or the performance of services except in the case of certain larger, long lead time orders at Cooper Energy Services which, prior to the sale of the rotating business in September 1999, were accounted for using the percentage of completion method. Under this method, revenue was recognized as work progressed in the ratio that costs incurred bore to estimated total costs. The aggregate of costs incurred reduced net inventories while the revenue recognized was shown as a receivable.

Short-term Investments  —  Investments in available for sale marketable debt and equity securities are carried at market value, based on quoted market prices. Differences between cost and market value are reflected as a component of accumulated other elements of comprehensive income until such time as those differences are realized.

Receivables  —  The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments based upon several factors including, but not limited to, historical experience and the current and projected financial condition of the specific customer.

Inventories  —  Inventories are carried at cost or, if lower, net realizable value. On the basis of current costs, 68% of inventories in 2001 and 71% in 2000 are carried on the last-in, first-out (LIFO) method. The remaining inventories, which are located outside the United States and Canada, are carried on the first-in, first-out (FIFO) method. The Company writes down its inventory for estimated obsolescence or excess quantities on hand equal to the difference between the cost of the inventory and its estimated realizable value.

Plant and Equipment  —  Depreciation is provided over the estimated useful lives of the related assets, or in the case of assets under capital leases, over the related lease term, if less, using primarily the straight-line method. The range of estimated useful lives are: buildings – 10 to 40 years; machinery and equipment – 3 to 18 years; and tooling, dies, patterns and all other – 5 to 10 years.

Intangibles  —  Intangibles consist primarily of goodwill related to purchase acquisitions. With minor exceptions, the goodwill is being amortized over 40 years from respective acquisition dates. The Company considers this amortization period to be appropriate due to the long-lived nature of the businesses acquired and the lack of rapid technological change or obsolescence associated with these operations. Through December 31, 2001, the carrying value of the Company’s goodwill was reviewed at the division level at least annually or whenever there were indications that the goodwill might be impaired. At this time, the Company has no reason to believe that future cash flows from these divisions will not be sufficient to fully realize the remaining carrying value of its goodwill.

Income Taxes  —  The asset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Income tax expense includes U.S. and foreign income taxes, including U.S. federal taxes on undistributed earnings of foreign subsidiaries to the extent such earnings are planned to be remitted. Taxes are not provided on the translation component of comprehensive income since the effect of translation is not considered to modify the amount of the earnings that are planned to be remitted. The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized.

Environmental Remediation and Compliance  —  Environmental remediation and postremediation monitoring costs are accrued when such obligations become probable and reasonably estimable. Such future expenditures are not discounted to their present value.

Product Warranty  —  Estimated warranty expense is accrued either at the time of sale or, in most cases, when specific warranty problems are encountered. Adjustments to the accruals are made periodically to reflect actual experience.

        Stock-Based Compensation  —  The Company measures compensation expense for its stock-based compensation plans using the intrinsic value method and has provided in Note 9 of the Notes to Consolidated Financial Statements pro forma disclosures of the effect on net income and earnings per common share as if the alternative fair value method had been applied in measuring compensation expense.

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Derivative Financial Instruments  —  Effective January 1, 2001, the Company recognizes all derivative financial instruments as assets and liabilities and measures them at fair value. For derivative financial instruments that are designated and qualify as a cash flow hedge, the effective portions of changes in fair value of the derivative are recorded in other comprehensive income, net of tax, and are recognized in the income statement when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized currently in earnings. Changes in the fair value of derivatives that do not qualify for hedge treatment are recognized currently in earnings. The Company had no outstanding derivatives at December 31, 2001.

Cash Equivalents  —  For purposes of the Consolidated Cash Flows statement, the Company considers all investments purchased with original maturities of three months or less to be cash equivalents.

Reclassifications  —  Certain prior year amounts have been reclassified to conform to the current year presentation.

New Accounting Pronouncements  —  In June 2001, the Financial Accounting Standards Board approved the issuance of Statement of Financial Accounting Standards No. 141, Business Combinations (FAS 141) and Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (FAS 142). These standards change the accounting for business combinations, goodwill and intangible assets. FAS 141 eliminates the pooling-of-interests method of accounting for business combinations. This standard was effective for any business combination initiated after June 30, 2001. Adoption of FAS 141 did not have a significant effect on the Company’s financial position or results of operations at the time of adoption. Under FAS 142, goodwill and indefinite-lived intangible assets will no longer be amortized but will be reviewed annually for impairment. The Company is required to adopt this standard effective January 1, 2002 (and for business combinations subsequent to June 30, 2001). During 2002, the Company will perform its first required impairment test of goodwill and other intangible assets as of January 1, 2002. The Company has not yet determined the effect of adopting FAS 142 on its results of operations or financial position.

Additionally, Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (FAS 144), was issued in October 2001. This statement, which supersedes Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, is effective beginning January 1, 2002. The Company is currently evaluating the effect that the adoption may have on its consolidated results of operations or financial position.

Note 2:    Nonrecurring/Unusual Charges

The nonrecurring/unusual charges by segment for the last three years were as follows:

	Year Ended December 31,
(dollars in thousands)	2001		2000		1999
Cameron	$	—	$	8,121	$	15,881
CCV		—		1,448		9,873
CES		20,159		67,503		29,385
CES-Gain on sale of rotating compressor product line		—		—		(45,262	)
CTC		—		327		708
	$	20,159	$	77,399	$	10,585

During 2001, CES recorded $20,159,000 of costs incurred in connection with completing the consolidation of its manufacturing operations, closing obsolete facilities and discontinuing the manufacture of new Superior engines. These actions were substantially completed during the first half of the year. The charges during 2001 consisted primarily of approximately $4,516,000 of employee severance and various relocation costs, $2,544,000 of contract cancellation costs and $11,579,000 of plant shutdown costs. Included in the plant shutdown costs were $4,088,000 of costs incurred by the Superior Engine business during the shutdown period.

        During 2000, the Company recorded $77,399,000 of nonrecurring/unusual costs. Of this amount, approximately $36,966,000 represented non-cash write-offs or write-downs of assets and $40,433,000 reflected either cash expenditures or accruals for cash that will be spent in future periods. Of the cash total, approximately $12,168,000 related to employee severance and other employee costs including workmen’s compensation, medical, pay-to-stay agreements and similar items, $8,841,000 related to personnel and equipment relocation, $5,378,000 related to facility clean-up (including environmental) and rearrangement, $6,356,000 related to operating costs for redundant facilities being held for sale and $7,690,000 related to productivity degradation, including outsourcing during phase-out and other costs. The major projects included approximately $32,659,000 related to the discontinuance of CES’s manufacturing of Superior engines and the resulting shutdown of its manufacturing facility in Springfield, Ohio; $14,126,000 related to remaining costs associated with the discontinuance of all manufacturing and foundry operations in Grove City, Pennsylvania; $13,503,000 resulting from the relocation of all manufacturing, warehousing and other operations from Mt. Vernon, Ohio (original segment headquarters for CES) to other locations pursuant to the 1999 sale of CES’s rotating compressor business to Rolls-Royce plc; $6,634,000 related to the write-off of the Canadian translation component in connection with the sale of this business; $4,058,000

42

related to the relocation of Cameron’s drilling BOP stack and subsea “Christmas tree” manufacturing from Ville Platte, Louisiana to Liberty, Texas (subsea trees) and Beziers, France (BOPs); $2,826,000 related to the shutdown of Cameron’s manufacturing facility in Vienna, Austria and relocation of this capacity to other European locations; and $3,593,000 associated with various facility shutdown and realignment costs and other actions for each of the divisions.

On September 30, 1999, the Company completed the sale to Rolls-Royce plc of the CES division’s rotating compressor product line, which included centrifugal compressors, power turbines and En-Tronic^® controls. The operations that were sold had primary facilities in Mt. Vernon, Ohio, Liverpool, United Kingdom and Hengelo in the Netherlands. The Company received $203,160,000 in cash in connection with the sale. Included in the sale was the Company’s 50% interest in Cooper Rolls, Inc., a marketing joint venture company equally owned with Rolls-Royce prior to the transaction. The Company recorded a pre-tax gain from the sale totaling $45,262,000.

Cameron recorded approximately $13,176,000 during 1999 for employee severance, primarily associated with the continued rationalization of its operations in the U.S., the U.K. and France in response to decreased market demand that began in 1998. The remaining nonrecurring charges for 1999 relate primarily to employee severance and other costs associated with the closure of this segment’s manufacturing facility in Austria.

The $9,873,000 of nonrecurring/unusual charges recorded by CCV during 1999 relate to: (i) continuing costs from the shutdown (including severance, relocation and other costs) of a manufacturing facility in Missouri City, Texas, (ii) one-time acquisition costs relating to the 1998 acquisition of Orbit Valve International, Inc. and (iii) severance, primarily associated with employment reductions at this segment’s operations in Beziers, France.

CES recorded approximately $29,385,000 during 1999 (including approximately $15,212,000 of non-cash asset impairment charges) relating to employee severance, the shutdown of the Company’s underutilized foundry and associated machining operations in Grove City, Pennsylvania and the relocation of its compressor plant in Mt. Vernon, Ohio. The remaining 1999 costs primarily relate to employee relocations and various facility/warehouse consolidations.

During 1999 and 2000, CTC’s nonrecurring charges related to employee severance associated with declining demand in that segment’s markets.

The cash flow effect of the above actions (excluding proceeds from the sale of the rotating business) was approximately $27,245,000 in 2001, $37,488,000 in 2000 and $37,409,000 in 1999. The aggregate ending accruals at December 31, 2001 and 2000 for the Company’s restructuring activities were $6,187,000 and $13,273,000, respectively.

Note 3:    Acquisitions

During 2001, the Company’s acquisitions consisted primarily of two aftermarket parts and service suppliers in the CES division and a supplier of motion compensation solutions in the Cameron division. Cash and debt consideration for the 2001 acquisitions totaled $55,350,000 and resulted in goodwill of approximately $24,471,000. These acquisitions were accounted for under the purchase method of accounting and their results of operations since the date of acquisition have been included in the Company’s consolidated results of operations. The acquisitions in 2000 and 1999 were not significant.

Note 4:    Receivables

Receivables consisted of the following:

	December 31,
(dollars in thousands)	2001			2000
Trade receivables	$	300,565		$	261,197
Other receivables		9,633			10,651
Allowance for doubtful accounts		(3,993	)		(3,080	)
	$	306,205		$	268,768

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Note 5:    Inventories

Inventories consisted of the following:

	December 31,
(dollars in thousands)	2001			2000
Raw materials	$	35,470		$	37,717
Work-in-process		139,793			108,418
Finished goods, including parts and subassemblies		323,783			303,979
Other		1,982			2,138
		501,028			452,252
Excess of current standard costs over LIFO costs		(52,477	)		(55,148	)
Allowance for obsolete and excess inventory		(24,732	)		(24,364	)
	$	423,819		$	372,740

Note 6:    Plant and Equipment and Intangibles

Plant and equipment consisted of the following:

	December 31,
(dollars in thousands)	2001			2000
Land and land improvements	$	39,950		$	35,540
Buildings		215,267			173,555
Machinery and equipment		438,429			406,239
Tooling, dies, patterns, etc.		58,565			58,906
Assets under capital leases		23,551			22,964
All other		108,931			99,450
Construction in progress		26,917			35,659
		911,610			832,313
Accumulated depreciation		(451,510	)		(429,093	)
	$	460,100		$	403,220

Intangibles consisted of the following:

	December 31,
(dollars in thousands)	2001			2000
Goodwill	$	454,674		$	437,480
Assets related to pension plans		243			371
Capitalized software and other		92,153			58,531
		547,070			496,382
Accumulated amortization		(253,158	)		(234,782	)
	$	293,912		$	261,600

Note 7:    Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following:

	December 31,
(dollars in thousands)	2001		2000
Trade accounts and accruals	$	207,020	$	186,153
Salaries, wages and related fringe benefits		58,340		51,886
Payroll and other taxes		16,978		18,033
Product warranty, late delivery, and similar costs		15,558		16,812
Deferred income taxes		32,024		27,269
Nonrecurring/unusual charges		4,322		10,488
Other		14,994		14,363
	$	349,236	$	325,004

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Note 8:    Employee Benefit Plans

Information regarding the Company’s defined benefit pension and postretirement benefit plans was as follows:

	Pension Benefits									Postretirement Benefits
(dollars in thousands)	2001			2000			1999			2001			2000			1999
Service cost	$	5,971		$	7,569		$	9,598		$	48		$	67		$	168
Interest cost		18,721			17,825			18,366			3,090			3,123			2,928
Expected return on plan assets		(29,543	)		(31,921	)		(30,653	)		—			—			—
Amortization of prior service cost		(351	)		(188	)		(266	)		(136	)		(200	)		(300	)
Amortization of (gains) losses and other		(5,466	)		(9,442	)		(5,802	)		(200	)		(10,100	)		(10,600	)
Net periodic benefit (income) expense		(10,668	)		(16,157	)		(8,757	)		2,802			(7,110	)		(7,804	)
Curtailment (gain) loss		(577	)		53			(446	)		—			(300	)		—
Settlement gain		—			(1,484	)		(2,087	)		—			—			—
Termination benefit expense		839			304			—			—			—			—
Total net benefit (income) expense	$	(10,406	)	$	(17,284	)	$	(11,290	)	$	2,802		$	(7,410	)	$	(7,804	)

	Pension Benefits						Postretirement Benefits
(dollars in thousands)	2001			2000			2001			2000
Change in benefit obligation:
Benefit obligation at beginning of year	$	273,657		$	275,707		$	41,911		$	43,708
Service cost		5,971			7,569			48			67
Interest cost		18,721			17,825			3,090			3,123
Plan participants’ contributions		721			754			—			—
Amendments		—			350			—			—
Actuarial (gains) losses		24,640			(3,594	)		247			(8	)
Merger of acquired company plan		—			4,248			—			—
Exchange rate changes		(3,069	)		(8,752	)		—			—
Curtailment results		(1,591	)		121			—			(139	)
Settlement results		—			4,411			—			—
Termination benefit results		839			304			—			—
Benefits paid directly or from plan assets		(19,892	)		(25,286	)		(3,616	)		(4,840	)
Benefit obligation at end of year	$	299,997		$	273,657		$	41,680		$	41,911

	Pension Benefits						Postretirement Benefits
(dollars in thousands)	2001			2000			2001			2000
Change in plan assets:
Fair value of plan assets at beginning of year	$	355,819		$	361,531		$	—		$	—
Actual return on plan assets		(29,546	)		15,330			—			—
Actuarial gains (losses)		(8,602	)		8,551			—			—
Company contributions		340			158			3,616			4,840
Plan participants’ contributions		721			754			—			—
Merger of acquired company plan		—			5,310			—			—
Exchange rate changes		(4,027	)		(10,873	)		—			—
Benefits paid from plan assets		(19,631	)		(24,942	)		(3,616	)		(4,840	)
Fair value of plan assets at end of year, primarily debt and equity securities	$	295,074		$	355,819		$	—		$	—

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	Pension Benefits						Postretirement Benefits
(dollars in thousands)	2001			2000			2001			2000
Plan assets in excess of (less than) benefit obligations at end of year	$	(4,923	)	$	82,162		$	(41,680	)	$	(41,911	)
Unrecognized net (gain) loss		83,350			(14,688	)		(5,776	)		(6,223	)
Unrecognized prior service cost		(2,764	)		(2,099	)		(303	)		(439	)
Unrecognized net transition obligation		98			151			—			—
Prepaid (accrued) pension cost		75,761			65,526			(47,759	)		(48,573	)
Underfunded plan adjustments recognized:
Accrued minimum liability		(932	)		(888	)		—			—
Intangible asset		243			371			—			—
Accumulated other comprehensive income, net of tax		331			388			—			—
Net assets (liabilities) recognized on balance sheet at end of year	$	75,403		$	65,397		$	(47,759	)	$	(48,573	)

	Pension Benefits		Postretirement Benefits
	2001	2000	2001		2000
Weighted-average assumptions as of December 31:
Domestic plans:
Discount rate	7.25%	7.75%	7.25	%	7.65	%
Expected return on plan assets	9.25%	9.25%
Rate of compensation increase	4.5%	4.5%
Health care cost trend rate			7.0	%	7.5	%
International plans:
Discount rate	6.0–6.25%	6.0-6.25%
Expected return on plan assets	6.0-8.5%	6.0-8.5%
Rate of compensation increase	3.5-4.5%	3.5-4.5%

The rate of compensation increase for the domestic plans is based on an age-grade scale ranging from 7.5% to 3.0% with a weighted-average rate of approximately 4.5%.

The health care cost trend rate is assumed to decrease gradually from 7.0% to 5.0% by 2006 and remain at that level thereafter. A one-percentage-point change in the assumed health care cost trend rate would have the following effects:

(dollars in thousands)	1-Percentage point increase		1-Percentage point decrease
Effect on total of service and interest cost components in 2001	$	225,000	$	(207,000	)
Effect on postretirement benefit obligation as of December 31, 2001	$	2,637,000	$	(2,344,000	)

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Amounts applicable to the Company’s pension plans with projected and accumulated benefit obligations in excess of plan assets are as follows:

	Projected Benefit Obligation in Excess of Plan Assets						Accumulated Benefit Obligation in Excess of Plan Assets
(dollars in thousands)	2001			2000			2001			2000
Fair value of applicable plan assets	$	122,568		$	2,669		$	2,786		$	2,669
Projected benefit obligation of applicable plans	$	(132,679	)	$	(8,514	)
Accumulated benefit obligation of applicable plans							$	(7,738	)	$	(7,595	)

The Company sponsors the Cooper Cameron Corporation Retirement Plan (Retirement Plan) covering all salaried U.S. employees and certain domestic hourly employees, as well as separate defined benefit pension plans for employees of its U.K. and German subsidiaries, and several unfunded defined benefit arrangements for various other employee groups.

In addition, the Company’s full-time domestic employees who are not covered by a bargaining unit are also eligible to participate in the Cooper Cameron Corporation Retirement Savings Plan. Under this plan, employees’ savings deferrals are partially matched with shares of the Company’s Common stock. The Company’s expense under this plan equals the matching contribution under the Plan’s formula. Expense for the years ended December 31, 2001, 2000 and 1999 amounted to $7,581,000, $7,349,000 and $7,598,000, respectively. Similarly, the Company provides various savings plans for hourly and other employees under collective bargaining agreements which provide for Company matching contributions in cash based on specified formulas. Expense with respect to these various defined contribution plans for the years ended December 31, 2001, 2000 and 1999 amounted to $8,642,000, $7,783,000 and $9,439,000, respectively.

The Company’s salaried employees also participate in various domestic employee welfare benefit plans, including medical, dental and prescriptions, among other benefits for active employees. Salaried employees who retired prior to 1989, as well as certain other employees who were near retirement at that date and elected to receive certain benefits, have retiree medical and prescription benefits and, if retirement occurred prior to January 1, 1998, have life insurance benefits, while active salaried employees do not have postretirement health care or life insurance benefits.

The hourly employees have separate plans with varying benefit formulas, but currently active employees, except for certain employees similar to those described above, will not receive health care benefits after retirement.

All of the welfare benefit plans, including those providing postretirement benefits, are unfunded.

Note 9:    Stock Options and Employee Stock Purchase Plan

The following table summarizes stock option activity for each of the three years ended December 31:

	Number of Shares
	Long-term and Broad Based Incentive Plans		Non-employee Director Plan		Weighted Average Exercise Prices
Stock options outstanding at December 31, 1998	7,052,816		318,540		$	30.84
Options granted	1,646,113		61,740		$	41.35
Options cancelled	(230,004	)	—		$	36.80
Options exercised	(884,744	)	—		$	17.74
Stock options outstanding at December 31, 1999	7,584,181		380,280		$	34.38
Options granted	2,472,205		72,548		$	58.24
Options cancelled	(206,242	)	—		$	31.74
Options exercised	(4,382,012	)	(128,054	)	$	31.80
Stock options outstanding at December 31, 2000	5,468,132		324,774		$	46.96
Options granted	2,110,390		67,740		$	36.57
Options cancelled	(166,262	)	(10,290	)	$	48.13
Options exercised	(555,385	)	(45,000	)	$	32.01
Stock options outstanding at December 31, 2001	6,856,875		337,224		$	45.03

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Information relating to selected ranges of exercise prices for outstanding and exercisable options at December 31, 2001 is as follows:

Options Outstanding				Options Exercisable
Range of Exercise Prices	Number Outstanding as of 12/31/2001	Weighted Average Years Remaining on Contractual Life	Weighted Average Exercise Price	Number Exercisable as of 12/31/2001	Weighted Average Exercise Price
$8.33 - $24.19	555,847	6.68	$23.73	535,922	$23.71
$29.25 - $33.00	1,934,086	8.93	$32.93	51,276	$31.68
$34.34 - $42.69	1,649,289	6.80	$40.06	1,189,013	$39.45
$43.85 - $53.72	1,623,791	8.05	$53.09	493,018	$53.04
$54.72 - $79.94	1,431,086	4.25	$66.26	1,196,852	$66.50
$8.33 - $79.94	7,194,099	7.14	$45.03	3,466,081	$48.18

Options are granted to key employees under the Long-term and Broad Based Incentive Plans and generally become exercisable on the first anniversary date following the date of grant in one-third increments each year. Certain key executives also elected in 2001 and 2000 to receive options in lieu of salary for the service years ending December 31, 2002 and 2001, respectively. The options granted under the Options in Lieu of Salary Program generally become exercisable at the end of the related salary period and expire five years after the beginning of the salary period. Similar options were not granted in 1999 with respect to salary for the year 2000.

Under the Company’s Non-employee Director Stock Option Plan, non-employee directors receive a grant of 6,000 stock options annually and, for new directors, upon first joining the Board. The options generally expire five years after the date of grant and become exercisable one year following the date of grant. In addition, directors are permitted to take either a portion of or their full annual retainer in cash ($30,000) or receive, in lieu of cash, additional stock options. All directors elected to receive their retainer in stock options. These retainer option shares, totalling 25,740 for each of the service years 2002, 2001 and 2000, were granted in each of the preceding years. The retainer options become exercisable one year following the beginning of the retainer period and expire five years following the beginning of the retainer period. The exercise price for all option grants is equal to the fair market value of the Company’s stock at the date of grant.

As of December 31, 2001, shares reserved for future grants under the Long-term Incentive, Broad Based Incentive, and Non-employee Director Stock Option Plans were 1,703,845, 67,932 and 337,688, respectively.

Had the Company followed the alternative fair value method of accounting for stock-based compensation, the weighted-average fair value per share of options granted during 2001, 2000 and 1999 would have been $15.42, $24.29 and $17.02, respectively. The weighted-average fair value per share of stock purchases under the Employee Stock Purchase Plan during 2001, 2000 and 1999 would have been $18.82, $18.98 and $10.56, respectively. The fair values were estimated using the Black-Scholes model with the following weighted-average assumptions:

	Year Ended December 31,
	2001	2000	1999
Expected life (in years)	3.3	3.4	3.6
Risk-free interest rate	4.5%	5.8%	5.5%
Volatility	53.3%	48.8%	49.4%
Dividend yield	0.0%	0.0%	0.0%

The table that follows summarizes the pro forma effect on net income (loss) and earnings (loss) per share in the year presented as if the fair values of stock-based compensation had been recognized as compensation expense on a straight-line basis over the vesting period of the grant. The following pro forma effect on net income (loss) for the years presented may not be representative of the pro forma effect on net income (loss) in future years.

	Year Ended December 31,
	2001		2000			1999
Net income (loss):
As reported	$	98,345,000	$	27,660,000		$	43,002,000
Pro forma	$	67,075,000	$	(4,934,000	)	$	20,417,000
Diluted earnings (loss) per share:
As reported		$1.75		$0.50			$0.78
Pro forma		$1.21		$(0.09	)		$0.36

48

Employee Stock Purchase Plan

Under the Cooper Cameron Employee Stock Purchase Plan, the Company is authorized to sell up to 2,000,000 shares of Common stock to its full-time employees in the United States, U.K., Ireland, Singapore and Canada, nearly all of whom are eligible to participate. Under the terms of the Plan, employees may elect each year to have up to 10% of their annual compensation withheld to purchase the Company’s Common stock. The purchase price of the stock is 85% of the lower of the beginning-of-plan year or end-of-plan year market price of the Company’s Common stock. Under the 2001/2002 plan, more than 1,800 employees elected to purchase approximately 152,000 shares of the Company’s Common stock at $43.08 per share, or 85% of the market price of the Company’s Common stock on July 31, 2002, if lower. A total of 92,768 shares were purchased at $44.07 per share on July 31, 2001 under the 2000/2001 plan.

Note 10:    Long-term Debt

The Company’s debt obligations were as follows:

	December 31,
(dollars in thousands)	2001			2000
Convertible debentures, net of $68,801 of unamortized original issue discount	$	451,955		$	—
Floating-rate revolving credit advances		5,151			170,463
Other debt		3,124			14,493
Obligations under capital leases		9,399			7,316
		469,629			192,272
Current maturities		(10,487	)		(4,212	)
Long-term portion	$	459,142		$	188,060

On May 16, 2001, the Company issued two series of convertible debentures with aggregate gross proceeds to the Company of $450,000,000. The first series consisted of twenty-year zero-coupon convertible debentures (the “Zero-Coupon Convertible Debentures”) with an aggregate principal amount at maturity of approximately $320,756,000. The debentures were priced at $779.41 per debenture, which represents a yield-to-maturity of approximately 1.25%. The Company has the right to redeem the Zero-Coupon Convertible Debentures anytime after three years at the issue price plus the accrued original issue discount, and the debenture holders have the right to require the Company to repurchase the debentures on the third, eighth and thirteenth anniversaries of the issue. The Zero-Coupon Convertible Debentures are convertible into the Company’s common stock at a rate of 8.1961 shares per debenture, representing an initial conversion price of $95.095 per share.

The second series consisted of twenty-year convertible debentures in an aggregate amount of $200,000,000, with an interest rate of 1.75%, payable semi-annually on May 15 and November 15 (the “1.75% Convertible Debentures”). The Company has the right to redeem the 1.75% Convertible Debentures anytime after five years at the principal amount plus accrued and unpaid interest, and the debenture holders have the right to require the Company to repurchase the debentures on the fifth, tenth and fifteenth anniversaries of the issue. The 1.75% Convertible Debentures are convertible into the Company’s common stock at a rate of 10.5158 shares per debenture, or $95.095 per share.

The net proceeds from the debentures were used to repay amounts outstanding under the Company’s revolving credit agreement and for general working capital purposes, including acquisitions.

        As of December 31, 2001, the Company was party to a revolving credit agreement (the Credit Agreement) with various banks which provided for an aggregate unsecured borrowing capacity of $250,000,000 of floating-rate revolving credit advances. This credit agreement expires March 31, 2002. The Company is required to pay a facility fee on the committed amount under the Credit Agreement, which, at December 31, 2001, equalled .075% annually. In January 2002, the Company reduced the committed amount under this facility to $150,000,000. After giving effect to this reduction, the Company had $147,501,000 available under this facility at January 25, 2002.

In addition to the above, the Company also has other unsecured and uncommitted credit facilities available both domestically and to its foreign subsidiaries.

        At December 31, 2001, the weighted-average interest rate on the revolving credit advances was 2.46% (6.82% at December 31, 2000). The weighted-average interest rate on the other debt was 3.24% at December 31, 2001 (6.24% at December 31, 2000, excluding approximately $1,288,000 of dollar equivalent local currency indebtedness in Brazil at a notional rate, before currency effects, of 22.4% annually).

During January 2001, the Company entered into interest rate swaps which effectively converted $155,000,000 of outstanding floating rate debt to fixed rate debt at a weighted-average interest rate of 5.24%. These swaps were terminated during the second quarter of 2001 resulting in a pre-tax loss of $1,238,000.

Future maturities of the Company’s debt (excluding the convertible debentures and capital lease obligations) are $5,851,000 in 2002, $1,912,000 in 2003 and $512,000 in 2004.

49

Under the terms of the Credit Agreement, the Company is required to maintain certain financial ratios including a debt-to-capitalization ratio of not more than 50%, except in certain instances involving acquisitions, and a coverage ratio of earnings before interest, taxes, depreciation and amortization (EBITDA) less capital expenditures equal to at least 2.5 times interest expense. The Credit Agreement also contains various other customary covenants. The Company is in compliance with all loan covenants.

For the years 2001, 2000 and 1999, total interest expense was $13,481,000, $18,038,000 and $27,834,000, respectively. Interest paid by the Company in 2001, in 2000 and in 1999 is not materially different from the amounts expensed (except for interest capitalized in 2001 of approximately $1,847,000).

The Company leases certain facilities, office space, vehicles and office, data processing and other equipment under capital and operating leases. Future minimum lease payments with respect to capital leases and operating leases with terms in excess of one year are as follows:

(dollars in thousand)	Capital Leases			Operating Leases
Year ended December 31:
2002	$	4,757		$	6,456
2003		2,561			5,389
2004		1,909			4,624
2005		618			3,783
2006		15			3,654
Thereafter		4			31,334
Future minimum lease payments		9,864			55,240
Less: amount representing interest		(465	)		—
Lease obligations at December 31, 2001	$	9,399		$	55,240

Note 11:    Income Taxes

The components of income (loss) before provision for income taxes were as follows:

	Year Ended December 31,
(dollars in thousands)	2001		2000			1999
Income (loss) before income taxes:
U.S. operations	$	62,785	$	(26,137	)	$	13,536
Foreign operations		79,797		69,910			57,380
Income before income taxes	$	142,582	$	43,773		$	70,916

The provisions for income taxes charged to operations were as follows:

	Year Ended December 31,
(dollars in thousands)	2001		2000			1999
Current:
U.S. federal	$	6,696	$	54,242		$	10,805
U.S. state and local and franchise		2,432		9,432			4,501
Foreign		14,509		16,375			23,296
		23,637		80,049			38,602
Deferred:
U.S. federal		8,541		(61,318	)		(6,829	)
U.S. state and local		1,285		(9,221	)		(1,026	)
Foreign		10,774		6,603			(2,833	)
		20,600		(63,936	)		(10,688	)
Income tax provision	$	44,237	$	16,113		$	27,914

50

Items giving rise to deferred income taxes were as follows:

	Year Ended December 31,
(dollars in thousands)	2001		2000			1999
Reserves and accruals	$	3,887	$	12,895		$	(16,349	)
Inventory		2,590		5,842			(8,315	)
Percentage of completion income recognized		—		—			(2,018	)
Pension and postretirement benefit income not currently taxable		2,828		9,234			7,162
U.S. tax deductions less than (in excess of) amounts currently deductible		5,571		(85,635	)		15,744
Other		5,724		(6,272	)		(6,912	)
Deferred income taxes	$	20,600	$	(63,936	)	$	(10,688	)

The reasons for the differences between the provision for income taxes and income taxes using the U.S. federal income tax rate were as follows:

	Year Ended December 31,
(dollars in thousands)	2001			2000			1999
U.S. federal statutory rate		35.00	%		35.00	%		35.00	%
Nondeductible goodwill		2.07			7.32			4.48
State and local income taxes		1.63			(0.03	)		2.37
Tax exempt income		(3.70	)		(1.60	)		(0.99	)
Foreign statutory rate differential		(3.22	)		(11.61	)		(2.75	)
Change in valuation of prior year tax assets		—			(4.34	)		(3.24	)
Foreign losses (receiving) not receiving a tax benefit		(1.89	)		(1.08	)		2.64
Translation write-offs not deductible for tax		—			7.27			—
Nondeductible expenses		0.61			2.40			1.28
All other		0.53			3.48			0.57
Total		31.03	%		36.81	%		39.36	%
Total income taxes paid	$	15,111		$	14,724		$	42,696

Components of deferred tax assets (liabilities) were as follows:

	December 31,
(dollars in thousands)	2001			2000
Deferred tax liabilities:
Plant and equipment	$	(32,473	)	$	(34,879	)
Inventory		(53,041	)		(51,470	)
Pensions		(28,192	)		(24,272	)
Other		(30,928	)		(19,687	)
Total deferred tax liabilities		(144,634	)		(130,308	)
Deferred tax assets:
Postretirement benefits other than pensions		18,268			18,579
Reserves and accruals		36,121			39,088
Net operating losses and related deferred tax assets		101,140			98,014
Other		1,366			1,440
Total deferred tax assets		156,895			157,121
Valuation allowance		(17,427	)		(16,201	)
Net deferred tax assets (liabilities)	$	(5,166	)	$	10,612

51

During each of the last three years, certain of the Company’s international operations have incurred losses that have not been tax benefited, while others, that had losses in a prior year, generated earnings in a subsequent year that utilized the prior year unrecorded benefit of the loss. In addition, during 2000 and 1999, respectively, $1,900,000 and $2,300,000 of deferred tax assets that had been reserved in prior years were realized and the related reserves were reversed. The effect of these items on the Company’s overall effective tax rate are included in the rate reconciliation captions: “Change in valuation of prior year tax assets” and “Foreign losses (receiving) not receiving a tax benefit”. As a result of all of the foregoing, the valuation allowances established in prior years were increased in 2001 by $1,226,000 and reduced in 2000 and 1999 by $2,494,000 and $425,000, respectively, with a corresponding increase or reduction in the Company’s income tax expense. In addition, a tax benefit of $3,800,000 was recorded in 2001 relating to certain other foreign losses.

At December 31, 2001, the Company had a deferred tax asset of $90,332,000 related to net operating loss carryforwards which, if not utilized, will generally expire in 2020. The Company had a valuation allowance of $8,659,000 as of December 31, 2001 against the net operating loss and credit carryforwards as well as a valuation allowance of $8,768,000 against certain other deferred tax assets. The Company has considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance. In the event the Company were to determine that it would not be able to realize all or part of its net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made.

Note 12:    Stockholders’ Equity

Common Stock

Under its Amended and Restated Certificate of Incorporation, the Company is authorized to issue up to 150,000,000 shares of common stock, par value $.01 per share. Additionally, in November 1998, the Company’s board of directors approved the repurchase of up to 10,000,000 shares of Common stock for use in the Company’s various employee stock ownership, option and benefit plans.

Changes in the number of shares of the Company’s outstanding stock for the last three years were as follows:

	Common Stock	Treasury Stock		Outstanding Shares
Balance—December 31, 1998	53,259,620	—		53,259,620
Purchase of treasury stock		(3,515,900	)	(3,515,900	)
Stock issued under stock option and other employee benefit plans	741,887	82,352		824,239
Balance—December 31, 1999	54,001,507	(3,433,548	)	50,567,959
Stock issued under stock option and other employee benefit plans	10,422	3,433,548		3,443,970
Balance—December 31, 2000	54,011,929	—		54,011,929
Purchase of treasury stock		(611,000	)	(611,000	)
Stock issued under stock option and other employee benefit plans	554,125	39,680		593,805
Balance—December 31, 2001	54,566,054	(571,320	)	53,994,734

At December 31, 2001, 10,380,208 shares of unissued Common stock were reserved for future issuance under various employee benefit plans.

During the fourth quarter of 2001, the Company entered into a forward purchase agreement with a counterparty for the purchase of 286,000 shares of its common stock, at an average price of $34.24 per share. In accordance with EITF 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, this forward purchase agreement has not been included as a liability in the Company’s December 31, 2001 Consolidated Balance Sheet because this agreement can be settled at the Company’s option through physical or net-share settlement at any time within the next two years. The Company is required to settle this agreement if the Company’s stock falls below $16.50 per share.

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Preferred Stock

The Company is authorized to issue up to 10,000,000 shares of preferred stock, par value $.01 per share. At December 31, 2001, no preferred shares were issued or outstanding. Shares of preferred stock may be issued in one or more series of classes, each of which series or class shall have such distinctive designation or title as shall be fixed by the Board of Directors of the Company prior to issuance of any shares. Each such series or class shall have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in such resolution or resolutions providing for the issuance of such series or class of preferred stock as may be adopted by the Board of Directors prior to the issuance of any shares thereof. A total of 1,500,000 shares of Series A Junior Participating Preferred Stock has been reserved for issuance upon exercise of the Stockholder Rights described below.

Stockholder Rights Plan

On May 23, 1995, the Company’s Board of Directors declared a dividend distribution of one Right for each then-current and future outstanding share of Common stock. Each Right entitles the registered holder to purchase one one-hundredth of a share of Series A Junior Participating Preferred Stock of the Company, par value $.01 per share, for an exercise price of $300. Unless earlier redeemed by the Company at a price of $.01 each, the Rights become exercisable only in certain circumstances constituting a potential change in control of the Company, described below, and will expire on October 31, 2007.

Each share of Series A Junior Participating Preferred Stock purchased upon exercise of the Rights will be entitled to certain minimum preferential quarterly dividend payments as well as a specified minimum preferential liquidation payment in the event of a merger, consolidation or other similar transaction. Each share will also be entitled to 100 votes to be voted together with the Common stockholders and will be junior to any other series of Preferred Stock authorized or issued by the Company, unless the terms of such other series provides otherwise.

Except as otherwise provided in the Plan, in the event any person or group of persons acquire beneficial ownership of 20% or more of the outstanding shares of Common stock, each holder of a Right, other than Rights beneficially owned by the acquiring person or group (which will have become void), will have the right to receive upon exercise of a Right that number of shares of Common stock of the Company, or, in certain instances, Common stock of the acquiring person or group, having a market value equal to two times the current exercise price of the Right.

Retained Earnings (Deficit)

The Company’s retained earnings (deficit) includes a $441,000,000 charge related to the goodwill write-down that occurred concurrent with the Company becoming a separate stand-alone entity on June 30, 1995 in connection with the split-off from its former parent, Cooper Industries, Inc. Delaware law, under which the Company is incorporated, provides that dividends may be declared by the Company’s Board of Directors from a current year’s earnings as well as from the net of capital in excess of par value plus the retained earnings (deficit). Accordingly, at December 31, 2001, the Company had approximately $999,119,000 from which dividends could be paid.

Note 13:    Industry Segments

The Company’s operations are organized into four separate business segments — Cameron, Cooper Cameron Valves (CCV), Cooper Energy Services (CES) and Cooper Turbocompressor (CTC). Cameron is one of the world’s leading providers of systems and equipment used to control pressures and direct flows of oil and gas wells. Cameron’s products include surface and subsea production systems, blowout preventers, drilling and production control systems, gate valves, actuators, chokes, wellheads, drilling and production risers and aftermarket parts and services. CCV is a leading provider of valves and related systems primarily used to control pressure and direct the flow of oil and gas as they are moved from individual wellheads through flow lines, gathering lines and transmission systems to refineries, petrochemical plants and industrial centers for processing. CCV’s products include ball valves, gate valves, butterfly valves, Orbit valves, rotary process valves, block and bleed valves, plug valves, actuators, chokes and aftermarket parts and service. CES is a leading provider of reciprocating compression equipment and related aftermarket parts and services for the energy industry. CTC manufactures and supplies integrally geared centrifugal compressors and related aftermarket products and services to manufacturing companies and chemical process industries worldwide.

The primary customers of Cameron, CCV and CES are major and independent oil and gas exploration and production companies, foreign national oil and gas companies, drilling contractors, pipeline companies, refiners and other industrial and petrochemical processing companies. CTC’s customers include manufacturing companies and chemical process industries.

The Company markets its equipment through a worldwide network of sales and marketing employees supported by agents and distributors in selected international locations. Due to the extremely technical nature of many of the products, the marketing effort is further supported by a staff of engineering employees.

For the years ended December 31, 2001, 2000 and 1999, the Company incurred research and development costs, designed to enhance or add to its existing product offerings, totaling $27,388,000, $27,276,000 and $34,827,000, respectively. Cameron accounted for 76%, 78% and 78% of each respective year’s total costs.

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Summary financial data by segment follows:

	For the Year Ended December 31, 2001
(dollars in thousands)	Cameron		CCV		CES			CTC		Corporate & Other			Consolidated
Revenues	$	898,294	$	292,268	$	272,754		$	100,362	$	—		$	1,563,678
EBITDA 1	$	172,675	$	52,484	$	28,016		$	12,632	$	(14,351	)	$	251,456
Depreciation and amortization		48,811		14,198		11,858			6,600		1,628			83,095
Interest		—		—		—			—		5,620			5,620
Nonrecurring/unusual charges		—		—		20,159			—		—			20,159
Income (loss) before taxes	$	123,864	$	38,286	$	(4,001	)	$	6,032	$	(21,599	)	$	142,582
Capital expenditures	$	71,056	$	6,985	$	9,032		$	3,979	$	33,952		$	125,004
Total assets	$	1,038,322	$	247,864	$	242,315		$	104,075	$	242,476		$	1,875,052

	For the Year Ended December 31, 2000
(dollars in thousands)	Cameron		CCV		CES			CTC		Corporate & Other			Consolidated
Revenues	$	838,341	$	221,097	$	224,822		$	102,449	$	—		$	1,386,709
EBITDA 1	$	148,730	$	37,069	$	19,504		$	24,193	$	(14,965	)	$	214,531
Depreciation and amortization		45,711		11,379		10,727			6,644		860			75,321
Interest		—		—		—			—		18,038			18,038
Nonrecurring/unusual charges		8,121		1,448		67,503			327		—			77,399
Income (loss) before taxes	$	94,898	$	24,242	$	(58,726	)	$	17,222	$	(33,863	)	$	43,773
Capital expenditures	$	38,615	$	5,981	$	19,340		$	2,572	$	91		$	66,599
Total assets	$	884,187	$	245,653	$	171,568		$	106,893	$	85,572		$	1,493,873

	For the Year Ended December 31, 1999
(dollars in thousands)	Cameron		CCV		CES			CTC		Corporate & Other			Consolidated
Revenues	$	817,055	$	233,581	$	319,682		$	104,743	$	—		$	1,475,061
EBITDA 1	$	139,281	$	33,368	$	9,947		$	22,867	$	(12,412	)	$	193,051
Depreciation and amortization		44,416		12,965		18,491			6,639		1,205			83,716
Interest		—		—		—			—		27,834			27,834
Nonrecurring/unusual charges		15,881		9,873		(15,877	)		708		—			10,585
Income (loss) before taxes	$	78,984	$	10,530	$	7,333		$	15,520	$	(41,451	)	$	70,916
Capital expenditures	$	38,835	$	4,891	$	16,925		$	4,050	$	208		$	64,909
Total assets	$	908,120	$	245,102	$	194,417		$	101,867	$	21,213		$	1,470,719

¹    Earnings before interest, taxes, depreciation and amortization and nonrecurring/unusual charges.

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Geographic revenue and long-lived assets related to operations as of and for the years ended December 31 were as follows:

	2001		2000		1999
Revenues:
United States	$	932,534	$	750,383	$	809,752
United Kingdom		221,274		204,638		225,978
Other foreign countries		409,870		431,688		439,331
Total	$	1,563,678	$	1,386,709	$	1,475,061
Long-lived assets:
United States	$	529,803	$	429,611	$	445,497
United Kingdom		102,989		112,149		123,541
Other foreign countries		121,220		123,060		131,529
Total	$	754,012	$	664,820	$	700,567

For normal management reporting, and therefore the above segment information, consolidated interest is treated as a Corporate item because short-term investments and debt, including location, type, currency, etc., are managed on a worldwide basis by the Corporate Treasury Department. In addition, during implementation, capital spending for the Company’s enterprise-wide software upgrade is being reflected as a Corporate asset. Upon completion of this project, this asset will be allocated to each segment.

Note 14:    Off-Balance Sheet Risk, Concentrations of Credit Risk and Fair Value of Financial Instruments

Off-Balance Sheet Risk

At December 31, 2001, the Company was contingently liable with respect to approximately $59,980,000 of standby letters of credit (“letters”) issued in connection with the delivery, installation and performance of the Company’s products under contracts with customers throughout the world. The Company was also liable for approximately $13,095,000 of bank guarantees and letters of credit used to secure certain financial obligations of the Company. While certain of the letters do not have a fixed expiration date, the majority expire within the next one to two years and the Company would expect to issue new or extend existing letters in the normal course of business. The Company’s other off-balance sheet risks are not material.

Concentrations of Credit Risk

Apart from its normal exposure to its customers, who are predominantly in the energy industry, the Company had no significant concentrations of credit risk at December 31, 2001.

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, short-term marketable debt and equity securities, trade receivables, trade payables and debt instruments. The book values of cash and cash equivalents, trade receivables and trade payables and floating-rate debt instruments are considered to be representative of their respective fair values.

The primary portion of the Company’s debt consists of fixed-rate convertible debentures. Based on quoted market prices, the book value for this debt at December 31, 2001 is $45,378,000 higher than the market value. The difference between book value and market value on the Company’s other fixed-rate debt is not material.

55

Note 15:    Summary of Noncash Investing and Financing Activities

Noncash investing and financing activities were as follows:

	Year Ended December 31,
(dollars in thousands)	2001		2000
Common stock issued for employee stock ownership and other plans	$	4,185	$	3,954
Tax benefit of certain employee stock benefit plan transactions		7,129		59,624
Other		30		—

Note 16:    Earnings Per Share

The calculation of basic and diluted earnings per share for each period presented is as follows:

	Year Ended December 31,
(amounts in thousands, except per share data)	2001		2000		1999
Net income	$	98,345	$	27,660	$	43,002
Add back interest on debentures, net of tax		3,032		—		—
Net income (assuming conversion of convertible debentures)	$	101,377	$	27,660	$	43,002
Average shares outstanding (basic)		54,170		52,800		53,328
Common stock equivalents		936		2,213		1,520
Incremental shares from assumed conversion of convertible debentures		2,969		—		—
Shares utilized in diluted earnings per share calculation		58,075		55,013		54,848
Earnings per share:
Basic	$	1.82	$	.52	$	.81
Diluted	$	1.75	$	.50	$	.78

Note 17:    Accumulated Other Elements of Comprehensive Income

Accumulated other elements of comprehensive income comprised the following:

	December 31,
(dollars in thousands)	2001			2000
Accumulated foreign currency translation loss	$	(52,645	)	$	(36,964	)
Accumulated adjustments to record minimum pension liabilities		(331	)		(388	)
Change in fair value of marketable securities		(74	)		247
	$	(53,050	)	$	(37,105	)

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Note 18:    Unaudited Quarterly Operating Results

Unaudited quarterly operating results were as follows:

	2001 (by quarter) 2
(dollars in thousands, except per share data)	1		2		3		4
Revenues	$	334,835	$	404,625	$	417,218	$	407,000
Gross margin 1		103,885		120,415		128,779		129,521
Net income		14,255		19,807		34,400		29,883
Earnings per share:
Basic		.26		.36		.63		.55
Diluted		.26		.35		.60		.53

	2000 (by quarter) 2
(dollars in thousands, except per share data)	1		2		3		4
Revenues	$	338,302	$	349,993	$	349,978	$	348,436
Gross margin 1		97,664		103,156		103,285		107,807
Net income (loss)		12,665		16,197		8,352		(9,554	)
Earnings (loss) per share:
Basic		.25		.31		.16		(.18	)
Diluted		.24		.29		.15		(.18	)

¹ Gross margin equals revenues less cost of sales before depreciation and amortization.

² See Note 2 of the Notes to Consolidated Financial Statements for further information relating to nonrecurring/unusual charges incurred during 2001 and 2000 and included herein.

EX-21.1

EXHIBIT 21.1

COOPER CAMERON CORPORATION – SUBSIDIARIES & JOINT VENTURES

(As of March 20, 2002)

Cooper Cameron Corporation (Delaware)—Parent	% Owned By Subsidiary	% Owned by CCC	State/Country of Incorporation or Organization
Cameron Algerie (1 share owned by CCPEG)		100%	Algeria
Cameron Argentina S.A.I.C. (122,700 shares owned by CCPEG)	Less than 1%	100%	Argentina
Cameron Australasia Pty. Ltd.		100%	Australia
Cooper Cameron Pensions Australia, Pty. Ltd.	100%		Australia
Cameron France, S.A. (6 shares owned by directors)		100%	France
Cameron France E.U.R.L. (in liquidation 12/2001)	100%		France
Cameron Gabon, S.A. (7 shares owned by directors)		100%	Gabon
Cameron GmbH		100%	Germany
Cameron Services Middle East LLC (Joint Venture)1		24%	Oman
Cameron Ireland Limited (1 share owned by CCPEG)		100%	Ireland
Cameron Norge AS		100%	Norway
Cameron Venezolana, S.A.		100%	Venezuela
Cameron Remanufacturas, C.A.	100%		Venezuela
Camercay, Ltd.	100%		Grand Cayrnan
Compression Services Company		100%	Ohio
Cooper Cameron do Brasil Ltda. (1 share owned by CCPEG)		100%	Brazil
Cooper Cameron Foreign Sales Company Ltd.		100%	Barbados
Cooper Cameron (Malaysia) Sdn Bhd		**49%	Malaysia
Cooper Cameron (U.K.) Limited		100%	United Kingdom
Cameron Offshore Engineering Limited	100%		United Kingdom
Cooper Cameron Pensions Limited	100%		United Kingdom
Cameron Integrated Services Limited	100%		United Kingdom
Cooper Cameron Holding B.V.		100%	Netherlands
Cooper Energy Services B.V.	100%		Netherlands
Cameron B.V.	100%		Netherlands
Cooper Cameron Limited		100%	Canada
Cooper Cameron Canada, Ltd.		100%	Canada
Cooper Cameron Corporation Nigeria Limited2		60%	Nigeria
Cooper Cameron S.R.L.		100%	Italy
Cooper Energy Services de Venezuela, S.A.		100%	Venezuela
Cooper Energy Services International, Inc.		100%	Ohio
Canada Tiefbohrgeräte and Maschinenfabrik GmbH	100%		Austria
(1 share owned by CCPEG)
Cooper Cameron (Singapore) Pte, Ltd.	39%	61%	Singapore
Riyan Cameron (B) Sendirian Berhad	100%		Brunei
Cooper Cameron de Mexico S.A. de C.V. (1 share owned by CCPEG)		100%	Mexico
Cooper Cameron Petroleum Equipment Group, Inc. (CCPEG)		100%	Delaware
Cooper Flow Control Australia Pty. Ltd.	50%	50%	Australia
Cooper Turbocompressor, Inc. (Delaware)		100%	Delaware
Lyulka-Cooper (Russian Federation Joint Venture)3		50%	Russia
Orbit Valve International, Inc. (Arkansas)		100%	Arkansas
Orbit Valve Company (Arkansas)	100%		Arkansas
Wellhead Services, Inc. (Nevada)		100%	Nevada

1 Partially owned by United Engineering Services LLC

2 Partially owned by various Nigerian entities and individuals.

3 Partially owned by Lyulka-Saturn.

** Local Malaysian law requires that a majority of stock be owned by local residents. Attorney/agents hold 51% of stock on CCC behalf.

EX-23.1

Exhibit 23.1

Consent of Independent Auditors

We consent to the incorporation by reference in this Annual Report (Form 10-K) of Cooper Cameron Corporation of our report dated January 29, 2002, included in the 2001 Annual Report to Stockholders of Cooper Cameron Corporation.

We also consent to the incorporation by reference in the following Registration Statements on Forms S-8 or Form S-3 of Cooper Cameron Corporation of our report dated January 29, 2002, with respect to the consolidated financial statements incorporated herein by reference in the Annual Report (Form 10-K) for the year ended December 31, 2001.

Registration Statement No.	Purpose
No. 333-26923 and No. 33-95004	Form S-8 Registration Statement pertaining to the Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan.
No. 33-94948	Form S-8 Registration Statement pertaining to the Cooper Cameron Corporation Employee Stock Purchase Plan.
No. 33-95002	Form S-8 Registration Statement pertaining to the Cooper Cameron Corporation Retirement Savings Plan.
No. 333-57991	Form S-8 Registration Statement pertaining to the Individual Account Retirement Plan for Bargaining Unit Employees at the Cooper Cameron Corporation Buffalo, New York Plant.
No. 333-53545	Form S-8 Registration Statement pertaining to the Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan.
No. 333-51705	Form S-3 Registration Statement pertaining to the Cooper Cameron Corporation shelf registration of debt securities.
No. 333-77641	Form S-8 Registration Statement pertaining to the Cooper Cameron Corporation Savings-Investment Plan for Hourly Employees.
No. 333-79787	Form S-8 Registration Statement pertaining to the Cooper Cameron Corporation Second Amended and Restated 1995 Stock Option Plan for Non-Employee Directors.

Registration Statement No.	Purpose
No. 333-37850	Form S-8 Registration Statement pertaining to the Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan.
No. 333-46638	Form S-8 Registration Statement pertaining to the Cooper Cameron Corporation Broad Based 2000 Incentive Plan.
No. 333-82082	Form S-8 Registration Statement pertaining to the Cooper Cameron Corporation Broad Based 2000 Incentive Plan.
No. 333-61820	Form S-8 Registration Statement pertaining to the Cooper Cameron Corporation Broad Based 2000 Incentive Plan.

/s/     Ernst & Young LLP

ER NST & YOUNG LLP

Houston, Texas

March 22, 2002