Document n9z3vyQMpbO8dZ1e3gOYQjkz8

EXECUTION COPY MUTUAL GUARANTY AGREEMENT MUTUAL GUARANTY AGREEMENT (this "Agreement"), dated as of December 30, 1994, by and between ABEX, INC., a Delaware corporation ("Ab-x") and COOPER INDUSTRIES, INC. an Ohio cor poration ("Cooper") (each of Abex and Cooper, in its capacity as guarantor hereunder, being referred to herein as a "Guar antor") in favor of each other and the other persons referred to below. WHEREAS, Pneumo Abex Corporation, a Delaware cor poration and an indirect wholly owned subsidiary of Abex ("Seller"), and Wagner Electric Corporation, a Delaware cor poration and a direct wholly owned subsidiary of Cooper ("Buyer") are entering into an Asset Purchase Agreement, of even date herewith (the "Asset Purchase Agreement"); WHEREAS, Abex and Cooper will each derive substantial direct and indirect benefit from their respective subsidiaries' rights under the Asset Purchase Agreement; and WHEREAS, one of the conditions to the consummation of the transactions contemplated by the Asset Purchase Agreement is that Abex and Cooper execute and deliver this Agreement; NOW THEREFORE, for good and valuable consideration including the mutual- covenants set forth herein and the ben efits to be derived under the Asset Purchase Agreement, the parties hereby agree as follows: SECTION 1. Guaranteed Obligations. Each. Guarantor, as direct obligor and not merely as surety, absolutely and un conditionally guarantees to the other party hereto and to such other party's subsidiary which is party to the Asset Purchase Agreement (each of such persons in such capacity herein col lectively referred to as the "Guarantees") the full and prompt payment when and as due of all amounts payable under the Asset Purchase Agreement by such Guarantor's subsidiary which is a party to the Asset Purchase Agreement and the full and prompt performance by such Guarantor's subsidiary which is a party to the Asset Purchase Agreement of all its undertakings and ob ligations under the Asset Purchase Agreement (collectively, the "Guaranteed Obligations"). ' SECTION 2. Abex Notice and Letter of Credit Re quirements . Abex agrees that, for a period of four years following the Closing Date, it will not engage in any Abex Transaction (as defined below) unless in any such case it shall ,) ) ABEX-215 50 SCF-ABEX-3230 Mi have given Buyer forty-five (45) days' prior written notice of any such Abex Transaction. In the event that (i) Abex delivers such written notice to Buyer and (ii) Buyer within such 45-day period delivers to Abex a written opinion of an investment hanking firm of national standing to the effect that the pro posed Abex Transaction would have a material adverse effect on phe ability of Abex to meet its obligations under this Agree ment, Abex shall not effect the proposed Abex Transaction un less and until (a) Seller or Abex shall have theretofore caused to be duly executed and delivered to Buyer documentation from a Financial Institution in form reasonably satisfactory to Buyer which either increases the aggregate amount available for drawdowns under the Letter of Credit to fifteen million dollars ($15,000,000) or establishes another letter of credit in sub stantially the same form as the Letter of Credit such that the combined aggregate amount of the two letters of credit is fifteen million dollars ($15,000,000), and (b) in the case of Abex Transactions set forth in categories (iv) or (v) of the definition thereof, the Person who acquires all or substan tially all of Abex's assets, or the surviving Person of any merger or consolidation with Abex, shall have assumed all obligations of Abex under this Agreement, During the 45-day period referred to above, Abex shall use its reasonable efforts to provide to the investment banking firm referred to above all financial information reasonably requested by such investment banking firm subject to a customary confidentiality agreement. Notwithstanding anything herein to the contrary, Abex may engage in an Abex Transaction without providing such prior notice or complying with its obligations in the immediately preceding sentence if it has fully performed its obligations set forth in clauses (a) and (b) of this paragraph. "Abex Transaction" shall mean (i) any liquidation, dissolution or winding up of the affairs of Abex, fii) any bankruptcy, insolvency, bankruptcy reorganization or similar cases or proceedings with respect to Abex, (iii) any leveraged recapitalization by Abex, (iv) any sale, assignment, lease or other disposition by Abex (whether in one transaction or a series of related transactions) of all or substantially all of the assets of Abex to any Person, and (v) any merger or con solidation with any Person (unless the net worth of the com bined entity is equal to or greater than the net worth of Abex immediately prior to such merger or consolidation). SECTION 3. Parties in Interest. This Agreement shall inure to the benefit of all Guarantees and their respec tive successors and assigns. SECTION 4. Waiver of Equitable Remedies. To the fullest extent permitted by applicable law, each Guarantor 2- - waives any legal or equitable defense to the enforceability of ics obligations hereunder, and agrees that its obligations shall be absolute and unconditional and shall not be affected or discharged by any circumstance, act or event whatsoever (including without limitation the insolvency, voluntary or involuntary bankruptcy, liquidation, dissolution, winding up, merger, consolidation or reorganization of any of Abex, Cooper, Seller or Buyer), except payment and performance in full, or written waiver, of the Guaranteed Obligations. SECTION 5. Guaranty of Payment. This is an irre vocable and continuing guaranty of payment and not merely a guaranty of collection and shall remain in full force and ef fect until the Guaranteed Obligations have been satisfied, paid and performed in full, or waived by all relevant Guarantees in writing. Each Guarantor waives any right to require any of the Guarantees to (and it shall not be necessary for any of the Guarantees, in order to enforce such payment or performance by the relevant Guarantor, to first) proceed against any other Person or asset liable on or securing the Guaranteed Obliga tions or pursue or exhaust any other remedy whatsoever. SECTION 6. Dispute Resolution. Any claim or dispute arising in connection with this Agreement shall be resolved in accordance with Section 13.2(b) and (c) of the Asset Purchase Agreement, as if the parties hereto were parties to, and this Agreement were subject to, such provisions. SECTION 7. Defined Terms. All capitalized terms used without definition in this Agreement shall have the mean ings ascribed to them in the Asset Purchase Agreement. SECTION 8. Governing Laws. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware without reference to the choice of law prin ciples thereof. . SECTION 9. Authority to Execute Agreement. Each of Abex and Cooper represents that: (a) it has full corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (b) the execution and delivery of this Agreement, the consummation of the transac tions contemplated hereby and the performance of its obliga tions hereunder have been duly and validly authorized and ap proved by all necessary corporate proceedings on its part; and (c) this Agreement has been duly executed and delivered by it and, assuming the due execution and delivery hereof by the other party hereto, this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency. 3- - reorganization, moratorium or other laws relating to or af fecting the rights and remedies of creditors generally and to general principles of equity (regardless of whether a proceed ing is brought in equity or at law) . SECTION 10. Notices. All notices and other com munications hereunder shall be sufficiently given for all purposes hereunder if in writing and delivered personally, sent by documented overnight delivery service or, to the extent receipt is confirmed, telecopy, telefax or other electronic transmission service to the appropriate address or number as set forth below. Notice to Abex shall be addressed to: Abex, Inc. ' Liberty Lane Hampton, NH 03842 Attention: President Telecopy Number; (603) 929-2248 with a copy to: Abex, Inc. Liberty Lane Hampton, NH 03842 Attention: General Counsel Telecopy Number: (603) 929-2409 and a copy to: ' Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 Attention: Eric S. Robinson, Esq. Telecopy Number: (212) 403-2000 or at such other address and to the attention of such other Person as Abex may designate by written notice to Cooper (which is actually received by Cooper). Notices to Cooper shall be addressed to: Cooper Industries, Inc. 1001 Fannin Street, Suite 3900 Houston, Texas 77002 Attention: General Counsel Telecopy Number: (713) 739-5882 with a copy to: 4- - Cooper Industries, Inc. 1001 Fannin Street, Suite 3900 Houston, Texas 77002 Attention: Larry W. McCurdy Executive Vice President, Operations . Telecopy Number: (713) 739-5909 or at such other address and to the attention of such other Person as Cooper may designate by written notice to Abex (which is actually received by Abex). IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date first written above. COOPER INDUSTRIES, INC. i Bv Name: Larry W. Mcgu^dy Title: Executive vice President-(toerations k A- Title:Nice ?re^<k.rn 5 -