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THE BENDiX!

IN THE CIRCUIT COURT THIRD JUDICIAL CIRCUIT MADISON COUNTY, ILLINOIS JAMES HUTCHESON, Plaintiff, v.

(S D N.Y Mar 21.2002') With all ofthis in mind, the Court turns to an analysis of whether Plaintiffs gave proper notice of their claim within the one-year time period as required by section 7 1 (a) The October 23,1989 letter asserts a right to indemnity on account ofa possible breach ofthe "compliance with law" representation In that letter, Plaintiffs express, in a general fashion, the opinion that landfills at the Orzinuovi plant might not comply with Italian law "[w]hile such waste disposal may or may not be partially covered by some official permit, it appears that at least a significant portion ofthe waste disposal on the Orzinuovi premises is not covered by any license or permit whatsoever " First Am Compl, Ex B The letter does not indicate the basis for this impression, nor does it specify which Italian law, ifany, the existence of the landfills possibly violated The letter advises that an investigation into the legality of the landfills was still ongoing See id *8 For starters, the mere presence of landfills at a manufacturing plant was not per se unlawful under Italian law because government officials issued permits authorizing such activity (as was the case here) See, e g, Roberts Aff 1) 17, Ex P, see also Defs ' Ex 52, pp 5-6 ("[Ujntil 1976, no specific legislation (whether national or regional) existed in Italy dealing specifically with wastes disposal and/or water pollution ") In that sense, Plaintiffs could not properly make a claim for indemnity simply based upon the discovery of landfills Plaintiffs' letter intimates as much given the acknowledgments that at least some of the waste disposal might be officially authorized and that the situation called for further investigation Meanwhile, despite Plaintiffs' implication to the contrary, at this point in their investigation, they had no reason to conclude that landfills at the Orzinuovi plant created any illegality In fact, on October 6, 1989, in response to Plaintiffs' inquiry regarding the legal status of the landfills, Frendo management advised Plaintiffs that the "dump inside the plant" was used "up to the second half of 1983" and that, "we presented on April 17,1984 the land reclamation project of the interested area and we obtained the approval from 'Provincia' on April 30, 1984 " Defs ' 56 1 U 19, Ex J In light of this, when Plaintiffs made their indemnity demand they had information indicating official approval of the waste disposal at the Orzinuovi plant Moreover, Plaintiffs engaged in a questionable course of conduct after making their indemnify demand This behavior included ignoring Abex's requests for more information regarding the basis for Plaintiffs claim For instance, after receipt of the October 23rd demand, Abex responded on October 31, 1989 by requesting Page 7 proof to support Plaintiffs' claim and asking for access to Frendo employees with knowledge of the relevant facts See Defs ' 56 1 U 62, Tab 2 That October 31 letter notified Plaintiffs ofthe lack ofspecificity m their notice "the letter of October 23, 1989 does not give us enough facts to conclude one way or the other whether there was a material breach of any representations, warranties or covenants under the Stock Purchase Agreement or whether there is a duty to indemnify '' Id On at least two separate occasions, Abex requested more specific information concerning the basis for Plaintiffs'indemnity demand, each time giving Plaintiffs an opportunity to specify their claim within the one-year limitation period See, eg, Defs ' 56 1 63-64, Tabs 3 & 4 These numerous requests, however, went unheeded IFN91 Plaintiffs also neglected to conduct a timely inquiry into the permit history of landfills at the plant, a seemingly obvious step in an investigation of this type In this regard, Plaintiffs' representative who was primarily responsible for gathering facts concerning the landfills and for dealing with Italian authorities with respect to the landfill situation testified that he made no attempt to ascertain any information regarding permit authorization for the landfills, a telling admission See Roberts Aff ^ 3, Ex B, pp 89-90 Additionally, the record reflects that Plaintiffs waited almost one and one- half years after the October 23rd indemnity demand to retain Italian counsel to analyze Italian environmental requirements as they relate to potential claims against Abex with respect to the Orzinuovi plant See Defs'56 1 U 81, Tab 8 This factor implies that as of October 23, 1989 Plaintiffs knew of no legal ground on which to base their claim for indemnify, which explains (but hardly absolves) the failure to specify potential liability under the law in their notice of claim Furthermore, Plaintiffs waited nearly two years after giving notice to Defendants before informing Italian authorities, on October 2, 1991, ofthe presence of landfills at the Orzinuovi plant See Defs ' Exs , Tab 16 Their October 2nd notification mentions nothing about a violation of law as the reason for Plaintiffs' proposed landfill removal project, even though Plaintiffs took care to draft the letter in such a way as to avoid damaging "our litigation in the United States " See Defs Exs, Tab 12 Despite this goal, at no time during their discussions with Italian authorities did Plaintiffs state that the reason for their proposed removal project was due to concerns about the legality of the landfills FN9 Plaintiffs sent Abex a letter on November 23, 1989, but this communication failed to illuminate the basis for Plaintiffs' claim with respect to the landfills, as Plaintiffs' own position reflects "The December 21, Copr West 2003 No Claim to Orig U S Govt Works

COOPER INDUSTRIES LTD(Form 424B2, Received 10/25/2002 13 39 31) Page 24 of 68 comprising a part thereof), owned or leased on the first date on which a debt security is authenticated by the trustee or thereafter acquired or leased by the Guarantor or any Restricted Subsidiary, other than (a) any property which the Board of Directors determines is not of material importance to the total business conducted, or assets owned, by the Guarantor and its Subsidiaries, as an entirety, or (b) any portion of any such property which the Board of Directors determines not to be of material importance to the use or operation of such property, and - any shares or Indebtedness issued by any Restricted Subsidiary - "Manufacturing plant" does not include any plant owned or leased jointly or in common with one or more persons other than the Guarantor and its Restricted Subsidiaries in which the aggregate interest of the Guarantor and its Restricted Subsidiaries does not exceed 50% "Manufacturing equipment" means manufacturing equipment in such manufacturing plants used directly m the production of the Guarantor's or any Restricted Subsidiary's products and does not include office equipment, computer equipment, rolling stock and other equipment not directly used in the production of the Guarantor's or any Restricted Subsidiary's products "RESTRICTED SUBSIDIARY" means any Subsidiary substantially all the property of which is located within the continental United States, other than - a Subsidiary primarily engaged m financing, including, without limitation, lending on the security of, purchasing or discounting (with or without recourse) receivables, leases, obligations or other claims arising from or m connection with the purchase or sale of products or services, - a Subsidiary primarily engaged in leasing or insurance, or - a Subsidiary primarily engaged m financing the Guarantor's or any Restricted Subsidiary's operations outside the continental United States "SALE AND LEASEBACK TRANSACTION" means any arrangement with any person providing for the leasing by the Guarantor or any Restricted Subsidiary of any Principal Property of the Guarantor or any Restricted Subsidiary whether the property is now owned or hereafter acquired which Principal Property has been or is to be sold or transferred by the Guarantor or the Restricted Subsidiary to such person However, the following shall not be Sale and Leaseback Transactions - leases for a term of not more than three years, - leases between the Guarantor and a Restricted Subsidiary or between Restricted Subsidiaries, and - leases of property executed prior to, at the time of, or within one year after the later of, the acquisition, the completion of construction, including any improvements or alterations on real property, or the commencement of commercial operation, of the property "SECURED INDEBTEDNESS" of any corporation means Indebtedness secured by any Lien upon property (including Shares or Indebtedness issued by any Restricted Subsidiary) owned by the Guarantor or any Restncted Subsidiary 12 "SUBSIDIARY" means any corporation a majority of the voting shares of which are at the time owned Jlttrv/Ainirvu diorpViAlH^r PAm/pAAnor;/F/irrofT^ofoti nwu 11 4 moo 1 /I O/OAAO

COOPER INDUSTRIES LTD(Form 424B2, Received 10/25/2002 13 39 31) Page 39 of 68 As of December 31, 2001 all employee reduction and facility consolidation actions related to the first quarter 1999 and fourth quarter 1998 employee reduction and facility consolidation plans were essentially completed and amounts accrued for these programs have been satisfied NOTE 3: CHARGE RELATED TO DISCONTINUED OPERATIONS In October 1998, Cooper sold its Automotive Products business to Federal-Mogul Corporation ("Federal- Mogul") These discontinued businesses (including the Abex product line obtained from Pneumo-Abex Corporation ("Pneumo") m 1994) were operated through subsidiary companies, and the stock of those subsidiaries was sold to Federal-Mogul pursuant to a Purchase and Sale Agreement dated August 17, 1998 ("1998 Agreement") In conjunction with the sale, Federal-Mogul indemnified Cooper for certain liabilities of these subsidiary companies, including liabilities related to the Abex product line and any potential liability that Cooper may have to Pneumo pursuant to a 1994 Mutual Guaranty Agreement between Cooper and Pnuemo On October 1, 2001, Federal-Mogul and several of its affiliates filed a Chapter 11 bankruptcy petition and indicated that Federal-Mogul may not honor the indemnification obligations to Cooper As of the date of this filing, Federal-Mogul had not yet made a decision whether to reject the 1998 Agreement, which includes the indemnification to Cooper If Federal-Mogul rejects the 1998 Agreement, Cooper will be relieved of its future obligations under the 1998 Agreement, including specific indemnities relating to payment of taxes and certain obligations regarding insurance for its former Automotive Products businesses To the extent Cooper is obligated to Pneumo for any asbestos-related claims arising from the Abex product line ("Abex Claims"), Cooper has rights, confirmed by Pneumo, to significant insurance for such claims Based on information provided by representatives of Federal-Mogul, from August 28, 1998 through December 31, 2001, a total of 75,152 Abex Claims were filed, of which 16,974 claims have been resolved leavmg 58,178 Abex Claims pending at December 31, 2001, that are the responsibility of Federal-Mogul Since August 28, 1998, the average indemnity payment for resolved Abex Claims was $908 before insurance A total of $25 5 million was spent on defense costs for the period August 28, 1998 through December 31, 2001 Historically, existing insurance coverage has provided 50% to 80% of the total defense and indemnity payments for the Abex claims Since the October 1, 2001 bankruptcy filing by Federal-Mogul through December 31, 2001, a total of 3,541 Abex Claims have been filed F-8 COOPER INDUSTRIES, INC.

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11572-1000 MXY/dal REQUEST NO. 21: Any and all writings or documents of any nature whatsoever referring, reflecting, concerning or relating to in any way whatsoever any health surveillance program conducted by or on behalf of this Defendant, any predecessor or related companies, or its employees.