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EXHIBIT 99.2
INVESTMENT AGREEMENT
BETWEEN
COOPER INDUSTRIES, INC.
AND
WYMAN-GORDON COMPANY
DATED AS OF JANUARY 10, 1994
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TABLE OF CONTENTS
SECTION PAGE
Parties B-1
Preambles B-1
ARTICLE I CERTAIN COVENANTS B-1
Section 1.1 Restrictions on Resale or Other
Dispositions B-1
Section 1.2 Distribution of Shares B-2
Section 1.3 Undertaking to File Reports and
Cooperate in Rule 144 Transactions B-3
Section 1.4 Delivery of Financial Statements B-3
Section 1.5 Amendments to the Company's Articles
of Organization and By-Laws B-3
ARTICLE II VOTING, OWNERSHIP AND OTHER RESTRICTIONS B-4
Section 2.1 Obligation to be Counted for Quorum B-4
Section 2.2 Voting by Cooper B-4
Section 2.3 Cooper Standstill Agreements B-4
Section 2.4 Legend and Stop Transfer Order B-6
ARTICLE III REGISTRATION RIGHTS B-6
Section 3.1 Certain Definitions B-6
Section 3.2 Demand Registration B-7
Section 3.3 Piggyback Registration B-9
Section 3.4 Expenses B-11
Section 3.5 Registration and Qualifications B-11
Section 3.6 Conversion of other Securities, etc. B-14
Section 3.7 Underwriting; Due Diligence B-14
Section 3.8 Restrictions on Public Sale; Inconsistent
Agreements B-15
Section 3.9 Indemnification and Contribution B-15
ARTICLE IV TERM AND EFFECTIVENESS OF AGREEMENT B-19
Section 4.1 Effectiveness of Agreement B-19
Section 4.2 Term of Agreement B-19
Section 4.3 Certain Provisions Regarding Termination B-19
ARTICLE V ELECTION OF DIRECTORS B-22
Section 5.1 B-22
ARTICLE VI GENERAL B-22
Section 6.1 Specific Enforcement; Other Remedies B-22
Section 6.2 Severability B-23
Section 6.3 Definitions B-23
Section 6.4 Amendment and Modifications B-23
Section 6.5 Descriptive Headings B-23
Section 6.6 Counterparts B-23
Section 6.7 Successors and Assigns B-23
Section 6.8 Accounting Matters B-24
Section 6.9 Notices B-24
Section 6.10 Governing Law B-25
SIGNATURES B-25
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INVESTMENT AGREEMENT
INVESTMENT AGREEMENT, dated as of January 10, 1994 (the
"Agreement"), between Cooper Industries, Inc., an Ohio corporation
("Cooper"), and Wyman-Gordon Company, a Massachusetts corporation
(the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and delivery of
this Agreement, Cooper and the Company are entering into the Stock
Purchase Agreement, dated as of the date hereof (the "Acquisition
Agreement"); and
WHEREAS, the Acquisition Agreement provides, among other
things, for the sale by Cooper of all of the outstanding shares of
stock of Cameron Forged Products Company to the Company (the "Sale
Transaction"); and
WHEREAS, pursuant to the Acquisition Agreement, as
consideration for the sale of the stock of Cameron Forged Products
Company, Cooper will receive $5 million, payable as provided in the
Acquisition Agreement, and 16,500,000 shares (the "Shares") of
common stock, par value $1.00 per share, of the Company (the
"Company Common Stock"); and
WHEREAS, the Shares will represent approximately 48% of the
total number of shares of Company Common Stock that will be
outstanding following consummation of the Sale Transaction; and
WHEREAS, Cooper and the Company wish to provide certain
arrangements with respect to their relationship following
consummation of the Sale Transaction and each of them requires that
the other enter into this Agreement as an inducement to its
entering into the Acquisition Agreement.
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
CERTAIN COVENANTS
Section 1.1 Restrictions on Resale or Other Dispositions. So
long as this Agreement remains in effect, Cooper covenants and
agrees that it will not sell, transfer any beneficial interest in,
pledge, hypothecate or otherwise dispose of or encumber any Company
Voting Securities (as hereinafter defined); provided, that Cooper
or any of its wholly-owned subsidiaries which hold Company Voting
Securities may sell, transfer, pledge, hypothecate or otherwise
dispose of or encumber Company Voting Securities:
(a) to any direct or indirect wholly-owned subsidiary of
Cooper which agrees to be bound by this Agreement; provided, that
such subsidiary shall remain a direct or indirect wholly-owned
subsidiary of Cooper for so long as it holds any Company Voting
Securities or any beneficial interest therein; or
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(b) pursuant to a bona fide underwritten offering or other
distribution of such Company Voting Securities registered under the
Securities Act of 1933, as amended (the "Securities Act"); or
(c) pursuant to a bona fide underwritten offering or other
distribution of securities of Cooper convertible into or
exercisable or exchangeable for Company Voting Securities
registered under the Securities Act; or
(d) pursuant to Rule 144 of the General Rules and Regulations
under the Securities Act, or any successor rule of similar effect
("Rule 144"); provided, that Cooper shall notify the Company at
least two days prior to the date of entering any sale or transfer
order or agreement with respect to Company Voting Securities
pursuant to Rule 144; provided, further that, if the Company shall
thereupon notify Cooper of the pendency of a sale under any public
offering by it of Company Common Stock or any other Company Voting
Securities, neither Cooper nor any of its affiliates shall effect
any sales under Rule 144 within 10 days prior to the commencement
of or during such offering; or
(e) pursuant to a tender offer or exchange offer if the Board
of Directors of the Company has (i) recommended that shareholders
of the Company accept such offer and such recommendation has not
been withdrawn or (ii) expressed no opinion and remains neutral
toward such offer; or
(f) pursuant to a merger or consolidation in which the Company
is acquired, or a sale of all or substantially all of the Company's
assets to another corporation or any other transaction approved by
the Board of Directors of the Company.
For purposes of this Agreement, "Company Voting Securities"
shall mean (i) the Company Common Stock, (ii) any other Company
securities entitled to vote generally for the election of directors
of the Company, or (iii) any securities of the Company convertible
into or exchangeable for or exercisable for Company Common Stock or
any other Company securities entitled to vote generally for the
election of directors of the Company.
Section 1.2 Distribution of Shares. In any transaction or
transactions described in Section 1.1(b), 1.1(c) or 1.1(d), the
seller of Company Voting Securities or securities of Cooper
convertible into or exercisable or exchangeable for Company Voting
Securities will use its reasonable best efforts to effect the sale
or transfer of such securities in a manner which will effect the
broadest possible distribution and such seller of Company Voting
Securities will use its reasonable best efforts to make no sales or
transfers of such Company Voting Securities to any one person or
group within the meaning of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), who or which after such transfer
shall own Company Voting Securities representing more than 4% of
the voting power for the election of directors represented by all
of the then-outstanding Company Voting Securities (whether directly
or indirectly). Such seller shall use its reasonable best efforts
to cause any underwriters with respect to any transaction or
transactions described in Section 1.1(b) or 1.1(c) to comply with
the distribution restrictions set forth in the preceding sentence.
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Section 1.3 Undertaking to File Reports and Cooperate in Rule
144 Transactions. The Company shall file, on a timely basis, all
annual, quarterly and other reports required to be filed under
Sections 13 and 15(d) of the Exchange Act, and the Rules and
Regulations of the Securities and Exchange Commission (the
"Commission") promulgated thereunder, as amended from time to time.
In the event of any proposed sale of Company Voting Securities by
Cooper or its affiliates pursuant to Section 1.1(d) above, the
Company shall cooperate with Cooper so as to enable such sales to
be made in accordance with applicable laws, rules and regulations,
the requirements of the Company's transfer agent, and the
reasonable requirements of the broker, if any, through which the
sales are proposed to be executed, and shall, upon request, furnish
unlegended certificates representing Company Voting Securities in
such numbers and denominations as Cooper shall reasonably require
for delivery pursuant to such sales.
Section 1.4 Delivery of Financial Statements. The Company
will deliver to Cooper:
(a) the quarterly consolidated financial statements of the
Company, including any notes thereto, for the first three quarterly
periods of each fiscal year, as soon as available but no later than
the date such quarterly financial information is filed with the
Commission;
(b) the audited year-end consolidated financial statements of
the Company, including any notes thereto and the report of the
Company's independent certified public accountants thereon, as soon
as available but no later than the date such audited financial
statements are filed with the Commission; and
(c) a written statement of the Consolidated Net Worth (as
hereinafter defined and calculated in accordance with Section
4.3(a)(iv) hereof) of the Company (the "Net Worth Statement") each
time that financial statements are delivered to Cooper pursuant to
Section 1.4(a) or 1.4(b). The principal financial officer of the
Company shall certify that the Net Worth Statement was prepared by
him or under his direction and that it shows the Consolidated Net
Worth of the Company as of immediately following the consummation
of the Sale Transaction and the Consolidated Net Worth of the
Company as of the end of the most recent fiscal quarter or fiscal
year, as the case may be, based on the financial statements of the
Company then being delivered to Cooper.
Section 1.5 Amendments to the Company's Articles of
Organization and By-Laws. The Company shall not amend, alter or
otherwise modify (i) Article 6 of the Company's Articles of
Organization in any manner which adversely affects Cooper or any
other person to whom any of the Shares have been transferred in
accordance with the terms of this Agreement; (ii) Article VI,
Section 14 of the Company's By-Laws pursuant to which the Company
shall have opted-out of Chapter 110D of the Massachusetts General
Laws; and (iii) the Amended and Restated Rights Agreement in the
form attached as an Annex to the Acquisition Agreement (the
"Amended and Restated Rights Agreement") and the Company shall not
adopt any other rights or similar agreement; provided, however,
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following prior consultation with Cooper, the Company may amend the
Amended and Restated Rights Agreement in accordance with the terms
thereof provided such amendment does not adversely affect Cooper or
any other person to whom any of the Shares have been transferred in
accordance with the terms of this Agreement.
ARTICLE II
VOTING, OWNERSHIP AND OTHER RESTRICTIONS
Section 2.1 Obligation to be Counted for Quorum. Cooper
agrees to cause all Company Voting Securities beneficially owned by
it or any wholly-owned subsidiary to which it has transferred any
Company Voting Securities, and agrees to use reasonable efforts to
cause all Company Voting Securities known by Cooper to be
beneficially owned by "affiliates" (as defined in Rule 12b-2
promulgated under the Exchange Act) of Cooper over which Cooper has
control, to be present at all shareholder meetings of the Company
at which the vote of common shareholders is sought so that they may
be counted for the purpose of determining the presence of a quorum
at such meetings.
Section 2.2 Voting by Cooper. Cooper agrees to vote or cause
to be voted all Company Voting Securities beneficially owned by it
or any wholly-owned subsidiary to which it has transferred any
Company Voting Securities, and agrees to use reasonable efforts to
cause to be voted all Company Voting Securities known by Cooper to
be beneficially owned by its affiliates over which it has control
on all matters (including the election of directors) either in the
manner recommended to shareholders by the Board of Directors of the
Company, or, at Cooper's election, in the same proportion as the
vote of the other shareholders of the Company. Notwithstanding the
foregoing, Cooper, such wholly-owned subsidiaries of Cooper and
such affiliates of Cooper over which it has control will not be
obligated to vote as provided in this Section 2.2 if the matter
being voted on by the shareholders of the Company would, if
approved, result in a breach of this Agreement.
Section 2.3 Cooper Standstill Agreements. So long as this
Agreement remains in effect, Cooper and its controlled affiliates
shall not, directly or indirectly, acting alone or in concert with
others, unless specifically requested or approved in advance by the
Board of Directors of the Company:
(a) in any manner acquire or agree, attempt, seek or propose
to acquire (or make any request for permission with respect
thereto), by purchase, merger, through the acquisition of control
of another person, by joining a partnership, limited partnership,
syndicate or other "group" (within the meaning of Section 13(d)(3)
of the Exchange Act), or otherwise, ownership (including, but not
limited to, beneficial ownership as defined in Rule 13d-3 under the
Exchange Act) of any of the assets or businesses of the Company or
any securities issued by the Company (the "Company Securities"), or
any rights or options to acquire such ownership (including from a
third party), except (i) as expressly permitted by this Agreement
or the Acquisition Agreement, or (ii) pursuant to customary
business transactions in the ordinary course of the Company's and
Cooper's business, or (iii) in the case of Company Securities, in
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connection with (A) a stock split or reverse stock split or other
reclassification affecting outstanding Company Securities, or (B) a
stock dividend or other pro rata distribution by the Company to
holders of outstanding Company Securities;
(b) make or cause to be made any proposal for the acquisition
of the Company or any assets or businesses of the Company or
Company Securities or for any other extraordinary transaction
involving the Company, including, without limitation, any merger,
or other business combination, restructuring, recapitalization,
liquidation or similar transaction, except (i) as expressly
permitted by this Agreement or the Acquisition Agreement or (ii)
proposals pursuant to customary business transactions in the
ordinary course of the Company's and Cooper's business;
(c) form, join or in any way participate in a "group" (within
the meaning of Section 13(d)(3) of the Exchange Act) with respect
to any Company Securities;
(d) make, or in any way cause or participate in, any
"solicitation" of "proxies" to vote (as such terms are defined in
Regulation 14A under the Exchange Act) with respect to the Company,
or communicate with, seek to advise, encourage or influence any
person or entity, in any manner, with respect to the voting of, any
Company Securities, or become a "participant" in any "election
contest" (as such terms are defined or used in Rule 14a-11 under
the Exchange Act) with respect to the Company, or execute any
written consent with respect to the Company;
(e) initiate, propose or otherwise solicit shareholders for
the approval of one or more shareholder proposals with respect to
the Company or induce or attempt to induce any other person to
initiate any shareholder proposal, or (except as expressly
permitted by this Agreement) seek election to or seek to place a
representative on the Board of Directors of the Company or seek the
removal of any member of the Board of Directors of the Company;
(f) in any manner, agree, attempt, seek or propose (or make
any request for permission with respect thereto) to deposit any
Company Securities, directly or indirectly, in any voting trust or
similar arrangement or to subject any Company Voting Securities to
any other voting or proxy agreement, arrangement or understanding;
(g) disclose any intention, plan or arrangement, or make any
public announcement (or request permission to make any such
announcement), or induce any third party to take any action,
inconsistent with the foregoing;
(h) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the
foregoing; or
(i) advise, assist or encourage or finance (or assist or
arrange financing to or for) any other person in connection with
any of the foregoing.
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Section 2.4 Legend and Stop Transfer Order. To assist in
effectuating the provisions of this Agreement, Cooper hereby
consents:
(a) to the placement, if appropriate, of the following legend
on all certificates representing the Company Voting Securities
beneficially owned by it until such shares have been sold,
transferred or disposed of:
The securities represented by this certificate are subject to
the provisions of an Agreement between Cooper Industries, Inc.
and the issuer of such securities, and may not be sold,
transferred, pledged, hypothecated or otherwise disposed of
except in accordance therewith. A copy of such Agreement is on
file at the office of the clerk of the issuer.
(b) to the entry of a stop transfer order with the transfer
agent or agents of Company Voting Securities against the transfer
of the Company Voting Securities held by Cooper except in
compliance with the requirements of this Agreement, or if the
Company is its own transfer agent with respect to any Company
Voting Securities, to the refusal by the Company to transfer any
such securities except in compliance with the requirements of this
Agreement.
ARTICLE III
REGISTRATION RIGHTS
Section 3.1 Certain Definitions. As used in this Article III
the following capitalized terms shall have the following meanings:
(a) "Holder" means Cooper and any permitted transferee
pursuant to Section 1.1(a).
(b) "Registrable Securities" means the Shares and any
securities issued in respect of or in exchange for any of the
Shares, including, without limitation, by way of any stock split or
reverse stock split or other reclassification or any stock dividend
or other pro rata distribution; provided, that any such Shares or
other securities shall not be Registrable Securities with respect
to a proposed offer or sale thereof when a registration statement
with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have
been disposed of in accordance with the plan of distribution set
forth in such registration statement.
(c) "Registration Expenses" means all expenses in connection
with any registration of securities pursuant to this Agreement
including, without limitation, the following: (i) the reasonable
fees, disbursements and expenses of the Company's and Cooper's
counsel(s) (United States and foreign) and accountants in
connection with the registration of the Registrable Securities to
be disposed of under the Securities Act; (ii) all expenses in
connection with the preparation, printing and filing of the
registration statement, any preliminary prospectus or final
prospectus, any other offering document and amendments and
supplements thereto and the mailing and delivering of copies
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thereof to any underwriters and dealers; (iii) the cost of printing
or producing any agreement(s) among underwriters, underwriting
agreement(s), and blue sky or legal investment memoranda, any
selling agreements and any other documents in connection with the
offering, sale or delivery of the Registrable Securities to be
disposed of; (iv) all expenses in connection with the qualification
of the Registrable Securities to be disposed of for offering and
sale under state securities laws, including the reasonable fees and
disbursements of counsel for the Holders of Registrable Securities
in connection with such qualification and in connection with any
blue sky and legal investment surveys; (v) the filing fees incident
to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the
Registrable Securities to be disposed of; (vi) transfer agents',
depositaries' and registrars' fees and the fees of any other agent
appointed in connection with such offering; (vii) all security
engraving and security printing expenses; and (viii) all fees and
expenses payable in connection with the listing of the Registrable
Securities on each securities exchange or inter-dealer quotation
system on which any class of Company Voting Securities is then
listed.
Section 3.2 Demand Registration. (a) Upon written notice
from a Holder of Registrable Securities in the manner set forth in
Section 6.9 hereof requesting that the Company effect the
registration under the Securities Act of any or all of the
Registrable Securities held by such Holder, which notice shall
state that the Holder has a bona fide intent to dispose of such
Registrable Securities and shall specify the intended method or
methods of disposition, the Company will use its reasonable best
efforts to effect (at the earliest possible date) the registration
under the Securities Act of such Registrable Securities for
disposition in accordance with the intended method or methods of
disposition stated in such request (but not including any offering
on a delayed or continuous basis pursuant to Rule 415 (or any
successor rule to similar effect) promulgated under the Securities
Act); provided, that:
(i) if, upon receipt of a registration request pursuant
to this Section 3.2(a), the Company and the Holder(s)
requesting registration are advised by a nationally recognized
investment banking firm selected by the Company that, in such
firm's opinion, a registration at the time and on the terms
requested would materially and adversely affect any
immediately planned underwritten public offering by the
Company of its equity securities or debt securities which are
convertible into equity securities of the Company, which
offering had been contemplated by the Company prior to receipt
of notice requesting registration pursuant to this Section
3.2(a) (a "Transaction Blackout"), the Company, upon giving
written notice of a Transaction Blackout to such Holder(s),
shall not be required to effect a registration pursuant to
this Section 3.2(a) until the earliest of (A) the abandonment
of such financing, (B) 90 days after the completion of such
financing, (C) the termination of any "hold back" period
obtained by the underwriter(s) from any person in connection
with such financing, and (D) 60 days after receipt by the
Holder(s) of written notice from the Company of such
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Transaction Blackout if by such 60th day the Company shall not
have filed a registration statement relating to such
financing with the Commission;
(ii) if, while a registration request is pending pursuant to
this Section 3.2(a), the general counsel of the Company has
determined in good faith that (A) the filing of a registration
statement would require the disclosure of material information
which the Company has a bona fide business purpose for
preserving as confidential or (B) the Company is unable to
comply with the Commission's registration requirements, the
Company, upon giving written notice of any such event to the
Holder(s) requesting registration, shall not be required to
effect a registration pursuant to this Section 3.2(a) until
the earlier of (1) the date upon which such material
information is disclosed to the public or ceases to be
material or the Company is able to so comply with the
Commission's requirements, as the case may be, and (2) 30 days
after the general counsel of the Company makes such good faith
determination; and
(iii) a Holder shall have the right to exercise
registration rights pursuant to this Section 3.2 an unlimited
number of times; provided, each demand will be subject to the
following conditions: (A) each registration will include a
minimum of 10% of the Company Voting Securities initially
issued to Cooper in the Sale Transaction (except that this
minimum condition will not be applicable to the Holders' last
demand to sell all remaining Registrable Securities held by
the Holders); and (B) the Holders will not demand more than
two registrations in any twelve-month period and there will be
at least 120 days between the effective date of a prior
registration statement of the Company and the Holders' demand
for a subsequent registration.
(b) Notwithstanding any other provision of this Agreement to
the contrary, a registration requested by a Holder of Registrable
Securities pursuant to this Section 3.2 shall not be deemed to have
been effected (and, therefore, not requested for purposes of
subsection 3.2(a)), (i) if it is not declared effective by order of
the Commission for any reason other than a misrepresentation or an
omission by such Holder, (ii) if after it has become effective such
registration is interfered with by any stop order, injunction or
other order or requirement of the Commission or other governmental
agency or court for any reason other than a misrepresentation or an
omission by such Holder and, as a result thereof, the Registrable
Securities requested to be registered cannot be completely
distributed in accordance with the plan of distribution set forth
in the related registration statement, or (iii) if the conditions
to closing specified in the purchase agreement or underwriting
agreement entered into in connection with such registration are not
satisfied or waived other than by reason of some act or omission by
such Holder.
(c) Notwithstanding clause (i) of subsection 3.2(a), the
Company may not impose a Transaction Blackout during any offering
of Registrable Securities requested by a Holder pursuant to this
Section 3.2.
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(d) In the event that any registration pursuant to this
Section 3.2 shall involve, in whole or in part, an underwritten
offering, (i) the Company shall have the right to designate one
nationally recognized investment banking firm, reasonably
satisfactory to Cooper and the Holder(s) requesting registration,
as the lead managing underwriter of such underwritten offering,
(ii) the Holder(s) requesting registration shall have the right to
designate one nationally recognized investment banking firm,
reasonably satisfactory to the Company, as co-managing underwriter
of such underwritten offering and (iii) any other co-managing
underwriters of such underwritten offering shall be designated
jointly by the Company and the Holder(s) requesting registration.
(e) The Company shall have the right to cause the registration
of additional securities for sale for the account of any person in
any registration of Registrable Securities requested by a Holder
pursuant to this Section 3.2; provided, that the Company shall not
have the right to cause the registration of such additional
securities if such Holder and the Company are advised by a
nationally recognized investment banking firm selected by such
Holder that, in such firm's opinion, registration of such
additional securities would materially and adversely affect the
offering and sale of the Registrable Securities then contemplated
by such Holder. In the event that any such registration shall
involve, in whole or in part, an underwritten offering, the Holder
may require that any such additional securities be included in the
offering proposed by such Holder on the same terms and conditions
as the Registrable Securities are included therein.
Section 3.3 Piggyback Registration. If the Company at any
time proposes to register any of its Common Stock or any other of
its common equity securities (collectively, "Other Securities")
under the Securities Act (other than a registration on Form S-4 or
S-8 or any successor or similar forms), whether or not for sale for
its own account, in a manner which would permit registration of
Registrable Securities for sale to the public under the Securities
Act, it will give prompt written notice to the Holders of its
intention to do so and of the rights of the Holders under this
Section 3.3 at least 45 days (or, in the case of a registration on
Form S-3 or any successor or similar form, 10 days) prior to the
anticipated filing date of the registration statement relating to
such registration (such notice shall also specify the anticipated
filing date of such registration statement). Upon the written
request of any Holder made within 15 days (or, in the case of a
registration on Form S-3 or any successor or similar form, 5 days)
after the receipt of the Company's notice (which request shall
specify the number of Registrable Securities intended to be
disposed of and the intended method of disposition thereof), the
Company will use its reasonable best efforts to effect, in
connection with such registration of the Other Securities, the
registration under the Securities Act of all Registrable Securities
which the Company has been so requested to register, to the extent
required to permit the disposition (in accordance with such
intended methods thereof) of the Registrable Securities so
requested to be registered; provided, that:
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(a) if, at any time after giving such written notice of its
intention to register any Other Securities and prior to the
effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason
not to register the Other Securities, the Company may, at its
election, give written notice of such determination to the Holders
and thereupon the Company shall be relieved of its obligation to
register such Registrable Securities in connection with the
registration of such Other Securities (but not from its obligation
to pay Registration Expenses to the extent incurred in connection
therewith as provided in Section 3.4 hereof), without prejudice,
however, to the rights of the Holders immediately to request that
such registration be effected as a registration under Section 3.2
hereof;
(b) (i) if the registration referred to in the first sentence
of this Section 3.3 is to be an underwritten primary registration
on behalf of the Company, and the managing underwriter(s) advise(s)
the Company in writing that in their good faith opinion such
offering would be materially and adversely affected by the
inclusion therein of the Registrable Securities requested to be
included therein, the Company shall include in such registration:
(1) first, all securities the Company proposes to sell for its own
account ("Company Registrable Securities"), (2) second, up to the
full number of Registrable Securities held by the Holders and
requested to be included in such registration in excess of the
number or amount of Company Registrable Securities which, in the
good faith opinion of such underwriter(s), can be sold without
materially and adversely affecting such offering, and (3) third,
the number or amount of other securities, if any, requested to be
included therein in excess of the number or amount of Company
Registrable Securities and such Registrable Securities which, in
the opinion of such underwriter(s), can be sold without materially
and adversely affecting such offering; and (ii) if the registration
referred to in the first sentence of this Section 3.3 is to be an
underwritten secondary registration on behalf of holders of
securities(other than Registrable Securities) of the Company (the
"Other Holders"), and the managing underwriter(s) advise(s) the
Company in writing that in their good faith opinion such offering
would be materially and adversely affected by the inclusion therein
of the Registrable Securities requested to be included therein, the
Company shall include in such registration: (1) first, all
securities the Other Holders propose to sell for their own account
(the "Secondary Securities") and (2) second, up to the full number
of Registrable Securities held by Holders and requested to be
included in such registration in excess of the number or amount of
Secondary Securities which, in the good faith opinion of such
underwriter(s), can be sold without materially and adversely
affecting such offering and (3) third, the number or amount of
other securities, if any, requested to be included therein in
excess of the number or amount of Secondary Securities and such
Registrable Securities which, in the good faith opinion of such
underwriter(s), can be sold without materially and adversely
affecting such offering; and
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(c) no registration of Registrable Securities effected under
this Section 3.3 shall relieve the Company of its obligation to
effect a registration of Registrable Securities pursuant to Section
3.2 hereof.
Section 3.4 Expenses. The Company will pay all Registration
Expenses in connection with each registration of Registrable
Securities pursuant to this Agreement, except that after the third
demand registration pursuant to Section 3.2, the Holders will pay
all Registration Expenses in connection with each demand
registration of Registrable Securities held by the Holders. The
Holders shall pay all underwriting discounts or commissions or
transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by the Holders.
Section 3.5 Registration and Qualification. If and whenever
the Company is required to use its reasonable best efforts to
effect the registration of any Registrable Securities under the
Securities Act as provided in Section 3.2 or 3.3 hereof, the
Company will as promptly as is practicable:
(a) prepare, file and use its reasonable best efforts to cause
to become effective a registration statement under the Securities
Act relating to the Registrable Securities to be offered;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions
of the Securities Act with respect to the disposition of all
Registrable Securities until the earlier of (A) such time as all of
such Registrable Securities have been disposed of in accordance
with the intended methods of disposition set forth in such
registration statement and (B) the expiration of 90 days after such
registration statement becomes effective; provided, that such
90-day period shall be extended for such number of days that equals
the number of days elapsing from (x) the date the written notice
contemplated by Section 3.5(f) hereof is given by the Company to
(y) the date on which the Company delivers to the Holders the
supplement or amendment contemplated by Section 3.5(f) hereof; and
provided, further, if such registration is in connection with an
offering by the Holders, pursuant to Section 3.6 hereof, such
registration statement shall be kept effective until the earlier of
(A) above or (B) the expiration of the exercise, exchange or
conversion period;
(c) furnish to the Holders and to any underwriter of such
Registrable Securities such number of conformed copies of such
registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of
copies of the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus),
in conformity with the requirements of the Securities Act, such
documents incorporated by reference in such registration statement
or prospectus, and such other documents, as the Holders or such
underwriter may reasonably request, and a copy of any and all
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transmittal letters or other correspondence to, or received from,
the Commission or any other governmental agency or self-regulatory
body or other body having jurisdiction (including any domestic or
foreign securities exchange) relating to such offering;
(d) use its reasonable best efforts to register or qualify all
Registrable Securities covered by such registration statement under
the securities or blue sky laws of such jurisdictions (domestic or
foreign) as the Holders or any underwriter of such Registrable
Securities shall reasonably request, and use its reasonable best
efforts to obtain all appropriate registrations, permits and
consents required in connection therewith, and do any and all other
acts and things which may be necessary or advisable to enable the
Holders or any such underwriter to consummate the disposition in
such jurisdictions of its Registrable Securities covered by such
registration statement; provided, that the Company shall not for
any such purpose be required to qualify generally to do business as
a foreign corporation in any jurisdiction wherein it is not so
qualified, or to subject itself to taxation in any such
jurisdiction, or to consent to general service of process in any
such jurisdiction; provided, further, that, in the case of any such
registration or qualification in any non-United States
jurisdiction, (i) the Company shall have no obligation to use its
reasonable best efforts to so register or qualify Registrable
Securities if in the good faith opinion of the general counsel of
the Company such registration or qualification shall impose on the
Company an on-going material compliance obligation and (ii) the
Company shall not be obligated to keep any such registration or
qualification in effect except for so long as is necessary or
appropriate in order to dispose of Registrable Securities in such
jurisdiction;
(e) furnish to the Holders included in such registration (i)
on the date that the Registrable Securities are delivered to any
underwriters for sale pursuant to such registration statement, an
opinion of counsel representing the Company dated as of such date
for the purposes of such registration, addressed to the
underwriters and to the Holders, stating that such registration
statement has become effective under the Securities Act and that
(A) to the best knowledge of such counsel, no stop order suspending
the effectiveness hereof has been issued and no proceedings for
that purpose have been instituted or are pending or contemplated
under the Securities Act, (B) the registration statement, the
related prospectus, and each amendment or supplement thereof,
comply as to form in all material respects with the requirements of
the Securities Act and the applicable rules and regulations
thereunder (except that such counsel need express no opinion as to
the financial statements or any other financial or statistical data
or any engineering report contained or incorporated therein) and
(C) to such other effects as may reasonably be requested by counsel
for the underwriters or by the Holders or their counsel, and (ii)
on the effective date of the registration statement, the date that
the Registrable Securities are delivered to any underwriters for
sale pursuant to such registration statement and on the effective
date of each post-effective amendment to the registration
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statement, a "comfort" letter dated such date from the regular
independent public accountants retained by the Company, addressed
to the underwriters and to the Holders registering Registrable
Securities thereunder, stating that they are independent public
accountants within the meaning of the Securities Act and that, in
the opinion of such accountants, the financial statements of the
Company included or incorporated by reference in the registration
statement or the prospectus, or any amendment or supplement
thereto, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the
published rules and regulations thereunder, and such letter shall
additionally cover such other financial matters (including
information as to the period ending no more than five business days
prior to the date of such letter) included in the registration
statement in respect of which such letter is being given as the
underwriters or the Holders registering Registrable Securities
thereunder may reasonably request;
(f) immediately notify the Holders in writing (i) at any time
when a prospectus relating to a registration pursuant to Section
3.2 or 3.3 hereof is required to be delivered under the Securities
Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (ii) of any request by
the Commission or any other regulatory body or other body having
jurisdiction for any amendment of or supplement to any registration
statement or other document relating to such offering, and in
either such case (i) or (ii) at the request of any Holder prepare
and furnish to such Holder a reasonable number of copies of an
amendment of or a supplement to such prospectus as may be necessary
so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made,
not misleading;
(g) if requested by the underwriters of any underwritten
offering of Registrable Securities, use its reasonable best efforts
to list all such Registrable Securities covered by such
registration on each securities exchange and inter-dealer quotation
system (in each case, domestic or foreign) on which a class of
Company Voting Securities is then listed, and use its reasonable
best efforts to obtain all appropriate registrations, permits and
consents required in connection therewith, and do any and all other
acts and things which may be necessary or advisable to effect such
listing; and
(h) furnish unlegended certificates representing ownership of
the Registrable Securities being sold in such denominations as
shall be requested by the Holders registering Registrable
Securities thereunder or the underwriters.
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Section 3.6 Conversion of Other Securities, etc. If Cooper
offers any options, rights, warrants or other securities issued by
it that are offered with, convertible into or exercisable or
exchangeable for any Registrable Securities, the Registrable
Securities underlying such options, rights, warrants or other
securities shall be eligible for registration pursuant to Section
3.2 and Section 3.3 of this Agreement.
Section 3.7 Underwriting; Due Diligence. (a) If requested by
the underwriters for any underwritten offering of Registrable
Securities pursuant to a registration requested under this
Agreement, the Company will enter into an underwriting agreement
with such underwriters for such offering, such agreement to contain
such representations and warranties by the Company and such other
terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution substantially to
the effect and to the extent provided in Section 3.9 hereof and the
provision of opinions of counsel and accountants' letters to the
effect and to the extent provided in Section 3.5(e) hereof. The
representations and warranties in such underwriting agreement by,
and the other agreements on the part of, the Company to and for the
benefit of such underwriters, shall also be made to and for the
benefit of the Holders on whose behalf the Registrable Securities
are to be distributed by such underwriters.
(b) In the event that any registration pursuant to Section 3.3
shall involve, in whole or in part, an underwritten offering, the
Company may require the Registrable Securities requested to be
registered pursuant to Section 3.3 to be included in such
underwriting on the same terms and conditions as shall be
applicable to the other securities being sold through underwriters
under such registration. If requested by the underwriters for any
underwritten offering requested under this Agreement, the Holders
on whose behalf the Registrable Securities are to be distributed by
such underwriters will enter into an underwriting agreement with
such underwriters, such agreement to contain such representations
and warranties by such Holders and such other terms and provisions
as are customarily contained in underwriting agreements with
respect to secondary distributions, including, without limitation,
indemnities and contribution substantially to the effect and to the
extent provided in Section 3.9 thereof. The representations and
warranties in such underwriting agreement by, and the other
agreements on the part of, such Holders to and for the benefit of
such underwriters, shall also be made to and for the benefit of the
Company.
(c) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the
Securities Act, the Company will give the Holders of such
Registrable Securities and the underwriters, if any, and their
respective counsel and accountants, such reasonable and customary
access to its books and records and such opportunities to discuss
the business of the Company with its officers and the independent
public accountants who have certified the Company's financial
statements as shall be necessary, in the reasonable opinion of such
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Holders and such underwriters or their respective counsel, to
conduct a reasonable investigation within the meaning of the
Securities Act.
Section 3.8 Restrictions on Public Sale; Inconsistent
Agreements. (a) If any registration of Registrable Securities
pursuant to Section 3.2 shall be in connection with an underwritten
public offering, the Company agrees and agrees to cause any
controlled affiliates of the Company not to effect any public sale
or distribution of any of its securities of the same class or
series as such Registrable Securities or any securities convertible
into or exchangeable or exercisable for any securities of the same
class or series as such Registrable Securities (other than any such
sale or distribution of such securities in connection with any
exchange offer, merger or consolidation by the Company or a
subsidiary of the Company or in connection with the purchase of all
or substantially all the assets of any other person or in
connection with an employee stock option plan, employee stock
ownership plan or other benefit plan) during the 30-day period
prior to, and during the 90-day period beginning on, the effective
date of such registration statement (except as part of such
registration), or for such shorter period acceptable to the
underwriters of such offering.
(b) The Company agrees that any agreement entered into after
the date of this Agreement pursuant to which the Company issues or
agrees to issue any equity securities or any securities convertible
into or ex changeable or exercisable for any equity securities of
the Company which will be privately placed shall contain (i) a
provision under which holders of such securities agree not to
effect any public sale or distribution of any such securities
during the period referred to in Section 3.8(a), including any sale
pursuant to Rule 144 under the Securities Act (except as part of
such registration, if permitted) and (ii) no terms or provisions
inconsistent with any term or provision of this Agreement.
Section 3.9 Indemnification and Contribution. (a) In the
case of each offering of Registrable Securities made pursuant to
this Agreement (whether pursuant to Section 3.2 or Section 3.3),
the Company agrees to indemnify and hold harmless the Holders of
Registrable Securities, its officers and directors, each
underwriter of Registrable Securities so offered and each person,
if any, who controls any of the foregoing persons within the
meaning of the Securities Act, from and against any and all claims,
liabilities, losses, damages, expenses and judgments, joint or
several, to which they or any of them may become subject, under the
Securities Act or otherwise, including any amount paid in
settlement of any litigation commenced or threatened, and shall
promptly reimburse them, as and when incurred, for any reasonable
legal fees (including disbursements and related expenses) or other
reasonable out-of-pocket expenses incurred by them in connection
with investigating any claims and defending any actions, insofar as
such losses, claims, damages, liabilities or actions shall arise
out of, or shall be based upon, any untrue statement or alleged
untrue statement of a material fact contained in the registration
statement (or in any preliminary or final prospectus included
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therein), or any amendment thereof or supplement thereto, or in any
document incorporated by reference therein, or any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or shall arise out of or be based upon any violation or
alleged violation by the Company of the Securities Act, any blue
sky laws, securities laws or other applicable laws of any state or
country in which the Registrable Securities are offered and
relating to action or inaction required of the Company in
connection with such offering; provided, that the Company shall not
be liable to any Holder of Registrable Securities in any such case
to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or
alleged untrue statement, or any omission, if such statement or
omission shall have been made in reliance upon and in conformity
with information relating to such Holder furnished to the Company
in writing by or on behalf of such Holder specifically for use in
the preparation of the registration statement (or in any
preliminary or final prospectus included therein), or any amendment
thereof or supplement thereto. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on
behalf of the Holders of Registrable Securities and shall survive
the transfer of such securities. The foregoing indemnity agreement
is in addition to any liability which the Company may otherwise
have to the Holders of Registrable Securities, its officers and
directors, underwriters of the Registrable Securities, or any
controlling person of the foregoing; provided, further, that, in
the case of an offering with respect to which any Holder has
designated the lead managing underwriter(s), this indemnity does
not apply to any loss, liability, claim, damage or expense arising
out of or based upon any untrue statement or alleged untrue
statement or omission or alleged omission in any preliminary
prospectus if a copy of a prospectus was not sent or given by or on
behalf of an underwriter to such person asserting such loss, claim,
damage, liability or action at or prior to the written confirmation
of the sale of the Registrable Securities as required by the
Securities Act and such untrue statement or omission had been
corrected in such prospectus.
(b) In the case of each offering made pursuant to this
Agreement (whether pursuant to Section 3.2 or Section 3.3), each
Holder of Registrable Securities included in such offering, by
exercising its registration rights hereunder, agrees to indemnify
and hold harmless the Company, its officers and directors and each
person, if any, who controls any of the foregoing within the
meaning of the Securities Act (and if requested by the
underwriters, each underwriter who participates in the offering and
each person, if any, who controls any such underwriter within the
meaning of the Securities Act), from and against any and all
claims, liabilities, losses, damages, expenses and judgments, joint
or several, to which they or any of them may become subject, under
the Securities Act or otherwise, including any amount paid in
settlement of any litigation commenced or threatened, and shall
promptly reimburse them, as and when incurred, for any reasonable
legal fees (including disbursements and related expenses) or other
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reasonable out-of-pocket expenses incurred by them in connection
with investigating any claims and defending any actions, insofar as
any such losses, claims, damages, liabilities or actions shall
arise out of, or shall be based upon, any untrue statement or
alleged untrue statement of a material fact contained in the
registration statement (or in any preliminary or final prospectus
included therein) or any amendment thereof or supplement thereto,
or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the
extent that such untrue statement of a material fact is contained
in, or such material fact is omitted from, information relating to
such Holder furnished in writing to the Company by or on behalf of
such Holder specifically for use in the preparation of such
registration statement (or any preliminary or final prospectus
included therein), or any amendment thereof or supplement thereto.
The foregoing indemnity is in addition to any liability which such
Holder may otherwise have to the Company, or any of its directors,
officers or controlling persons; provided, that, in the case of an
offering with respect to which the Company has designated the lead
managing underwriter(s), this indemnity does not apply to any loss,
liability, claim, damage or expense arising out of or based upon
any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary prospectus if a copy of a
prospectus was not sent or given by or on behalf of an underwriter
to such person asserting such loss, claim, damage, liability or
action at or prior to the written confirmation of the sale of the
Registrable Securities as required by the Securities Act and such
untrue statement or omission had been corrected in such prospectus.
(c) Procedure for Indemnification. Each party indemnified
under paragraph (a) or (b) of this Section 3.9 shall, promptly
after receipt of notice of any claim or the commencement of any
action against such indemnified party in respect of which indemnity
may be sought, notify the indemnifying party in writing of the
claim or the commencement thereof; provided, that the failure to
notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party on account of
the indemnity agreement contained in paragraph (a) or (b) of this
Section 3.9, unless the indemnifying party was prejudiced by such
failure, and in no event shall relieve the indemnifying party from
any other liability which it may have to such indemnified party. If
any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein, and,
to the extent that it wishes, jointly with any other similarly
notified indemnifying party, to assume the defense thereof with
counsel satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 3.9
for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, that the indemnified
parties, shall have the right, as a group, to employ one law firm
as separate counsel to represent them if, in the reasonable
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judgment of the indemnified parties, it is advisable for them to be
represented by separate counsel, and in that event the fees and
expenses of such separate counsel shall be paid by the indemnifying
party. If the indemnified parties employ such separate counsel they
will not agree to any settlement of any such claim or action
without the prior written consent of the indemnifying party, such
consent not to be unreasonably withheld. If the indemnifying party
so assumes the defense thereof, it may not agree to any settlement
of any such claim or action as the result of which any remedy or
relief, other than monetary damages for which the indemnifying
party shall be responsible hereunder, shall be applied to or
against the indemnified parties, without the prior written consent
of the indemnified parties, such consent not to be unreasonably
withheld. If the indemnifying party does not assume the defense
thereof, it shall be bound by any settlement to which the
indemnified parties agree, irrespective of whether the indemnifying
party consents thereto. In any action hereunder as to which the
indemnifying party has assumed the defense thereof with counsel
satisfactory to the indemnified party, the indemnified party shall
continue to be entitled to participate in the defense thereof, with
counsel of its own choice, but, except as set forth above, the
indemnifying party shall not be obligated hereunder to reimburse
the indemnified party for the costs thereof.
If the indemnification provided for in this Section 3.9 shall
for any reason be unavailable to an indemnified party in respect of
any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall,
in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of
such loss, claim, damage or liability, or action in respect
thereof, in such proportion as shall be appropriate to reflect the
relative fault of the indemnifying party on the one hand and the
indemnified party on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material
fact relates to information supplied by the indemnifying party on
the one hand or the indemnified party on the other, the intent of
the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission, but
not solely by reference to any indemnified party's stock ownership
in the Company. The amount paid or payable by an indemnified party
as a result of the loss, claim, damage or liability, or action in
respect thereof, referred to above in this paragraph shall be
deemed to include, for purposes of this paragraph, any reasonable
legal fees (including disbursements and related expenses) or other
reasonable out-of-pocket expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
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ARTICLE IV
TERM AND EFFECTIVENESS OF AGREEMENT
Section 4.1 Effectiveness of Agreement. This Agreement shall
be effective only upon consummation of the Sale Transaction
contemplated by the Acquisition Agreement. Neither party shall have
any obligation to the other pursuant to this Agreement until such
consummation has occurred, and this Agreement shall terminate
simultaneously with any termination of the Acquisition Agreement in
accordance with its terms.
Section 4.2 Term of Agreement. Except as otherwise provided
in Section 4.3, the respective covenants and agreements of Cooper
and the Company contained in Article I and Article II of this
Agreement will continue in full force and effect from the date of
effectiveness of this Agreement pursuant to Section 4.1 until the
earlier of (i) the tenth anniversary of such date, and (ii) the
first date on which Cooper beneficially owns less than 5% of the
outstanding Company Voting Securities.
Section 4.3 Certain Provisions Regarding Termination.
(a) The limitations on Cooper and its affiliates set forth in
Articles I and II will terminate immediately and be of no further
force and effect on the date that a "Trigger Event" shall have
occurred. For these purposes, "Trigger Event" shall mean the
occurrence of one or more of the following events, without Cooper's
prior written consent:
(i) in connection with the issuance of Company Voting
Securities (other than (x) issuances pursuant to the Company's
current employee benefit plans or other customary employee
benefit plans of the Company or (y) issuances in connection
with bona fide capital raising programs pursuant to which the
securities are sold for fair value, as approved by the Board
of Directors of the Company, and the proceeds of which are
invested in the businesses in which the Company or one or more
of its subsidiaries are then engaged or (z) issuances for fair
value, as determined by the Board of Directors of the Company,
in connection with acquisitions by the Company or one of its
wholly-owned subsidiaries primarily involving one or more
Similar Businesses (as hereinafter defined)) the failure to
provide Cooper with the right to purchase, at the same price
as the Company Voting Securities are being issued, that number
or amount of Company Voting Securities which would enable
Cooper to maintain its proportionate interest in the Company
following such issuance;
(ii) a "Change in Control" of the Company (as hereinafter
defined);
(iii) a material acquisition or investment by the Company
or one of its subsidiaries, other than an acquisition or
investment by the Company or one of its wholly-owned
subsidiaries primarily involving one or more Similar
Businesses;
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(iv) a decline of at least 35% in the "Consolidated Net
Worth" of the Company from the Consolidated Net Worth of the
Company immediately following the consummation of the Sale
Transaction after giving effect to the Sale Transaction
(including the issuance of the Shares to Cooper), but not
taking into account (A) any reduction in the Company's
Consolidated Net Worth attributable to or taken in connection
with or as a result of the Sale Transaction or the combination
of the business acquired from Cooper with the Company's
business and recorded in the Company's financial statements
for any period ending on (and including) the end of the first
full fiscal year of the Company after the consummation of the
Sale Transaction or (B) any adjustments following the date of
consummation of the Sale Transaction as a result of any
changes in generally accepted accounting principles ("GAAP")
(including the implementation of Statement of Financial
Accounting Standards ("SFAS") No. 106) or any other regulatory
changes or requirements applicable to the Company or its
financial statements or (C) any adjustment resulting from any
liability arising from or growing out of any matter or
circumstance existing as of the time of the consummation of
the Sale Transaction and relating to the business or assets
acquired by the Company from Cooper but not reflected on the
balance sheet of such business and assets or (D) any change in
the translation component of shareholders' equity or (E)
adjustments as a result of sales of the Company's accounts
receivables pursuant to a bona fide receivables securitization
program pursuant to which fair value is received for
receivables so sold (as determined by the Company's Board of
Directors, taking into account, among other things, any
discount or credit enhancement features required by any
securities rating agency) or (F) any adjustment resulting from
a SFAS No. 109 valuation allowance recorded or reserved by the
Company with respect to deferred tax assets that were included
in or excluded from the Company's final Accounting Practice
Bulletin No. 16 acquisition date balance sheet;
(v) any default or defaults by the Company or one of its
subsidiaries under any indebtedness of the Company or its
subsidiaries for money borrowed with a principal amount then
outstanding, individually or in the aggregate, in excess of $5
million, which default shall constitute a failure to pay any
portion of the principal of each indebtedness at final
maturity or shall have resulted in such indebtedness becoming
or being declared due and payable prior to the date on which
it would otherwise have become due and payable without such
indebtedness having been discharged, or such acceleration
having been rescinded or annulled within a period of 30 days
after maturity or acceleration;
(vi) an "Event of Bankruptcy" (as hereinafter defined);
or
(vii) the failure of the Board of Directors of the
Company to nominate at least two of Cooper's representatives
for election to the Company's Board of Directors.
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Notwithstanding clause (i) above, the Company may not issue
any securities having more than one vote per share (other than
pursuant to the Amended and Restated Rights Agreement) without
the prior written consent of Cooper.
(b) For purposes of this Section 4.3:
(i) A "Change in Control" shall mean a merger or
consolidation involving the Company or a sale of all or
substantially all of the assets of the Company, in each case
except for a transaction in which the Company's shareholders
receive at least 50% of the stock of the surviving, resulting
or acquiring corporation; the acquisition by an individual,
entity or group (excluding the Company or an employee benefit
plan of the Company or a corporation controlled by the
Company's shareholders) of shares of capital stock of the
Company entitled to cast a majority of the votes entitled to
be cast on matters submitted to the shareholders of the
Company; or a change in a majority of the members of any class
of the Company's Board of Directors in connection with an
"election contest" (as used in Rule 14a-11 under the Exchange
Act).
(ii) "Consolidated Net Worth" shall mean, as at any date
of determination, the consolidated shareholders' equity of the
Company and those of its subsidiaries that would be accounted
for as consolidated subsidiaries in the Company's financial
statements in accordance with GAAP (as in effect from time to
time), as determined on a consolidated basis in accordance
with GAAP (as in effect from time to time); provided, that the
Consolidated Net Worth of the Company immediately following
the consummation of the Sale Transaction shall include 60% of
the "LIFO reserve" as of that date, and thereafter for
purposes of calculating Consolidated Net Worth the earnings or
loss of the Company shall be computed utilizing the FIFO
(first-in, first-out) method of accounting for inventory.
(iii) An "Event of Bankruptcy" shall mean (A) the
commencement by the Company of a voluntary proceeding under
any applicable bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by the
Company to the entry of a decree or order for relief in
respect of the Company in an involuntary case or proceeding
under any applicable bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Company, or the
admission by the Company in writing of its inability to pay
its debts generally as they become due; or (B) the entry by a
court having jurisdiction in the premises of (1) a decree or
order for relief in respect of the Company in an involuntary
case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law or (2) a
decree or order adjudging the Company a bankrupt or insolvent,
or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or
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in respect of the Company under any applicable law, or
ordering the winding up or liquidation of the affairs of the
Company, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days.
(iv) "Similar Businesses" shall mean businesses in which
the Company or one or more of its subsidiaries are engaged and
any businesses involving products related to or complementary
to the products of the Company or one or more of its
subsidiaries or any similar businesses providing customers of
the Company or one or more of its subsidiaries with products
or services similar to those provided by the Company or one or
more of its subsidiaries.
ARTICLE V
ELECTION OF DIRECTORS
Section 5.1 (a) The Company agrees that it will use its best
efforts to cause two persons designated by Cooper and reasonably
acceptable to the Company to be elected to the Board of Directors
of the Company and to serve as directors of the Company until their
successors are duly elected and qualified. In the event that any
such designee shall cease to serve as a director for any reason,
the Company will use its best efforts to cause such vacancy
resulting thereby to be filled by a designee of Cooper reasonably
acceptable to the Company. In order to effect the purposes and
intent of this Section 5.1, the Company, among other things, shall
vote all shares for which the Company's management or Board of
Directors holds proxies or is otherwise entitled to vote in favor
of the election of the designees of Cooper except as may otherwise
be provided by shareholders submitting such proxies.
(b) The Company agrees that any designees of Cooper who are
elected to serve on the Company's Board of Directors shall be
furnished with all information generally provided to the Company's
Board of Directors and shall have access to information regarding
the Company on a basis equal to that of the other outside or its
inside directors. The Company agrees that Cooper's designees
serving on the Company's Board of Directors shall, in connection
with the performance of their duties as directors of the Company,
be (i) compensated at a level commensurate with the compensation of
the Company's other outside directors, (ii) reimbursed for all
out-of-pocket charges and expenses incurred, (iii) entitled to the
benefit of insurance policies of the Company which provide coverage
to its other outside directors and (iv) furnished with and entitled
to the same perquisites as the Company's other outside directors.
ARTICLE VI
GENERAL
Section 6.1 Specific Enforcement; Other Remedies.
(a) Cooper acknowledges and agrees that the Company would be
irreparably damaged in the event any of the provisions of this
Agreement were not performed by Cooper in accordance with their
specific terms or were otherwise breached. It is accordingly agreed
that the Company shall be entitled to an injunction or injunctions
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to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court
of the United States or any state thereof having jurisdiction, in
addition to any other remedy to which the Company may be entitled
at law or equity.
(b) The Company acknowledges and agrees that Cooper would be
irreparably damaged in the event any of the provisions of this
Agreement were not performed by the Company in accordance with
their specific terms or were otherwise breached. It is accordingly
agreed that Cooper shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions hereof or seek
recovery of money damages in any court of the United States or any
state thereof having jurisdiction, in addition to any other remedy
to which Cooper may be entitled at law or equity.
Section 6.2 Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remainder
of the terms, provisions, covenants and restrictions shall remain
in full force and effect and shall in no way be affected, impaired
or invalidated. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without
including any of such which may be hereafter declared invalid, void
or unenforceable.
Section 6.3 Definitions. As used herein the term "affiliate"
shall have the meaning set forth in Rule 12b-2 under the Exchange
Act and the term "person" shall mean any individual, partnership,
joint venture, corporation, trust or other entity.
Section 6.4 Amendment and Modification. This Agreement may
be amended, modified or supplemented only by an agreement in
writing signed by both of the parties hereto.
Section 6.5 Descriptive Headings. Descriptive headings are
for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
Section 6.6 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
Section 6.7 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the
successors and permitted assigns of the parties hereto, but neither
this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by either of the parties hereto without
the prior written consent of the other party. Notwithstanding the
foregoing, Cooper may assign its rights under this Agreement to any
of its direct or indirect wholly-owned subsidiaries as long as such
subsidiary remains a direct or indirect wholly-owned subsidiary of
Cooper, but no such assignment shall relieve Cooper of its
obligations hereunder.
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Section 6.8 Accounting Matters. The Company will furnish to
Cooper all information that is required by GAAP to enable Cooper to
account for its investment in the Company in whatever manner it
shall deem appropriate. To the extent reasonably requested by
Cooper, the Company will, and will cause its employees, independent
public accountants and other representatives to provide information
regarding the Company to, and otherwise cooperate with, Cooper so
as to enable Cooper to prepare financial statements in accordance
with generally accepted accounting principles and to comply with
its reporting requirements and other disclosure obligations under
applicable United States securities laws and regulations.
Section 6.9 Notices. All notices and other communications
provided for herein shall be validly given, made or served, if in
writing and delivered personally, sent by facsimile transmission
(receipt of which is confirmed) or mailed by registered or
certified mail (return receipt requested), postage prepaid, to the
parties at the following addresses (or at such other address for a
party as shall be specified by like notice; provided that notices
of a change of address shall be effective only upon receipt
thereof):
(i) if to Cooper or a Holder of Registrable Securities, to
Cooper Industries, Inc.
First City Tower, Suite 4000
1001 Fannin
Houston, Texas 77002
Attention: General Counsel
Telephone No.: (713) 739-5902
Facsimile No.: (713) 735-5882
(ii) if to the Company, to
Wyman-Gordon Company
224 Worcester Street
Box 8001
Grafton, Massachusetts 01536
Attention: Wallace F. Whitney, Jr.
Telephone No.: (508) 839-4441
Facsimile No.: (508) 839-7500
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Adam O. Emmerich
Telephone No.: (212) 403-1000
Facsimile No.: (212) 403-2000
(iii) if to a Holder of Registrable Securities, to the name
and address as the same appear in the security transfer books
of the Company.
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Notice given by facsimile shall be deemed delivered on the business
day after it is sent to the recipient. Notice given by mail as set
out above shall be deemed delivered five calendar days after the
date the same is mailed.
Section 6.10 Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of New York
without regard to any applicable principles of conflicts of law.
IN WITNESS WHEREOF, Cooper and the Company have caused this
Agreement to be duly executed by their respective officers, each of
whom is duly and validly authorized and empowered, all as of the
day and year first above written.
COOPER INDUSTRIES, INC.
By: /s/H. John Riley, Jr.
Name: H. John Riley, Jr.
Title: President and Chief
Operating Officer
WYMAN-GORDON COMPANY
By: /s/John M Nelson
Name: John M. Nelson
Title: Chairman and Chief
Executive Officer
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