Document:

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Exhibit 10.25

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                           FIVE-YEAR CREDIT AGREEMENT

                                 ---------------

                            COOPER INDUSTRIES, LTD.,

                                COOPER US, INC.,

                                       and

                           THE BANKS AS DEFINED HEREIN

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                     Page
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<S>                                                                                                                <C>
Section 1.        Certain Defined Terms..........................................................................       1

Section 2.        Representations................................................................................       7
       2.01       Corporate Existence and Power..................................................................       7
       2.02       Corporate Authority............................................................................       7
       2.03       Financial Condition............................................................................       8
       2.04       Litigation.....................................................................................       9
       2.05       Liens..........................................................................................       9
       2.06       Use of Loans...................................................................................       9
       2.07       Taxes..........................................................................................       9
       2.08       Titles, etc....................................................................................       9
       2.09       ERISA..........................................................................................       9
       2.10       Validity, Etc..................................................................................       9

Section 3.        Commitment.....................................................................................       9
       3.01       Changes of Commitment..........................................................................       9
       3.02       Facility Fee...................................................................................      10

Section 4.        Conditions of Lending..........................................................................      10
       4.01       Initial Loans..................................................................................      10
       4.02       Each Loan......................................................................................      12

Section 5.        Drawings.......................................................................................      13
       5.01       Loans..........................................................................................      13
       5.02       Borrowings and Interest Elections..............................................................      13
       5.03       Lending Offices................................................................................      14
       5.04       Prepayments....................................................................................      14

Section 6.        Payments of Principal and Interest.............................................................      14
       6.01       Repayment of Loans.............................................................................      14
       6.02       Interest.......................................................................................      15

Section 7.        Payments; Computations; Etc....................................................................      15
       7.01     Payments.........................................................................................      15
       7.02     Non-Business Days................................................................................      15
       7.03     Computations.....................................................................................      15
       7.04     Setoff...........................................................................................      15
       7.05     Sharing of Payments and Setoffs..................................................................      16
</TABLE>

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<TABLE>
<S>                                                                                                                    <C>
Section 8.        Illegality and Yield Protection................................................................      16
       8.01       Basis for Determining Interest Rate Inadequate.................................................      16
       8.02       Illegality.....................................................................................      16
       8.03       Increased Cost and Reduced Return..............................................................      17
       8.04       Base Rate Loans Substituted for Affected Eurodollar Loans......................................      18
       8.05       Taxes..........................................................................................      18
       8.06       Break Funding Payments.........................................................................      19

Section 9.        Covenants......................................................................................      20
       9.01       Financial Statements...........................................................................      20
       9.02       Indebtedness...................................................................................      21
       9.03       Liens..........................................................................................      22
       9.04       Merger and Sale of Assets......................................................................      23
       9.05       Taxes..........................................................................................      24
       9.06       Sale-and-Leaseback.............................................................................      24
       9.07       Maintenance of Property; Insurance.............................................................      24
       9.08       Cooper US......................................................................................      24
       9.09       Interest Coverage..............................................................................      24
       9.10       Principal Domestic Operating Subsidiaries......................................................      24

Section 10.       Events of Default.............................................................................       25

Section 11.       Miscellaneous..................................................................................      27
       11.01      Waiver.........................................................................................      27
       11.02      Notices........................................................................................      27
       11.03      Amendments and Waivers.........................................................................      27
       11.04      Successors and Assigns.........................................................................      28
       11.05      Participations.................................................................................      28
       11.06      Expenses.......................................................................................      29
       11.07      Counterparts...................................................................................      29
       11.08      Indemnity......................................................................................      29
       11.09      Survival.......................................................................................      29
       11.10      Usury..........................................................................................      29
       11.11      Governing Law..................................................................................      30
       11.12      Jurisdiction...................................................................................      30
       11.13      Waiver of Jury Trial...........................................................................      30
       11.14      Patriot Act ...................................................................................      30

Section 12.       Guarantee......................................................................................      30
       12.01      Guarantee......................................................................................      30
       12.02      Guarantee Unconditional........................................................................      31
       12.03      Discharge Upon Payment in Full; Reinstatement in Certain Circumstances.........................      31
       12.04      Waiver by the Guarantor........................................................................      32
       12.05      Subrogation....................................................................................      32
</TABLE>

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<TABLE>
<S>                                                                                                                    <C>
       12.06      Stay of Acceleration...........................................................................      32
</TABLE>

EXHIBIT A Form of Notes

EXHIBIT B Amendment Form

EXHIBIT C Guarantee Form for Cooper Industries, Inc.

EXHIBIT D Guarantee Form for Cooper Industries, LLC

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      This FIVE YEAR CREDIT AGREEMENT (the "Agreement") is dated this 3rd day of
November, 2004 by and between COOPER INDUSTRIES, LTD., a Bermuda company "Cooper
Bermuda"), COOPER US, INC., a Delaware corporation ("Cooper US") and the Banks.
This Agreement shall not become effective until November 17, 2004 (the
"Effective Date").

      The parties hereto agree as follows:

      Section 1.  Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (all terms defined in this
Agreement in the singular to have the same meanings when used in the plural and
vice versa):

            "Applicable Lending Office" means each Bank's principal office or
      such other office of such Bank as such Bank may from time to time specify
      to Cooper US.

            "Applicable Margin" means whichever of the following is applicable
      from time to time and produces the lowest Applicable Margin: (a) .18
      percent at any date if, at such date, any Debt Rating is A1 or better by
      Moody's or A+ or better by Standard & Poor's; (b) .22 percent at any date
      if, at such date, any Debt Rating is A2 by Moody's or A by Standard &
      Poor's; (c) .31 percent at any date if, at such date, any Debt Rating is
      A3 by Moody's or A- by Standard & Poor's; (d) .45 percent at any date if,
      at such date, any Debt Rating is Baa1 by Moody's or BBB+ by Standard &
      Poor's; (e) .63 percent at any date if, at such date, any Debt Rating is
      Baa2 by Moody's or BBB by Standard & Poor's; (f) .80 percent at any date
      if, at such date, any Debt Rating is Baa3 by Moody's or BBB- by Standard &
      Poor's; and (g) 1.00 percent at all times when none of subsections (a),
      (b), (c), (d), (e) or (f) are applicable. Any change in the Applicable
      Margin caused by a change in the Debt Rating shall be effective on the
      date of any relevant change in the Debt Rating. Promptly after Moody's or
      Standard & Poor's shall have announced a change in the Debt Rating, Cooper
      US shall notify each Bank of such change. During any time that the
      aggregate principal amount of all outstanding Loans exceeds 50% of the
      aggregate amount of the Commitments, the Applicable Margin for all such
      outstanding Loans shall be increased by .10 percent during any time that
      any Debt Rating is A3 or better by Moody's or A- or better by Standard &
      Poor's and .125 percent at all other times. Notwithstanding the first
      sentence of this definition, if there is a difference of more than one
      rating level between the best Debt Rating assigned by Moody's and the best
      Debt Rating assigned by Standard & Poor's, then the rating level
      immediately below the better of the two rating levels shall determine the
      Applicable Margin.

            "Bank" means each bank or other financial institution listed on the
      signature pages hereof, each bank or other financial institution which
      agrees in writing to become a lender under this Agreement by signing an
      agreement in the form of Exhibit B, and their respective successors.

            "Base Rate" means, for any day, the higher of (a) the Prime Rate or
      (b) the Federal Funds Rate plus 1/2 of one percent.

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            "Base Rate Loans" means Loans which bear interest at a rate based
      upon the Base Rate.

            "Borrower" means Cooper Bermuda or Cooper US, as the case may be,
      with respect to each Loan hereunder.

            "Business Day" means any day on which commercial banks are not
      authorized or required to close in New York City and, if such day relates
      to a borrowing of, a payment of principal of or interest on, or the
      Interest Period for, a Eurodollar Loan or a notice by Borrower with
      respect to any such borrowing, payment or Interest Period, which is also a
      day on which dealings in Dollar deposits are carried out in the London
      interbank market.

            "Capitalized Lease Obligations" means any and all lease obligations
      which, in accordance with GAAP, have been or should be capitalized on the
      books of the lessee.

            "Code" means the Internal Revenue Code of 1986, as amended from time
      to time.

            "Commitment" means the obligation of each Bank to make Loans
      pursuant to Section 5 of this Agreement in an aggregate amount at any one
      time outstanding up to but not exceeding the amount set forth under such
      Bank's name on the signature pages hereof or on an agreement in the form
      of Exhibit B (as such amount may be reduced from time to time in
      accordance with the Agreement).

            "Commitment Termination Date" means November 17, 2009.

            "Consolidated Subsidiary" means any Subsidiary (whether now existing
      or hereafter organized or acquired) which was at December 31, 2003, or
      which at any time thereafter is, consolidated with Cooper Bermuda in any
      consolidated financial statement furnished to any Bank.

            "Debt" means at any time Capitalized Lease Obligations and debt
      created, issued, guaranteed (whether directly, or indirectly by way of
      agreement, contingent or otherwise, to purchase, to provide funds for
      payment, to supply funds to or otherwise invest in the debtor, or
      otherwise to assure the creditor against loss), incurred or assumed for
      money borrowed or for the deferred (for 91 days or more) purchase price of
      property or services purchased, excluding, however, accounts payable
      (other than for borrowed money or for such deferred purchase price) and
      accrued expenses incurred in the ordinary course of business, provided
      that the same are not overdue in a material amount or, if overdue, are
      being contested in good faith and by appropriate proceedings.

            "Debt Rating" means the highest rating of (i) any senior unsecured
      long-term debt for borrowed money of any Consolidated Subsidiary which is
      fully guaranteed by Cooper Bermuda or (ii) the long-term corporate credit
      of Cooper Bermuda.

            "Defaulting Bank" means any Bank that (a) has failed to fund any
      portion of a Loan required to be funded by it hereunder within one
      Business Day of the date required to be

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      funded by it hereunder or (b) has been deemed insolvent or become the
      subject of a bankruptcy or insolvency proceeding.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
      as amended from time to time, including (unless the context otherwise
      requires) any rules or regulations promulgated thereunder.

            "ERISA Affiliate" means any trade or business (whether or not
      incorporated) that, together with the Borrower, is treated as a single
      employer under Section 414(b) or (c) of the Code or, solely for purposes
      of Section 302 of ERISA and Section 412 of the Code, is treated as a
      single employer under Section 414 of the Code.

            "Eurodollar Loan Interest Payment Date" means, for any Eurodollar
      Loan, the last day of the Interest Period therefor and, if such Interest
      Period is longer than three months, at three-month intervals following the
      first day of such Interest Period.

            "Eurodollar Loans" means Loans the interest on which is determined
      on the basis of rates referred to in the definition of "Eurodollar Rate".

            "Eurodollar Rate" means, for any Eurodollar Loan, the rate per annum
      equal to the sum of (i) the product of (a) the average British Bankers
      Association interest settlement rate at 11:00 a.m. London time two
      Business Days prior to the first day of the Interest Period for such Loan
      for Dollar deposits having a term comparable to such Interest Period
      multiplied by (b) the Statutory Reserve Rate; and (ii) the Applicable
      Margin, such sum to be rounded upwards, if necessary, to the nearest 1/100
      of 1%.

            "Event of Default" shall have the meaning assigned to that term in
      Section 10.

            "Facility Fee Rate" means whichever of the following is applicable
      from time to time and produces the lowest Facility Fee Rate: (a) .07
      percent at any date if, at such date, any Debt Rating is A1 or better by
      Moody's or A+ or better by Standard & Poor's; (b) .08 percent at any date
      if, at such date, any Debt Rating is A2 by Moody's or A by Standard &
      Poor's; (c) .09 percent at any date if, at such date, any Debt Rating is
      A3 by Moody's or A- by Standard & Poor's; (d) .10 percent at any date if,
      at such date, any Debt Rating is Baa1 by Moody's or BBB+ by Standard &
      Poor's; (e) .12 percent at any date if, at such date, any Debt Rating is
      Baa2 by Moody's or BBB by Standard & Poor's; (f) .20 percent at any date
      if, at such date, any Debt Rating is Baa3 by Moody's or BBB- by Standard &
      Poor's; and (g) .25 percent at all times when none of Subsections (a),
      (b), (c), (d), (e) or (f) are applicable. Any change in the Facility Fee
      Rate caused by a change in the Debt Rating shall be effective on the date
      of any relevant change in the Debt Rating. Promptly after Moody's or
      Standard & Poor's shall have announced a change in the Debt Rating, Cooper
      US shall notify each Bank of such change. Notwithstanding the first
      sentence of this definition, if there is a difference of more than one
      rating level between the best Debt Rating assigned by Moody's and the best
      Debt Rating assigned by Standard & Poor's, then the rating level
      immediately below the better of the two rating levels shall determine the
      Facility Fee Rate.

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            "FAS 142 Impairment Loss" means any goodwill and other intangible
      asset impairment loss recognized in accordance with Statement of Financial
      Accounting Standards No. 142 "Goodwill and Other Intangible Assets."

            "Federal Funds Rate" means, for any day, the rate per annum (rounded
      upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
      average of the rates on overnight Federal funds transactions with members
      of the Federal Reserve System arranged by Federal funds brokers on such
      day, as published by the Federal Reserve Bank of New York on the Business
      Day next succeeding such day; provided that (a) if such day is not a
      Business Day, the Federal Funds Rate for such day shall be such rate on
      such transactions on the next preceding Business Day as so published on
      the next succeeding Business Day, and (b) if no such rate is so published
      on such next succeeding Business Day, the Federal Funds Rate for such day
      shall be the average for all of the Banks of the average of the rates
      quoted to each Bank on such day for such transactions at approximately
      2:00 p.m. New York City time as determined in good faith by such Bank.

            "GAAP" means generally accepted accounting principles in the United
      States of America, consistently applied.

            "Guarantor" means (i) Cooper Bermuda with respect to all amounts
      owed by Cooper US to any Bank under this Agreement; and (ii) Cooper US
      with respect to all amounts owed by Cooper Bermuda to any Bank under this
      Agreement.

            "Interest Coverage Ratio" means for any fiscal four-quarter period,
      the ratio on a consolidated basis for Cooper Bermuda of: (i) the sum of
      (a) net income excluding any FAS 142 Impairment Loss plus (b) income taxes
      plus (c) interest expense plus (d) goodwill amortization plus (e)
      depreciation; divided by (ii) interest expense.

            "Interest Period" means, with respect to any Eurodollar Loan, the
      period commencing on the date such Loan is made and ending on the
      numerically corresponding day in the first, second, third or sixth
      calendar month thereafter, as a Borrower may select as provided in Section
      5.02 of the Agreement, except that each such Interest Period which
      commences on the last Business Day of a calendar month (or on any day for
      which there is no numerically corresponding day in the appropriate
      subsequent calendar month) shall end on the last Business Day of the
      appropriate subsequent calendar month. Notwithstanding the foregoing, (i)
      if any Interest Period would otherwise commence before and end after the
      Commitment Termination Date, such Interest Period shall end on the
      Commitment Termination Date, and (ii) notwithstanding Section 7.02 of the
      Agreement, each Interest Period which would otherwise end on a day which
      is not a Business Day shall end on the next succeeding Business Day (or,
      if such next succeeding Business Day falls in the next succeeding calendar
      month, then such Interest Period shall end on the next preceding Business
      Day).

            "Loan" means any loan made by a Bank pursuant to this Agreement.

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            "Loan Notification Time" means 10:00 a.m. New York time on the day
      which is not less than the number of Business Days prior to the date of
      such borrowing specified below opposite the type of such Loan:

<TABLE>
<CAPTION>
     Type                           Number of Business Days
-----------------                   -----------------------
<S>                                 <C>
 Base Rate Loan                              0
 Eurodollar Loan                             3
</TABLE>

            "Material Adverse Effect" means a material adverse effect on (a) the
      business, assets, operations or financial condition of Cooper Bermuda and
      the Consolidated Subsidiaries taken as a whole, (b) the ability of the
      Borrowers to perform their obligations under the Agreement or (c) the
      rights of or benefits available to the Banks under the Agreement.

            "Net Worth" means at any time shareholders' equity of Cooper Bermuda
      on a consolidated basis determined in accordance with GAAP.

            "Note(s)" means promissory notes in substantially the form set forth
      in Exhibit A hereto, dated the date of the initial Loan (or such earlier
      date), duly executed and delivered to each Bank by each of Cooper Bermuda
      and Cooper US and payable to each Bank in the amount of its Commitment,
      including any amendment, modification, renewal or replacement of such
      promissory notes.

            "Operating Earnings" means consolidated earnings of Cooper Bermuda
      and the Consolidated Subsidiaries before income taxes, interest expense
      and general corporate expenses, determined in accordance with GAAP, except
      that unrealized appreciation in the value of investment in, and
      undistributed earnings of, Subsidiaries not consolidated will not be
      included.

            "PBGC" means the Pension Benefit Guaranty Corporation and any entity
      succeeding to any or all of its functions under ERISA.

            "Person" means any natural person, corporation, limited liability
      company, trust, joint venture, association, company, partnership or other
      entity.

            "Plan" means any employee pension benefit plan (other than a
      Multiemployer Plan as defined or used in ERISA) subject to the provisions
      of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
      and in respect of which a Borrower or any ERISA Affiliate is (or, if such
      plan were terminated, would under Section 4069 of ERISA be deemed to be)
      an "employer" as defined in Section 3(5) of ERISA.

            "Post-Default Rate" means, in respect of any principal of any Loan
      or any other amount payable by a Borrower under the Agreement which is not
      paid when due (whether at stated maturity, by acceleration or otherwise),
      a rate per annum during the period commencing on the due date until such
      amount is paid in full equal to 1% above the Base Rate as in effect from
      time to time (provided that, if such amount in default is principal of

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      a Eurodollar Loan and the due date is a day other than the last day of the
      Interest Period therefor, the "Post-Default Rate" for such principal shall
      be, for the period commencing on the due date and ending on the last day
      of such Interest Period therefor, 1% above the interest rate for such Loan
      as provided in Section 6.02 of the Agreement and, thereafter, the rate
      provided for above in this definition).

            "Prime Rate" means, for any day, the mode of the rates of interest
      per annum in effect as established or publicly announced by each Bank at
      its respective principal office in the United States as its prime or base
      rate (each change in such rate to be effective from and including the date
      such change is established or publicly announced as being effective). If
      on any day there is more than one such prime or base rate that appears
      with the highest frequency, then the Prime Rate means the highest of such
      high-frequency rates.

            "Principal Domestic Operating Subsidiaries" means Cooper B-Line,
      Inc., Cooper Bussmann, Inc., Cooper Crouse-Hinds, LLC, Cooper Lighting,
      Inc., Cooper Power Systems, Inc. and Cooper Wiring Devices, Inc.

            "Quarterly Dates" means the last day of each March, June, September
      and December, the first of which shall be the first such day following the
      Effective Date.

            "Regulatory Change" means any change after the date of this
      Agreement in laws or regulations or the adoption or making after such date
      of any laws or regulations, interpretations, directives or requests, in
      each case applying to a Bank or its Applicable Lending Office.

            "Required Banks" means at any time Banks having at least 51% of the
      aggregate amount of the Commitments or, if the Commitments shall have been
      terminated pursuant to Section 10, holding Loans evidencing at least 51%
      of the aggregate unpaid principal amount of the Loans (with the aggregate
      amount of each Bank's participations acquired pursuant to Section 7.05
      being deemed held by such Bank for purposes of this definition); provided
      that the Commitment of, and the portion of the total amount of the Loans
      outstanding held by, any Defaulting Bank shall be disregarded in any
      determination of Required Banks.

            "Significant Subsidiary" means each Consolidated Subsidiary which
      has contributed five percent or more of the consolidated revenues of
      Cooper Bermuda and the Consolidated Subsidiaries for Cooper Bermuda's
      fiscal year most recently ended.

            "Statutory Reserve Rate" means, as to each Bank, a fraction
      (expressed as a decimal), the numerator of which is the number one and the
      denominator of which is the number one minus the aggregate of the maximum
      reserve percentages (including any marginal, special, emergency or
      supplemental reserves) expressed as a decimal established by the Federal
      Reserve System Board of Governors to which such Bank is subject, with
      respect to the Eurodollar Rate, for eurocurrency funding (currently
      referred to as "Eurocurrency Liabilities" in Regulation D of such Board).
      Such reserve

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<PAGE>

      percentages shall include those imposed pursuant to such Regulation D. The
      Statutory Reserve Rate shall be adjusted automatically on and as of the
      effective date of any change in any reserve percentage.

            "Subsidiary" means at any time any corporation, limited liability
      company, partnership or joint venture at least a majority of the voting
      securities of which (other than securities having voting power only by
      reason of the happening of a contingency) are at such time owned by Cooper
      Bermuda and/or one or more Subsidiaries.

            "Termination Event" means any event or condition which would
      constitute grounds under Section 4042 of ERISA for the termination of, or
      for the appointment of a trustee to administer, any Plan.

            "Total Capitalization" means at any time the sum of Debt and Net
      Worth of Cooper Bermuda and the Consolidated Subsidiaries.

            All accounting terms not specifically defined herein shall be
construed in accordance with GAAP.

      Section 2. Representations. Cooper  US  and  Cooper  Bermuda,  as
applicable,  represent, covenant and warrant that:

      2.01        Corporate Existence and Power. Cooper US is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, is duly qualified to transact business in all places where, in the
opinion of Cooper US, such qualification is necessary, except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect, and
has the requisite corporate power to make this Agreement and to borrow and
perform its obligations hereunder. Cooper Bermuda is a company duly
incorporated, validly existing and in good standing under the laws of the
Country of Bermuda, is duly qualified to transact business in all places where,
in the opinion of Cooper Bermuda, such qualification is necessary, except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect, and has the requisite corporate power to execute and deliver this
Agreement and perform its obligations hereunder. Each Significant Subsidiary is
in good standing in its respective jurisdiction of incorporation and is duly
qualified to transact business in all places where, in the opinion of Cooper
Bermuda, such qualification is necessary except where the failure to do so could
not reasonably be expected to have a Material Adverse Effect.

      2.02        Corporate Authority.

            (1) The execution, delivery and performance by Cooper US of this
Agreement (i) have been duly authorized by all necessary corporate action; (ii)
will not violate any provision of law or of its Articles of Incorporation or
Bylaws; and (iii) as of the date of this Agreement, do not result in the breach
of, or constitute a default under, or require any consent under, any agreement
presently in effect providing for or relating to extensions of credit (including
credit agreements, indentures, guarantees and other instruments), other than for
goods and services purchased in the ordinary course of business (which are not
material in amount), to which Cooper US or any

                                       7

<PAGE>

Subsidiary or any of their property may be bound or affected, except as
previously disclosed to the Banks in writing.

            (2) The execution, delivery and performance by Cooper Bermuda of
this Agreement (i) have been duly authorized by all necessary corporate action;
(ii) will not violate any provision of law or of its Memorandum of Association
or Bye-laws; and (iii) as of the date of this Agreement, do not result in the
breach of, or constitute a default under, or require any consent under, any
agreement presently in effect providing for or relating to extensions of credit
(including credit agreements, indentures, guarantees and other instruments),
other than for goods and services purchased in the ordinary course of business
(which are not material in amount), to which Cooper Bermuda or any Subsidiary or
any of their property may be bound or affected, except as previously disclosed
to the Banks in writing.

      2.03        Financial Condition.

            (1) The consolidated balance sheet of Cooper Bermuda and its
Consolidated Subsidiaries as of December 31, 2003, and the consolidated
statements of income and reconciliation of capital accounts of Cooper Bermuda
and its Consolidated Subsidiaries for the 12 months ending on that date, with
the opinion thereon of Ernst & Young, heretofore furnished to the Bank, fairly
present in all material respects and in accordance with GAAP the consolidated
financial condition of Cooper Bermuda and its Consolidated Subsidiaries at the
date of such balance sheet and the results of their operations for the period
ending on said date, respectively. To the best of Cooper Bermuda's knowledge and
belief, neither Cooper Bermuda nor any Consolidated Subsidiary had on December
31, 2003, any contingent liabilities, liabilities for taxes or unusual forward
or long-term commitments which are material in amount in relation to the
consolidated financial condition of Cooper Bermuda and the Consolidated
Subsidiaries, except as referred to or reflected or provided for in said
consolidated balance sheet or the related notes to consolidated financial
statements as at that date. From December 31, 2003 to the date of this
Agreement, there has been no change or event that could reasonably be expected
to have had a Material Adverse Effect except for any changes or events that are
disclosed in Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that
have been filed by Cooper Bermuda with the Securities and Exchange Commission.

            (2) The consolidated balance sheet of Cooper Bermuda and its
Consolidated Subsidiaries as of June 30, 2004, and the consolidated statements
of income of Cooper Bermuda and its Consolidated Subsidiaries for the 3 months
ending on that date, hereretofore furnished to the Bank, fairly present in all
material respects and in accordance with GAAP (subject to the absence of
year-end notes and to normal year-end audit adjustments) consolidated financial
condition of Cooper Bermuda and its Consolidated Subsidiaries at the date of
such balance sheet and the results of their operations for the period ending on
said date, respectively. To the best of Cooper Bermuda's knowledge and belief,
neither Cooper Bermuda nor any Consolidated Subsidiary had on December 31, 2003,
any contingent liabilities, liabilities for taxes or unusual forward or
long-term commitments which are material in amount in relation to the
consolidated financial condition of Cooper Bermuda and the Consolidated
Subsidiaries, except as referred to or reflected or provided for in said
consolidated balance sheet or the related notes to consolidated financial
statements as at that date.

                                       8

<PAGE>

      2.04        Litigation.There are no suits or proceedings pending, or to
the knowledge of Cooper Bermuda threatened, against or affecting Cooper Bermuda
or any Subsidiary which would, in the opinion of Cooper Bermuda, if determined
adversely to Cooper Bermuda or such Subsidiary, result in the occurrence of an
Event of Default.

      2.05        Liens. The properties and assets of Cooper Bermuda and its
Consolidated Subsidiaries are not subject to any lien or encumbrance, other than
those permitted by Section 9.03.

      2.06        Use of Loans. Neither Cooper Bermuda nor any Subsidiary is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U or X of the Board of Governors of the Federal
Reserve System) and no part of the proceeds of any Loan hereunder will be used
to purchase or carry any margin stock.

      2.07        Taxes. Cooper Bermuda and each Consolidated Subsidiary have
filed all tax returns which were required to be filed except where failure to do
so could not reasonably be expected to have a Material Adverse Effect, and paid
all taxes shown thereon to be due, including interest and penalties, or are
contesting same in good faith and by proper proceedings and have provided
adequate reserves for payment thereof.

      2.08        Titles, etc. Cooper Bermuda and all Consolidated Subsidiaries
have good title to their respective properties and assets, free and clear of all
mortgages, liens and encumbrances, except such as are permitted by Section 9.03
and except covenants, restrictions, rights, easements and minor irregularities
in title which do not interfere with the occupation, use and enjoyment by Cooper
Bermuda or such Consolidated Subsidiaries of such properties and assets in the
normal course of business as presently conducted or do not materially impair the
value thereof for such business.

      2.09        ERISA. Cooper Bermuda and Cooper US have each met their
minimum funding requirements under ERISA with respect to all of their Plans and
have not incurred any material liabilities to PBGC under ERISA in connection
with any such Plan.

      2.10        Validity, Etc. This Agreement is a valid and binding agreement
of each Borrower enforceable in accordance with its terms; and the Loans, when
made hereunder, will constitute valid and binding obligations of each Borrower,
enforceable in accordance with their terms, in each case subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

      Section 3.  Commitment.

      3.01        Changes of Commitment. The Borrowers may terminate or reduce
the amount of the unused Commitments at any time or from time to time upon not
less than five Business Days' prior written notice to each Bank of each such
termination or reduction, which notice shall specify the effective date thereof
and the amount of such reduction (which shall not

                                       9

<PAGE>

be less than $1,000,000 per Bank). The Commitments once terminated or reduced
may not be reinstated unless mutually agreed to in writing by Cooper Bermuda,
Cooper US and the Banks. The Commitments shall be reduced to zero on the
Commitment Termination Date. Any termination or reduction of the unused
Commitments (other than because of replacement of a Bank pursuant to Section
11.04) shall be made on a pro rata basis. The Borrowers may, at any time, add a
Person as a "Bank" under this Agreement, thereby increasing the aggregate
Commitments, by executing an amendment to this Agreement in the form of Exhibit
B attached hereto and having the new bank execute such amendment. A photocopy of
each executed amendment to add a Bank shall be delivered to each of the Banks by
Cooper US. After the execution of any such amendment, the new bank referenced
therein shall be a "Bank" with all of the rights and obligations of a Bank under
this Agreement.

      3.02        Facility Fee. Cooper US shall pay to each Bank a fee on the
daily average amount of each Bank's Commitment (whether used or unused), for the
period from the date such Bank's Commitment becomes effective under this
Agreement to but excluding the earlier of the date such Commitment is terminated
or the Commitment Termination Date, at a rate per annum equal to the Facility
Fee Rate. The fee accrued through and including any Quarterly Date or through
and excluding the date the Commitment is terminated, if earlier, shall be
payable within 10 days following each such Quarterly Date or within 10 days
following the date the Commitment is terminated, whichever is earlier.

      Section 4.  Conditions of Lending.

      4.01        Initial Loans. The obligations of the Banks to make the
initial Loan to be made by them hereunder is subject to the following conditions
precedent:

            (1) Signatures. Cooper US shall have certified to each Bank the name
and signature of each officer of Cooper US authorized to sign this Agreement and
each person authorized to request a borrowing hereunder. Cooper Bermuda shall
have certified to each Bank the name and signature of each officer of Cooper
Bermuda authorized to sign this Agreement and each person authorized to request
a borrowing hereunder. Each Bank may conclusively rely on such certifications
until it receives notice in writing to the contrary.

            (2) Opinion of Cooper US Counsel. Each Bank shall have received from
Squire, Sanders & Dempsey, counsel to Cooper US, a favorable written opinion
satisfactory to the Banks and Cooper US as to:

            (i) The matters concerning Cooper US referred to in the initial
      sentence of Section 2.01 (excluding the qualification to do business
      issues), Section 2.02(1)(i) and Section 2.02(1)(ii).

            (ii) The due authorization, execution and delivery by Cooper US of
      this Agreement, and the validity and enforceability of this Agreement and
      of the Loans (when made pursuant to this Agreement) in accordance with the
      terms hereof (subject to limitation as to enforceability which might
      result from bankruptcy, insolvency, reorganization, fraudulent conveyance,
      moratorium or other similar law affecting creditors' rights generally).

                                       10

<PAGE>

            (iii) The necessity of any authorization or approval by any public
      regulatory body of the State of Delaware or the United States of America
      of the transactions contemplated hereby and as to the sufficiency of any
      which have been obtained.

            (iv) Such other matters incident to the transactions hereby
      contemplated as the Banks may reasonably request.

For purposes of such opinion, counsel to Cooper US may rely upon (a) opinions of
counsel in other jurisdictions, provided that such other counsel is satisfactory
to the Banks and Cooper US; and (b) as to matters of fact upon certificates of
public officials and of officers of Cooper US.

This section shall not require counsel for Cooper US to express any opinion as
to the applicability to any Loan held by any Bank, or as to the effect, of the
law of any state wherein any Bank may be located which limits rates of interest
which may be charged or collected by such Bank.

            (3) Opinion of Cooper Bermuda Counsel. Each Bank shall have received
from Appleby, Spurling & Hunter, counsel to Cooper Bermuda, a favorable written
opinion satisfactory to the Banks and Cooper Bermuda as to:

            (i) The matters concerning Cooper Bermuda referred to in the second
      sentence of Section 2.01 (excluding the qualification to do business
      issues), Section 2.02(2)(i) and Section 2.02(2)(ii).

            (ii) The due authorization, execution and delivery by Cooper Bermuda
      of this Agreement, and the validity and enforceability of this Agreement
      (subject to limitation as to enforceability which might result from
      bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
      or other similar law affecting creditors' rights generally).

            (iii) The necessity of any authorization or approval by any public
      regulatory body of Bermuda of the transactions contemplated hereby and as
      to the sufficiency of any which have been obtained.

            (iv) Such other matters incident to the transactions hereby
      contemplated as the Banks may reasonably request.

For purposes of such opinion, counsel to Cooper Bermuda may rely upon (a)
opinions of counsel in other jurisdictions, provided that such other counsel is
satisfactory to the Bank and Cooper Bermuda; and (b) as to matters of fact upon
certificates of public officials and of officers of Cooper Bermuda.

This section shall not require counsel for Cooper Bermuda to express any opinion
as to the applicability to the Loans held by any Bank, or as to the effect, of
the law of any state wherein

                                       11

<PAGE>

any Bank may be located which limits rates of interest which may be charged or
collected by such Bank.

            (4) Opinion of General Counsel of Cooper US. Each Bank shall have
received from the General Counsel of Cooper US one or more favorable written
opinions as to (i) the matters concerning Cooper US referred to in Section 2.01
(insofar as they relate to qualification to do business) and Section 2.04, and
(ii) the absence, as of the date of this Agreement, of any requirement for
consent and of any default, by reason of the making and performance by Cooper US
of this Agreement, under any agreement presently in effect providing for or
relating to extensions of credit (including credit agreements, indentures,
guarantees and other instruments), other than for goods and services purchased
in the ordinary course of business, in respect of which Cooper US and/or any
Subsidiary is or may become directly or contingently obligated, of which such
counsel has knowledge, other than any disclosed to each Bank by Cooper US
pursuant to Section 2.02(1)(iii).

            (5) Opinion of General Counsel of Cooper Bermuda. Each Bank shall
have received from the General Counsel of Cooper Bermuda one or more favorable
written opinions as to (i) the matters concerning Cooper Bermuda referred to in
Section 2.01 (insofar as they relate to qualification to do business) and
Section 2.04, and (ii) the absence, as of the date of this Agreement, of any
requirement for consent and of any default, by reason of the making and
performance by Cooper Bermuda of this Agreement, under any agreement presently
in effect providing for or relating to extensions of credit (including credit
agreements, indentures, guarantees and other instruments), other than for goods
and services purchased in the ordinary course of business, in respect of which
Cooper Bermuda and/or any Subsidiary is or may become directly or contingently
obligated, of which such counsel has knowledge, other than any disclosed to each
Bank by Cooper Bermuda pursuant to Section 2.02(2)(iii).

            (6) Proof of Corporate Action. Each Bank shall have received
certified copies of all corporate action taken by Cooper US and Cooper Bermuda
to authorize the execution, delivery and performance of this Agreement and
borrowings hereunder, and such other authorization papers as the Banks shall
reasonably require.

            (7) Cooper Industries, Inc. Guarantee. Cooper Bermuda shall cause
Cooper Industries, Inc. to execute and deliver to each Bank: (i) a guarantee in
the form of Exhibit C; (ii) a certification of the name and signature of each
officer of Cooper Industries, Inc. authorized to sign the guarantee; and (iii) a
certified copy of all corporate action taken by Cooper Industries, Inc. to
authorize the execution, delivery and performance of the guarantee.

            (8) Cooper Industries, LLC Guarantee. Cooper Bermuda shall cause
Cooper Industries, LLC to execute and deliver to each Bank: (i) a guarantee in
the form of Exhibit D; (ii) a certification of the name and signature of each
officer of Cooper Industries, LLC authorized to sign the guarantee; and (iii) a
certified copy of all corporate action taken by Cooper Industries, LLC to
authorize the execution, delivery and performance of the guarantee.

      4.02        Each Loan. The obligation of the Banks to make Loans hereunder
is subject to the conditions precedent that no Event of Default and no event
which with notice or

                                       12

<PAGE>

lapse of time or both would become an Event of Default, shall have occurred and
be continuing or shall result from the making of any such Loan; and the
representations and warranties in Section 2 shall be true in all material
respects on and as of the date of the making of such Loan with the same force
and effect as if made on and as of such date. Each notice of borrowing by each
Borrower hereunder shall constitute a certification by such Borrower to the
effect set forth in the preceding sentence (both as of the date of such notice
and as of the date of such borrowing).

      Section 5.  Drawings.

      5.01        Loans.

            (a) Each Bank agrees, on the terms of this Agreement, to make Loans
to the Borrowers during the period from and including the Effective Date of the
Agreement to but excluding the Commitment Termination Date in an aggregate
principal amount at any one time outstanding up to but not exceeding the amount
of such Bank's Commitment. Subject to the terms of this Agreement, during such
period the Borrowers may borrow, repay and reborrow the amount of each Bank's
Commitment. The proceeds of the Loans will be used for the general corporate
purposes of the Borrowers.

            (b) The Loans shall be evidenced by the Notes, which Notes shall be
delivered prior to or contemporaneously with the making of the initial Loans and
shall, upon execution and delivery thereof, constitute the legal, valid and
binding obligation of each Borrower. Each Bank is hereby authorized to record
the principal amount of each its Loans and each repayment on the schedule
attached to the applicable Note provided, however, that the failure to so record
shall not affect the Borrower's obligations under such Note.

      5.02        Borrowings and Interest Elections. A Borrower shall give each
Bank notice by telephone or in writing by hand delivery or telecopier of each
borrowing under this Agreement, which notice shall specify the amount (which
shall be at least $1,000,000 per Bank in the case of Eurodollar Loans and
$1,000,000 per Bank in the case of Base Rate Loans), the type and date (which
shall be a Business Day) of the Loan to be borrowed and (in the case of a
Eurodollar Loan) the duration of the Interest Period therefor and shall be
received by each Bank not later than the Loan Notification Time. Each group of
borrowing notices given by a Borrower under this Agreement shall be pro rata
(and each group of pro rata notices shall be for borrowings of the same term)
based on the aggregate of the unused Commitments (as of the effective date of
such requested Loan) of the Banks under this Agreement.

All payments of proceeds of Loans to be made by each Bank to Cooper Bermuda
under this Agreement shall be made in U.S. Dollars ("Dollars"), in immediately
available funds, to Cooper Bermuda at its account number 323313701 at JPMorgan
Chase Bank, New York, New York (or to such other account of Cooper Bermuda as
Cooper Bermuda may from time to time direct each Bank in writing) not later than
12:00 noon New York time on the date such Loan is to be made.

All payments of proceeds of Loans to be made by each Bank to Cooper US under
this Agreement shall be made in Dollars, in immediately available funds, to
Cooper US at its account

                                       13

<PAGE>

number 304264946 at JPMorgan Chase Bank, New York, New York (or to such other
account of Cooper US as Cooper US may from time to time direct the Bank in
writing) not later than 12:00 noon New York time on the date such Loan is to be
made.

Each Borrower agrees that each Bank may act upon phone or facsimile instructions
for borrowings, interest elections, loan extensions and repayments (provided
such instructions do not conflict with any provisions of this Agreement) which
are received by such Bank and believed in good faith to be from persons
authorized by such Borrower. Each Borrower further agrees to indemnify and hold
each Bank harmless from any claims by virtue of such Bank's acting upon such
phone or facsimile instructions except for claims arising solely from such
Bank's gross negligence, willful misconduct or action in conflict with this
Agreement.

      5.03        Lending Offices. The Loans of each type shall be made and
maintained at each Bank's Applicable Lending Office for Loans of such type.

      5.04        Prepayments. A Borrower may prepay any Base Rate Loan upon not
less than one Business Day's prior notice to the Banks, which notice shall
specify the prepayment date (which shall be a Business Day) and the amount of
the prepayment (which shall be not less than $1,000,000 per Bank or, the total
amount outstanding of such Base Rate Loan if such amount outstanding is less
than $1,000,000 per Bank), provided that interest on the principal prepaid,
accrued to the prepayment date, shall be paid on the prepayment date. No
Borrower may prepay any Eurodollar Loan except as provided in Section 8.06. All
prepayments by a Borrower shall be pro rata based on the unpaid principal
balance of the Loans owed to each Bank.

      5.05        Nature of Bank's Obligations with Respect to Loans. Each Bank
shall be obligated to make its pro rata share of the Loans in connection with
each request for a Loan pursuant to Section 5.02. The aggregate principal amount
of each Bank's Loans outstanding hereunder to the Borrowers at any time shall
never exceed its Commitment. The obligations of each Bank hereunder are several.
The failure of any Bank to perform its obligations hereunder shall not affect
the obligations of the Borrowers to any other Bank nor shall any other Bank be
liable for the failure of such Bank to perform its obligations hereunder. The
Banks shall have no obligations to make Loans hereunder on or after the
Commitment Termination Date.

      Section 6.  Payments of Principal and Interest.

      6.01        Repayment of Loans.

            (a) Each repayment by a Borrower shall be pro rata based on the
amounts advanced by the Banks to such Borrower under each group of pro rata
borrowing notices. The unpaid principal balance of the Loans and all accrued and
unpaid interest thereon shall be due and payable on the Commitment Termination
Date.

            (b) If the outstanding aggregate principal amount of the Loans from
any Bank exceeds the amount of such Bank's Commitment at any time, the Borrowers
shall promptly pay or prepay the Loans in an aggregate principal amount equal to
such excess, together with interest thereon accrued to the date of such payment
or prepayment and any amounts payable pursuant to Section 8.06 hereof in
connection therewith.

                                       14

<PAGE>

      6.02        Interest. The applicable Borrower shall pay to each applicable
Bank interest on the unpaid principal amount of each Loan for the period
commencing on the date of such Loan to but excluding the date such Loan shall be
paid in full, at the following rate per annum: (a) if such Loan is a Base Rate
Loan, the Base Rate (as in effect from time to time); and (b) if such Loan is a
Eurodollar Loan, the Eurodollar Rate for such Loan for the Interest Period
therefor. Notwithstanding the foregoing, such Borrower shall pay to each
applicable Bank interest on any principal of any Loan, and (to the extent
legally enforceable) on any other amount payable by such Borrower under this
Agreement, which shall not be paid in full when due (whether at stated maturity,
by acceleration or otherwise) for the period commencing on the due date thereof
until the same is paid in full at the applicable Post-Default Rate. Accrued
interest on each Loan shall be payable (i) for Base Rate Loans, on the first day
of each calendar month and (ii) for Eurodollar Loans, on the Eurodollar Loan
Interest Payment Date, except that interest payable at the Post-Default Rate
shall be payable from time to time on demand of each Bank.

      Section 7.  Payments; Computations; Etc.

      7.01        Payments. All payments of principal, interest and other
amounts to be made by a Borrower under this Agreement shall be made in Dollars,
in immediately available funds, to the applicable Bank at the address specified
in writing by the Bank, not later than 12:00 noon New York time on the date on
which such payment shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next succeeding Business
Day).

      7.02        Non-Business Days. If the due date of any payment under this
Agreement would otherwise fall on a day which is not a Business Day such date
shall be extended to the next succeeding Business Day and interest shall be
payable for any principal so extended for the period of such extension.

      7.03        Computations. Interest on Eurodollar Loans shall be computed
on the basis of a year of 360 days and actual days elapsed (including the first
day but excluding the last day) occurring in the period for which payable and
interest on Base Rate Loans and facility fees shall be computed on the basis of
a year of 365 or 366 days, as the case may be, and actual days elapsed
(including the first day but excluding the last day) occurring in the period for
which payable.

      7.04        Setoff. Each Borrower agrees that, in addition to (and without
limitation of) any right of setoff, bankers' lien or counterclaim any Bank may
otherwise have, each Bank shall be entitled, at its option, to offset balances
held by it or any of its affiliates for the account of either Borrower at any of
its or their offices, in Dollars or in any other currency, against any principal
of or interest on any of the Loans or any other amount payable by either
Borrower to such Bank under this Agreement which is not paid when due and after
the expiration of any express grace or cure period (regardless of whether such
balances are then due to either Borrower) and each such affiliate is hereby
irrevocably authorized to permit such offset, in which case such Bank shall
promptly notify either Borrower thereof, provided that such Bank's failure to
give such notice shall not affect the validity thereof.

                                       15

<PAGE>

      7.05        Sharing of Payments and Setoffs. Each Bank agrees that if it
shall, by exercising any right of setoff or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Loan made by it which is greater than its pro rata share
based on the unpaid principal balance of the Loans, the Bank receiving such
proportionately greater payment shall purchase such participations in the Loans
made by the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest shall be shared by
the Banks pro rata; provided that nothing in this Section shall impair the right
of any Bank to exercise any right of setoff or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of a
Borrower other than its indebtedness under the Loans. Each Borrower agrees, to
the fullest extent it may effectively do so under applicable law, that any Bank
acquiring a participation in a Loan pursuant to the foregoing arrangements may
exercise rights of setoff or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of such Borrower in the amount of such participation.

      Section 8.  Illegality and Yield Protection.

      8.01        Basis for Determining Interest Rate Inadequate. If on or prior
to the first day of any Interest Period for any Eurodollar Loan, the Required
Banks notify Cooper US that the Eurodollar Rate will not adequately reflect the
cost to such Banks (the "Notifying Banks") of funding their Eurodollar Loans for
such Interest Period, then until a sufficient number of Notifying Banks have
given notice to Cooper US that the circumstances giving rise to such suspension
no longer exist, the obligations of the Banks to make Eurodollar Loans shall be
suspended. Unless a Borrower notifies each Bank at least two Business Days
before the date of such Eurodollar Loan for which a notice of borrowing has
previously been given that it elects not to borrow on such date, such Eurodollar
Loan shall instead be made as a Base Rate Loan. When each Notifying Bank
determines that the circumstances giving rise to such suspension no longer
exist, such Bank shall so notify Cooper US at which time such Bank shall cease
to be regarded as a Notifying Bank. When the Notifying Banks are less than the
Required Banks, then such suspension will terminate and after such date the
obligations of the Banks to make Eurodollar Loans shall resume and the Borrowers
may resume giving notices for Eurodollar Loans.

      8.02        Illegality. If, on or after the date of this Agreement, any
Regulatory Change shall make it unlawful or impossible for any Bank (or its
Applicable Lending Office) to make, maintain or fund its Eurodollar Loans and
such Bank shall so notify the Borrowers and the Borrowers shall forthwith give
notice thereof to the other Banks, then until such Bank notifies the Borrowers
that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Eurodollar Loans shall be suspended. Before
giving any notice to the Borrowers pursuant to this Section, such Bank shall
designate a different Applicable Lending Office if such designation will avoid
the need for giving such notice and will not, in the judgement of such Bank, be
otherwise disadvantageous to such Bank. If such Bank shall determine that it may
not lawfully continue to maintain and fund any of its outstanding Eurodollar
Loans to maturity and shall so specify in such notice, the applicable Borrower
shall immediately prepay in full the then outstanding principal amount of each
such Eurodollar Loan, together with accrued interest thereon, without the
payment of any cost, fee or penalty for the early payment of the Eurodollar
Loan.

                                       16

<PAGE>

      8.03        Increased Cost and Reduced Return.

      (a) If on or after the date of this Agreement, any Regulatory Change: (i)
shall subject any Bank (or its Applicable Lending Office) to any tax, duty or
other charge with respect to its Eurodollar Loans, its Note or its obligation to
make Eurodollar Loans, or shall change the basis of taxation of payments to any
Bank (or its Applicable Lending Office) of the principal of or interest on its
Eurodollar Loans or any other amounts due under this Agreement in respect of its
Eurodollar Loans or its obligation to make Eurodollar Loans (except for changes
in the rate of tax on the overall net income of such Bank or its Applicable
Lending Office imposed by the jurisdiction in which such Bank's principal
executive office or Applicable Lending Office is located); or (ii) shall impose,
modify or deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System or
any similar Governmental Authority), special deposit, insurance assessment or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Applicable Lending Office) or shall impose
on any Bank (or its Applicable Lending Office) or the London interbank market
any other condition affecting its Eurodollar Loans, its Note or its obligation
to make Eurodollar Loans; and the result of any of the foregoing is to increase
the cost to such Bank (or its Applicable Lending Office) of making or
maintaining any Eurodollar Loan, or to reduce the amount of any sum received or
receivable by such Bank (or its Applicable Lending Office) under this Agreement
or under its Note with respect thereto, by an amount deemed by such Bank to be
material, then, within 30 days after demand by such Bank, the Borrowers shall
pay to such Bank such additional amount or amounts as will compensate such Bank
for such increased cost or reduction. The Banks acknowledge and agree that the
foregoing subsection (a) creates no right to demand payment of additional
amounts (1) in respect of laws, rules and regulations, as in effect and
interpreted and administered on the date hereof, or (2) already accounted for in
the Statutory Reserve Rate.

      (b) If any Bank shall have determined that, after the date hereof, any
Regulatory Change has or would have the effect of reducing the rate of return on
capital of such Bank as a consequence of such Bank's obligations hereunder to a
level below that which such Bank could have achieved but for such any Regulatory
Change (taking into consideration its policies with respect to capital adequacy)
by an amount deemed by such Bank to be material, then from time to time, within
30 days after demand by such Bank, the applicable Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank for such
reduction; provided that such Borrower shall not be obligated to compensate such
Bank for any reduction incurred more than 60 days prior to the receipt by such
Borrower from such Bank of the notice contemplated by subsection (c) below. The
Banks acknowledge and agree that the foregoing subsection (b) creates no right
to demand payment of additional amounts in respect of laws, rules and
regulations regarding capital adequacy as in effect and interpreted and
administered on the date hereof.

      (c) Each Bank will notify the Borrowers within 90 days of any event of
which it has knowledge, occurring after the date hereof, which will entitle such
Bank to compensation pursuant to this Section and will designate a different
Applicable Lending Office if such designation will avoid the need for, reduce
the amount of, such compensation and will not, in the judgement of such Bank, be
otherwise disadvantageous to such Bank; provided that if a Bank

                                       17
<PAGE>

shall not have so notified the Borrowers within 90 days of such event, such Bank
may not seek compensation for any period beginning prior to the date upon which
the Borrowers are notified of such event. A certificate of any Bank claiming
compensation under this Section and setting forth the calculation of the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.

      8.04       Base Rate Loans Substituted for Affected Eurodollar Loans. If
(i) the obligation of any Bank to make Eurodollar Loans has been suspended
pursuant to Section 8.02 or (ii) any Bank has demanded compensation under
Section 8.03(a), then unless and until such Bank notifies the Borrowers that the
circumstances giving rise to such suspension or demand for compensation no
longer apply, all Loans which would otherwise be made by such Bank as Eurodollar
Loans shall be made instead as Base Rate Loans (on which interest and principal
shall be payable contemporaneously with the related Eurodollar Rate Loans of the
other Banks).

      8.05        Taxes.

            (a) Any and all payments by any Borrower or Guarantor to or for the
account of any Bank hereunder or under any Note shall be made free and clear of
and without deduction for any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto; excluding taxes imposed on or measured by such Bank's income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Bank is organized or any political subdivision thereof and taxes imposed on or
measured by such Bank's income, and franchise or similar taxes imposed on it, by
the jurisdiction of such Bank's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Withholding Taxes," and all such excluded taxes being hereinafter referred
to as "Domestic Taxes"). If any Borrower or Guarantor shall be required by law
to deduct any Withholding Taxes from or in respect of any sum payable hereunder
or under any Note to any Bank, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) such Bank receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the applicable Borrower or Guarantor shall make such deductions, (iii) the
applicable Borrower or Guarantor shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law, and (iv) shall furnish to such Bank the original or a certified copy of a
receipt evidencing payment thereof.

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

            (c) Each Borrower and Guarantor agrees to indemnify each Bank for
the full amount of Withholding Taxes or Other Taxes (including, without
limitation, any Withholding Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by such Bank and any
penalties, interest and expenses arising therefrom or with

                                       18

<PAGE>

respect thereto. This indemnification payment shall be made within 15 days from
the date the Bank makes written demand therefor.

            (d) At such times as each Borrower shall reasonably request, each
Bank, if organized under the laws of a jurisdiction outside the United States,
shall provide each Borrower with Internal Revenue Service forms (in each case
accompanied by any statements which may be required under applicable Treasury
regulations), as appropriate, certifying that such Bank is entitled to receive
payments under this Agreement (i) without deduction or withholding of any United
States federal income taxes, or (ii) subject to a reduced rate of United States
federal withholding tax, unless an event (including, without limitation, any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders such forms inapplicable
or which would prevent such Bank from duly completing and delivering any such
form with respect to it and such Bank advises Cooper US that it is not capable
of receiving payments without any deduction or withholding of such taxes.

            (e) For any period with respect to which any Bank has failed to
provide the Borrowers with the appropriate form in accordance with Section
8.05(d), such Bank shall not be entitled to indemnification under Section
8.05(a) or 8.05(c) with respect to Withholding Taxes imposed by the United
States; provided, however, that should such Bank, which is otherwise exempt from
or subject to a reduced rate of withholding tax, become subject to Withholding
Taxes because of its failure to deliver a form required hereunder, Borrower
shall take such steps as such Bank shall reasonably request to assist such Bank
to recover such Withholding Taxes.

            (f) If a Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section, then such Bank will change the
jurisdiction of its Applicable Lending Office so as to eliminate or reduce any
such additional payment which may thereafter accrue if such change, in the
judgement of the Bank in the good faith exercise of its discretion, is not
otherwise disadvantageous to such Bank.

            (g) If a Bank determines that it has received a refund of any
Withholding Taxes or Other Taxes as to which it has been indemnified by a
Borrower or with respect to which such Borrower has paid additional amounts
pursuant to this Section, it shall pay over such refund to such Borrower, net of
all out-of-pocket expenses of such Bank and without interest (other than any
interest paid by the relevant governmental authority with respect to such
refund). This Subsection shall not be construed to require any Bank to make
available its tax returns (or any other information relating to its taxes which
it deems confidential) to the Borrowers.

      8.06       Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, or (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto, the applicable Borrower shall compensate each Bank for the
loss, cost and expense attributable to such event. Such loss, cost or expense to
any Bank shall be deemed to include an amount determined by such Bank to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the

                                       19

<PAGE>

Eurodollar Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Bank would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Bank
setting forth any amount or amounts that such Bank is entitled to receive
pursuant to this Section shall be delivered to the applicable Borrower and shall
be conclusive absent manifest error. The applicable Borrower shall pay such Bank
the amount shown as due on any such certificate within 10 days after receipt
thereof.

      Section 9.  Covenants. From the date hereof and so long as the Commitments
shall be outstanding and until the payment in full of all Loans outstanding
hereunder and the performance of all other obligations of Cooper US and Cooper
Bermuda hereunder, Cooper US and Cooper Bermuda agree that, unless the Required
Banks shall otherwise consent in writing:

      9.01        Financial Statements. Cooper Bermuda will deliver to each
Bank:

            (1) As soon as available and in any event within 30 days after such
statements are due to be filed with the Securities and Exchange Commission for
each of the first three fiscal quarters in each fiscal year, consolidated
statements of income of Cooper Bermuda and its Consolidated Subsidiaries, for
the period from the beginning of such fiscal year to the end of such fiscal
quarter, the related consolidated balance sheet of Cooper Bermuda and its
Consolidated Subsidiaries as at the end of such fiscal quarter and the related
consolidated statement of cash flows, setting forth in comparative form in the
case of consolidated statements of income and consolidated statements of cash
flows, the corresponding figures for the corresponding period of the preceding
fiscal year, all in reasonable detail and accompanied by (i) a certificate
signed by an authorized financial officer of Cooper Bermuda stating that said
financial statements include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation in all material
respects of the financial information for the periods indicated, which
certificate shall include a statement that such officer has no knowledge, except
as specifically stated, of any default by Cooper Bermuda in the observance of
any of the provisions in this Agreement and (ii) a certificate signed by an
authorized financial officer of Cooper Bermuda, in form and substance
satisfactory to the Required Banks, demonstrating compliance with the covenants
contained in this Section.

            (2) As soon as available and in any event within 30 days after such
statements are due to be filed with the Securities and Exchange Commission for
each fiscal year, consolidated statements of income and reconciliation of
capital accounts of Cooper Bermuda and its Consolidated Subsidiaries for such
year, the related consolidated balance sheet of Cooper Bermuda and its
Consolidated Subsidiaries as at the end of such year and the related
consolidated statement of cash flows, setting forth in each case in comparative
form the corresponding figures for the preceding fiscal year, all in reasonable
detail and accompanied by (i) an opinion, which opinion shall not be subject to
(a) any "going concern" or like qualification or exception or (b) any
qualification or exception as to the scope of the related audit, of Cooper
Bermuda's independent public accountants together with a written statement of
such accountants to the

                                       20

<PAGE>

effect that in making the examination necessary to support an opinion for such
financial statements, they obtained no knowledge of any default by Cooper
Bermuda in the fulfillment of any of the covenants contained in this Agreement
or if, in the opinion of such accountants any such default exists, specifying
such default and the nature thereof, (ii) a certificate signed by an authorized
financial officer of Cooper Bermuda stating that said financial statements
fairly present in all material respects in accordance with GAAP the financial
condition and the results of operations of Cooper Bermuda and its Consolidated
Subsidiaries as at the end of such year and for the year involved and that such
officer has no knowledge, except as specifically stated, of any default by
Cooper Bermuda in the observance of any of the provisions in this Agreement; and
(iii) a certificate signed by an authorized financial officer of Cooper Bermuda,
in form and substance satisfactory to the Required Banks, demonstrating
compliance with the covenants contained in this Section.

            (3) Promptly upon a responsible financial officer of Cooper US or
Cooper Bermuda becoming aware of the existence of a condition, event or act
which constitutes an Event of Default or which, with notice or lapse of time or
both, would constitute such an Event of Default, a written notice to each Bank
specifying the nature and period of existence thereof and what action Cooper US,
Cooper Bermuda or such Subsidiary, as the case may be, is taking or proposes to
take with respect thereto.

            (4) Promptly after their becoming available:

            (a) Copies of all financial statements, reports and proxy statements
which Cooper Bermuda or any Consolidated Subsidiary which has shares listed on a
stock exchange shall have sent to its respective public stockholders.

            (b) Copies of all regular periodic reports, if any, which Cooper
Bermuda or any Consolidated Subsidiary shall have filed with the Securities and
Exchange Commission.

            (5) From time to time, with reasonable promptness, such additional
information regarding the business, affairs and financial condition of Cooper
Bermuda and its Subsidiaries as the Required Banks may reasonably request.

Documents required to be delivered pursuant to this Section (to the extent any
such documents are filed with, or included in materials otherwise filed with,
the Securities and Exchange Commission) may be delivered electronically and if
so delivered, shall be deemed to have been delivered on the date on which the
Company posts such documents on the internet, or provides a link thereto on the
Company's website; provided that documents not so filed with the Securities and
Exchange Commission shall be delivered in paper form.

      9.02       Indebtedness. Cooper Bermuda and the Consolidated Subsidiaries
may incur, create, assume or suffer to exist any indebtedness of any kind or
character, provided that Cooper Bermuda shall at no time permit Debt of Cooper
Bermuda and the Consolidated Subsidiaries, determined on a consolidated basis,
to exceed 60% of Total Capitalization.

                                       21

<PAGE>

      9.03        Liens. Cooper Bermuda shall not, nor shall it permit any
Consolidated Subsidiary to, create or suffer to exist any mortgage, pledge,
security interest, conditional sale or other title retention agreement, lien,
charge or encumbrance upon any of its property or assets, now owned or hereafter
acquired, securing any indebtedness or obligation (all such security being
hereinafter called "liens"), except:

            (i) Materialmen's, suppliers', tax and other like liens arising in
      the ordinary course of business securing obligations which are not overdue
      or are being contested in good faith by appropriate proceedings;

            (ii) Other liens incidental to the conduct of its business or the
      ownership of its property and assets which were not incurred in connection
      with the borrowing of money or the obtaining of advances or credit, the
      existence of which could not reasonably be expected to have a Material
      Adverse Effect;

            (iii) Liens on property or assets of any corporation existing on the
      date such corporation becomes a Consolidated Subsidiary or such property
      or assets become property or assets of Cooper Bermuda; provided that such
      liens had not been created in anticipation of such corporation becoming a
      Consolidated Subsidiary or such property or assets being acquired by
      Cooper Bermuda;

            (iv) Any lien renewing, extending or refunding any lien permitted by
      clause (iii) immediately above; provided that the principal amount secured
      is not increased and the lien is not extended to any other property;

            (v) Pre-existing liens, namely liens (including interests existing
      in favor of a lessor under a lease) securing Capitalized Lease Obligations
      and other Debt of Cooper Bermuda, which liens were in existence on
      December 31, 2003; provided that pre-existing liens shall not include any
      lien renewing, extending or refunding any such pre-existing lien existing
      on December 31, 2003;

            (vi) Cooper Bermuda or any Consolidated Subsidiary may create or
      suffer to exist or renew, extend or refund any interests in favor of the
      United States of America or any state thereof or any department, agency,
      instrumentality or political subdivision of any such jurisdiction to
      secure partial, progress, advance or other payments pursuant to any
      contract or statute, or to secure any Debt payable to the foregoing
      incurred for the purpose of financing or refinancing all or any part of
      the purchase price or cost of constructing or improving the property
      subject to such interests, including without limitation interests to
      secure Debt in respect of any pollution control, industrial revenue bond
      or similar type of financing;

            (vii) Liens which are incidental to interest rate or currency swaps,
      the purchase or sale of marketable securities, or the hedging of
      commodities and which secure obligations not exceeding 10% of Net Worth;

                                       22

<PAGE>

            (viii) Liens on and security interests in all goods, documents,
      deposits, instruments, securities, general intangibles, policies of
      insurance, and all proceeds and products thereof, in which Cooper Bermuda
      or any Consolidated Subsidiary may have or obtains any interest in
      connection with a letter of credit or letter of guarantee or any
      underlying transaction, securing letters of credit and letters of
      guarantee issued in the ordinary course of business; and

            (ix) Liens, not otherwise permitted by the foregoing provisions of
      this Section, securing Debt not exceeding 2% of Net Worth in principal
      amount at any one time outstanding.

      9.04        Merger and Sale of Assets. Cooper Bermuda shall not, nor shall
it permit any Consolidated Subsidiary to, merge or consolidate with any other
Person or sell, lease, transfer or otherwise dispose of all or a substantial
part of its assets to any Person, or acquire by purchase or otherwise all or
substantially all of the stock or assets of any Person, except that:

            (i) Any Consolidated Subsidiary may merge or consolidate with Cooper
      Bermuda (provided that Cooper Bermuda shall be the continuing or surviving
      corporation, unless the purpose of such merger or consolidation is to
      effect a change in the state of incorporation or Country of organization
      of Cooper Bermuda) or with any one or more other Consolidated
      Subsidiaries.

            (ii) Any Consolidated Subsidiary may sell, lease, transfer or
      otherwise dispose of any of its assets to Cooper Bermuda or one or more
      other Consolidated Subsidiaries;

            (iii) Cooper Bermuda or any Consolidated Subsidiary may sell, lease,
      transfer or otherwise dispose of assets in a transaction (including a
      transfer of assets through a merger or consolidation) with any other
      Person that is not a Consolidated Subsidiary, if the assets sold
      contributed less than 10% of Operating Earnings for the fiscal year then
      most recently ended; and

            (iv) Any Person that is not a Consolidated Subsidiary may be merged
      into or consolidated with Cooper Bermuda or any Consolidated Subsidiary,
      or Cooper Bermuda or any Consolidated Subsidiary may acquire all or
      substantially all of the stock or assets of any Person, if, in the case of
      each such transaction, immediately thereafter and after giving effect
      thereto:

            (a) Cooper Bermuda and its Consolidated Subsidiaries shall be in
            compliance with this Agreement;

            (b) in the case of any merger into or consolidation with Cooper
            Bermuda, Cooper Bermuda shall be the continuing or surviving
            corporation;

            (c) if the consideration payable by Cooper Bermuda and/or the
            Consolidated Subsidiaries in connection with any such transaction
            shall consist, in whole or in part, of shares of stock of Cooper
            Bermuda (except for liabilities to dissenting

                                       23

<PAGE>

            shareholders), the total number of shares of stock of Cooper Bermuda
            having ordinary voting power for the election of directors issued or
            exchanged in connection with, or outstanding as a result of, such
            transaction shall not exceed 40% of the total of such voting shares
            of Cooper Bermuda outstanding immediately prior to such transaction;
            and

            (d) any Subsidiary acquired in, or continuing as a result of, any
            such transaction shall be or forthwith become a Consolidated
            Subsidiary.

      9.05        Taxes. Cooper Bermuda shall, and shall cause each Consolidated
Subsidiary to pay and discharge all taxes, assessments and governmental charges
or levies imposed on it or on its income or profits or on any of its property
prior to the date on which penalties attach thereto, except that no corporation
will be required hereby to pay any such tax, assessment, charge or levy, the
payment of which is being contested in good faith and by proper proceedings.

      9.06        Sale-and-Leaseback. Cooper Bermuda shall not, nor shall it
permit any Consolidated Subsidiary to, sell or transfer to a person (other than
Cooper Bermuda or a Consolidated Subsidiary) any property, whether now owned or
hereafter acquired, if at the time or thereafter Cooper Bermuda or a
Consolidated Subsidiary shall lease as lessee such property or any part thereof
or other property which Cooper Bermuda or a Consolidated Subsidiary intends to
use for substantially the same purpose as the property sold or transferred
except such transactions:

            (i) Incidental to transactions permitted by Section 9.03(vi); or

            (ii) From which arise Capitalized Lease Obligations and other rental
      obligations not exceeding two percent of Net Worth in the aggregate at any
      one time.

      9.07        Maintenance of Property; Insurance. Cooper Bermuda will keep,
and will cause each Significant Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted; will maintain, and will cause each Significant Subsidiary to
maintain (either in the name of Cooper Bermuda or in such Significant
Subsidiary's own name) either with financially sound and reputable insurance
companies or pursuant to a plan of self-insurance established in accordance with
sound and appropriate practices, insurance on all their property in at least
such amounts and against at least such risks as are usually insured against in
the same general area by companies of established repute engaged in the same or
a similar business.

      9.08        Cooper US. Cooper US shall at all times be a Consolidated
Subsidiary.

      9.09        Interest Coverage. As of the end of each fiscal four quarter
period Cooper Bermuda's Interest Coverage Ratio shall be at least 3.0 to 1.0.

      9.10        Principal Domestic Operating Subsidiaries. The aggregate
amount of all of the Debt of the Principal Domestic Operating Subsidiaries may
not exceed $50,000,000. Cooper Bermuda shall not cause or permit any of the
Principal Domestic Operating Subsidiaries,

                                       24

<PAGE>

directly or indirectly, to guarantee the payment of any Debt of Cooper Bermuda
or any Consolidated Subsidiary ("Upstream Guaranteed Debt") without for the same
period of time also causing such Principal Domestic Operating Subsidiary, or
Principal Domestic Operating Subsidiaries as the case may be, to guarantee the
obligations of the Borrowers hereunder. Notwithstanding the immediately
preceding sentence, such guarantee of the Borrowers' obligations hereunder shall
not be required so long as the aggregate amount of all of the Debt of the
Principal Domestic Operating Subsidiaries and the Upstream Guaranteed Debt does
not exceed $50,000,000.

      Section 10. Events of Default. If any one of the following events (herein
called "Events of Default") shall occur and be continuing:

            (a) Any representation or warranty made or deemed made herein by
      Cooper US or Cooper Bermuda, or any certificate furnished to any Bank
      hereunder, shall prove to have been incorrect in any material respect when
      made or deemed made; or

            (b) Default in the payment when due hereunder of any principal of or
      interest on any Loan; or

            (c) (i) Default by Cooper US or Cooper Bermuda in the performance of
      any agreement contained in Section 9.04, Section 9.06 or Section 9.09; or
      (ii) default by Cooper US or Cooper Bermuda in the performance of any
      other agreement contained in Section 9, other than in Sections 9.01(1),
      (2), (4) or (5), which shall remain unremedied for 10 days after either
      Cooper US or Cooper Bermuda shall have had knowledge of the occurrence
      thereof; or

            (d) Default by Cooper US or Cooper Bermuda, as applicable, in the
      performance of any other agreement herein which shall remain unremedied
      for 30 days after written notice thereof shall have been given to Cooper
      US by any Bank; or

            (e) Any payment on any bond, debenture, note or other evidence of
      indebtedness of Cooper Bermuda or any Consolidated Subsidiary, where the
      amount of the facility under which the default occurred exceeds one
      percent of Net Worth as of the date of the most recent financial statement
      provided to the Banks pursuant to Section 9.01, shall become due whether
      by maturity, acceleration or otherwise and shall not be promptly paid; or

            (f) Cooper Bermuda or any Significant Subsidiary (each such Person,
      whether Cooper Bermuda or a Significant Subsidiary, hereafter in this
      Section is called a "Corporation"), shall (i) apply for or consent to the
      appointment of a receiver, trustee or liquidator of itself or of its
      property, (ii) be unable, or admit in writing inability, to pay its debts
      as they mature, (iii) make a general assignment for the benefit of
      creditors, (iv) be adjudicated a bankrupt or insolvent, or (v) file a
      voluntary petition in bankruptcy or a petition or answer seeking
      reorganization or an arrangement with creditors or to take advantage of
      any insolvency law or an answer admitting the material allegations of a
      petition filed against it in any bankruptcy, reorganization or insolvency
      proceeding, or corporate action shall be taken by it for the purpose of
      effecting any of the foregoing; or

                                       25

<PAGE>

            (g) An order, judgement or decree shall be entered, without the
      application, approval or consent of the respective Corporation, by any
      court or governmental agency of competent jurisdiction, approving a
      petition seeking reorganization of any Corporation, or appointing a
      receiver, trustee, liquidator, intervenor or the like of such Corporation,
      or of all or a substantial part of its assets, and such order, judgement
      or decree, unless being contested in good faith and by appropriate
      proceedings, shall continue unstayed and in effect for any period of 30
      consecutive days; or

            (h) Any Termination Event shall have occurred and shall have
      continued under circumstances which may result in an uninsured payment or
      repayment liability of any Corporation to PBGC in an amount which could
      reasonably be expected to have a Material Adverse Effect; or

            (i) The occurrence of a Stock Acquisition Date (as hereinafter
      defined). For the purposes of this Section 10(i), the term "Stock
      Acquisition Date" shall mean the earlier of (i) the date of public
      announcement, or a filing with the Securities and Exchange Commission
      pursuant to Section 13 of the Securities and Exchange Act of 1934, as
      amended, (the "1934 Act"), by an Acquiring Person to the effect that such
      Acquiring Person has become such or (ii) the determination by Cooper
      Bermuda that an Acquiring Person has become such; "Acquiring Person" shall
      mean any Person who, or which, together with all Affiliates and Associates
      of such Person, shall be the Beneficial Owner of Voting Stock constituting
      a Controlling Block but shall not mean any Plan; "Affiliate" and
      "Associate" shall have the respective meanings ascribed to such terms in
      Rule 12b-2 of the General Rules and Regulations under the 1934 Act, as in
      effect on the date of the Agreement; "Beneficial Owner" shall have the
      meaning ascribed to such term in Rule 13d-3 of the General Rules and
      Regulations under the 1934 Act, as in effect on the date of the Agreement;
      "Controlling Block" shall mean a number of shares of Voting Stock which
      possess more than 50 percent of the aggregate voting power of Voting Stock
      then outstanding; and "Voting Stock" shall mean all securities of Cooper
      Bermuda entitling the owner or holder thereof to vote for the election of
      directors of Cooper Bermuda, other than upon the happening of a default or
      contingency; or

            (j) Judgements or orders for the payment of money in excess of
      $100,000,000 in the aggregate shall be rendered against Cooper Bermuda or
      any Consolidated Subsidiary and either (i) enforcement proceedings shall
      have been commenced by any creditor upon such judgement or order or (ii)
      there shall be any period of 30 consecutive days during which a stay of
      enforcement of such judgement or order, by reason of a pending appeal or
      otherwise, shall not be in effect; provided, however, that any such
      judgement or order shall not be an Event of Default under this Section 10
      (j) if, for so long as and to the extent that (i) the amount of such
      judgement or order is covered by a valid and binding policy of insurance
      between the defendant and the insurer covering payment thereof and (ii)
      such insurer, which shall be rated at least "A" by A.M. Best company, has
      been notified and has not disputed the claim made for payment of the
      amount of such judgement or order; or

                                       26

<PAGE>

            (k) Any provision of Section 12 hereof or of either of the
      Guarantees given by Cooper Industries, LLC or Cooper Industries, Inc.
      pursuant hereto (Section 12 and such Guarantees being referred to
      collectively in this Section 10(k) as the "Guarantees"), at any time after
      their execution and delivery and for any reason other than as expressly
      permitted hereunder or thereunder or satisfaction in full of all the
      obligations and liabilities of the Borrowers hereunder, ceases to be in
      full force and effect; or any Guarantor, Cooper Industries, LLC or Cooper
      Industries, Inc. or any other Person contests in any manner the validity
      or enforceability of any provision of any Guarantee; or any Guarantor,
      Cooper Industries, LLC or Cooper Industries, Inc. denies that it has any
      or further liability or obligation under the Guarantee given by it, or
      purports to revoke, terminate or rescind any such Guarantee (it being
      acknowledged and agreed that Cooper Industries, Inc. may merge into Cooper
      Industries, LLC without causing an Event of Default under this Section
      10(k)).

            THEREUPON, in case of any Event of Default specified in Section
10(f) or Section 10(g), the Commitments shall automatically terminate and the
principal of and interest on all Loans shall become forthwith due and payable
all without protest, presentment, notice or demand, all of which are expressly
waived by Cooper US and Cooper Bermuda, and in case of any other Event of
Default specified above, the Required Banks, may, by written notice to Cooper US
terminate the Commitments and/or, if Loans are then outstanding, declare the
principal of and interest on all the Loans to be forthwith due and payable,
whereupon the same will become forthwith due and payable, all without protest,
presentment, notice or demand, all of which are expressly waived by Cooper US
and Cooper Bermuda.

      Section 11. Miscellaneous.

      11.01       Waiver. No failure on the part of any Bank to exercise and no
delay in exercising, and no course of dealing with respect to, any right, power
or privilege under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or privilege under this
Agreement preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.

      11.02       Notices. All notices and other communications provided for
herein shall be in writing and telecopied, e-mailed, mailed or delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof; or, as to either party, at such other address as shall
be designated by such party in a notice to the other party. Except as otherwise
provided herein, all notices and other communications hereunder shall be deemed
to have been duly given when transmitted by telecopier, e-mail or personally
delivered or, in the case of a mailed notice, four Business Days after the date
deposited in the mails, first class postage prepaid, in each case given or
addressed as aforesaid, except that notices to any Bank pursuant to Section 5
shall be effective only upon receipt and shall be irrevocable.

      11.03       Amendments and Waivers. Any provision of this Agreement or the
Notes may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed in the case of the Agreement by Cooper Bermuda and Cooper
US and the Required Banks, and in the case of any Note by the applicable
Borrower and the applicable Bank; provided that no such

                                       27

<PAGE>

amendment or waiver shall, unless signed by each of the Banks directly affected
thereby, (i) increase or decrease the Commitment of any Bank (except for a
ratable decrease in the Commitments of all Banks) or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate of interest on any
Loan or any fees hereunder, (iii) postpone the date fixed for any payment of
principal of or interest on any Loan or any fees hereunder or for any reduction
or termination of any Commitment, (iv) change any Bank's percentage of the
Commitments (other than through the execution of an agreement in the form of
Exhibit B) or of the aggregate unpaid principal amount of the Loans which shall
be required for the Banks or any of them to take any action under this Section
or any other provision of this Agreement, or (v) release Cooper Bermuda or
Cooper US from their obligations under Section 12 hereof.

      11.04       Successors and Assigns. (a) This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that neither Cooper US nor Cooper Bermuda may
assign any of its rights or obligations hereunder without the prior written
consent of the Banks, and no Bank may assign any of its rights or obligations
hereunder without the prior written consent of Cooper Bermuda and Cooper US.
Notwithstanding the preceding sentence of this Section, any Bank may, upon
written notice to Cooper US, (i) assign all, or a proportionate part of all, of
the rights and obligations under this Agreement and any Note issued hereunder to
any Affiliate; and (ii) assign all, or a proportionate part of all, of its
rights and obligations under any Loans to any Affiliate. Notwithstanding
anything to the contrary in this Agreement, if any Bank makes an assignment
under this Section, neither Cooper Bermuda nor Cooper US shall be obliged to pay
any greater amount to such assignee under this Agreement than it would have been
obliged to pay had there been no such assignment. "Affiliate" means either a
wholly-owned subsidiary of the Bank or a wholly-owned subsidiary of any
corporation controlling the Bank. Any Bank may from time to time deposit the
Note with any Federal Reserve Bank to serve as collateral for obligations of
such Bank to such Federal Reserve Bank.

      (b) The Borrowers shall have the right to replace a Bank as a party to
this Agreement at any time when there are no Loans outstanding and the Borrowers
may, upon written notice to such Bank, replace such Bank by causing such Bank to
terminate its Commitment which is being replaced. The Borrowers shall pay in
full all accrued fees and other amounts owing to such replaced Bank through the
date of replacement. The replacement bank will execute an amendment in the form
of Exhibit B attached hereto, and a photocopy of each executed amendment to
replace a Bank shall be delivered to each of the Banks by Cooper US.

      11.05       Participations. Any Bank may sell participations in all or any
part of any Loan or Loans and/or its Commitment to another bank or other entity,
in which event, the participant shall not have any rights (unless such rights
are acquired pursuant to Section 7.05) under this Agreement (the participant's
rights against such Bank in respect of such participation to be those set forth
in the agreement executed by such Bank in favor of the participant relating
thereto) and all amounts payable by the Borrowers under Section 8 shall be
determined as if such Bank had not sold such participation. Any Bank may furnish
to participants (including prospective participants) copies of (i) this
Agreement, (ii) the promissory note or notes (if any) evidencing the Loans,
(iii) any guaranty, security or similar agreement providing for any guaranty,
collateral or other similar support for the Loans, (iv) any amendments, consents
or

                                       28

<PAGE>

waivers relating to the items listed in (i), (ii) or (iii) of this Section, (v)
any documents furnished to any Bank in satisfaction of conditions precedent to
the making of any Loan and (vi) any other documents or information expressly
required by this Agreement to be furnished to any Bank.

      11.06       Expenses. The applicable Borrower shall pay or reimburse the
Banks for paying costs of collection (including reasonable counsel fees) if
default is made in the payment of any Loan.

      11.07       Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.

      11.08       Indemnity. Cooper Bermuda and Cooper US hereby agree to
indemnify each Bank, its affiliates, and their respective officers, directors,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims, damages or expenses incurred by, imposed upon or
asserted against any of them arising out of or by reason of any investigation,
litigation or other proceedings (including any threatened investigation or
litigation or other proceedings) relating to the making or performance by Cooper
Bermuda or Cooper US of this Agreement or any actual or proposed use by Cooper
Bermuda or Cooper US or any of the Subsidiaries of the proceeds of any of the
Loans, including, without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation or litigation or
other proceedings (but excluding any such losses, liabilities, claims, damages
or expenses incurred by reason of the gross negligence or willful misconduct of
the person or entity to be indemnified). The obligations of Cooper Bermuda or
Cooper US under this Section shall survive the repayment of the Loans and the
termination of the Commitments. Cooper Bermuda and Cooper US, on behalf of
itself and its Subsidiaries, also agree not to assert any claim for special,
indirect, consequential or punitive damages against any Bank, any of its
affiliates, or any of its or their respective directors, officers, employees,
attorneys and agents, on any theory of liability arising out of or otherwise
relating to this Agreement.

      11.09       Survival. The obligations of the Borrowers under
Sections 8.03, 8.06, 11.06 and 11.08 shall survive the repayment of the Loans
and the termination of the Commitments.

      11.10       Usury. If the effective rate of interest to be received by any
Bank under this Agreement or the Note, including the stated rates of interest
and fees contracted for hereunder and any other amounts contracted for hereunder
which are deemed to be interest, at any time exceeds the highest lawful rate,
then the outstanding principal amount of the Loans made hereunder by such Bank
shall bear interest at a rate which would make the effective rate of interest
for such Bank equal the highest lawful rate until the difference between the
amounts which would have been due at the stated rates and the amounts which were
due at the highest lawful rate (the "Lost Interest") has been recaptured by such
Bank. If when the Loans made hereunder are repaid in full the Lost Interest has
not been fully recaptured by such Bank pursuant to the preceding sentence, then,
to the extent permitted by law, the interest rates charged under Section 6.02
shall be retroactively increased such that the effective rate of interest was at
the highest lawful rate since the effectiveness of this Agreement to the extent
necessary to recapture the Lost Interest not recaptured pursuant to the
preceding sentence and, to the extent allowed by

                                       29

<PAGE>

law, the applicable Borrower shall pay to such Bank the amount of the Lost
Interest remaining to be recaptured by such Bank. NOTWITHSTANDING the foregoing
or any other term in this Agreement to the contrary, it is the intention of the
Banks and the Borrowers to conform strictly to any applicable usury laws.
Accordingly, if any Bank contracts for, charges, or receives any consideration
which constitutes interest in excess of the highest lawful rate, then any such
excess shall be cancelled automatically and, if previously paid, shall at the
affected Bank's option be applied to the outstanding amount of the Loans made
hereunder by such Bank or be refunded to the applicable Borrower.

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

      11.12       Jurisdiction. In addition to any other jurisdiction in which
Cooper US and Cooper Bermuda may be legally served with process, Cooper US and
Cooper Bermuda hereby agree that they each may also both be served with process
at Cooper US's corporate headquarters in Houston, Texas at the "Address for
Notices" specified below Cooper US's name on the signature pages hereof. Cooper
US and Cooper Bermuda hereby irrevocably and unconditionally submit, for
themselves and their property, to the nonexclusive jurisdiction of the Supreme
Court of the state of New York and of any United States District Court sitting
in the state of New York, and any state or federal appellate court with
jurisdiction to hear an appeal from the aforementioned courts, in any action or
proceeding arising out of or relating to this Agreement, or for recognition or
enforcement of any judgement, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in the state of New York, or, to the
extent permitted by law, in any federal court in the state of New York. Each of
the parties hereto agrees that a final judgement in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgement or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any Bank may otherwise have to bring any
action or proceeding relating to this Agreement against Cooper US, Cooper
Bermuda or their properties in the courts of any jurisdiction.

      11.13       Waiver of Jury Trial. Cooper US, Cooper Bermuda and the Banks
hereby irrevocably waive all rights to trial by jury in any action, proceeding
or counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to this Agreement or the Note.

      11.14       Patriot Act. The Borrowers hereby acknowledge that pursuant to
the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the "Act"), each Bank is required to obtain, verify
and record information that identifies the Borrowers, which information includes
the name and address of the Borrowers and other information that will allow the
Banks to identify the Borrowers in accordance with the Act.

      Section 12. Guarantee.

      12.01       Guarantee. Each Guarantor hereby guarantees the full and
punctual payment (whether at stated maturity, upon acceleration or otherwise) of
all principal of and interest on amounts loaned to either Borrower under the
Agreement and all other amounts

                                       30

<PAGE>

payable by either Borrower under the Agreement. This is a guarantee of payment
and not merely of collection. Upon failure by either Borrower to pay punctually
any such amount, the applicable Guarantor shall be jointly and severally liable
to pay on demand the amount not so paid at the place and in the manner specified
in the Agreement.

      12.02       Guarantee Unconditional. The obligations of each Guarantor
hereunder shall be unconditional and absolute, and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected, at any time by:

            (i) any extension, renewal, settlement, compromise, waiver or
      release in respect of any obligation of either Borrower under the
      Agreement, by operation of law or otherwise;

            (ii) any modification or amendment of or supplement to the
      Agreement;

            (iii) any release, impairment, non-perfection or invalidity of any
      direct or indirect security for any obligation of either Borrower under
      the Agreement;

            (iv) any change in the corporate existence, structure or ownership
      of either Borrower, or any insolvency, bankruptcy, reorganization or other
      similar proceeding affecting such Borrower or its assets or any resulting
      release or discharge of any obligation of either Guarantor or Borrower
      contained in the Agreement;

            (v) the existence of any claim, set-off or other rights which either
      Guarantor may have at any time against a Borrower or any other party,
      whether in connection herewith or any unrelated transactions, PROVIDED
      that nothing herein shall prevent the assertion of any such claim by
      separate suit or compulsory counterclaim;

            (vi) any invalidity or unenforceability relating to or against a
      Borrower for any reason under the Agreement, or any provision of
      applicable law or regulation purporting to prohibit the payment by such
      Borrower of any amount payable by it under the Agreement; or

            (vii) any other act or omission to act, or delay of any kind by a
      Borrower, a Bank or any other party or any other circumstance whatsoever
      which might, but for the provisions of this paragraph, constitute a legal
      or equitable discharge of or defense to either of the Guarantors'
      obligations hereunder.

      12.03       Discharge Upon Payment in Full; Reinstatement in Certain
Circumstances. Except as otherwise provided below, this guarantee shall remain
in full force and effect until the Agreement shall have terminated and the
principal of and interest on the Loans and all other amounts payable by the
Borrowers under the Agreement shall have been paid in full. If at any time any
payment of principal of or interest on any Loan or any other amount payable by a
Borrower under the Agreement is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of such Borrower or
otherwise, the applicable

                                       31

<PAGE>

Guarantor's obligations hereunder with respect to such payment shall be
reinstated at such time as though such payment had been due but not made at such
time.

      12.04       Waiver by the Guarantor. Each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
party against a Borrower or any other party.

      12.05       Subrogation. Upon making any payment hereunder with respect to
a Borrower, the applicable Guarantor shall be subrogated to the rights of the
payee against such Borrower with respect to such payment; PROVIDED that no
Guarantor shall enforce any payment by way of subrogation until all amounts of
principal of an interest on any Loans and all other amounts payable by a
Borrower under the Agreement have been paid in full and the Agreement has been
terminated.

      12.06       Stay of Acceleration. In the event that acceleration of the
time for payment of any amount payable by a Borrower under the Agreement is
stayed upon insolvency, bankruptcy or reorganization of such Borrower all such
amounts otherwise subject to acceleration under the terms of this Guarantee
shall nonetheless be payable by the applicable Guarantor hereunder forthwith on
demand by the Banks.

                                       32

<PAGE>

            IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the day and year first above written.

                                             COOPER US, INC.

                                             By   /s/ Alan J. Hill
                                                  ------------------------------
                                             Title: Vice President and Treasurer

                                             Address for Notices:

                                             By Mail:
                                             P.O.  Box 4446
                                             Houston, Texas  77210
                                             By Courier:
                                             600 Travis
                                             Suite 5800
                                             Houston, TX  77002
                                             Attention:  Treasurer
                                             Telecopier: 713-209-8983

                                             COOPER INDUSTRIES, LTD.,
                                             A Bermuda company

                                             By:  /s/ Alan J. Hill
                                                  ------------------------------

                                             Title: Vice President and Treasurer

                                             Address for Notices:

                                             By Mail:
                                             P.O.  Box 4446
                                             Houston, Texas  77210
                                             By Courier:
                                             600 Travis
                                             Suite 5800
                                             Houston, TX  77002
                                             Attention:  Treasurer
                                             Telecopier: 713-209-8983

                                       33

<PAGE>

                                        AUSTRALIA AND NEW ZEALAND BANKING GROUP
                                        LIMITED

                                        By _____________________________

                                        Title:__________________________

                                        Commitment: $50,000,000

                                        Address for Notices:

                                        AUSTRALIA AND NEW ZEALAND BANKING GROUP
                                        LIMITED
                                        1177 Avenue of the Americas
                                        New York, NY 10036-2798
                                        Attention: Damodar Menon
                                        Telephone: 212-801-9752
                                        Telecopier: 212-536-9257
                                        E-Mail: dmenonusa@anz.com

                                       34

<PAGE>

                                         BANK OF AMERICA, N.A.

                                         By    __________________________

                                         Title:__________________________

                                         Commitment: $50,000,000

                                         Address for Notices:

                                         BANK OF AMERICA, N.A.
                                         901 Main Street, 14th Floor
                                         Dallas, TX 75202
                                         Attention: Hari Kalyandurg
                                         Telephone: 214-209-2354
                                         Telecopier: 214-290-9413

                                         Copy of Notices To:

                                         BANK OF AMERICA, N.A.
                                         335 Madison Avenue, 5th Floor
                                         New York, NY 10017
                                         Attention: John W. Pocalyko
                                         Managing Director
                                         Telephone: 212-503-8340
                                         Telecopier: 212-503-7066
                                         e-mail: john.pocalyko@bankofamerica.com

                                       35

<PAGE>

                                         Citibank, N.A.

                                         By    ___________________________

                                         Title:___________________________

                                         Commitment: $50,000,000

                                         Address for Notices:

                                         Citibank, N.A.
                                         2 Pennes Way
                                         Floor 2
                                         New Castle, DE 19720
                                         Attention: Sally Schoenleber
                                         Telephone: 302-894-6061
                                         Telecopier: 302-894-6120
                                         e-mail: sally.schoenleber@citigroup.com

                                         Copy of Notices To:

                                         Citicorp North America, Inc.
                                         400 Perimeter Center, Suite 600
                                         Atlanta, GA 30346-1233
                                         Attention: Todd C. Davis
                                         Telephone: 770-668-8124
                                         Telecopier: 770-668-8137
                                         e-mail: todd.c.davis@citigroup.com

                                       36
<PAGE>

                                  Deutsche Bank AG New York Branch

                                  By _____________________________

                                  Name:  Hans-Josef Thiele

                                  Title: Director

                                  By _____________________________

                                  Name:  Christian Dallwitz

                                  Title: Director

                                  Commitment: $50,000,000

                                  Address for Notices:

                                  Deutsche Bank AG New York Branch
                                  90 Hudson Street
                                  Jersey City, NJ 07302
                                  Attention: Joe Cusmai
                                  Telephone: 201-593 2202
                                  Telecopier: 201-593 2313
                                  e-mail: joe.cusmai@db.com

                                       37
<PAGE>

                                  JPMORGAN CHASE BANK

                                  By _____________________________

                                  Title:__________________________

                                  Commitment: $50,000,000

                                  Address for Notices:

                                  JPMorgan Chase Bank
                                  Loan & Agency Services
                                  1111 Fannin, 10th Floor
                                  Houston, TX 77002
                                  Attention: Autumn M. Mashue
                                  Telephone: 713-750-6199
                                  Telecopier: 713-750-2932
                                  e-mail: autumn.m.mashue@jpmorgan.com

                                  Copy of Notices To:
                                  JPMorgan Chase Bank
                                  Credit & Lending
                                  270 Park Avenue, 4th Floor
                                  New York, NY 10017-2070
                                  Attention: Robert Sacks
                                  Telephone: 212-270-4118
                                  Telecopier:  212-270-6637
                                  e-mail: robert.sacks@jpmorgan.com

                                       38
<PAGE>

                                  MELLON BANK, N.A.

                                  By _____________________________

                                  Title:  First Vice President

                                  Commitment: $50,000,000

                                  Address for Notices:

                                  Mellon Bank, N.A.
                                  One Mellon Bank Center
                                  Room 4530
                                  Pittsburgh, PA 15258-0001
                                  Telephone: 412-234-7298
                                  Telecopier: 412-236-1914

                                  Copy of Notices To:
                                  Mellon Global Exposure Management
                                  400 South Hope Street, Fifth Floor
                                  Los Angeles, CA 90071-2806
                                  Attention: Lawrence C. Ivey
                                  Telephone: 213-553-9543
                                  Telecopier:  212-629-0492
                                  e-mail: ivey.l@mellon.com

                                       39
<PAGE>

                                  PNC BANK, NATIONAL ASSOCIATION.

                                  By _________________________________

                                  Title:__________________________

                                  Commitment: $50,000,000

                                  Address for Notices:

                                  PNC Bank, National Association
                                  One PNC Plaza
                                  249 Fifth Avenue
                                  Pittsburgh, PA 15222-2707
                                  Attention: Philip K. Liebscher
                                  Telephone: 412-762-3202
                                  Telecopier: 412-762-6484
                                  e-mail: philip.liebscher@pncbank.com

                                  Copy of Notices to:

                                  PNC Bank, National Association
                                  One PNC Plaza
                                  249 Fifth Avenue
                                  Pittsburgh, PA 15222-2707
                                  Attention: Luke G. McElhinny
                                  Telephone: 412-768-9756
                                  Telecopier: 412-768-9259
                                  e-mail: luke.mcelhinny@pncbank.com

                                       40
<PAGE>

                                  THE ROYAL BANK OF SCOTLAND PLC

                                  By __________________________________

                                  Title:____________________________

                                  Commitment: $50,000,000

                                  Address for Notices:

                                  The Royal Bank of Scotland plc
                                  101 Park Avenue, 12th Floor
                                  New York, NY 10178
                                  Attention: Yao-Li Li
                                  Telephone: 212-401-1335
                                  Telecopier: 212-401-1336

                                       41
<PAGE>

                                  UBS Loan Finance LLC

                                  By __________________________________

                                  Title:____________________________

                                  By __________________________________

                                  Title:____________________________

                                  Commitment: $50,000,000

                                  Address for Notices:

                                  UBS Loan Finance LLC
                                  677 Washington Boulevard, 6th Floor Tower
                                  Stamford, CT 06901
                                  Attention: Denise Conzo
                                  Telephone: 203-719-3853
                                  Telecopier: 203-719-3888

                                       42
<PAGE>

                                  WACHOVIA BANK, N.A.

                                  By Sarah T. Warren

                                  Title: Director

                                  Commitment: $50,000,000

                                  Address for Borrowing Notices:

                                  Wachovia Bank
                                  201 South College Street
                                  Mail code NC1183
                                  Charlotte, NC 28288
                                  Attention: Lekeisha Neely
                                  Telephone: 704-374-6145
                                  Telecopier: 704-715-0094
                                  e-mail: lekeisha.neely@wachovia.com

                                  Address for Other Notices:

                                  Wachovia Bank
                                  301 S. College Street
                                  Mail Code NC0760
                                  Charlotte, NC 28288
                                  Attention: Sarah T. Warren
                                  Telephone: 704-383-4498
                                  Telecopier: 704-383-1625
                                  e-mail: sarah.warren@wachovia.com

                                       43
<PAGE>

                                    EXHIBIT A

                                      NOTE

$_____________                                                   Month Day, 2004

      Cooper Industries, Ltd., a Bermuda company ("Cooper Bermuda"), promises to
pay to Name of Bank (the "Bank") the principal sum of___________ Million Dollars
or the aggregate unpaid principal amount of all Loans made by the Bank to Cooper
Bermuda pursuant to the Five Year Credit Agreement dated as of Month Day 1,
2004, between Cooper Bermuda, Cooper US, Inc., a Delaware corporation ("Cooper
US"), the Bank and certain other lenders (the "Agreement"), whichever is less,
in immediately available funds at______________________________, together with
interest on the unpaid principal amount hereof at the rates and on the dates set
forth in the Agreement. Cooper Bermuda shall pay each Loan as set forth in the
Agreement.

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

      This Note is issued pursuant to, and is entitled to the benefits of, the
Agreement, as it may be amended from time to time, to which reference is hereby
made for a statement of the terms and conditions under which this Note may be
transferred, prepaid or its maturity date accelerated. Capitalized terms used
herein and not otherwise defined herein are used with the meanings attributed to
them in the Agreement.

      Except as otherwise provided in the Agreement, Cooper Bermuda waives
presentment, demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement of
this Note and the Agreement.

      This Note is governed by New York law.

                                             COOPER INDUSTRIES, LTD.

                                             By: _______________________________

                                             Title: Vice President and Treasurer

                                       1
<PAGE>

                   SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL

                                       TO

                         NOTE OF COOPER INDUSTRIES, LTD.
                           dated _____________________

<TABLE>
<CAPTION>
         Principal
           Amount      Interest      Principal      Unpaid
Date      of Loan      Period       Amount Paid     Balance
----     ---------     --------     -----------     -------
<S>      <C>           <C>          <C>             <C>
</TABLE>

                                        1
<PAGE>

                                      NOTE

$_____________                                                   Month Day, 2004

      Cooper US, Inc., a Delaware corporation ("Cooper US"), promises to pay to
JPMorgan Chase Bank (the "Bank") the principal sum of ___________ Million
Dollars or the aggregate unpaid principal amount of all Loans made by the Bank
to Cooper US pursuant to the Five Year Credit Agreement dated as of Month Day,
2004, between Cooper US, Cooper Industries, Ltd., a Bermuda company ("Cooper
Bermuda"), the Bank and certain other lenders (the "Agreement"), whichever is
less, in immediately available funds at _______________________________________,
together with interest on the unpaid principal amount hereof at the rates and on
the dates set forth in the Agreement. Cooper US shall pay each Loan as set forth
in the Agreement.

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

      This Note is issued pursuant to, and is entitled to the benefits of, the
Agreement, as it may be amended from time to time, to which reference is hereby
made for a statement of the terms and conditions under which this Note may be
transferred, prepaid or its maturity date accelerated. Capitalized terms used
herein and not otherwise defined herein are used with the meanings attributed to
them in the Agreement.

      Except as otherwise provided in the Agreement, Cooper US waives
presentment, demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement of
this Note and the Agreement.

      This Note is governed by New York law.

                                             COOPER US, INC.

                                             By: _______________________________

                                             Title: Vice President and Treasurer

                                        1
<PAGE>

                   SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL

                                       TO

                             NOTE OF COOPER US, INC
                           dated _____________________

<TABLE>
<CAPTION>
         Principal
           Amount        Interest      Principal       Unpaid
Date      of Loan         Period      Amount Paid      Balance
----     ---------       --------     -----------      -------
<S>      <C>             <C>          <C>              <C>
</TABLE>

                                       1
<PAGE>

                                    EXHIBIT B

                                    AMENDMENT

      This Amendment (the "Amendment") is dated as of ______________ and is
entered into by and among Cooper Industries, Ltd. and Cooper US, Inc.
(collectively, the "Borrower"), and ________________________________ (the "New
Bank"). Capitalized terms used but not defined herein shall have the meanings
given to them in the Five Year Credit Agreement dated as of _____________, 2004
among the Borrower and the banks parties thereto (as amended, the "Credit
Agreement"), receipt of a copy of which is hereby acknowledged by the New Bank.
The Borrower and the New Bank hereby agree as follows:

1.    The New Bank hereby irrevocably assumes all of the obligations of a "Bank"
under the Credit Agreement and any other documents or instruments delivered
pursuant thereto just as if the New Bank had been an original signatory to the
Credit Agreement as a "Bank."

2.    The New Bank shall become a "Bank" under the Credit Agreement.

3.    The amount of the Commitment of the New Bank is $ ______________

4.    The Borrower has executed and delivered to the New Bank promissory notes
in the form attached to the Credit Agreement.

5.    This Amendment shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns. This Amendment may
be executed in any number of counterparts, which together shall constitute one
instrument. This Amendment shall be governed by and construed in accordance with
the laws of the State of New York.

      The terms set forth in this Amendment are hereby agreed to:

                                                      COOPER INDUSTRIES, LTD.

                                                 By:____________________________
                                                 Name:__________________________
                                                 Title:_________________________

                                                 COOPER US, INC.

                                                 By:____________________________
                                                 Name:__________________________
                                                 Title:_________________________

                                                 [Signature Block for New Bank]

                                       1
<PAGE>

                                    EXHIBIT C

                                  GUARANTEE BY
                             COOPER INDUSTRIES, INC.

      This Guarantee is a guarantee of payment of amounts loaned to the
Borrowers pursuant to a Five-Year Credit Agreement ("Agreement") dated the ____
day of ____________, 2004 between Cooper Industries, Ltd., a Bermuda company,
("Cooper Bermuda"), Cooper US, Inc., a Delaware corporation ("Cooper US") and
the Banks as defined in such Agreement. Defined terms in this Guarantee shall
have the meaning ascribed to such terms in the Agreement.

      1.    Guarantee. The undersigned Cooper Industries, Inc., an Ohio
      corporation, hereby guarantees the full and punctual payment (whether at
      stated maturity, upon acceleration or otherwise) of all principal of and
      interest on amounts loaned to either Borrower under the Agreement and all
      other amounts payable by either Borrower under the Agreement. This is a
      guarantee of payment and not merely of collection. Upon failure by either
      Borrower to pay punctually any such amount, Cooper Industries, Inc. shall
      be jointly and severally liable to pay on demand the amount not so paid at
      the place and in the manner specified in the Agreement.

      2.    Guarantee Unconditional. The obligations of Cooper Industries, Inc.
      hereunder shall be unconditional and absolute, and, without limiting the
      generality of the foregoing, shall not be released, discharged or
      otherwise affected, at any time by:

            (i)   any extension, renewal, settlement, compromise, waiver or
            release in respect of any obligation of either Borrower under the
            Agreement, by operation of law or otherwise;

            (ii)  any modification or amendment of or supplement to the
            Agreement;

            (iii) any release, impairment, non-perfection or invalidity of any
            direct or indirect security for any obligation of either Borrower
            under the Agreement;

            (iv)  any change in the corporate existence, structure or ownership
            of either Borrower, or any insolvency, bankruptcy, reorganization or
            other similar proceeding affecting such Borrower or its assets or
            any resulting release or discharge of any obligation of any
            guarantor or Borrower contained in the Agreement;

            (v)   the existence of any claim, set-off or other rights which any
            guarantor may have at any time against a Borrower or any other
            party, whether in connection herewith or any unrelated transactions,
            PROVIDED that nothing herein shall prevent the assertion of any such
            claim by separate suit or compulsory counterclaim;

                                        1
<PAGE>

            (vi)  any invalidity or unenforceability relating to or against a
            Borrower for any reason under the Agreement, or any provision of
            applicable law or regulation purporting to prohibit the payment by
            such Borrower of any amount payable by it under the Agreement; or

            (vii) any other act or omission to act, or delay of any kind by a
            Borrower, a Bank or any other party or any other circumstance
            whatsoever which might, but for the provisions of this paragraph,
            constitute a legal or equitable discharge of or defense to any of
            the undersigned guarantors' obligations hereunder.

      3.    Term. The obligations of Cooper Industries, Inc. under this
      Guarantee shall terminate at such time as Cooper Industries, Inc. ceases
      to be a direct or indirect subsidiary of Cooper Bermuda.

      IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly
executed as of this ____ day of _______________, 200__.

                                            COOPER INDUSTRIES, INC.

                                            By:    _____________________________

                                            Title: _____________________________

                                            By:    _____________________________

                                            Title: _____________________________

                                        2
<PAGE>

                                    EXHIBIT D

                                  GUARANTEE BY
                             COOPER INDUSTRIES, LLC

      This Guarantee is a guarantee of payment of amounts loaned to the
Borrowers pursuant to a Five-Year Credit Agreement ("Agreement") dated the ____
day of ____________, 2004 between Cooper Industries, Ltd., a Bermuda company,
("Cooper Bermuda"), Cooper US, Inc., a Delaware corporation ("Cooper US") and
the Banks as defined in such Agreement. Defined terms in this Guarantee shall
have the meaning ascribed to such terms in the Agreement.

      1.    Guarantee. The undersigned Cooper Industries, LLC, a Delaware
      limited liability company, hereby guarantees the full and punctual payment
      (whether at stated maturity, upon acceleration or otherwise) of all
      principal of and interest on amounts loaned to either Borrower under the
      Agreement and all other amounts payable by either Borrower under the
      Agreement. This is a guarantee of payment and not merely of collection.
      Upon failure by either Borrower to pay punctually any such amount, Cooper
      Industries, LLC shall be jointly and severally liable to pay on demand the
      amount not so paid at the place and in the manner specified in the
      Agreement.

      2.    Guarantee Unconditional. The obligations of Cooper Industries, LLC
      hereunder shall be unconditional and absolute, and, without limiting the
      generality of the foregoing, shall not be released, discharged or
      otherwise affected, at any time by:

            (i)   any extension, renewal, settlement, compromise, waiver or
            release in respect of any obligation of either Borrower under the
            Agreement, by operation of law or otherwise;

            (ii)  any modification or amendment of or supplement to the
            Agreement;

            (iii) any release, impairment, non-perfection or invalidity of any
            direct or indirect security for any obligation of either Borrower
            under the Agreement;

            (iv)  any change in the corporate existence, structure or ownership
            of either Borrower, or any insolvency, bankruptcy, reorganization or
            other similar proceeding affecting such Borrower or its assets or
            any resulting release or discharge of any obligation of any
            guarantor or Borrower contained in the Agreement;

                                        3
<PAGE>

            (v)   the existence of any claim, set-off or other rights which any
            guarantor may have at any time against a Borrower or any other
            party, whether in connection herewith or any unrelated transactions,
            PROVIDED that nothing herein shall prevent the assertion of any such
            claim by separate suit or compulsory counterclaim;

            (vi)  any invalidity or unenforceability relating to or against a
            Borrower for any reason under the Agreement, or any provision of
            applicable law or regulation purporting to prohibit the payment by
            such Borrower of any amount payable by it under the Agreement; or

            (vii) any other act or omission to act, or delay of any kind by a
            Borrower, a Bank or any other party or any other circumstance
            whatsoever which might, but for the provisions of this paragraph,
            constitute a legal or equitable discharge of or defense to any of
            the undersigned guarantors' obligations hereunder.

      3.    Term. The obligations of Cooper Industries, LLC under this Guarantee
      shall terminate at such time as of Cooper Industries, LLC ceases to be a
      direct or indirect subsidiary of Cooper Bermuda.

      IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly
executed as of this ____ day of _______________, 200__.

                                            COOPER INDUSTRIES, LLC

                                            By:_________________________________

                                            Title:______________________________

                                            By:_________________________________

                                            Title:______________________________

                                        4exv10w1

 

Exhibit 10.1

NON-QUALIFIED STOCK OPTION AGREEMENT

GREY WOLF, INC. 2003 INCENTIVE PLAN

(effective as of March 26, 2003)

     THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) made as of ____________,
2004, by and between GREY WOLF, INC., a corporation organized under the laws of the State of Texas
(
the “Company”), and ____________, an individual (the “Grantee”);

WITNESSETH:

     WHEREAS, the Company desires to provide an incentive to the Grantee to further the business of
the Company and the Company has agreed to grant the Grantee options to purchase shares of common
stock, $0.10 par value (“Common Stock”), of the Company; and

     WHEREAS, by granting the Grantee options to purchase shares of Common Stock pursuant to the
terms of this Agreement, the Company intends to carry out the purposes set forth in the Grey Wolf,
Inc. 2003 Incentive Plan (effective as of March 26, 2003) (the “Plan”) adopted by the Board of
Directors of the Company (the “Board of Directors”) effective March 26, 2003 and approved by the
shareholders of the Company on May 13, 2003; and

     WHEREAS, the Company and the Grantee desire to set forth the terms and conditions of such
options to purchase Common Stock;

     NOW, THEREFORE, in consideration of the mutual promises contained herein, and other good and
valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the
parties hereto do hereby agree as follows:

     1. Grant of Option. Subject to the terms and conditions hereinafter set forth, the
Company hereby grants to the Grantee a non-qualified option (the “Option”) to purchase all or any
part of an aggregate number of ____________ shares of Common Stock (such shares, as increased or
decreased in accordance with Section 10 hereof, being referred to hereinafter as the “Option
Shares”) at an exercise price of $_______ per share (hereinafter the “Exercise Price”).

     2. Subject to Plan. The Option and its exercise are subject to the terms and
conditions of the Plan, and the terms of the Plan shall control to the extent not otherwise
inconsistent with the provisions of this Agreement. The capitalized terms used herein that are
defined in the Plan shall have the same meanings assigned to them in the Plan. The Option is
subject to any rules promulgated pursuant to the Plan by the Board or the Committee and
communicated to the Grantee in writing.

     3. Exercise Period. The Option shall be exercisable by Grantee as to twenty (20%) of
the Option Shares one (1) year after the date of this Agreement, as to an additional twenty percent
(20%) of the Option Shares two (2) years after the date of this Agreement, as to an additional
twenty percent (20%) of the Option Shares three (3) years after the date of this Agreement, as to
an additional twenty percent (20%) of the Option Shares four (4) years after the date of this
Agreement, until the fifth anniversary of the date of this Agreement, after which time the Option
shall be exercisable in full. The

 

 

Option shall expire and terminate as to any Option Shares not purchased by the Grantee on or
before the tenth anniversary of the date of this Agreement (the “Expiration Date”), subject to
earlier termination as set forth herein or pursuant to the terms of the Plan. Notwithstanding any
other provision of this Agreement to the contrary, the Option shall be immediately exercisable by
Grantee as to one hundred percent (100%) of the Option Shares as may be applicable pursuant to
Sections 5.5 and 5.7 of the Plan and Section 12 below.

     4. Method of Exercising the Option. The Option shall be exercised by the Grantee by
delivering to the Company written notice from the Grantee as of a date set by the Company which is
in advance of the proposed exercise date. The notice from the Grantee shall state that the Grantee
is exercising the Option and shall specify the number of Option Shares that the Grantee desires and
is entitled to purchase. Such notice shall be in a form and content as determined by the Committee
and shall be accompanied by full payment for the Option Shares to be exercised. The Option may
only be exercised with respect to full shares, and no fractional shares shall be issued.

     The Option Price upon exercise of the Option Shares shall be payable to the Company in full
either: (i) in cash or its equivalent, or (ii) subject to prior approval by the Committee in its
discretion, by tendering previously acquired Shares having an aggregate Fair Market Value at the
time of exercise equal to the total Option Price (provided that the Shares which are tendered must
have been held by the Grantee for at least six (6) months prior to their tender to satisfy the
Option Price), or (iii) subject to prior approval by the Committee in its discretion, by
withholding Shares which otherwise would be acquired on exercise having an aggregate Fair Market
Value at the time of exercise equal to the total Option Price, or (iv) subject to prior approval by
the Committee in its discretion, by a combination of (i), (ii), and (iii) above. Any payment in
Shares shall be effected by the surrender of such Shares to the Company in good form for transfer
and shall be valued at their Fair Market Value on the date when the Stock Option is exercised.
Unless otherwise permitted by the Committee in its discretion, the Grantee shall not surrender, or
attest to the ownership of, Shares in payment of the Option Price if such action would cause the
Company to recognize compensation expense (or additional compensation expense) with respect to the
Stock Option for financial reporting purposes.

     The Committee, in its discretion, also may allow the Option Price to be paid with such other
consideration as shall constitute lawful consideration for the issuance of Shares (including,
without limitation, effecting a “cashless exercise” with a broker of the Option), subject to
applicable securities law restrictions and tax withholdings, or by any other means which the
Committee determines to be consistent with the Plan’s purpose and applicable law. A “cashless
exercise” of an Option is a procedure by which a broker provides the funds to the Grantee to effect
an Option exercise, to the extent consented to by the Committee in its discretion. At the
direction of the Grantee, the broker will either (i) sell all of the Shares received when the
Option is exercised and pay the Grantee the proceeds of the sale (minus the Option Price,
withholding taxes and any fees due to the broker) or (ii) sell enough of the Shares received upon
exercise of the Option to cover the Option Price, withholding taxes and any fees due the broker and
deliver to the Grantee (either directly or through the Company) a stock certificate for the
remaining Shares. Dispositions to a broker effecting a cashless exercise are not exempt under
Section 16 of the Exchange Act.

     The Committee, in its discretion, may also allow an Option to be exercised by a broker-dealer
acting on behalf of the Grantee if (i) the broker-dealer has received from the Grantee a duly
endorsed Incentive Agreement evidencing such Option and instructions signed by the Grantee
requesting the

2

 

Company to deliver the Shares of Common Stock subject to such Option to the broker-dealer on behalf
of the Grantee and specifying the account into which such Shares should be deposited, (ii) adequate
provision has been made with respect to the payment of any withholding taxes due upon such
exercise, and (iii) the broker-dealer and the Grantee have otherwise complied with Section
220.3(e)(4) of Regulation T, 12 CFR Part 220 (or its successor).

     As soon as practicable after receipt of a written notification of exercise and full payment,
the Company shall deliver, or cause to be delivered, to or on behalf of the Grantee, in the name of
the Grantee or other appropriate recipient, Share certificates for the number of Shares purchased
under the Stock Option. Such delivery shall be effected for all purposes when the Company or a
stock transfer agent of the Company shall have deposited such certificates in the United States
mail, addressed to Grantee or other appropriate recipient.

     Subject to Section 6.2 of the Plan, during the lifetime of a Grantee, each Option granted to
him shall be exercisable only by the Grantee (or his legal guardian in the event of his Disability)
or by a broker-dealer acting on his behalf pursuant to a cashless exercise under the foregoing
provisions of this Section.

     Any certificate issued to evidence Shares issued upon the exercise of this Incentive Award may
bear such legends and statements as the Committee shall deem advisable to assure compliance with
federal and state laws and regulations, including but not limited to, blue sky and securities laws,
the requirements of the stock exchange or market upon which such shares are then listed and/or
traded and any other restrictions on these Shares.

     The Grantee or other person exercising the Option Shares under this Incentive Award may be
required by the Committee to give a written representation that the Incentive Award and the Shares
subject to the Incentive Award will be acquired for investment and not with a view to public
distribution; provided, however, that the Committee, in its sole discretion, may release any person
receiving an Incentive Award from any such representations either prior to or subsequent to the
exercise of this Incentive Award.

     5. Transferability of Option. The Option shall not be transferable or assignable, in
whole or in part, and except as otherwise provided in Section 12 of this Agreement and Section 5.2
of the Plan or by will or the laws of descent or distribution. The Option shall be exercisable (i)
only by the Grantee during his lifetime, or (ii) in the event of his death, by his heirs,
representatives, distributees, or legatees in accordance with his will or the laws of descent and
distribution (but only to the extent that the Option would be exercisable by the Grantee under this
Agreement).

     6. Payment of Taxes Upon Exercise. The Grantee understands and acknowledges that under
currently applicable law, the Grantee maybe required to include in the Grantee’s taxable income, at
the time of exercise of the Option, the amount by which the value of the Option Shares purchased
(the “Exercise Shares”) exceeds the Exercise Price paid. The Grantee hereby authorizes the Company
to withhold Exercise Shares of a value equivalent to (but not to exceed) the amount of tax required
to be withheld by the Company out of any taxable income derived by the Grantee upon exercise of the
Option pursuant to Section 6.3 of the Plan; provided, however, that the Grantee may, in the
alternative, in order to satisfy such withholding requirement, deliver to the Company cash or other
shares of Common Stock owned by the Grantee.

3

 

     7. Investment Representation. The Grantee represents that the Option Shares available
for purchase by the Grantee under this Agreement will be acquired only for investment and not with
a view toward resale or distribution.

     8. Securities Law, Other Applicable Laws and Company Policies; Legends. The Grantee
agrees and understands that the Option Shares may be restricted securities as defined in Rule 144
promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and may not be
sold, assigned or transferred, unless the sale, assignment or transfer of such shares is registered
under the Securities Act and applicable state securities laws, as now in effect or hereafter
amended, or there is furnished an opinion of counsel in form and substance satisfactory to the
Company from counsel acceptable to the Company that such registrations are not required. Grantee
agrees and understands that transactions under the Plan and this Agreement are intended to and
shall comply with all applicable laws including, but not limited to, the requirements of Rule 16b-3
under the Securities Exchange Act and Securities Regulation BTR. Grantee also agrees and
understands that transactions under the Plan and this Agreement are intended to and shall comply
with the Company’s insider trading policies as revised from time to time or such other of the
Company’s policies related to trading in the Company’s stock including, but not limited to,
policies relating to black-out periods. The Grantee further understands and agrees that, unless
issued pursuant to an effective registration statement under the Securities Act, the following
legend shall beset forth on each certificate representing Option Shares:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE
SOLD OR TRANSFERRED EXCEPT UPON SUCH REGISTRATION OR UPON RECEIPT BY THE CORPORATION
OF AN OPINION OF COUNSEL FOR THE CORPORATION, IN FORM AND SUBSTANCE SATISFACTORY TO
THE CORPORATION, THAT SUCH REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER.”

     In addition, the following legend shall be placed on each certificate representing Option
Shares;

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE GOVERNED BY THE TERMS OF THE GREY
WOLF, INC. 2003 INCENTIVE PLAN (EFFECTIVE MARCH 26, 2003), WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF THE CORPORATION AND A COPY OF WHICH WILL BE PROVIDED FOR
INSPECTION UPON WRITTEN REQUEST.”

     9. No Rights as Shareholder. The Grantee shall not have any rights as a shareholder
with respect to any of the Option Shares until the date of issuance by the Company to the Grantee
of a stock certificate representing such Option Shares. Except as otherwise provided in Section 5.5
of the Plan, the Grantee shall not be entitled to any dividends, cash or otherwise, or any
adjustment of the Option Shares for such dividends, if the record date therefor is prior to the
date of issuance of such stock certificate. Upon valid exercise of the Option by the Grantee, the
Company agrees to cause a valid stock certificate for the number of Option Shares then purchased to
be issued and delivered to the Grantee within seven (7) business days thereafter.

     10. Corporate Proceedings of the Company. The terms respecting corporate proceedings
of the Company shall be governed by such terms as provided in Section 5.5 of the Plan.

4

 

     11. Registration Rights. The Grantee shall have no registration rights with respect to
the Option Shares.

     12. Termination of Employment, Death, Disability and Retirement.

     a. Termination of Employment. If the Grantee’s Employment is terminated for any reason
other than due to his death, Disability, Retirement or for Cause, any non-vested portion of
the Option at the time of such termination shall automatically expire and terminate and no
further vesting shall occur after the termination date. If the Grantee ceases to be
employed by the Company, or a parent or subsidiary of the Company, and prior to such
cessation the Grantee was so employed at all times from the date of this grant in this
Agreement until the date of the cessation of Employment, then the Grantee shall be entitled
to exercise his rights only with respect to the portion of the Option that was vested as of
the termination date for a period that shall end on the earlier of (i) the
Expiration Date set forth in this Agreement with respect to the vested portion of such
Option or (ii) the date that occurs ninety (90) calendar days after his termination date.
Notwithstanding anything herein to the contrary, the Grantee may exercise the Option as to
all of the Shares subject to the Option (to the extent the Grantee is entitled to do so with
respect to the portion of the Option that is vested at the date Grantee ceases employment
with the Company or a parent or subsidiary corporation of the Company) on or before three
years after the date Grantee ceases employment with the Company or a parent or subsidiary
corporation of the Company if Grantee’s employment with the Company or a parent or
subsidiary corporation of the Company is terminated at any time other than within one (1)
year after that date a Change of Control of the Company shall be deemed to have occurred for
any reason other than (i) voluntary resignation or retirement, (ii) death or Disability, or
(iii) Cause. A Grantee’s Employment shall not be deemed to have been terminated if a
Grantee who is an Employee becomes a Consultant or Outside Director immediately upon his
termination of employment with the Company, or if a Grantee’s status otherwise changes
between or among Employee, Consultant or Outside Director without a gap in service for the
Company in any such capacity. All determinations regarding whether and when there has been
a termination of Employment shall be made by the Committee. Notwithstanding the foregoing,
the Committee may, in its sole discretion, extend for a reasonable period the time in which
a Grantee may exercise the Option after termination of employment, not to extend beyond the
Expiration Date.

     b. Termination of Employment for Cause. In the event of the termination of a Grantee’s
Employment for Cause, all vested and non-vested Options under this Agreement shall
immediately expire, and shall not be exercisable to any extent, as of 12:01 a.m. (CST) on
the date of such termination of Employment.

     When used in connection with the termination of a Grantee’s Employment, Cause shall
mean and includes (i) chronic alcoholism or controlled substance abuse as determined by a
doctor chosen by the Committee and the Grantee; (ii) an act of proven fraud or dishonesty on
the part of the Grantee with respect to the Company or its subsidiaries; (iii) knowing and
material failure by the Grantee to comply with material applicable laws and regulations
relating to the business of the Company or its subsidiaries; (iv) the Grantee’s material and
continuing failure to perform (as opposed to unsatisfactory performance) his duties to the
Company except, in each case, where such failure is caused by the illness or other similar
incapacity or disability of the Grantee; or (v) conviction of a crime involving moral
turpitude or a felony.

5

 

     c. Retirement. Upon the Retirement of the Grantee:

          (i) any non-vested portion of any outstanding Option or other Option shall
immediately terminate and no further vesting shall occur; and

          (ii) any vested Option shall expire on the earlier of (A) the
Expiration Date set forth in this Agreement; or (B) the expiration of (1) one year
after the date of Retirement.

     d. Disability. Upon termination of Employment as a result of the Grantee’s Disability:

          (i) any nonvested portion of any outstanding Option shall immediately terminate
upon termination of Employment and no further vesting shall occur; and

          (ii) if the Grantee becomes Disabled while employed by the Company or a parent
or subsidiary corporation of the Company, and prior to such Disability the Grantee
was employed at all times from the date of the granting of the Option until the date
of Disability, the Option must be exercised by the Grantee (to the extent that the
Grantee is entitled to do so at the date of Disability with respect to the vested
portion of the Option) at any time or before: (i) the Expiration Date, if the
Company determines that the Grantee is Disabled within one (1) year after a date of
Change of Control of the Company shall be deemed to have occurred; or (ii) three
years after the Company determines the Grantee is Disabled, if such determination
occurs at any time other than within one (1) year after the date of a Change of
Control of the Company shall be deemed to have occurred, and if not so exercised, the
Option shall thereupon terminate.

     e. Death. Upon termination of Employment as a result of death of the Grantee:

          (i) any nonvested portion of any outstanding Option shall immediately terminate
upon termination of Employment and no further vesting shall occur; and

          (ii) if the Grantee dies while employed by the Company or a parent or subsidiary
entity of the Company, and prior to death the Grantee was employed at all times from
the date of the granting of the Option until the date of death, the Option must be
exercised (to the extent that the Grantee is entitled to do so at the date of death
with respect to the vested portion of the Option) by a legatee or legatees of the
Grantee under the Grantee’s will, or by the Grantee’s personal representatives or
distributes, at any time on or before: (i) the Expiration Date, if Grantee dies
within one (1) year after the date a Change of Control of the Company shall be deemed
to have occurred; or (ii) three years after the Grantee dies, if the Grantee dies at
any time other than within one (1) year after the date a Change of Control of the
Company shall be deemed to have occurred and if not so exercised, the Option shall
thereupon terminate.

     f. Change of Control. The Grantee may exercise this Option as to all of the Shares
subject to this Option (whether previously exercisable or not, i.e., whether vested
or unvested) on or before the expiration of the Expiration Date if (i) a Change of Control
of the Company shall be deemed to have occurred and (ii) within one (1) year after the date
a Change of Control of the

6

 

Company shall be deemed to have occurred, Grantee’s employment with the Company or a
parent or subsidiary corporation of the Company is terminated for any reason other than
voluntary resignation, retirement, death, Disability or Cause,

     A “Change in Control” of the Company shall be deemed to occur if:

          (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the “Act”)) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the
Company representing 35% or more of the combined voting power of the Company’s then
outstanding securities;

          (ii) there occurs a proxy contest or a consent solicitation, or the Company is a
party to a merger, consolidation, sale of assets, plan of liquidation or other
reorganization as a consequence of which members of the Board of Directors in office
immediately prior to such transaction or event constitute less than a majority of the
Board of Directors thereafter;

          (iii) during any period of two consecutive years, other than as a result of an
event described in clause (b) of this paragraph, individuals who at the beginning of
such period constituted the Board of Directors (including for this purpose any new
director whose election or nomination for election by the Company’s stockholders was
approved by a vote of at least a majority of the directors then still in office who
were directors at the beginning of such period) cease for any reason to constitute at
least a majority of the Board of Directors; or

          (iv) Any other event that a majority of the Board of Directors, in its sole
discretion, shall determine constitutes a Change in Control hereunder.

     13. Disposition of Stock After Exercise of Option. Notwithstanding any other provision
of this Agreement to the contrary, in consideration of the granting of the Option, the Grantee
agrees not to dispose of any Option Shares without the prior approval of the Company unless such
shares have been registered under the Securities Act.

     14. Notices. All notices, demands, requests and other communications required or
permitted hereunder shall be in writing and shall be deemed to be delivered when actually received
through U.S. Express Mail or any private express service (as evidenced by a written receipt), or,
if earlier, and regardless of whether actually received (except where receipt is specified in this
Agreement), four (4) days following deposit in a regularly maintained receptacle for the United
States mail, registered or certified, return receipt requested, postage frilly prepaid, addressed
to the addressee at its address set forth below or at such other address as such party may have
specified theretofore by notice delivered in accordance with this Section:

7

 

	 	 	 
	If to the Company:

	 	GREY WOLF, INC.

10370 Richmond Ave., Suite 600

Houston, Texas 77042

Attn: Chief Financial Officer

	 
	 	 
	If to Grantee:

	 	Name

Address

City, State Zip

     15. Transferability: Binding Effect. The Option shall be transferable only as set
forth in Section 5 of this Agreement and Section 5.2 of the Plan. Subject to the foregoing, all
covenants, terms, agreements and conditions of this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the Company and the Grantee and their respective successors and
assigns.

     16. Entire Agreement. This Agreement together with the Plan supersede any and all
other prior understandings and agreements, either oral or in writing, between the parties with
respect to the subject matter hereof and constitute the sole and only agreements between the
parties with respect to the said subject matter. All prior negotiations and agreements between the
parties with respect to this Incentive Award are merged into this Agreement. Each party to this
Agreement acknowledges that no representations, inducements, promises, or agreements, orally or
otherwise, have been made by any party or by anyone acting on behalf of any party, which are not
embodied in this Agreement or the Plan and that any agreement, statement or promise that is not
contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.

     17. Governing Law. This Agreement shall be governed by the laws of the State of Texas.

     18. Captions. The section and paragraph headings in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

     19. Counterparts. This Agreement may be executed in multiple original counterparts,
each of which shall be deemed an original, but all of which together shall constitute but one and
the same instrument.

     20. Modification. No change or modification of this Agreement shall be valid or
binding upon the parties unless the change or modification is in writing and signed by the parties.
Notwithstanding the preceding sentence, the Company may amend the Plan or revoke this Option to
the extent permitted by the Plan.

     21. Community Property. Each spouse individually is bound by, and such spouse’s
interest, if any, in any Optioned Shares is subject to, the terms of this Agreement. Nothing in
this Agreement shall create a community property interest where none otherwise exists.

     22. No Right to Continue Service or Employment. Nothing herein shall be construed to
confer upon the Grantee the right to continue in the employ or to provide services to the Company
or any Company affiliate or Subsidiary, whether as an employee or as a consultant or as an Outside
Director, or interfere with or restrict in any way the right of the Company or any Company
affiliate or Subsidiary to discharge the Grantee as an employee, consultant or Outside Director at
any time.

8

 

     23. Grantee’s Acknowledgments. The Grantee acknowledges receipt of a copy of the Plan,
which is annexed hereto, and represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all the terms and provisions thereof. The
Grantee hereby agrees to accept as binding, conclusive, and final all decisions or interpretations
of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this
Agreement.

     IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date first
written above.

	 	 	 	 	 
	 	COMPANY:

GREY WOLF, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	David W. Wehlmann 	 
	 	 	Title:  	Executive Vice President and CFO 	 
	 	 	Date:  	 	 
	 
	 	GRANTEE:

 	 
	 	  	 	 
	 	 	Name:  	Name 	 
	 	 	Date: 	 
	 

9

 

ACKNOWLEDGMENT OF SPOUSE TO

TERMS OF NON-QUALIFIED STOCK OPTION AGREEMENT

     I,
____________, am the
spouse of ____________ (“Grantee”), and I am fully aware of,
understand, and fully consent and agree to the provisions of the Non-Qualified Stock Option
Agreement, dated
____________ (the “Agreement”), executed by Grantee and GREY WOLF, INC. (the
“Company”). I understand the binding effect of this Agreement and its binding effect upon any
interest, community or otherwise, I may now or hereafter own with respect to any option or stock of
the Company which is the subject of the Agreement, and I agree that the termination for any reason
of my marital relationship with Grantee shall not have the effect of removing any such option or
stock of the Company from the coverage of the Agreement.

     Signed
this day of
________________________.

	 	 	 	 	 
	 	 	 
	 	  	
 	 
	 	 	Spouse Name, 	 
	 	 	Spouse of ____________________

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